CARNAVALE RESOURCES LIMITED — Capital/Financing Update 2014

Aug 4, 2014

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5 August 2014

The Manager ASX Market Announcements ASX Ltd Level 4, 20 Bridge Street Sydney, NSW 2000

COMPLETION OF FIRST TRANCHE OF CAPITAL RAISING AND BOARD CHANGE

Further to its announcement dated 30 July 2014, Carnavale Resources Ltd (ASX: CAV) confirms that Tranche 1 of the capital raising for 28,663,202 shares at a price of 1.5 cents each has been completed raising $429,948 .

28.66 million attaching options to be issued to the participants of the Tranche 1 placement and a further 5.997 million shares at 1.5 cents each together with 5.997 million free attaching options to be subscribed for by Mr Gajewski and Mr Beckwith will be issued, subject to shareholder approval at a meeting of shareholders to take place in September 2014.

The monies raised from the Tranche 1 capital raising will be used to fund the exploration commitment as part of the option agreement to acquire Tojo Minerals Pty Ltd (“Tojo”) and will be also be used for working capital.

The Company advises that Mr Peter Christie has resigned as a director, effective immediately.

Mr Christie is resigning from the Board to concentrate on his existing work commitments. The Board wishes to thank Mr Christie for his contribution to the Company since his appointment as a founding director in 2006.

The Company provides notice pursuant to ASX Listing Rule 3.10.5A that:

(a) Dilution to existing shareholders as a result of the issue

A total of 15,665,296 shares were issued pursuant to Listing Rule 7.1A, representing 8.45% of the post-placement capital. The balance of the capital raising was completed under the Company’s 15% capacity and comprised 12,997,906 shares, representing 7.01% of the post-placement capital.

The percentage of the post-placement capital held in aggregate by pre-placement security holders who did not participate in the placement is 79.61%; the percentage of the post-placement capital held in aggregate by pre-placement security holders who did participate in the placement is 6.00% and the percentage of the post-placement capital held in aggregate by participants in the placement who were not previously security holders is 14.39%.

(b)

CARNAVALE RESOURCES LIMITED

ABN 49 119 450 243 Level 1, Suite 5, The Business Centre 55 Salvado Road Subiaco Western Australia 6008 T: +61 8 9380 9098 F: +61 8 9380 6761 E: admin@carnavaleresources.com W: www.carnavaleresources.com.au

The Company issued shares to professional and sophisticated investors as it was considered to be the most efficient and expedient method for raising the funds required to achieve the stated objectives.

• (c) No underwriting arrangements were in place for the placement.

• (d) Commission for the placement was 6% (plus GST) of the total funds raised.

An Appendix 3B is attached with respect to the new securities issued and the Company gives notice that:

• it issued the securities without disclosure to investors under Part 6D.2 of the Corporations Act 2001 (“Act”);

• this notice is being given under section 708A(5)(e) of the Act;

• as at today’s date, the Company has complied with:

• (i) the provisions of Chapter 2M of the Act as they apply to the Company; and

• (ii) section 674 of the Act; and

• as at today’s date there is no other information that is excluded information which is required to be set out in this notice pursuant to section 708A(6)(e) of the Act.

Yours faithfully

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Paul Jurman Company Secretary

2

Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

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

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

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

Name of entity

Carnavale Resources Limited ABN 49 119 450 243

We (the entity) give ASX the following information.

Part 1 - All issues

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

1 +Class of +securities issued or to be issued 2 Number of +securities issued or to be issued (if known) or maximum number which may be issued 3 Principal terms of the +securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)	Ordinary shares
	28,663,202 ordinary shares
	Fully paid ordinary shares ranking equally with existing shares.

• See chapter 19 for defined terms.

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4 Do the +securities rank equally in all respects from the +issue date with an existing +class of quoted +securities? If the additional +securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 6a Is the entity an +eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h in relation to the +securities the subject of this Appendix 3B, and comply with section 6i 6b The date the security holder resolution under rule 7.1A was passed 6c Number of +securities issued without security holder approval under rule 7.1 6d Number of +securities issued with security holder approval under rule 7.1A	Yes, rank equally with existing quoted shares (CAV).
	Ordinary shares at 1.5 cents each (with free attaching options to be issued subject to receiving shareholder approval).
	To assist with funding the expenditure required to satisfy the initial commitment amount in relation to the Tojo Projects and general working capital.
	Yes.
	12 November 2013.
	12,997,906
	15,665,296

• See chapter 19 for defined terms.

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6e Number of +securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of +securities issued under an exception in rule 7.2 6g If +securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation. 6h If +securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B. 8 Number and +class of all +securities quoted on ASX (_including_the +securities in section 2 if applicable) 9 Number and +class of all +securities not quoted on ASX (_including_the +securities in section 2 if applicable)	N/A	N/A
	N/A
	Yes. Issue price: $0.015 Date on which the price at which the securities were issued was agreed: 28 July 2014. 15 day VWAP: $0.012 (source IRESS).
	N/A
	Listing rule 7.1 – 10,500,038. Listing rule 7.1A – Nil.
	4 August 2014.
	Number	+Class
	185,316,166	Ordinary Shares (CAV).
	Number	+Class
	131,826,452	Unlisted Options exercisable at 3 cents on or before 30 November 2016.

• See chapter 19 for defined terms.

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• 10 Dividend policy (in the case of a No plans to pay dividends at this stage. trust, distribution policy) on the increased capital (interests)

Part 2 - Pro rata issue – Not Applicable

	Part 2 - Pro rata
11	Is security holder approval
	required?
12	Is the issue renounceable or non-
	renounceable?
13	Ratio in which the +securities will
	be offered
14	+Class of +securities to which the
	offer relates
15	+Record date to determine
	entitlements
16	Will holdings on different registers
	(or subregisters) be aggregated for
	calculating entitlements?
17	Policy for deciding entitlements in
	relation to fractions
18	Names of countries in which the
	entity has security holders who will
	not be sent new offer documents
	Note: Security holders must be told how their
	entitlements are to be dealt with.
	Cross reference: rule 7.7.
19	Closing date for receipt of
	acceptances or renunciations
20	Names of any underwriters
21	Amount of any underwriting fee or
	commission
22	Names of any brokers to the issue
23	Fee or commission payable to the
	broker to the issue

• See chapter 19 for defined terms.

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24	Amount of any handling fee payable
	to brokers who lodge acceptances
	or renunciations on behalf of
	security holders
25	If the issue is contingent on security
	holders’ approval, the date of the
	meeting
26	Date entitlement and acceptance
	form and offer documents will be
	sent to persons entitled
27	If the entity has issued options, and
	the terms entitle option holders to
	participate on exercise, the date on
	which notices will be sent to option
	holders
28	Date rights trading will begin (if
	applicable)
29	Date rights trading will end (if
	applicable)
30	How do security holders sell their
	entitlements in full through a
	broker?
31	How do security holders sell_part_of
	their entitlements through a broker
	and accept for the balance?
32	How do security holders dispose of
	their entitlements (except by sale
	through a broker)?
33	+Issue date

Part 3 - Quotation of securities

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

34 Type of[+] securities ( tick one ) (a) √ +Securities described in Part 1.

• (b) All other[+] securities

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

• See chapter 19 for defined terms.

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Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders 36 If the +securities are +equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over 37 A copy of any trust deed for the additional[+] securities

Entities that have ticked box 34(b)

38 Number of +securities for which +quotation is sought 39 +Class of +securities for which quotation is sought 40 Do the[+] securities rank equally in all respects from the[+] issue date with an existing[+] class of quoted[+] securities? If the additional[+] securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

• See chapter 19 for defined terms.

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41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another +security, clearly identify that other +security) 42 Number and +class of all +securities quoted on ASX (including the +securities in clause 38)
	Number	+Class

• See chapter 19 for defined terms.

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Quotation agreement

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

• 2 We warrant the following to ASX.

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

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

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

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

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

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

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

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

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Sign here: ........................................................... Date: 5 August 2014.

(Director/Company secretary) Print name: P Jurman

• See chapter 19 for defined terms.

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Appendix 3B – Annexure 1

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

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

Part 1

Rule 7.1 – Issues exceeding 15% of capital

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

Part 1	Part 1
Rule 7.1 – Issues exceeding 15% of capital
Step 1: Calculate “A”, the base figure from which the placement capacity is calculated
Insertnumber of fully paid +ordinary securities on issue 12 months before the +issue date or date of agreement to issue	87,739,708
Addthe following: • Number of fully paid +ordinary securities issued in that 12 month period under an exception in rule 7.2 • Number of fully paid +ordinary securities issued in that 12 month period with shareholder approval • Number of partly paid +ordinary securities that became fully paid in that 12 month period Note: • Include only ordinary securities here – other classes of equity securities cannot be added • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of	13,930,661 fully paid ordinary shares issued on 28 October 2013 to holders of securities who participated in the Non-Renounceable Entitlement Issue. 15,315,908 fully paid ordinary shares issued on 4 November 2013 to investors who participated in the shortfall arising out of the Non-Renounceable Entitlement Issue. 20 fully paid ordinary shares issued on 26 November 2013 on conversion of options. 3,000,000 fully paid ordinary shares issued on 4 November 2013, shareholder approval given at the annual general meeting on 12 November 2013. 36,666,667 fully paid ordinary shares issued on 27 November 2013 pursuant to a placement, shareholder approval given at the annual general meeting on 12 November 2013.

• See chapter 19 for defined terms.

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securities on different dates as separate line items Subtract the number of fully paid[+] ordinary Nil securities cancelled during that 12 month period “A” 156,652,964

securities on different dates as separate line items
Subtractthe number of fully paid +ordinary securities cancelled during that 12 month period	Nil
“A”	156,652,964
Step 2: Calculate 15% of “A”
“B”	0.15 [Note: this value cannot be changed]
Multiply“A” by 0.15	23,497,944
Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used
Insertnumber of +equity securities issued or agreed to be issued in that 12 month period_not_ counting_those issued: • Under an exception in rule 7.2 • Under rule 7.1A • With security holder approval under rule 7.1 or rule 7.4 _Note: • This applies to equity securities, unless specifically excluded – not just ordinary securities • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items	12,997,906 fully paid ordinary shares issued on 4 August 2014 as part of a private placement to sophisticated investors.
“C”	12,997,906
Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1
“A” x 0.15 Note: number must be same as shown in Step 2	23,497,944
Subtract“C” Note: number must be same as shown in Step 3	12,997,906
Total[“A” x 0.15] – “C”	10,500,038 [Note: this is the remaining placement capacity under rule 7.1]

capacity under rule 7.1
“A” x 0.15	23,497,944
Note: number must be same as shown in Step 2
Subtract“C”	12,997,906
Note: number must be same as shown in Step 3
Total[“A” x 0.15] – “C”	10,500,038
	[Note: this is the remaining placement capacity
	under rule 7.1]

• See chapter 19 for defined terms.

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Part 2

Rule 7.1A – Additional placement capacity for eligible entities

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

“A” 156,652,964 Note: number must be same as shown in Step 1 of Part 1 Step 2: Calculate 10% of “A” “D” 0.10 Note: this value cannot be changed Multiply “A” by 0.10 15,665,296

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

• Insert number of[+] equity securities issued or 15,665,296 fully paid ordinary shares issued on 4 agreed to be issued in that 12 month period August 2014 as part of a private placement to under rule 7.1A sophisticated investors. Notes: • This applies to equity securities – not just ordinary securities

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

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

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

• “E” 15,665,296

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

capacity under rule 7.1A
“A” x 0.10	15,665,296
Note: number must be same as shown in Step 2
Subtract“E”	15,665,296
Note: number must be same as shown in Step 3

• See chapter 19 for defined terms.

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Total [“A” x 0.10] – “E”

Nil. Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

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