BULLETIN RESOURCES LIMITED — Merger & Acquisition 2014

Jan 23, 2014

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23rd January 2014

Proposed Acquisition of 80% of the Nicolsons Project from Bulletin Resources

Pacific Niugini is pleased to advise that it has offered to purchase the Nicolsons Project from Bulletin Resources Limited (ASX:BNR). The project is currently the subject of a purchase agreement between Bulletin and Matsa Resources (ASX:MAT), however the agreement is subject to a superior offer break provision. Bulletin has advised Pacific Niugini that it considers its offer superior to the Matsa offer, and is bound to accept the Pacific Niugini proposal if and when the Matsa agreement is terminated.

Matsa has the right to contest the fact that the Pacific Niugini offer is superior to the Matsa offer, and Matsa also has a right to match the Pacific Niugini offer within 14 days, in which case the revised Matsa offer will prevail.

If Matsa do not take up their right to match the terms in a revised offer, Pacific Niugini will hold exclusive rights to finalise the transaction and Bulletin will be bound to complete the transaction with Pacific Niugini, subject to the satisfaction of various conditions precedent, including the execution of a formal farm in and joint venture agreement.

The key terms of the proposed transaction are:

• $600,000 refundable cash deposit upon the termination of the Matsa agreement;

• $900,000 cash payment within 45 days of finalization of formal agreements;

• Either $1.3 million worth of fully paid ordinary shares or 15 million fully paid ordinary shares, whichever is greater.

The initial payment will earn 49% of the project, and the parties will form a joint venture with Pacific Niugini as the sole manager. Following the initial acquisition, PNR may earn up to 80% of the project as follows:

• An additional 16% (to a total of 65% ownership) by sole funding expenditure of $1.2 million in the first 12 months of the Joint Venture;

• An additional 15% (to a total of 80% ownership) by sole funding expenditure of $2.4 million (inclusive of the initial $1.2 million) in the first 24 months of the Joint Venture.

Pacific Niugini's obligation to spend the first $1.2 million is mandatory, whilst its obligation to spend the second $1.2 million is at Pacific Niugini's discretion.

Pacific Niugini is required to maintain the tenements in good standing until a minimum of $4 million has been spent, or four years has elapsed from commencement of the agreement, whichever comes first. Following the initial $4 million expenditure, Bulletin is required to elect whether it will contribute its 20% interest. If Bulletin does not elect to maintain its interest, Pacific Niugini will acquire the remaining 20% by either paying $2million in cash or shares, or by granting Bulletin a 1% Net Smelter Royalty to a total value of $4 million.

If the transaction is successful, Pacific Niugini intends to immediately take steps to finalise mining and processing plans using the existing processing plant and equipment, and to obtain the necessary permits required to recommence operations at the mine site. Matsa has not yet advised Pacific Niugini of its intentions in relation to the transaction, and Pacific Niugini will further update the market when Bulletin confirms whether the transaction is to proceed.

Ends.

Enquiries – Paul Cmrlec, Managing Director, (07) 3367 3996

The information in this report that relates to exploration, mineral resources or ore reserves is based on information compiled by Mr. Peter Cook (B.Sc. Geol) ) MAusIMM (111072) who is the non-executive chairman of Pacific Niugini Limited. Mr. Cook has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a competent person as described by the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr. Cook consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

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