CANYON RESOURCES LIMITED - Capital/Financing Update 2013

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CANYON RESOUR C ES LIMITED ACN 140 087 261

ENTITLEMENT ISSUE PROSPECTUS

For a non-renounceable e n titlement issue of 1 Share for every 2 Sh a res held by those Shareholders registered at t h e Record Date at an issue price of $0.04 5 per Share to raise up to $1,608,907 (based o n the number of Shares on issue as a t the date of this Prospectus) (together with 1 free Option for every 1 Share subscribed f o r and issued (New Option)) (Offer).

Corporate Adviser to the Company

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IMPORTANT NOTICE

This document is importan t and should be read in its entirety. If after reading this Prospectus you have any questions about the securities being o ffered under this Prospectus or any other ma t ter, then you should consult your stockbro k er, accountant or other professional adviser.

The Shares offered by this Pr o spectus should be considered as specula t ive.

1.	CORPORATE DIRECTORY .............................................................................................. 1
2.	TIMETABLE ..................................................................................................................... 2
3.	IMPORTANT NOTES ....................................................................................................... 3
4.	DETAILS OF THE OFFER .................................................................................................. 4
5.	PURPOSE AND EFFECT OF THE OFFER ........................................................................... 8
6.	RIGHTS AND LIABILITIES ATTACHING TO SECURITIES ................................................. 12
7.	RISK FACTORS ............................................................................................................ 17
8.	ADDITIONAL INFORMATION ...................................................................................... 26
9.	DIRECTORS’ AUTHORISATION .................................................................................... 36
10.	GLOSSARY .................................................................................................................. 37

1. CORPORATE DIRECTORY

Directors

Registered Office

Rhoderick Grivas (Executive Chairman)

7/29 The Avenue
Nedlands WA 6009

Phillip Gallagher (Managing Director)

Matthew Shackleton (Non-Executive Director)

Company Secretary

Telephone: + 61 8 6143 4256
Facsimile: +61 8 9389 1464

Principle Office

Phillip MacLeod

Share Registry*

Ground Floor
353 Rokeby Road
Subiaco  WA 6008

Computershare Investor Services Pty Limited
Level 2
45 St Georges Terrace
Perth WA 6000
Telephone:  +61 1300 787 272

Email:  [email protected]
Website: www.canyonresources.com.au

Solicitors

Steinepreis Paganin
Lawyers and Consultants
Level 4, The Read Buildings
16 Milligan Street
Perth  WA  6000

Auditor*

HLB Mann Judd
Level 4
130 Stirling Street
Perth WA 6000

Corporate Adviser

Hartleys Limited
Level 6
141 St Georges Terrace
Perth  WA  6000

* This entity is included for information purposes only.  It has not been involved in the
preparation of this Prospectus and has not consented to being named in this Prospectus.

2. TIMETABLE

`Lodgement of Prospectus with the ASIC`	`Lodgement of Prospectus with the ASIC`			`24 December 2013`
`Lodgement of Prospectus & Appendix`	`3B with ASX`			`24 December 2013`
`Notice sent to Optionholders`				`30 December 2013`
`Notice sent to Shareholders`				`30 December 2013`
`Ex date`				`31 December 2013`
`Record Date for determining Entitlements`				`7 January 2014`
`Prospectus` `despatched` `to` `Shareholders`			`&`	`9 January 2014`
`Company` `announces` `despatch`	`has`	`been`
`completed`
`Closing Date*`				`31 January 2014`
`Securities quoted on a deferred settlement`		`basis`		`3 February 2014`
`ASX notified of under subscriptions`				`4 February 2014`
`Despatch of holding statements`				`10 February 2014`
`Quotation of Securities issued under the Offer*`				`10 February 2014`

*The Directors may extend the Closing Date by giving at least 6 Business Days notice to
ASX prior to the Closing Date.  As such the date the Securities are expected to
commence trading on ASX may vary.

3. IMPORTANT NOTES

This Prospectus is dated 24 December 2013 and was lodged with the ASIC on
that date.  The ASIC and its officers take no responsibility for the contents of this
Prospectus or the merits of the investment to which this Prospectus relates.

No Securities may be issued on the basis of this Prospectus later than 13 months
after the date of this Prospectus.

No person is authorised to give information or to make any representation in
connection with this Prospectus, which is not contained in the Prospectus.  Any
information or representation not so contained may not be relied on as having
been authorised by the Company in connection with this Prospectus.

It is important that investors read this Prospectus in its entirety and seek
professional advice where necessary.  The Shares the subject of this Prospectus
should be considered highly speculative.

Applications for Securities offered pursuant to this Prospectus can only be
submitted on an original Entitlement and Acceptance Form or Shortfall
Application Form.

This Prospectus is a transaction specific prospectus for an offer of continuously
quoted securities (as defined in the Corporations Act) and has been prepared in
accordance with section 713 of the Corporations Act.  It does not contain the
same level of disclosure as an initial public offering prospectus.  In making
representations in this Prospectus regard has been had to the fact that the
Company is a disclosing entity for the purposes of the Corporations Act and
certain matters may reasonably be expected to be known to investors and
professional advisers whom potential investors may consult.

3.1 Risk factors

Potential investors should be aware that subscribing for Securities in the
Company involves a number of risks.  The key risk factors of which investors
should be aware are set out in section 7 of this Prospectus.  These risks together
with other general risks applicable to all investments in listed securities not
specifically referred to, may affect the value of the Shares in the future.
Accordingly, an investment in the Company should be considered highly
speculative.  Investors should consider consulting their professional advisers
before deciding whether to apply for Securities pursuant to this Prospectus.

4. DETAILS OF THE OFFER

4.1 The Offer

The Offer is being made as a non-renounceable entitlement issue of 1 Share for
every 2 Shares held by Shareholders registered at the Record Date at an issue
price of $0.045 per Share (together with 1 New Option for every 1 Share
subscribed for and issued).  Fractional entitlements will be rounded down to the
nearest whole number.

The Offer price of $0.045 reflects a discount of 25% to the last trading price of
Shares on ASX, being $0.06, prior to the announcement of the Offer. In addition
to the 25% discount, Shareholders who participate in the Offer will receive one
(1) free New Option for every two (2) Shares subscribed for and issued under the
Offer.

In addition to your Entitlement, all eligible Shareholders are invited to apply for
Shares over and above their Entitlement by way of the Shortfall Offer. Details of
the Shortfall Offer are set out in Section 4.7 below.

Based on the capital structure of the Company as at the date of this Prospectus,
(and assuming no existing Options are exercised prior to the Record Date) a
maximum of 35,753,481 Shares and 35,753,481 New Options will be issued
pursuant to this Offer to raise up to $1,608,907.  No funds will be raised from the
issue of the New Options.

As at the date of this Prospectus the Company has 17,356,130 Options on issue
all of which may be exercised prior to the Record Date in order to participate in
the Offer.  Please refer to section 0 of this Prospectus for information on the
exercise price and expiry date of the Options on issue.

All of the Shares offered under this Prospectus will rank equally with the Shares on
issue at the date of this Prospectus.  Please refer to section 6 for further
information regarding the rights and liabilities attaching to the Shares.

All of the New Options offered under this Prospectus will be issued on the terms
and conditions set out in section 6.2 of this Prospectus.

All Shares issued on conversion of the New Options will rank equally with the
Shares on issue at the date of this Prospectus.

The purpose of the Offer and the intended use of funds raised are set out in
section 5.1 of this Prospectus.

4.2 Minimum subscription

There is no minimum subscription.

4.3 Acceptance

Your acceptance of the Offer must be made on the Entitlement and
Acceptance Form accompanying this Prospectus.  Your acceptance must not
exceed your Entitlement as shown on that form.  If it does, your acceptance will
be deemed to be for the maximum Entitlement.

Eligible Shareholders may participate in the Offer as follows:

(a) if you wish to accept your full Entitlement:
(i) complete the Entitlement and Acceptance Form; and
(ii) attach your cheque, drawn on an Australian bank or bank draft made payable in Australian currency, for the amount indicated on the Entitlement and Acceptance Form; or
(b) if you only wish to accept part of your Entitlement:
(i) fill in the number of Shares you wish to accept in the space provided on the Entitlement and Acceptance Form; and
(ii) attach your cheque, drawn on an Australian bank or bank draft made payable in Australian currency, for the appropriate application monies (at $0.045 per Share); or
(c) if you do not wish to accept all or part of your Entitlement, you are not obliged to do anything.

Any application monies received for more than your final allocation of Shares
(only where the amount is $1.00 or greater) will be treated as an application
under the Shortfall Offer. Please refer to section 4.7 of this Prospectus for details
of the Shortfall Offer.  No interest will be paid on any application monies
received or refunded.

The Offer is non-renounceable.  Accordingly, a Shareholder may not sell or
transfer all or part of their Entitlement.

1 New Option with an exercise price of $0.06 and an expiry date of 31 January
2017 will be issued for every 1 Share subscribed for and issued under the Offer.
The Company will apply for quotation of the New Options on the ASX.

4.4 Payment by cheque/bank draft

All cheques must be drawn on an Australian bank or bank draft made payable
in Australian currency to “Canyon Resources Limited – Entitlement Issue
Account” and crossed “Not Negotiable”.

Your completed Entitlement and Acceptance Form and cheque must reach the
Company’s share registry no later than 5:00pm WST on the Closing Date.

4.5 Payment by BPAY®

For payment by BPAY®, please follow the instructions on the Entitlement and
Acceptance Form.  You can only make a payment via BPAY® if you are the
holder of an account with an Australian financial institution that supports BPAY®
transactions.  Please note that should you choose to pay by BPAY®:

(a) you do not need to submit the Entitlement and Acceptance Form but are taken to have made the declarations on that Entitlement and Acceptance Form;
(b) if you do not pay for your Entitlement in full, you are deemed to have taken up your Entitlement in respect of such whole number of Shares which is covered in full by your application monies; and

(c) if your payment exceeds the value of your Entitlement, any excess funds will be treated as an application in the Shortfall Offer.

It is your responsibility to ensure that your BPAY® payment is received by the share registry by no later than 3:00 pm (WST) on the Closing Date. You should be aware that your financial institution may implement earlier cut-off times with regards to electronic payment and you should therefore take this into consideration when making payment.

4.6 Underwriting

The Offer is not underwritten.

4.7 Shortfall Offer

Any Entitlement not taken up pursuant to the Offer will form the Shortfall Offer.

The Shortfall Offer is a separate offer made pursuant to this Prospectus and will
remain open for up to three months following the Closing Date. The issue price
for each Share to be issued under the Shortfall Offer shall be $0.045 being the
price at which Shares have been offered under the Offer. One New Option will
be issued for every one Share subscribed for under the Shortfall Offer on the
same terms as the Offer. The Shortfall Offer price reflects a discount of 25% to the
last trading price of Shares on ASX prior to the announcement of the Offer and
the proposed acquisition of the Birsok bauxite project. In addition to the 25%
discount, Shareholders who participate in Offer will receive one (1) free New
Option for every two (2) Shares subscribed for and issued under the Offer.

Eligible Shareholders who wish to subscribe under the Shortfall Offer over and
above their Entitlement are encouraged to complete the appropriate section of
the Entitlement and Acceptance Form accompanying this Prospectus and
provide the additional funds for those additional Shares and New Options
applied for. Non-Shareholder applicants should complete the Shortfall
Application Form.  The Directors reserve the right to issue Shortfall Securities at
their absolute discretion. In allocating the Shortfall, the Directors will have regard
to the number of applications for Shortfall received both from Eligible
Shareholders and any other third party applicants and the potential for any
change of control if the Shortfall is issued to a particular Applicant.

4.8 Effect on control of the Company

As at the date of this Prospectus, the Company only has one Shareholder with a
relevant interest in greater than 5% of the Company’s Shares on issue as set out
in Section 5.5 below.

The Directors do not expect therefore that the Offer will have any effect on the
control of the Company. In addition, the Directors shall ensure that any Shares
issued under the Shortfall Offer will not be issued where the issue to that
Applicant may have the effect of increasing the Applicant’s voting power in the
Company above 20%.

4.9 ASX listing

Application for Official Quotation of the Securities offered pursuant to this
Prospectus will be made in accordance with the timetable set out at the
commencement of this Prospectus.  If ASX does not grant Official Quotation of
the Securities offered pursuant to this Prospectus before the expiration of 3
months after the date of issue of the Prospectus, (or such period as varied by the

ASIC), the Company will not issue any Securities and will repay all application
monies for the Securities within the time prescribed under the Corporations Act,
without interest.

The fact that ASX may grant Official Quotation to the Securities is not to be
taken in any way as an indication of the merits of the Company or the Securities
now offered for subscription.

4.10 Issue

Securities issued pursuant to the Offer will be issued in accordance with the ASX
Listing Rules and timetable set out at the commencement of this Prospectus.

Securities issued pursuant to the Shortfall Offer will be issued on a progressive
basis.  Where the number of Securities issued is less than the number applied for,
or where no issue is made, surplus application monies will be refunded without
any interest to the Applicant as soon as practicable after the closing date of the
Shortfall Offer.

Pending the issue of the Securities or payment of refunds pursuant to this
Prospectus, all application monies will be held by the Company in trust for the
Applicants in a separate bank account as required by the Corporations Act.
The Company, however, will be entitled to retain all interest that accrues on the
bank account and each Applicant waives the right to claim interest.

Holding statements for Securities issued under the Offer will be mailed in
accordance with the ASX Listing Rules and timetable set out at the
commencement of this Prospectus and for Shortfall Securities issued under the
Shortfall Offer as soon as practicable after their issue.

4.11 Overseas shareholders

This Offer does not, and is not intended to, constitute an offer in any place or
jurisdiction in which, or to any person to whom, it would not be lawful to make
such an offer or to issue this Prospectus.

It is not practicable for the Company to comply with the securities laws of
overseas jurisdictions having regard to the number of overseas Shareholders, the
number and value of Shares these Shareholders would be offered and the cost
of complying with regulatory requirements in each relevant jurisdiction.
Accordingly, the Offer is not being extended and Shares will not be issued to
Shareholders with a registered address which is outside Australia or
New Zealand.

The Offer is being made in New Zealand pursuant to the Securities act (Overseas
Companies) Exemption Notice 2013.

Shareholders resident in Australia or New Zealand holding Shares on behalf of
persons who are resident overseas are responsible for ensuring that taking up an
Entitlement under the Offer does not breach regulations in the relevant overseas
jurisdiction.  Return of a duly completed Entitlement and Acceptance Form will
be taken by the Company to constitute a representation that there has been no
breach of those regulations.

4.12 Enquiries

Any questions concerning the Offer should be directed to Phil MacLeod,
Company Secretary, on +61 8 9413 7300.

5. PURPOSE AND EFFECT OF THE OFFER

5.1 Purpose of the Offer

The purpose of the Offer is to raise up to $1,608,907.  No funds will be raised from
the issue of the New Options.

The funds raised from the Offer are planned to be used in accordance with the
table set out below:

Item	Proceeds of the Offer	$	%
`1.`	`Expenses of the Offer1`	`134,000`	`8.33`
`2.`	`Payment of deposit under Farmin and` `Joint Venture Agreement`	`150,000`	`9.32`
`3.`	`Exploration` `on` `Cameroon` `Projects` `under` `Farmin` `and` `Joint` `Venture` `Agreement`	`700,000`	`43.51`
`4.`	`Exploration on Burkina Faso projects`	`350,000`	`21.75`
`5.`	`Working capital`	`274,907`	`17.09`
	Total	1,608,907	100

Notes:

1. Refer to section 8.8 of this Prospectus for further details relating to the estimated expenses of the Offer.

Funds raised will first be allocated toward covering the expenses of the Offer,
and will then be progressively allocated towards each of the items set out in the
table above, starting with funding on the Birsok bauxite project (assuming
settlement under the Farmin and Joint Venture Agreement), ongoing exploration
on the Burkina Faso gold projects, with all remaining funds allocated to working
capital. Regardless of whether settlement of the Farmin and Joint Venture
Agreement occurs, the Offer will proceed.

The above table is a statement of current intentions as of the date of this
Prospectus.  As with any budget, intervening events (including exploration
success or failure) and new circumstances have the potential to affect the
manner in which the funds are ultimately applied.  The Board reserves the right
to alter the way funds are applied on this basis.

5.2 Effect of the Offer

The principal effect of the Offer, assuming all Entitlements are accepted and no
Options are exercised prior to the Record Date, will be to:

(a) increase the cash reserves by $1,474,907 (after deducting the estimated expenses of the Offer) immediately after completion of the Offer;
(b) increase the number of Shares on issue from 71,506,962 as at the date of this Prospectus to 107,260,443 Shares following complete of the Offer; and
(c) increase the number of Options on issue from 17,356,130 as at the date of this Prospectus to 53,109,611 Options following completion of the Offer.

5.3 Pro-forma consolidated statement of financial position

The unaudited consolidated statement of financial position as at 30 September
2013 and the unaudited pro-forma consolidated statement of financial position
as at 30 September 2013 shown below have been prepared on the basis of the
accounting policies normally adopted by the Company and reflect the
changes to its financial position.

The pro-forma consolidated statement of financial position has been prepared
assuming all Entitlements are accepted, no Options are exercised prior to the
Record Date and including expenses of the Offer.

The pro-forma consolidated statement of financial position has been prepared
to provide investors with information on the assets and liabilities of the Company
and pro-forma assets and liabilities of the Company as noted below.  The
historical and pro-forma financial information is presented in an abbreviated
form, insofar as it does not include all of the disclosures required by Australian
Accounting Standards applicable to annual financial statements.

	UNAUDITED 30 September 2013	PROFORMA 30 September 2013
CURRENT ASSETS
`Cash and cash equivalents`	`1,599,333`	`3,074,240`
`Trade and other receivables`	`18,115`	`18,115`
`Other current assets`	`64,897`	`64,897`
TOTAL CURRENT ASSETS	`1,682,345`	`3,157,252`

NON-CURRENT ASSETS
`Available for sale financial` `assets`	`66,650`	`66,650`
`Property, plant and` `equipment`	`217,804`	`217,804`
`Capitalised exploration` `expenditure`	`5,860,656`	`5,860,656`
TOTAL NON-CURRENT ASSETS	`6,145,110`	`6,145,110`

TOTAL ASSETS	`7,827,455`	`9,302,362`

CURRENT LIABILITIES
`Trade and other payables`	`342,229`	`342,229`
`Provisions`	`45,937`	`45,937`
TOTAL CURRENT LIABILITIES	`388,166`	`388,166`

TOTAL LIABILITIES	`388,166`	`388,166`

NET ASSETS (LIABILITIES)	`7,439,289`	`8,914,196`

EQUITY
`Issued capital`	`17,514,184`	`18,989,091`
`Reserves`	`429,493`	`429,493`
`Accumulated losses`	`(10,504,388)`	`(10,504,388)`
TOTAL EQUITY	`7,439,289`	`8,914,196`

5.4 Effect on capital structure

The effect of the Offer on the capital structure of the Company, assuming all
Entitlements are accepted and no Options are exercised prior to the Record
Date, is set out below.

	Number
`Shares currently on issue`	`71,506,962`
`Shares offered pursuant to the Offer`	`35,753,481`
Total Shares on issue after completion of the Offer1, 2	107,260,443

Notes:

1. On 24 December 2013, the Company announced that it had entered into an agreement to earn in to up to a 75% interest in a bauxite project in Cameroon (through the acquisition of an interest in the Seychelles parent company that will hold the project). The consideration payable for the earn into the project includes an initial issue of 8,000,000 Shares in the Company, with settlement scheduled to occur in early to mid February 2014. Upon settlement, the number of Shares on issue will increase by 8,000,000 Shares.

2. As at the date of this Prospectus, the Company has the capacity to issue up to approximately 10,726,043 Shares without Shareholder approval under its 15% placement capacity pursuant to Listing Rule 7.1. Although the Directors have no immediate plans as at the date of this Prospectus to place any additional Shares, they reserve the right to issue up to that number of Shares at a price on or around the Offer price. The effect of the issue of any further Shares would be to increase the total number of Shares on issue in the Company after the close of the Offer and to increase the cash level of the Company by the extra amount raised (less any relevant expenses).

Options

	Number
`Options currently on issue:`
`Quoted exercisable at $0.16 on or before 29 February 2016`	`14,106,130`
`Unquoted exercisable at $0.16 on or before 29 February 2016`	`3,000,000`
`Unquoted exercisable at $0.45 on or before 12 April 2014`	`250,000`
Total Options on issue before Offer	17,356,130
`New Options offered pursuant to the Offer` `(Quoted exercisable at $0.06 on or before 31 January 2017)`	`35,753,481`
Total Options on issue after completion of the Offer1	53,109,611

Notes:

1. In addition to the Options currently on issue, the Directors have agreed to issue, as an incentive to certain brokers who assist the Company with raising funds under the Offer and the Shortfall Offer, approximately 9,000,000 New Options. These New Options, if issued, will increase the number of Options on issue following the close of the Offer. In addition, the Company intends in early 2014 seeking approval to issue up to 8,000,000 Options to the Directors. Further details in relation to these issues will be set out in a notice of meeting despatched to Shareholders in mid January 2014.

Convertible Securities

	Number
`Class A Convertible Securities currently on issue1`	`5`
`Class B Convertible Securities currently on issue1`	`10`
`Convertible Securities offered pursuant to the Offer`	`Nil`
Total Convertible Securities on issue after completion of the Offer	15

Note:

1. These Class A Convertible Securities and Class B Convertible Securities were issued as consideration for the acquisition of the Company’s assets in Burkina Faso and convert to a total of 15,000,000 Shares upon the achievement of certain milestones relating to those projects, as previously announced by the Company on 24 December 2010. Those milestones have not yet been achieved as at the date of this Prospectus and will not be achieved in at least the near term. The Class A Convertible Securities and Class B Convertible Securities expire 4 and 5 years respectively after they were issued in March 2011.

The capital structure on a fully diluted basis as at the date of this Prospectus
would be 103,863,092 Shares and on completion of the Offer (assuming all
Entitlements are accepted and no Options are exercised prior to the Record
Date) would be 175,370,054 Shares.

No Shares or Options on issue are subject to escrow restrictions, either voluntary
or ASX imposed.

5.5 Details of substantial holders

Based on publicly available information as at 23 December 2013, those persons
which (together with their associates) have a relevant interest in 5% or more of
the Shares on issue are set out below:

Shareholder	Shares	%
`HSBC Custody Nominees (Australia) Limited`	`4,337,729`	`6.07`

In the event all Entitlements are accepted there will be no change to the
substantial holders on completion of the Offer.

6. RIGHTS AND LIABILITIES ATTACHING TO SECURITIES

6.1 Shares

The following is a summary of the more significant rights and liabilities attaching
to Shares being offered pursuant to this Prospectus.  This summary is not
exhaustive and does not constitute a definitive statement of the rights and
liabilities of Shareholders.  To obtain such a statement, persons should seek
independent legal advice.

Full details of the rights and liabilities attaching to Shares are set out in the
Constitution, a copy of which is available for inspection at the Company’s
registered office during normal business hours.

`(a)` General meetings

Shareholders are entitled to be present in person, or by proxy, attorney
or representative to attend and vote at general meetings of the
Company.

Shareholders may requisition meetings in accordance with section 249D
of the Corporations Act and the Constitution of the Company.

`(b)` Voting rights

Subject to any rights or restrictions for the time being attached to any
class or classes of shares, at general meetings of shareholders or classes
of shareholders:

(i) each Shareholder entitled to vote may vote in person or by proxy, attorney or representative;
(ii) on a show of hands, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder has one vote; and
(iii) on a poll, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder shall, in respect of each fully paid Share held by him, or in respect of which he is appointed a proxy, attorney or representative, have one vote for each Share held, but in respect of partly paid shares shall have such number of votes as bears the same proportion to the total of such Shares registered in the Shareholder’s name as the amount paid (not credited) bears to the total amounts paid and payable (excluding amounts credited).

`(c)` Dividend rights

Subject to the rights of any preference Shareholders and to the rights of
the holders of any shares created or raised under any special
arrangement as to dividend, the Directors may from time to time
declare a dividend to be paid to the Shareholders entitled to the
dividend which shall be payable on all Shares according to the
proportion that the amount paid (not credited) is of the total amounts
paid and payable (excluding amounts credited) in respect of such
Shares.

The Directors may from time to time pay to the Shareholders any interim
dividends as they may determine.  No dividend shall carry interest as
against the Company.  The Directors may set aside out of the profits of
the Company any amounts that they may determine as reserves, to be
applied at the discretion of the Directors, for any purpose for which the
profits of the Company may be properly applied.

Subject to the ASX Listing Rules and the Corporations Act, the Company
may, by resolution of the Directors, implement a dividend reinvestment
plan on such terms and conditions as the Directors think fit and which
provides for any dividend which the Directors may declare from time to
time payable on Shares which are participating Shares in the dividend
reinvestment plan, less any amount which the Company shall either
pursuant to the Constitution or any law be entitled or obliged to retain,
be applied by the Company to the payment of the subscription price of
Shares.

`(d)` Winding-up

If the Company is wound up, the liquidator may, with the authority of a
special resolution, divide among the Shareholders in kind the whole or
any part of the property of the Company, and may for that purpose set
such value as he considers fair upon any property to be so divided, and
may determine how the division is to be carried out as between the
Shareholders or different classes of Shareholders.

The liquidator may, with the authority of a special resolution, vest the
whole or any part of any such property in trustees upon such trusts for
the benefit of the contributories as the liquidator thinks fit, but so that no
Shareholder is compelled to accept any shares or other securities in
respect of which there is any liability.

`(e)` Shareholder liability

As the Shares issued will be fully paid shares, they will not be subject to
any calls for money by the Directors and will therefore not become
liable for forfeiture.

`(f)` Transfer of shares

Generally, shares in the Company are freely transferable, subject to
formal requirements, the registration of the transfer not resulting in a
contravention of or failure to observe the provisions of a law of Australia
and the transfer not being in breach of the Corporations Act and the
ASX Listing Rules.

`(g)` Future increase in capital

The issue of any new Shares is under the control of the Directors of the
Company.  Subject to restrictions on the issue or grant of Securities
contained in the ASX Listing Rules, the Constitution and the Corporations
Act (and without affecting any special right previously conferred on the
holder of an existing share or class of shares), the Directors may issue
Shares as they shall, in their absolute discretion, determine.

(h) Variation of rights

Under section 246B of the Corporations Act, the Company may, with the

sanction of a special resolution passed at a meeting of Shareholders
vary or abrogate the rights attaching to shares.

If at any time the share capital is divided into different classes of shares,
the rights attached to any class (unless otherwise provided by the terms
of issue of the shares of that class), whether or not the Company is being
wound up, may be varied or abrogated with the consent in writing of
the holders of three quarters of the issued shares of that class, or if
authorised by a special resolution passed at a separate meeting of the
holders of the shares of that class.

`(i)` Alteration of constitution

In accordance with the Corporations Act, the Constitution can only be
amended by a special resolution passed by at least three quarters of
Shareholders present and voting at the general meeting.  In addition, at
least 28 days written notice specifying the intention to propose the
resolution as a special resolution must be given.

6.2 Options

`(a)` Entitlement

Each Option entitles the holder to subscribe for one Share upon exercise
of the Option.

`(b)` Exercise Price

Subject to paragraph (j), the amount payable upon exercise of each Option will be $0.06 ( Exercise Price ).

`(c)` Expiry Date

Each Option will expire at 5:00 pm (WST) on 31 January 2017 ( Expiry Date ). An Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

`(d)` Exercise Period

The Options are exercisable at any time on or prior to the Expiry Date ( Exercise Period ).

`(e)` Notice of Exercise

The Options may be exercised during the Exercise Period by notice in writing to the Company in the manner specified on the Option certificate ( Notice of Exercise ) and payment of the Exercise Price for each Option being exercised in Australian currency by electronic funds transfer or other means of payment acceptable to the Company.

`(f)` Exercise Date

A Notice of Exercise is only effective on and from the later of the date of receipt of the Notice of Exercise and the date of receipt of the payment of the Exercise Price for each Option being exercised in cleared funds ( Exercise Date ).

`(g)` Timing of issue of Shares on exercise

Within 15 Business Days after the later of the following:

(i) the Exercise Date; and
(ii) when excluded information in respect to the Company (as defined in section 708A(7) of the Corporations Act) (if any) ceases to be excluded information,

but in any case no later than 20 Business Days after the Exercise Date,
the Company will:

(iii) allot and issue the number of Shares required under these terms and conditions in respect of the number of Options specified in the Notice of Exercise and for which cleared funds have been received by the Company;
(iv) if required, give ASX a notice that complies with section 708A(5)(e) of the Corporations Act, or, if the Company is unable to issue such a notice, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors; and
(v) if admitted to the official list of ASX at the time, apply for official quotation on ASX of Shares issued pursuant to the exercise of the Options.

If a notice delivered under (g)(iv) for any reason is not effective to
ensure that an offer for sale of the Shares does not require disclosure to
investors, the Company must, no later than 20 Business Days after
becoming aware of such notice being ineffective, lodge with ASIC a
prospectus prepared in accordance with the Corporations Act and do
all such things necessary to satisfy section 708A(11) of the Corporations
Act to ensure that an offer for sale of the Shares does not require
disclosure to investors.

`(h)` Shares issued on exercise

Shares issued on exercise of the Options rank equally with the then
issued shares of the Company.

`(i)` Quotation of Shares issued on exercise

If admitted to the official list of ASX at the time, application will be made
by the Company to ASX for quotation of the Shares issued upon the
exercise of the Options.

`(j)` Reconstruction of capital

If at any time the issued capital of the Company is reconstructed, all
rights of an Optionholder are to be changed in a manner consistent
with the Corporations Act and the ASX Listing Rules at the time of the
reconstruction.

`(k)` Participation in new issues

There are no participation rights or entitlements inherent in the Options
and holders will not be entitled to participate in new issues of capital
offered to Shareholders during the currency of the Options without
exercising the Options.

`(l)` Change in exercise price

An Option does not confer the right to a change in Exercise Price or a
change in the number of underlying securities over which the Option
can be exercised.

`(m)` Quotation

The Company will apply for quotation of the Options on ASX.

`(n)` Transferability

The Options are transferable subject to any restriction or escrow
arrangements imposed by ASX or under applicable Australian securities
laws.

7. RISK FACTORS

7.1 Introduction

The Securities offered under this Prospectus are considered highly speculative.
An investment in the Company is not risk free and the Directors strongly
recommend potential investors to consider the risk factors described below,
together with information contained elsewhere in this Prospectus and to consult
their professional advisers before deciding whether to apply for Securities
pursuant to this Prospectus.

There are specific risks which relate directly to the Company’s business.  In
addition, there are other general risks, many of which are largely beyond the
control of the Company and the Directors.  The risks identified in this section, or
other risk factors, may have a material impact on the financial performance of
the Company and the market price of the Securities.

The following is not intended to be an exhaustive list of the risk factors to which
the Company is exposed.

7.2 Company specific

`(a)` Settlement Risk

The Company announced on 24 December 2013 that it had entered
into the Farmin and Joint Venture Agreement to acquire the right to
earn up to a 75% interest in the Birsok bauxite project in Cameroon
through the earning of an interest in Avance African Group Ltd.
Settlement is intended to occur after the Closing Date of the Prospectus.

Settlement of the Farmin and Joint Venture Agreement is subject to the
satisfaction of certain conditions that remain outstanding as at the date
of this Prospectus, including the receipt of approval of the Company’s
Shareholders at a general meeting to be held in early February 2014.
There is therefore a risk that settlement may not occur. A summary of the
terms of the Farmin and Joint Venture Agreement is contained in section
8.4.1 of this Prospectus. Were settlement not to occur and the Farmin
and Joint Venture Agreement be terminated, the Company would not
have the right to earn any interest in the Birsok bauxite project and
would continue to focus on its existing gold exploration assets in Burkina
Faso. Regardless of whether settlement of the Farmin and Joint Venture
Agreement occurs, the Offer will proceed. The Directors do not have
any current information that would indicate to them that settlement will
not occur under the Farmin and Joint Venture Agreement.

`(b)` Potential for significant dilution

Upon implementation of the Offer, assuming all Entitlements are
accepted and no Options are exercised prior to the Record Date the
number of Shares in the Company will increase from 71,506,962 currently
on issue to 107,260,443.  This means that each Share will represent a
significantly lower proportion of the ownership of the Company.

It is not possible to predict what the value of the Company or a Share
will be following the completion of the Offer being implemented and
the Directors do not make any representation as to such matters.

The last trading price of Shares on ASX prior to the prospectus being
lodged of $0.06 is not a reliable indicator as to the potential trading
price of Shares after implementation of the Offer. Based on the last
trading price of Shares on ASX, the Offer price of $0.045 represents a
discount of 25%.

In addition to the 25% discount, Shareholders who participate in Offer
will receive one (1) free attaching New Option for every two (2) Shares
subscribed and issued under the Offer.

`(c)`

Requirement for additional funding

Following settlement of the Farmin and Joint Venture Agreement, the
Company is required to spend at $2,000,000 to earn its initial 51% interest
under that Farmin and Joint Venture Agreement. The amount raised
and allocated toward exploration on the Birsok bauxite project is not
sufficient to satisfy this expenditure requirement and the Company may
likely need to raise additional funds to ensure that it can satisfy the earn
in requirement under the Farmin and Joint Venture Agreement.
Depending on the terms and structure of any further capital raising, the
interests of Shareholders could be further diluted. However, under the
Farmin and Joint Venture Agreement, the Company has the right to
control its expenditure on the Birsok bauxite project and it is therefore
likely that any further capital raising would be subject to exploration
success and the decision of the Board to proceed to earn the 51%
interest under the Farmin and Joint Venture Agreement.

`(d)` Cameroon and Burkina Faso (general)

Some of the Company’s projects are located in Burkina Faso and
Cameroon which are considered to be developing countries and as
such subject to emerging legal and political systems compared with the
system in place in Australia.

Possible sovereign risks include, without limitation, changes in the terms
of mining legislation including renewal and continuity of tenure of
permits, transfer of ownership of acquired permits to the Company,
changes to royalty arrangements, changes to taxation rates and
concessions, restrictions on foreign ownership and foreign exchange,
changing political conditions, changing mining and investment policies,
and changes in the ability to enforce legal rights.

Future operations and profitability in Burkina Faso and Cameroon may
be affected by changing government regulations with respect to, but
not limited to, restrictions on production; price controls; export controls;
currency remittance; income taxes; foreign investment; maintenance of
claims; environmental legislation; land use; land claims of local people;
water use; mine safety; and Government and local participation. Failure
to comply strictly with applicable laws, regulations and local practices
relating to mineral tenure and development could result in the loss,
reduction or expropriation of entitlements. The occurrence of these and
other various factors cannot be accurately predicted and could have
an adverse effect on the Company’s future operations and profitability.

Any of these factors may, in the future, adversely affect the financial
performance of the Company and the market price of its shares.

No assurance can be given regarding future stability in these or any
other country in which the Company may have an interest.

`(e)`

Civil Unrest

The regions of Northern and Western Africa, where the Company’s
projects and operations are (or will be) located, have recently
experienced elements of civil unrest and what have been described as
terrorist activities and insurgencies. These activities have occurred in
countries that border both Burkina Faso and Cameroon. In particular
Mali, to the north of Burkina Faso has experienced significant unrest and
Nigeria to the north of Cameroon and the Central African Republic to
the east of Cameroon have both had recent incidents of civil unrest or
terrorist activity.

No assurance can be given that such activities will not cross over the
border into Burkina Faso or Cameroon or that insurgents may attempt to
create unrest in neighbouring countries, including Burkina Faso and
Cameroon.

The Company undertakes all prudent and recommended actions to
ensure that its employees and contractors operating in the region are
kept safe from such activities and insurgencies.

`(f)` Exploration costs

The exploration costs of the Company are based on certain
assumptions with respect to the method and timing of exploration.  By
their nature, these estimates and assumptions are subject to significant
uncertainties and, accordingly, the actual costs may materially differ
from these estimates and assumptions.  Accordingly, no assurance can
be given that the cost estimates and the underlying assumptions will be
realised in practice, which may materially and adversely affect the
Company’s viability.

`(g)` Joint Venture Risk

Assuming settlement occurs under the Farmin and Joint Venture
Agreement, following the completion of the Company’s earn in
obligations to earn up to a 75% interest in Avance African Group Ltd,
the company will be a party to an incorporated joint venture for the
management of the Birsok bauxite project. The Company may then be
subject to the risk that changes in the status of the Company’s joint
venture partner or the relationship it shares with its joint venture partner
may adversely affect the operations and performance of the
Company.

`(h)` Mine development

Possible future development of a mining operation at any of the
Company’s projects is dependent on a number of factors including, but
not limited to, the acquisition and/or delineation of economically
recoverable mineralisation, favourable geological conditions, receiving
the necessary approvals from all relevant authorities and parties,
seasonal weather patterns, unanticipated technical and operational
difficulties encountered in extraction and production activities,
mechanical failure of operating plant and equipment, shortages or
increases in the price of consumables, spare parts and plant and

equipment, cost overruns, access to the required level of funding and
contracting risk from third parties providing essential services.

If the Company commences production, its operations may be
disrupted by a variety of risks and hazards which are beyond its control,
including environmental hazards, industrial accidents, technical failures,
labour disputes, unusual or unexpected rock formations, flooding and
extended interruptions due to inclement of hazardous weather
conditions and fires, explosions or accidents.  No assurance can be
given that the Company will achieve commercial viability through the
development or mining of its projects and treatment of ore.

`(i)`

Operations

The operations of the Company may be affected by various factors,
including failure to locate or identify mineral deposits, failure to achieve
predicted grades in exploration and mining, operational and technical
difficulties encountered in mining, difficulties in commissioning and
operating plant and equipment, mechanical failure or plant
breakdown, unanticipated metallurgical problems which may affect
extraction costs, adverse weather conditions, industrial and
environmental accidents, industrial disputes and unexpected shortages
or increases in the costs of consumables, spare parts, plant and
equipment.

No assurances can be given that the Company will achieve
commercial viability through the successful exploration and/or mining of
its mining permits and tenements.  Until the Company is able to realise
value from its projects, it is likely to incur ongoing operating losses.

`(j)`

Exploration success

The mining permits and tenements comprising the Company’s projects
are at various stages of exploration, and potential investors should
understand that mineral exploration and development are high-risk
undertakings.

There can be no assurance that exploration of the mining permits and
tenements, or any other licenses that may be acquired in the future, will
result in the discovery of an economic ore deposit.  Even if an
apparently viable deposit is identified, there is no guarantee that it can
be economically exploited.

`(k)` Infrastructure Access and Suitability Risk

The successful development of the Company’s bauxite project in
Cameroon (subject to settlement of the transaction and the Company
meeting the requirements to earn its interest) is dependent on the
availability of and access to sufficient and suitable infrastructure such as
rail and road networks, ports, power and water infrastructure with the
capacity to support its planned operations. The availability and costs of
this infrastructure affect capital and operating costs and the
Company’s ability to maintain anticipated levels of production and
sales. Limitations or interruptions in rail or shipping capacity could disrupt
the Company’s ability to deliver its products on time. This could have a
material adverse effect on the Company’s business, results of
operations, financial condition and prospects.

7.3 Industry specific

`(a)` Environmental

The operations and proposed activities of the Company are subject to
laws and regulations concerning the environment.  As with most
exploration projects and mining operations, the Company’s activities
are expected to have an impact on the environment, particularly if
advanced exploration or mine development proceeds.  It is the
Company’s intention to conduct its activities to the highest standard of
environmental obligation, including compliance with all environmental
laws.

Events, such as unpredictable rainfall or bushfires may impact on the
Company’s ongoing compliance with environmental legislation,
regulations and licences.  Significant liabilities could be imposed on the
Company for damages, clean up costs or penalties in the event of
certain discharges into the environment, environmental damage
caused by previous operations or non-compliance with environmental
laws or regulations.
The disposal of mining and process waste and mine water discharge are
under constant legislative scrutiny and regulation.  There is a risk that
environmental laws and regulations become more onerous making the
Company’s operations more expensive.

`(b)` Exploration

The future exploration activities of the Company may be affected by a
range of factors including geological conditions, limitations on activities
due to seasonal weather patterns, unanticipated operational and
technical difficulties, industrial and environmental accidents, native title
process, changing government regulations and many other factors
beyond the control of the Company.

The success of the Company will also depend upon the Company
having access to sufficient development capital, being able to
maintain title to its mining permits and tenements and obtaining all
required approvals for its activities.  In the event that exploration
programmes prove to be unsuccessful this could lead to a diminution in
the value of the mining permits and tenements, a reduction in the case
reserves of the Company and possible relinquishment of the mining
permits and tenements.

The exploration costs of the Company are based on certain
assumptions with respect to the method and timing of exploration.  By
their nature, these estimates and assumptions are subject to significant
uncertainties and, accordingly, the actual costs may materially differ
from these estimates and assumptions.  Accordingly, no assurance can
be given that the cost estimates and the underlying assumptions will be
realised in practice, which may materially and adversely affect the
Company’s viability.

`(c)` Resource estimates

The Company does not presently have any JORC Code compliant
resources on the mining permits and tenements.  In the event a resource
is delineated this would be an estimate only.  An estimate is an

expression of judgement based on knowledge, experience and industry
practice.  Estimates which were valid when originally calculated may
alter significantly when new information or techniques become
available.  In addition, by their very nature, resource estimates are
imprecise and depend to some extent on interpretations, which may
prove to be inaccurate.  As further information becomes available
through additional fieldwork and analysis, the estimates are likely to
change.  This may result in alterations to development and mining plans
which may, in turn, adversely affect the Company’s operations.

`(d)` Commodity price volatility and exchange rate risks

If the Company achieves success leading to mineral production, the
revenue it will derive through the sale of commodities exposes the
potential income of the Company to commodity price and exchange
rate risks.  Commodity prices fluctuate and are affected by many
factors beyond the control of the Company.  Such factors include
supply and demand fluctuations for precious metals, base metals and
bulk commodities technological advancements, forward selling
activities and other macro-economic factors.

Furthermore, international prices of various commodities are
denominated in United States dollars and both the Cameroon and
Burkina Faso currencies are ‘pegged’ to the Euro, whereas the income
and expenditure of the Company are and will be taken into account in
Australian currency, exposing the Company to the fluctuations and
volatility of the rate of exchange between the United States dollar or
Euro against the Australian dollar as determined ininternational markets.

7.4 General risks

`(a)` Economic

General economic conditions, movements in interest and inflation rates
and currency exchange rates may have an adverse effect on the
Company’s exploration, development and production activities, as well
as on its ability to fund those activities.

`(b)`

Market conditions

Share market conditions may affect the value of the Company’s
quoted securities regardless of the Company’s operating performance.
Share market conditions are affected by many factors such as:

(i) general economic outlook;
(ii) introduction of tax reform or other new legislation;
(iii) interest rates, inflation rates and currency fluctuations;
(iv) changes in investor sentiment toward particular market sectors;
(v) the demand for, and supply of, capital; and
(vi) terrorism or other hostilities.

The market price of securities can fall as well as rise and may be subject
to varied and unpredictable influences on the market for equities in

general and resource exploration stocks in particular.  Neither the
Company nor the Directors warrant the future performance of the
Company or any return on an investment in the Company.

`(c)`

Force Majeure

The Company’s projects now or in the future may be adversely affected
by risks outside the control of the Company including labour unrest, civil
disorder, war, subversive activities or sabotage, fires, floods, explosions or
other catastrophes, epidemics or quarantine restrictions.

`(d)` Litigation Risks

The Company is exposed to possible litigation risks including native title
claims, tenure disputes, environmental claims, contractual disputes,
occupational health and safety claims and employee claims.  Further,
the Company may be involved in disputes with other parties in the
future which may result in litigation.  Any such claim or dispute if proven,
may impact adversely on the Company’s operations, financial
performance and financial position.  The Company is not currently
engaged in any litigation.

`(e)` Risk of international operations generally

International sales and operations are subject to a number of risks,
including:

(i) potential difficulties in enforcing agreements (including joint venture agreements) and collecting receivables through foreign local systems;
(ii) potential difficulties in protecting intellectual property;
(iii) increases in costs for transportation and shipping; and
(iv) restrictive governmental actions, such as imposition of trade quotas, tariffs and other taxes.

Any of these factors could materially and adversely affect the
Company’s business, results of operations and financial condition.

`(f)`

Government policy changes

Adverse changes in government policies or legislation may affect
ownership of mineral interests, taxation, royalties, land access, labour
relations, and mining and exploration activities of the Company.  It is
possible that the current system of exploration and mine permitting in
which the Company’s projects are located may change, resulting in
impairment of rights and possibly expropriation of the Company’s
mining interests without adequate compensation.

`(g)` Additional requirements for capital

The Company’s capital requirements depend on numerous factors.
Depending on the Company’s ability to generate income from its
operations, the Company may require further financing in addition to
amounts raised under the Offer.  Any additional equity financing will
dilute shareholdings, and debt financing, if available, may involve

restrictions on financing and operating activities.  If the Company is
unable to obtain additional financing as needed, it may be required to
reduce the scope of its operations and scale back its exploration
programmes as the case may be.  There is however no guarantee that
the Company will be able to secure any additional funding or be able
to secure funding on terms favourable to the Company.

`(h)` Insurance risks

The Company intends to insure its operations in accordance with
industry practice.  However, in certain circumstances, the Company’s
insurance may not be of a nature or level to provide adequate
insurance cover.  The occurrence of an event that is not covered or fully
covered by insurance could have a material adverse effect on the
business, financial condition and results of the Company.

Insurance against all risks associated with mining exploration and
production is not always available and where available the costs can
be prohibitive.

`(i)` Competition risk

The industry in which the Company will be involved is subject to
domestic and global competition.  Although the Company will
undertake all reasonable due diligence in its business decisions and
operations, the Company will have no influence or control over the
activities or actions of its competitors, which activities or actions may,
positively or negatively, affect the operating and financial performance
of the Company’s projects and business.

`(j)`

Dividends

Any future determination as to the payment of dividends by the
Company will be at the discretion of the Directors and will depend on
the financial condition of the Company, future capital requirements
and general business and other factors considered relevant by the
Directors.  No assurance in relation to the payment of dividends or
franking credits attaching to dividends can be given by the Company.

`(k)` Taxation

The acquisition and disposal of Shares will have tax consequences,
which will differ depending on the individual financial affairs of each
investor.  All potential investors in the Company are urged to obtain
independent financial advice about the consequences of acquiring
Shares from a taxation viewpoint and generally.

To the maximum extent permitted by law, the Company, its officers and
each of their respective advisors accept no liability and responsibility
with respect to the taxation consequences of subscribing for Shares
under this Prospectus.

`(l)` Reliance on key personnel

The responsibility of overseeing the day-to-day operations and the
strategic management of the Company depends substantially on its
senior management and its key personnel.  There can be no assurance

given that there will be no detrimental impact on the Company if one or
more of these employees cease their employment.

7.5 Speculative investment

The above list of risk factors ought not to be taken as exhaustive of the risks
faced by the Company or by investors in the Company.  The above factors, and
others not specifically referred to above, may in the future materially affect the
financial performance of the Company and the value of the Securities offered
under this Prospectus

Therefore, the Securities to be issued pursuant to this Prospectus carry no
guarantee with respect to the payment of dividends, returns of capital or the
market value of those Securities.

Potential investors should consider that the investment in the Company is
speculative and should consult their professional advisers before deciding
whether to apply for Securities pursuant to this Prospectus.

8. ADDITIONAL INFORMATION

8.1 Litigation

As at the date of this Prospectus, the Company is not involved in any legal
proceedings and the Directors are not aware of any legal proceedings pending
or threatened against the Company.

8.2 Continuous disclosure obligations

The Company is a “disclosing entity” (as defined in section 111AC of the
Corporations Act) for the purposes of section 713 of the Corporations Act and,
as such, is subject to regular reporting and disclosure obligations.  Specifically,
like all listed companies, the Company is required to continuously disclose any
information it has to the market which a reasonable person would expect to
have a material effect on the price or the value of the Company’s securities.

This Prospectus is a “transaction specific prospectus”.  In general terms a
“transaction specific prospectus” is only required to contain information in
relation to the effect of the issue of securities on a company and the rights
attaching to the securities.  It is not necessary to include general information in
relation to all of the assets and liabilities, financial position, profits and losses or
prospects of the issuing company.

This Prospectus is intended to be read in conjunction with the publicly available
information in relation to the Company which has been notified to ASX and does
not include all of the information that would be included in a prospectus for an
initial public offering of securities in an entity that is not already listed on a stock
exchange.  Investors should therefore have regard to the other publicly
available information in relation to the Company before making a decision
whether or not to invest.

Having taken such precautions and having made such enquires as are
reasonable, the Company believes that it has complied with the general and
specific requirements of ASX as applicable from time to time throughout the 3
months before the issue of this Prospectus which required the Company to notify
ASX of information about specified events or matters as they arise for the
purpose of ASX making that information available to the stock market
conducted by ASX.

Information that is already in the public domain has not been reported in this
Prospectus other than that which is considered necessary to make this
Prospectus complete.

The Company, as a disclosing entity under the Corporations Act states that:

(a) it is subject to regular reporting and disclosure obligations;
(b) copies of documents lodged with the ASIC in relation to the Company (not being documents referred to in section 1274(2)(a) of the Corporations Act) may be obtained from, or inspected at, the offices of the ASIC; and

(c) it will provide a copy of each of the following documents, free of charge, to any person on request between the date of issue of this Prospectus and the Closing Date:
(i) the annual financial report most recently lodged by the Company with the ASIC;
(ii) any half-year financial report lodged by the Company with the ASIC after the lodgement of the annual financial report referred to in (i) and before the lodgement of this Prospectus with the ASIC; and
(iii) any continuous disclosure documents given by the Company to ASX in accordance with the ASX Listing Rules as referred to in section 674(1) of the Corporations Act after the lodgement of the annual financial report referred to in (i) and before the lodgement of this Prospectus with the ASIC.

Copies of all documents lodged with the ASIC in relation to the Company can
be inspected at the registered office of the Company during normal office
hours.

Details of documents lodged by the Company with ASX since the date of
lodgement of the Company’s latest annual financial report and before the
lodgement of this Prospectus with the ASIC are set out in the table below.

Date	Description of Announcement
`24/12/2013`	`Canyon to Acquire Major Interest in Cameroon Bauxite` `Project`
`23/12/2013`	`Trading Halt`
`20/12/2013`	`RTR: New Gold Discovery at Derosa Project Burkina Faso`
`29/11/2013`	`Information Require Under Listing Rule 3.10.5A`
`18/11/2013`	`Results of Meeting`
`08/11/2013`	`Facsimile Number for Proxy Forms`
`30/10/2013`	`Quarterly Activities Report`
`30/10/2013`	`Quarterly Cashflow Report`
`17/10/2013`	`Notice of Annual General Meeting/Proxy Form`
`17/10/2013`	`RTR: Derosa Project Update`

ASX maintains files containing publicly available information for all listed
companies.  The Company’s file is available for inspection at ASX during normal
office hours.

The announcements are also available through the Company’s website
www.canyonresources.com.au.

8.3 Market price of shares

The Company is a disclosing entity for the purposes of the Corporations Act and
its Shares are enhanced disclosure securities quoted on ASX.

The highest, lowest and last market sale prices of the Shares on ASX during the

three months immediately preceding the date of lodgement of this Prospectus
with the ASIC and the respective dates of those sales were:

`Highest`	`$0.075`	`7,`	`8, 17 & 18 October 2013`
`Lowest`	`$0.058`		`16 & 17 December 2013`
`Last`	`$0.06`		`23 December 2013`

8.4 Material contracts

The following are summaries of the significant terms of the material agreements
which relate to the business of the Company.

8.4.1 Farmin and Joint Venture Agreement

As announced on 24 December 2013, the Company has entered into a farmin and joint venture agreement ( Farmin and Joint Venture Agreement ) with Alures Mining Limited ( Alures ), Avance African Group Limited ( Avance ) and certain wholly owned subsidiaries of Altus Strategies Ltd, to acquire up to a 75% interest in the Birsok Licence and the Mandoum Licence (together the Projects ) by acquiring up to a 75% interest in Avance ( Transaction ) on the following material terms and conditions:

(a) ( Conditions Precedent ): the Farmin and Joint Venture Agreement is conditional on the satisfaction (or waiver) of the following outstanding conditions to be satisfied by 30 April 2014:
(i) the Company obtaining all necessary shareholder approvals required to issue the Initial Consideration Shares (as defined below) and any other approvals required by ASX;
(ii) the Company and Alures obtaining, in a form reasonably satisfactory to the Company and Alures respectively, all statutory and regulatory approvals and any other third party consents or waivers which are necessary or desirable to complete the Transaction (including any Australian and/or Cameroon Government approvals or other approvals required by Alures and the Company so that they will collectively hold a 100% interest in Avance, or its affiliates or subsidiary holding a 100% interest in the Projects);
(iii) the absence of any material adverse change in the financial and operational condition or the assets of either of the parties; and
(iv) the renewal of the Birsok Licence.
(b) ( Consideration ): The consideration payable by the Company for the right to earn up to a 75% interest in Avance will be:
(i) on the date that is 5 business days after the satisfaction of the last of the Conditions Precedent, the issue of 8,000,000 fully paid ordinary shares in the Company ( Initial Consideration Shares ) to Alures (or their nominee);
(ii) upon the definition of a minimum 150Mt JORC compliant resource with a minimum grade of 45% Al2O3 and a maximum of 2% reactive SiO2 (as opposed to total SiO2 content), while

the Company still has an interest in Avance or the Projects ( Milestone A ), the further issue of $1.5m worth of fully paid ordinary shares in the Company ( Milestone A Shares ) at a deemed issue price equal to the 45 trading day volume weighted average price of the Company’s ordinary shares trading on ASX ending on the day immediately prior to the date of satisfaction of Milestone A. The Company is required to provide a range of grades, one of which is to test whether the resource or a portion of the resource meets the Milestone A criteria; and

(iii) upon the completion of a feasibility study (to a bankable or definitive level), the grant of a mining lease on at least one of the Projects, and the completion of a capital raising by the Company to provide for 100% of the Company’s required capital expenditure required to reach first production of bauxite from the Projects, the further issue of $1.5m worth of fully paid ordinary shares in the Company ( Milestone B Shares ) to be issued at the same price as that capital raising ( Milestone B ).

Where Milestone B is achieved, but not Milestone A, then the Company
will issue Alures (in addition to the Milestone B Shares) 50% of those
Milestone A Shares that would have been issued under Milestone A at
the same price as the capital raising.

(c) ( Voluntary Escrow ): The Initial Consideration Shares will be subject to a voluntary escrow until the earlier of:
(i) the date the Company completes the requirements to earn its initial 51% interest in Avance (as set out below); and
(ii) 1 year from the date of issue of the Initial Consideration Shares.
(d) ( Initial Interest ): Following the issue of the Initial Consideration Shares, the Company will earn a 51% Interest ( Initial Interest ) by sole funding $2,000,000 worth of expenditure incurred by Avance in connection with the activities of Avance (including, amongst other things, costs of exploration on the Licences) ( Avance Expenditure ) (in aggregate), which work must include a minimum of 10,000m of aircore drilling or equivalent expenditure on RC or diamond drilling and initial metallurgical test work) ( Initial Interest Commitment ) within 2 years of the Initial Interest Date ( Initial Interest Commitment Period ).
(e) ( Additional Interest ): Subject to the Company earning the Initial Interest, the Company may, at its sole discretion, but by no later than 30 days following the date it receives its Initial Interest, notify Avance and Alures in writing of its intention to acquire a further 24% interest in Avance ( Additional Interest ) (free from encumbrances). Upon receipt of such notice, and in order to earn the Additional Interest, Canyon will be required to sole fund a further $4,000,000 of Avance Expenditure which must include funding of a pre-feasibility study commissioned by the Company ( Additional Interest Commitment ) within 3 years following the date it receives its Initial Interest ( Additional Interest Commitment Period ).

(f) ( Board Appointments ): From the date of the issue by the Company of the Initial Consideration Shares the Company:

(i) has the right to appoint such number of directors to Avance and the company holding the registered title to the Projects ( Subsidiary Company ) such that nominees of the Company make up the majority of the directors of Avance and the Subsidiary Company; and
(ii) agrees to invite Alures, subject to the satisfaction of the Conditions Precedent above, to nominate one nominee for appointment to the Company’s Board.
(g) ( Right of Withdrawal ): The Company must spend a minimum of $500,000 during the Initial Interest Commitment Period before it may elect to withdraw from its obligations pursuant to the Transaction. After the Initial Interest Commitment Period has expired, either party may withdraw from the joint venture at any time by notice in writing to the other party. Upon withdrawal, the withdrawing party shall absolutely forfeit and be deemed to have assigned to the other party all its interest in Avance.
(h) ( First Right of Refusal ): if either the Company or Alures wish to assign any or all of its interest in Avance to a third party, the assigning party must first offer to assign such interest to the non-assigning party.
(i) ( Termination ): The Farmin and Joint Venture Agreement will automatically terminate:
(i) on the date on which all parties agree in writing to terminate the agreement;
(ii) the date on which a shareholder in Avance disposes of its entire interest in the securities of Avance;
(iii) on the date Avance is wound up; or
(iv) on the date on which one person become the beneficial owner of all of the fully paid ordinary shares in the capital of Avance.
(j) ( Warranties ): each party provides warranties to the other party which are standard in agreements of this nature; and
(k) ( Governing Law ): The Farmin and Joint Venture Agreement is governed by the laws of Western Australia.

8.4.2 Corporate Advisory Mandate

The Company has entered into a mandate with Hartleys Limited ( Hartleys ), pursuant to which Hartleys provides corporate advice and capital raising services to the Company ( Mandate ).

Pursuant to the Mandate, the Company is obligated to pay to Hartleys a fee of
6% of the amount subscribed under any capital raising.

8.5 Interests of Directors

Other than as set out in this Prospectus, no Director or proposed Director holds,
or has held within the 2 years preceding lodgement of this Prospectus with the
ASIC, any interest in:

(a) the formation or promotion of the Company;
(b) any property acquired or proposed to be acquired by the Company in connection with:
(i) its formation or promotion; or
(ii) the Offer; or
(c) the Offer,

and no amounts have been paid or agreed to be paid and no benefits have
been given or agreed to be given to a Director or proposed Director:

(a) as an inducement to become, or to qualify as, a Director; or
(b) for services provided in connection with:
(i) the formation or promotion of the Company; or
(ii) the Offer.

`Security holdings`

The relevant interest of each of the Directors in the securities of the Company as
at the date of this Prospectus, together with their respective Entitlement, is set
out in the table below.

Director	Shares	Options	Entitlement	$
`Rhoderick Grivas`	`1,665,385`	`115,3851`	`832,692`	`37,471`
`Phillip Gallagher`	`1,520,001`	`20,0001`	`760,000`	`34,200`
`Matthew Shackleton`	`1,655,001`	`20,0001`	`827,500`	`37,237`

Note

1. Quoted Options exercisable at $0.16 on or before 29 February 2016.

`Remuneration`

The remuneration of an executive Director is decided by the Board, without the
affected executive Director participating in that decision-making process.  The
total maximum remuneration of non-executive Directors is set at such amount as
is determined by ordinary resolution of Shareholders in general meeting in
accordance with the Constitution, the Corporations Act and the ASX Listing
Rules, as applicable. The determination of non-executive Directors’
remuneration within that maximum will be made by the Board having regard to
the inputs and value to the Company of the respective contributions by each
non-executive Director.  The current amount has been set at an amount not to
exceed $300,000 per annum.

A Director may be paid fees or other amounts (ie non-cash performance
incentives such as Options, subject to any necessary Shareholder approval) as
the other Directors determine where a Director performs special duties or
otherwise performs services outside the scope of the ordinary duties of a
Director.  In addition, Directors are also entitled to be paid reasonable travelling
and other expenses incurred by them respectively in or about the performance
of their duties as Directors.

The following table shows the total (and proposed) annual remuneration paid to
both executive and non-executive directors.

Director	FY14	FY13	FY12
`Rhoderick Grivas`	`$131,100`	`$99,9171`	`$54,500`
`Phillip Gallagher`	`$202,112`	`$250,700`	`$237,075`
`Matthew Shackleton`	`$43,600`	`$48,6002`	`$48,6002`

Note

1. Prior to 1 February 2013 Mr Grivas was a Non-Executive Director.

2. Includes consulting fees of $5,000 paid for financial management services.

8.6 Interests of experts and advisers

Other than as set out below or elsewhere in this Prospectus, no:

(a) person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Prospectus;
(b) promoter of the Company; or
(c) underwriter (but not a sub-underwriter) to the issue or a financial services licensee named in this Prospectus as a financial services licensee involved in the issue,

holds, or has held within the 2 years preceding lodgement of this Prospectus with
the ASIC, any interest in:

(a) the formation or promotion of the Company;
(b) any property acquired or proposed to be acquired by the Company in connection with:
(i) its formation or promotion; or
(ii) the Offer; or
(c) the Offer,

and no amounts have been paid or agreed to be paid and no benefits have
been given or agreed to be given to any of these persons for services provided
in connection with:

(d) the formation or promotion of the Company; or
(e) the Offer.

Hartleys Limited will be paid a fee equal to 6% of all funds raised under the Offer
(being a maximum of $96,535) for acting as Corporate Adviser to the Company
in respect of the Offer.  During the 24 months preceding lodgement of this
Prospectus with the ASIC, Hartleys Limited has been paid fees totalling $378,412
by the Company.

Steinepreis Paganin has acted as the solicitors to the Company in relation to the
Offer.  The Company estimates it will pay Steinepreis Paganin $15,000 (excluding
GST and disbursements) for these services.  During the 24 months preceding
lodgement of this Prospectus with the ASIC, Steinepreis Paganin has been paid
fees totalling $ 121,524.52  (including GST and disbursements) for legal services
provided to the Company.

8.7 Consents

Each of the parties referred to in this section:

(a) does not make, or purport to make, any statement in this Prospectus other than those referred to in this section;
(b) to the maximum extent permitted by law, expressly disclaim and take no responsibility for any part of this Prospectus other than a reference to its name and a statement included in this Prospectus with the consent of that party as specified in this section;
(c) Hartleys Limited has given its written consent to being named as Corporate Adviser in this Prospectus, in the form and context in which it is named. Hartleys Limited has not withdrawn its consent prior to the lodgement of this Prospectus with the ASIC; and
(d) Steinepreis Paganin has given its written consent to being named as the solicitors to the Company in this Prospectus. Steinepreis Paganin has not withdrawn its consent prior to the lodgement of this Prospectus with the ASIC.

8.8 Expenses of the offer

In the event that all Entitlements are accepted, the total expenses of the Offer
are estimated to be approximately $134,000 (excluding GST) and are expected
to be applied towards the items set out in the table below:

`ASIC fees` `ASX fees` `Manager to the offer fees` `Legal fees` `Printing and distribution` `Miscellaneous` Total	$ `2,225` `10,330` `96,534` `15,000` `3,500` `6,411`
	`134,000`

8.9 Electronic prospectus

Pursuant to Class Order 00/44, the ASIC has exempted compliance with certain
provisions of the Corporations Act to allow distribution of an electronic
prospectus and electronic application form on the basis of a paper prospectus
lodged with the ASIC, and the publication of notices referring to an electronic
prospectus or electronic application form, subject to compliance with certain
conditions.

If you have received this Prospectus as an electronic Prospectus, please ensure
that you have received the entire Prospectus accompanied by the Application
Forms.  If you have not, please phone the Company on +61 8 9413 7300 and the
Company will send you, for free, either a hard copy or a further electronic copy
of the Prospectus, or both.  Alternatively, you may obtain a copy of this
Prospectus from the Company’s website at www.canyonresources.com.au.

The Company reserves the right not to accept an Application Form from a
person if it has reason to believe that when that person was given access to the
electronic Application Form, it was not provided together with the electronic
Prospectus and any relevant supplementary or replacement prospectus or any
of those documents were incomplete or altered.

8.10 Financial forecasts

The Directors have considered the matters set out in ASIC Regulatory Guide 170
and believe that they do not have a reasonable basis to forecast future earnings
on the basis that the operations of the Company are inherently uncertain.
Accordingly, any forecast or projection information would contain such a broad
range of potential outcomes and possibilities that it is not possible to prepare a
reliable best estimate forecast or projection.

8.11 Clearing House Electronic Sub-Register System (CHESS) and Issuer Sponsorship

The Company will not be issuing share or option certificates.  The Company is a
participant in CHESS, for those investors who have, or wish to have, a sponsoring
stockbroker.  Investors who do not wish to participate through CHESS will be
issuer sponsored by the Company.  Because the sub-registers are electronic,
ownership of securities can be transferred without having to rely upon paper
documentation.

Electronic registers mean that the Company will not be issuing certificates to
investors.  Instead, investors will be provided with a statement (similar to a bank
account statement) that sets out the number of Shares issued to them under this
Prospectus.  The notice will also advise holders of their Holder Identification
Number or Security Holder Reference Number and explain, for future reference,
the sale and purchase procedures under CHESS and issuer sponsorship.

Further monthly statements will be provided to holders if there have been any
changes in their security holding in the Company during the preceding month.

8.12 Privacy Act

If you complete an application for Securities, you will be providing personal
information to the Company (directly or by the Company’s share registry).  The
Company collects, holds and will use that information to assess your application,
service your needs as a holder of equity securities in the Company, facilitate
distribution payments and corporate communications to you as a Shareholder
and carry out administration.

The information may also be used from time to time and disclosed to persons
inspecting the register, bidders for your securities in the context of takeovers,
regulatory bodies, including the Australian Taxation Office, authorised securities
brokers, print service providers, mail houses and the Company’s share registry.

You can access, correct and update the personal information that we hold
about you.  Please contact the Company or its share registry if you wish to do so
at the relevant contact numbers set out in this Prospectus.

Collection, maintenance and disclosure of certain personal information is governed by legislation including the Privacy Act 1988 (Cth) (as amended), the Corporations Act and certain rules such as the ASX Settlement Operating Rules. You should note that if you do not provide the information required on the application for Securities, the Company may not be able to accept or process your application.

9. DIRECTORS’ AUTHORISATION

This Prospectus is issued by the Company and its issue has been authorised by a
resolution of the Directors.

In accordance with section 720 of the Corporations Act, each Director has
consented to the lodgement of this Prospectus with the ASIC.

==> picture [51 x 55] intentionally omitted <==

_______________________________ Rhoderick Grivas Executive Chairman For and on behalf of Canyon Resources Limited

10. GLOSSARY

$ means the lawful currency of the Commonwealth of Australia.

Applicant means a Shareholder who applies for Shares pursuant to the Offer or a Shareholder or other party who applies for Shortfall Shares pursuant to the Shortfall Offer.

Application Form means an Entitlement and Acceptance Form or Shortfall Application Form as the context requires.

ASIC means the Australian Securities and Investments Commission.

ASX means ASX Limited (ACN 008 624 691) or the financial market operated by it as the context requires.

ASX Listing Rules means the listing rules of the ASX.

ASX Settlement Operating Rules means the settlement rules of the securities clearing house which operates CHESS.

Birsok bauxite project means the bauxite project located in Cameroon which is the subject of the Farmin and Joint Venture Agreement.

Board means the board of Directors unless the context indicates otherwise.

Business Day means Monday to Friday inclusive, except New Year’s Day, Good Friday, Easter Monday, Christmas Day, Boxing Day and any other day that ASX declares is not a business day.

Closing Date means the date specified in the timetable set out at the commencement of this Prospectus (unless extended).

Company means Canyon Resources Limited (ACN 140 087 261).

Constitution means the constitution of the Company as at the date of this Prospectus.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the directors of the Company as at the date of this Prospectus.

Entitlement means the entitlement of a Shareholder who is eligible to participate in the Offer.

Entitlement and Acceptance Form means the entitlement and acceptance form either attached to or accompanying this Prospectus.

Farmin and Joint Venture Agreement means the farmin and joint venture agreement between the Company, Alures Mining Ltd and Avance African Group Limited dated 23 December 2013.

New Option means an Option issued on the terms set out in section 6.2 of this

Prospectus.

Offer means the non-renounceable entitlement issue the subject of this Prospectus.

Official Quotation means official quotation on ASX.

Option means an option to acquire a Share.

Optionholder means a holder of an Option.

Prospectus means this prospectus.

Record Date means the date specified in the timetable set out at the commencement of this Prospectus.

Securities means Shares and/or New Options offered pursuant to the Entitlement.

Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a holder of a Share.

Shortfall means the Shares not applied for under the Offer (if any).

Shortfall Application Form means the shortfall application form either attached to or accompanying this Prospectus.

Shortfall Offer means the offer of the Shortfall on the terms and conditions set out in section 4.7 of this Prospectus.

Shortfall Securities means those Securities issued pursuant to the Shortfall.

WST means Western Standard Time as observed in Perth, Western Australia.

AI assistant

CANYON RESOURCES LIMITED — Capital/Financing Update 2013

64608_rns_2013-12-23_fefd7a32-c171-459b-98a2-8efeca327dc8.pdf

CANYON RESOUR C ES LIMITED ACN 140 087 261

ENTITLEMENT ISSUE PROSPECTUS

IMPORTANT NOTICE

CONTENTS

1. CORPORATE DIRECTORY

Directors

Registered Office

Company Secretary

Principle Office

Share Registry*

Solicitors

Auditor*

Corporate Adviser

2. TIMETABLE

3. IMPORTANT NOTES

3.1 Risk factors

4. DETAILS OF THE OFFER

4.1 The Offer

4.2 Minimum subscription

4.3 Acceptance

4.4 Payment by cheque/bank draft

4.5 Payment by BPAY®

4.6 Underwriting

4.7 Shortfall Offer

4.8 Effect on control of the Company

4.9 ASX listing

4.10 Issue

4.11 Overseas shareholders

4.12 Enquiries

5. PURPOSE AND EFFECT OF THE OFFER

5.1 Purpose of the Offer

Notes:

5.2 Effect of the Offer

5.3 Pro-forma consolidated statement of financial position

5.4 Effect on capital structure

Shares

Options

Convertible Securities

5.5 Details of substantial holders

6. RIGHTS AND LIABILITIES ATTACHING TO SECURITIES

6.1 Shares

(a) General meetings

(b) Voting rights

(c) Dividend rights

(d) Winding-up

(e) Shareholder liability

(f) Transfer of shares

(g) Future increase in capital

(i) Alteration of constitution

6.2 Options

(a) Entitlement

(b) Exercise Price

(c) Expiry Date

(d) Exercise Period

(e) Notice of Exercise

(f) Exercise Date

(g) Timing of issue of Shares on exercise

(h) Shares issued on exercise

(i) Quotation of Shares issued on exercise

(j) Reconstruction of capital

(k) Participation in new issues

(l) Change in exercise price

(m) Quotation

(n) Transferability

7. RISK FACTORS

7.1 Introduction

7.2 Company specific

(a) Settlement Risk

(b) Potential for significant dilution

(c)

Requirement for additional funding

(d) Cameroon and Burkina Faso (general)

(e)

Civil Unrest

(f) Exploration costs

(g) Joint Venture Risk

(h) Mine development

CANYON RESOURCES LIMITED Capital/Financing Update 2013

`(a)` General meetings

`(b)` Voting rights

`(c)` Dividend rights

`(d)` Winding-up

`(e)` Shareholder liability

`(f)` Transfer of shares

`(g)` Future increase in capital

`(i)` Alteration of constitution

`(a)` Entitlement

`(b)` Exercise Price

`(c)` Expiry Date

`(d)` Exercise Period

`(e)` Notice of Exercise

`(f)` Exercise Date

`(g)` Timing of issue of Shares on exercise

`(h)` Shares issued on exercise

`(i)` Quotation of Shares issued on exercise

`(j)` Reconstruction of capital

`(k)` Participation in new issues

`(l)` Change in exercise price

`(m)` Quotation

`(n)` Transferability

`(a)` Settlement Risk

`(b)` Potential for significant dilution

`(c)`

`(d)` Cameroon and Burkina Faso (general)

`(e)`

`(f)` Exploration costs

`(g)` Joint Venture Risk

`(h)` Mine development

`(i)`

`(j)`

`(k)` Infrastructure Access and Suitability Risk

`(a)` Environmental

`(b)` Exploration

`(c)` Resource estimates

`(d)` Commodity price volatility and exchange rate risks

`(a)` Economic

`(b)`

`(c)`

`(d)` Litigation Risks

`(e)` Risk of international operations generally

`(f)`

`(g)` Additional requirements for capital

`(h)` Insurance risks

`(i)` Competition risk

`(j)`

`(k)` Taxation

`(l)` Reliance on key personnel

`Security holdings`

`Remuneration`