AVIRA RESOURCES LTD — Capital/Financing Update 2016

Sep 15, 2016

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ABN: 38 131 715 645 MGT Resources Ltd.

Suite 1305, Level 13, 109 Pitt Street, Sydney NSW 2000, Australia

T: 61 2 9262 1122 F: 61 2 9299 5175

16 September 2016

Company Announcements Office ASX Limited 20 Bridge Street Sydney NSW 2000

Via: e-lodgement

For immediate release

Cleansing Statement – issue of shares under placement Notice given under Section 708A(5) of the Corporations Act

Dear Sir

Pursuant to Section 708A(5)(e) of the Corporations Act 2001 (Cth) (“Corporations Act”), MGT Resources Limited (ASX: MGS) (the “Company”) gives notice in respect of the issue of 90,909,091 unquoted preference shares and 36,363,637 unquoted share options in the Company (Unquoted Options) at an exercise price of $0.001 per share on or before 16 September 2021 to Cloud Adventurer Limited and of 90,909,091 unquoted preference shares and 36,363,637 unquoted share options in the Company (Unquoted Options) at an exercise price of $0.001 per share on or before 16 September 2021 to Marvel Network Limited.

Details of the Issue

Unquoted preference shares

Class of Securities: Unquoted preference shares ASX Code of the securities: MGS Date of the issue: 16 September 2016 Total number of preference shares issued: 181,818,182 Issue price: $0.033

info@mgt.net.au www.mgt.net.au

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ABN: 38 131 715 645 MGT Resources Limited Suite 1305, Level 13, 109 Pitt Street, Sydney NSW 2000, Australia

T: 61 2 9262 1122 F: 61 2 9299 5175

Unquoted shares options

Class of Securities: Unquoted share options ASX Code of the securities: MGS Date of the issue: 16 September 2016 Total number of options issued: 72,727,274 Exercise price: $0.001 Expiry date: 16 September 2021

In accordance with the requirements of Section 708A(5)(e) of the Corporations Act, the Company provides notice to the ASX that:

1) the Company issued the Unquoted Preference Shares and Unquoted Share Options without disclosure to investors under Part 6D.2 of the Corporations Act 2001 (Cth) (“Corporations Act) ;

2) as at the date of this notice, the Company has complied with:

• (a) the provisions of Chapter 2M of the Corporations Act as they apply to the Company; and (b) Section 674 of the Corporations Act; and

3) as at the date of this notice, there is no information:

• (a) that has been excluded from a continuous disclosure notice in accordance with the ASX Listing Rules; and

info@mgt.net.au www.mgt.net.au

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ABN: 38 131 715 645 MGT Resources Limited Suite 1305, Level 13, 109 Pitt Street, Sydney NSW 2000, Australia

T: 61 2 9262 1122 F: 61 2 9299 5175

• (b) that investors and their professional advisers would reasonably require for the purpose of making an informed assessment of:

• (i) the assets and liabilities, financial position and performance, profits and losses and prospects of the Company; or

• (ii) the rights and liabilities attaching to the ordinary shares of the Company,

to the extent to which it is reasonable for investors and their professional advisers to expect to find the information in a disclosure document.

Yours sincerely,

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---

Jacqueline Butler Company Secretary

info@mgt.net.au www.mgt.net.au

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Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

MGT Resources Limited

ABN

38 131 715 645

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of+securities issued or to be issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued	 Fully Paid Preference Shares and  Unquoted Share Options exercisable at $0.001 on or before 16th September 2021.
	 181,818,182 Fully Paid Preference Shares and  72,727,274 Unquoted Share Options

• See chapter 19 for defined terms.

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3 Principal terms of the[+] securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)

$3,000,000 Unsecured Convertible Notes issued to Cloud Adventurer Limited and $3,000,000 Unsecured Convertible Notes issued to Marvel Network Limited converted into :

• 181,818,182 fully paid preference shares at $0.033 per Preference Share and

• 72,727,274 Unquoted Share options exercisable at $0.001 on or before 16[th] September 2021.

As approved by shareholders on 16[th] September 2016.

• See chapter 19 for defined terms.

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4 Do the+securities rank equally in all respects from the+issue date with an existing+class of quoted +securities? If the additional+securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 6a Is the entity an+eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h in relation to the+securities the subject of this Appendix 3B, and comply with section 6i 6b The date the security holder resolution under rule 7.1A was passed 6c Number of +securities issued without security holder approval under rule 7.1	No. Preference Shareholders and Option Holders do not rank equally with ordinary shareholders – for further information on all the terms and conditions of the Preference Shares and Options issued please refer to the Explanatory Memorandum of the Notice of Meeting for the General Meeting held on 16thSeptember 2016.
	$3,000,000 received at the time of issuing the Convertible Notes to Cloud Adventurer Limited and $3,000,000 received at the time of issuing the Convertible Notes to Marvel Network Limited.
	Debt restructuring to convert the $3,000,000 Unsecured Convertible Notes issued to Cloud Adventurer Limited and the $3,000,000 Unsecured Convertible Notes issued to Marvel Network Limited into preference shares and options. (For more information refer to MGT Resources Limited Notice of Meeting for the General Meeting held on 16thSeptember 2016)
	Yes
	18 November 2015
	N/A

• See chapter 19 for defined terms.

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6d Number of[+] securities issued with N/A security holder approval under rule 7.1A 6e Number of[+] securities issued with  181,818,182 fully paid preference security holder approval under rule shares at $0.033 per Note and 7.3, or another specific security  72,727,274 Unquoted Share options holder approval (specify date of exercisable at $0.001 on or before 16[th] meeting) September 2021. following shareholder approval at a general meeting on 16[th] September 2016. 6f Number of[+] securities issued under N/A an exception in rule 7.2 6g If[+] securities issued under rule N/A 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation. 6h If[+] securities were issued under N/A rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining See Annexure 1. issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates 16[st] September 2016 Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B. Number +Class 8 Number and +class of all 483,066,131 Fully Paid Ordinary +securities quoted on ASX Shares ( including the[+] securities in section 2 if applicable)

• See chapter 19 for defined terms.

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9 Number and +class of all +securities not quoted on ASX (_including_the+securities in section 2 if applicable) 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	Number	+Class
	181,818,182	Unquoted Fully Paid Preference Shares
	72,727,274	Unquoted options exercisable at $0.001 each on or before 16th September 2021.
	1,500,000	Unquoted convertible notes convertible at 8.75 cents per share into 17,142,857 ordinary shares on or before 11 November 2016
	6,800,000	Unquoted options exercisable at 15 cents each on or before 7 November 2016
	1,050,000	Unquoted options exercisable at 15 cents each on or before 17 December 2016
	N/A

Part 2 - Pro rata issue

art 2 - Pro rata issue
11 Is security holder approval required? 12 Is the issue renounceable or non- renounceable? 13 Ratio in which the+securities will be offered 14 +Class of+securities to which the offer relates 15 +Record date to determine entitlements	N/A
	N/A
	N/A
	N/A
	N/A

• See chapter 19 for defined terms.

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16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has security holders who will not be sent new offer documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of acceptances or renunciations	N/A
	N/A
	N/A
	N/A

• See chapter 19 for defined terms.

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20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of security holders 25 If the issue is contingent on security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and offer documents will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do security holders sell their entitlements_in full_through a broker? 31 How do security holders sell_part_of their entitlements through a broker and accept for the balance?	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A

• See chapter 19 for defined terms.

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32 How do security holders dispose of N/A their entitlements (except by sale through a broker)? 33 +Issue date N/A

N/A

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of[+] securities ( tick one )

• (a) +Securities described in Part 1

• (b) All other[+] securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders

36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over 37 A copy of any trust deed for the additional[+] securities

• See chapter 19 for defined terms.

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Entities that have ticked box 34(b)

38 Number of[+] securities for which N/A +quotation is sought 39 +Class of +securities for which N/A quotation is sought 40 Do the[+] securities rank equally in all N/A respects from the[+] issue date with an existing[+] class of quoted[+] securities? If the additional[+] securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 41 Reason for request for quotation N/A now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another[+] security, clearly identify that other[+] security) Number +Class 42 Number and[+] class of all[+] securities N/A N/A quoted on ASX ( including the +securities in clause 38)

• See chapter 19 for defined terms.

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Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted[+] quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: Date: 16[th] September 2016 Company secretary

Jacqueline Butler

• See chapter 19 for defined terms.

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Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1

Rule 7.1 – Issues exceeding 15% of capital

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

Part 1	Part 1
Rule 7.1 – Issues exceeding 15% of capital
Step 1: Calculate “A”, the base figure from which the placement capacity is calculated
Insertnumber of fully paid+ordinary securities on issue 12 months before the +issue date or date of agreement to issue	318,157,040
Addthe following: • Number of fully paid+ordinary securities issued in that 12 month period under an exception in rule 7.2 • Number of fully paid+ordinary securities issued in that 12 month period with shareholder approval • Number of partly paid+ordinary securities that became fully paid in that 12 month period Note: • Include only ordinary securities here – other classes of equity securities cannot be added • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items	 24,000,000 ordinary shares issued on 26thNovember 2015 following the exercise of 24,000,000 unquoted share options issued to Auskong International Mining Investment Co., Limited with an exercise prices of 5 cents per option on or before 30 December 2015 approved by shareholders at a General meeting on 16thFebruary 2015.  50,000,000 ordinary shares issued on 9 June 2016 following conversion of $1,500,000 unquoted unsecured convertible note issued to Auskong International Mining Investment Co., Limited with a conversion price of 3 cents per note as approved by shareholders at a General meeting on 16thFebruary 2015  60,606,061 ordinary shares issued on 30thJune 2016 following the conversion of $2,000,000 Converting Note issued to Auskong International Mining Investment Co., Limited with a conversion price of 3.3 cents as approved by shareholders at a General meeting on 30thJune 2016.

• See chapter 19 for defined terms.

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	 30,303,030 fully paid ordinary shares issued to Joseph Capital (Hong Kong) Limited on 19thJuly 2016 at 3.3 cents per share as subsequently approved by shareholders at a general meeting on 16thSeptember 2016.
Subtractthe number of fully paid+ordinary securities cancelled during that 12 month period	Nil.
“A”	483,066,131

• See chapter 19 for defined terms.

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Step 2: Calculate 15% of “A”

Step 2: Calculate 15% of “A”	Step 2: Calculate 15% of “A”
“B”	0.15 [Note: this value cannot be changed]
Multiply“A” by 0.15	72,459,920
Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used
Insertnumber of+equity securities issued or agreed to be issued in that 12 month period_not counting_those issued: • Under an exception in rule 7.2 • Under rule 7.1A • With security holder approval under rule 7.1 or rule 7.4 Note: • This applies to equity securities, unless specifically excluded – not just ordinary securities • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items	On 14thSeptember 2016 MGT Resources Limited agreed to issue an unsecured convertible note worth $500,000 to Joseph Capital (Hong Kong) Limited and convertible at $0.033 per share into 15,151,515 ordinary shares. The convertible note will be issued upon receipt of the funds.
“C”	15,151,515
Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1
“A” x 0.15 Note: number must be same as shown in Step 2	72,459,920
Subtract“C” Note: number must be same as shown in Step 3	15,151,515
Total[“A” x 0.15] – “C”	57,308,405 [Note: this is the remaining placement capacity under rule 7.1]

• See chapter 19 for defined terms.

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Part 2

Rule 7.1A – Additional placement capacity for eligible entities

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

“A” 483,066,131 Note: number must be same as shown in Step 1 of Part 1

Step 2: Calculate 10% of “A”

“D” 0.10 Note: this value cannot be changed Multiply “A” by 0.10 48,306,613

Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used

Insert number of[+] equity securities issued or agreed to be issued in that 12 month period under rule 7.1A

Nil

Notes:

• This applies to equity securities – not just ordinary securities

• Include here – if applicable – the securities the subject of the Appendix 3B to which this form is annexed

• Do not include equity securities issued under rule 7.1 (they must be dealt with in Part 1), or for which specific security holder approval has been obtained

• It may be useful to set out issues of securities on different dates as separate line items

• “E” Nil

• See chapter 19 for defined terms.

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Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A	Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A
“A” x 0.10 Note: number must be same as shown in Step 2	48,306,613
Subtract“E” Note: number must be same as shown in Step 3	Nil
Total[“A” x 0.10] – “E”	48,306,613 Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

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