Company Update

ECSI Limited (ASX:ECS) are pleased as announced on 5 July 2012 that the Notice of Meeting (NOM) and Independents Experts Report have been approved by both the Australian Securities and Investment Commission (ASIC) and the Australian Securities Exchange (ASX).

The Company has today started to prepare for the NOM and IER to be sent to all our shareholders to enable shareholders to vote on the proposed transaction announced on 27 January 2012.

We have enclosed in this announcement a copy of the NOM and IER.

The Company would like to thank all our shareholders for their patience and understanding through this process. The board believes that the proposed transaction will bring value to the Company and ultimately our shareholders.

George Karafotias

Director

ECSI Limited ACN 004 240 313

Notice of General Meeting

and

Explanatory Statement

and

Independent Expert's Report

and

Proxy Form

General Meeting of ECSI Limited to be held at

Middletons, Level 25, Rialto South Tower, 525 Collins Street, Melbourne, Victoria

on Wednesday 15 August 2012 commencing at 9.00 am.

This Notice of General Meeting, Explanatory Statement and Independent Expert's Report should be read in its entirety.

If Shareholders are in any doubt as to how to vote, they should seek advice from their own independent financial, taxation or legal adviser without delay.

ECSI Limited ACN 004 240 313 (Company)

General information

This notice of meeting (Notice) relates to a general meeting (Meeting) of the shareholders of the Company (Shareholders).

The Meeting will take place at Middletons, Level 25, Rialto South Tower. 525 Collins Street. Melbourne, Victoria on 15 August 2012 commencing 9.00 am.

The purpose of the Meeting is to:

$1₁$ obtain Shareholder approval for the prior placements of shares to sophisticated investors:
$2.$ obtain Shareholder approval for the proposed Consolidation of the share capital of the Company;
1. inform Shareholders of the Company's intentions to acquire:
70% of the issued shares in the capital of Green Mineral Resources Pty Ltd from $(a)$ Africa Uranium Limited: and
30% of the issued shares in the capital of Green Mineral Resources Pty Ltd from $(b)$ Bastos Foundation (Pty) Ltd,

(collectively, the African Transaction)

the quota representing 100% of the registered capital of Synclean Energy Kft from $(c)$ Synclean Energy PLC; and
the quota representing 100% of the registered capital of Synclean Resources Kft $(d)$ from Synclean Energy PLC,

(collectively, the Hungarian Transaction);

obtain Shareholder approval for the proposed issue of up to 10,000,000 Shares to investors $\overline{4}$ . under a prospectus to be issued by the Company; and
1. obtain Shareholder approval for the various components of the African Transaction and the Hungarian Transaction (collectively, the Transaction) as required under the ASX Listing Rules (Listing Rules) and the Corporations Act 2001 (Cth) (Corporations Act).

Each of the directors of the Company (Directors) considers that the Transaction will create significant value for Shareholders and assist the Company in the next phase of its growth.

Shareholders should also note that the independent expert has found that, for the purposes of section 611, Item of the Corporations Act 2001 (Cth), the Transaction is fair and reasonable for non-associated shareholders of the Company. Further detail can be found in the independent expert's report attached to this Notice.

The following documents accompany this Notice and are designed to assist Shareholders' understanding of the Resolutions under consideration:

Explanatory Statement: provides an explanation of the Resolutions and the disclosures $\bullet$ required by law and has been prepared with the assistance of the Company's legal adviser. Middletons:

Independent Expert's Report: RSM Bird Cameron was commissioned by the board of $\bullet$ Directors of the Company (Board) to provide an independent assessment of whether the Transaction is fair and reasonable to all Shareholders; and
Proxy form: to be used by Shareholders to appoint a proxy to vote on their behalf at the $\bullet$ Meeting.

The Resolutions are important and affect the future of the Company. You are urged to give careful consideration to the Notice, the Resolutions, the Explanatory Statement and the Independent Expert's Report. If you are in any doubt as to how to vote, you should seek advice from your own independent financial, taxation or legal adviser.

Key dates for Shareholders

Event	Date*
Dispatch of Notice to Shareholders	13 July 2012
Deadline for lodging proxy form for Meeting	$9.00$ am on 13 August 2012
Record date for eligibility to vote at Meeting	5.00 pm on 13 August 2012
Meeting to approve the Transaction and other matters, and a trading halt to be requested from the commencement of trading	15 August 2012
If Shareholders approve the Transaction, then the Company's securities will be suspended from trading on ASX until the Company complies with the requirements of Chapters 1 and 2 of the Listing Rules	15 Au gust 2012
Lodge Prospectus	20 August 2012
Expected date for issue of shares under the Prospectus and completion of the Transaction	26 October 2012
Trading in securities reinstated by ASX (subject to satisfaction of Chapters 1 and 2 of the Listing Rules). Normal $T + 3$ trading on a post-Consolidation basis commences	2 November

*Shareholders should note that the above timetable is indicative only and may be varied in consultation with ASX. Any changes will be released to the ASX.

ECSI Limited ACN 004 240 313 (Company)

General Meeting: Agenda

The business to be transacted at the Meeting is set out below:

Special Business

Approval of prior placement of Shares on 20 June 2011 $1.$

To consider and, if thought fit, to pass the following Resolution as an ordinary resolution:

"That, for the purposes of ASX Listing Rule 7.4 and all other purposes, approval is given for the prior issue on 20 June 2011 of 65 million Shares at an issue price of \$0.007 per Share to raise the amount of \$455,000 and otherwise on the terms described in the Explanatory Statement."

Voting exclusion statement on item 1:

The Company will disregard any votes cast on this Resolution set out in item 1 by:

a person who participated in the issue; and $\mathbf{\hat{y}}$
an associate of that person (or those persons). $\boldsymbol{\lambda}$

However, the Company need not disregard a vote if:

it is cast by a person as proxy for a person who is entitled to vote in accordance with $\overline{\mathbf{v}}$ the directions on the proxy form; or
it is cast by the person chairing the Meeting as proxy for a person who is entitled to $\boldsymbol{y}$ vote in accordance with the directions on the proxy form to vote as the proxy decides.

$2.$ Approval of prior placement of Shares on 13 February 2012

To consider and, if thought fit, to pass the following Resolution as an ordinary resolution:

"That, for the purposes of ASX Listing Rule 7.4 and all other purposes, approval is given for the prior issue on 13 February 2012 of 24 million Shares at an issue price of \$0.005 per Share to raise the amount of \$120,000 and otherwise on the terms described in the Explanatory Statement."

Voting exclusion statement on item 2:

The Company will disregard any votes cast on this Resolution set out in item 2 by:

a person who participated in the issue; and $\bar{\mathbf{z}}$
an associate of that person (or those persons). $\mathbf{v}$
However, the Company need not disregard a vote if:
it is cast by a person as proxy for a person who is entitled to vote in accordance with $\mathbf{\hat{z}}$ the directions on the proxy form; or

it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote in accordance with the directions on the proxy form to vote as the proxy decides.

$\overline{3}$ . Approval of prior placement of Shares on 8 May 2012

To consider and, if thought fit, to pass the following Resolution as an ordinary resolution;

"That, for the purposes of ASX Listing Rule 7.4 and all other purposes, approval is given for the prior issue on 8 May 2012 of 40 million Shares at an issue price of \$0,005 per Share to raise the amount of \$200,000 and otherwise on the terms described in the Explanatory Statement."

Voting exclusion statement on item 3:

The Company will disregard any votes cast on this Resolution set out in item 3 by:

a person who participated in the issue; and $\lambda$
an associate of that person (or those persons). $\mathbf{v}$

However, the Company need not disregard a vote if:

$\mathbf{v}$ it is cast by a person as proxy for a person who is entitled to vote in accordance with the directions on the proxy form; or
it is cast by the person chairing the Meeting as proxy for a person who is entitled to $\lambda$ vote in accordance with the directions on the proxy form to vote as the proxy decides

4. Consolidation

$\mathbf{v}$

To consider and, if thought fit, to pass the following Resolution as an ordinary resolution:

"That, subject to resolutions 5, 6, 7, 8, 9 and 10 being passed, pursuant to section 254H of the Corporations Act 2001 (Cth), the total issued share capital of the Company be consolidated at a ratio of 1 Share for every 25 Shares currently on issue, rounded up to the nearest whole number and otherwise on the terms described in the Explanatory Statement."

5. Approval of the issue for prospectus capital raising

To consider and, if thought fit, to pass the following Resolution as an ordinary resolution;

"That, subject to resolutions 4, 6, 7, 8, 9 and 10 being passed, for the purposes of ASX Listing Rule 7.1 and all other purposes, approval is given for the issue, under a prospectus, of up to 10,000,000 Shares (on a post-Consolidation basis) in the capital of the Company. with Shares to be issued at an issue price of \$0.20 to raise an amount of up to \$2,000,000. and otherwise on the terms described in the Explanatory Statement."

Voting exclusion statement on item 5:

The Company will disregard any votes cast on this Resolution set out in item 5 by:

a person who may participate in the proposed issue and a person who might obtain $\mathbf{v}$ a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the resolution is passed; and
an associate of that person (or those persons). $\chi$

However, the Company need not disregard a vote if:

it is cast by a person as proxy for a person who is entitled to vote in accordance with $\mathbf{v}$ the directions on the proxy form; or
it is cast by the person chairing the Meeting as proxy for a person who is entitled to $\mathbf{v}$ vote in accordance with the directions on the proxy form to vote as the proxy decides.

Approval for the change in nature and scale of activities 6.

To consider and, if thought fit, to pass the following Resolution as an ordinary resolution:

"That, subject to resolutions 4, 5, 7, 8, 9 and 10 being passed, for the purposes of ASX Listing Rule 11.1 and all other purposes, approval is given for the Company to make a significant change to the nature and scale of its activities as set out in the Explanatory Statement."

Voting exclusion statement on item 6:

The Company will disregard any votes cast on the Resolution set out in item 6 by:

a person who might obtain a benefit, except a benefit solely in the capacity of a $\chi$ holder of ordinary securities, if the resolution is passed; and
an associate of that person (or those persons). »

However, the entity need not disregard a vote if:

it is cast by a person as proxy for a person who is entitled to vote, in accordance with $\mathbf{y}$ the directions on the proxy form; or
it is cast by the person chairing the Meeting as proxy for a person who is entitled to $\mathbf{v}$ vote, in accordance with a direction on the proxy form to vote as the proxy decides.

$\overline{7}$ . Approval of the African Transaction

To consider and, if thought fit, to pass the following Resolution as an ordinary resolution:

"That, subject to resolutions 4, 5, 6, 8, 9 and 10 being passed, for the purposes of ASX Listing Rule 7.1, section 611 (item 7) of the Corporations Act 2001 (Cth) and all other purposes, approval is given for the issue of:

up to 32,000,000 Shares (on a post-Consolidation basis) in the capital of the $\mathbf{v}$ Company to Africa Uranium Limited; and
up to 13,714,286 Shares (on a post-Consolidation basis) in the capital of the $\boldsymbol{\lambda}$ Company to Bastos Foundation (Pty) Ltd,

for the acquisition of all of the issued shares in the capital of Green Mineral Resources Ptv Ltd and otherwise on the terms described in the Explanatory Statement."

Voting exclusion statement on item 7:

The Company will disregard any votes cast on the Resolution set out in item 7 by:

Africa Uranium Limited or Bastos Foundation (Pty) Ltd; and $\boldsymbol{\mathcal{Y}}$

an associate of Africa Uranium Limited or Bastos Foundation (Ptv) Ltd.

However, the entity need not disregard a vote if:

it is cast by a person as proxy for a person who is entitled to vote, in accordance with $\mathbf{v}$ the directions on the proxy form; or
it is cast by the person chairing the Meeting as proxy for a person who is entitled to $\mathbf{y}$ vote, in accordance with a direction on the proxy form to vote as the proxy decides.

8. Approval of the Hungarian Transaction

$\mathbf{v}$

To consider and, if thought fit, to pass the following Resolution as an ordinary resolution:

"That, subject to resolutions 4, 5, 6, 7, 9 and 10 being passed, for the purposes of ASX Listing Rule 7.1, section 611 (item 7) of the Corporations Act 2001 (Cth) and all other purposes, approval is given for the issue of:

up to 20,250,000 Shares (on a post-Consolidation basis) in the capital of the $\mathbf{v}$ Company to Synclean Energy PLC to acquire the quota representing all of the registered capital of Synclean Energy Kft; and
up to 20,250,000 Shares (on a post-Consolidation basis) in the capital of the $\mathbf{v}$ Company to Synclean Energy PLC to acquire the quota representing all of the registered capital of Synclean Resources Kft,

and otherwise on the terms described in the Explanatory Statement."

Voting exclusion statement on item 8:

The Company will disregard any votes cast on the Resolution set out in item 8 by:

Synclean Energy PLC; and $\mathbf{v}$
an associate of Synclean Energy PLC. $\mathbf{v}$

However, the entity need not disregard a vote if:

it is cast by a person as proxy for a person who is entitled to vote, in accordance with $\mathbf{y}$ the directions on the proxy form: or
it is cast by the person chairing the Meeting as proxy for a person who is entitled to $\mathbf{v}$ vote, in accordance with a direction on the proxy form to vote as the proxy decides.

9. Approval of the issue of shares to Mutual Wide

To consider and, if thought fit, to pass the following Resolution as an ordinary resolution:

"That, subject to resolutions 4, 5, 6, 7, 8 and 10 being passed, for the purposes of ASX Listing Rule 10.11, section 611 (item 7) of the Corporations Act 2001 (Cth). Chapter 2E of the Corporations Act 2001 (Cth) and all other purposes, approval is given for the issue of up to 30.300.000 Shares (on a post-Consolidation basis) in the capital of the Company to Mutual Wide Corporation Limited for the novation of the option to acquire Synclean Resources Kft and otherwise on the terms described in the Explanatory Statement.

Voting exclusion statement on item 9:

The Company will disregard any votes cast on the Resolution set out in item 9 by:

Voting exclusion statement on item 9:

The Company will disregard any votes cast on the Resolution set out in item 9 by:

Mutual Wide Corporation Limited; and $\bar{\mathbf{z}}$
$\mathbf{v}$ an associate of Mutual Wide Corporation Limited.

However, the entity need not disregard a vote if:

it is cast by a person as proxy for a person who is entitled to vote, in accordance with $\mathbf{\hat{z}}$ the directions on the proxy form; or
it is cast by the person chairing the Meeting as proxy for a person who is entitled to $\mathbf{v}$ vote, in accordance with a direction on the proxy form to vote as the proxy decides.

10. Approval of the novation of the option from Mutual Wide

To consider and, if thought fit, to pass the following Resolution as an ordinary resolution:

"That, subject to resolutions 4, 5, 6, 7, 8 and 9 being passed, for the purposes of ASX Listing Rule 10.1 and all other purposes, approval is given for the novation, by Mutual Wide in favour of the Company, of the option to acquire Synclean Resources Kft and otherwise on the terms described in the Explanatory Statement."

Voting exclusion statement on item 10:

The Company will disregard any votes cast on the Resolution set out in item 10 by Mutual Wide Corporation Limited.

However, the entity need not disregard a vote if:

$\chi$ it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
$\mathbf{v}$ it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

By order of the Board:

a de la calendaria de la construcción de la construcción de la construcción de la construcción de la construcc
Construcción

George Karafotias Company Secretary 29 June 2012

Notes

Who may vote?	The Company's Directors have determined, in accordance with Regulation 7.11.37 of the Corporations Regulations (Cth) 2001, that all Shares of the Company that are quoted on the ASX at 5.00 pm on 13 August 2012 will, for the purposes of determining voting entitlements at the Meeting, be taken to be held by the persons registered as holding the Shares at that time. This means that any person registered as the holder of Shares at 5.00 pm on 13 August 2012 is entitled to attend and vote at the Meeting in respect of those Shares.
Proxies: appointment	A Shareholder of the Company who is entitled to attend and vote at the Meeting has a right to appoint not more than 2 persons as their proxy to attend and vote for the Shareholder at the Meeting.
	Where a Shareholder appoints 2 proxies or attorneys to vote at the Meeting and the authority of one is not conditional on the other failing to attend or vote, the following rules will apply:
	the appointment is of no effect and a proxy may not vote unless each proxy is ۰ appointed to represent a specified portion of the Shareholder's voting rights;
	on a show of hands, only the first person named in the appointing instrument, or if ۰ they are named in separate instruments, the person whose name is earlier in alphabetical sequence may vote; and
	on a poll, each proxy or attorney may only exercise the voting rights the proxy or attorney represents.
	A proxy need not be a Shareholder of the Company.
Proxies: lodgement	To be valid, a proxy form must be received by the Company by no later than 9.00 am on 13 August 2012 (Proxy Deadline).
	Proxies may be submitted by:
	post or hand delivery to: Suite 3, Level 10, 499 St Kilda Road, Melbourne, Victoria (a) 3004; or
	facsimile: (03) 9650 8811. (b)
	A written proxy appointment must be signed by the Shareholder or the Shareholder's attorney.
	Where the appointment is signed by the appointor's attorney, a certified copy of the authority, or the authority itself, must be lodged with the Company in one of the above ways by the Proxy Deadline. If facsimile transmission is used, the authority must be certified.
Body corporate representative	A Shareholder of the Company who is a body corporate and who is entitled to attend and vote at the Meeting, or a validly appointed proxy who is a body corporate and who is appointed by a Shareholder of the Company entitled to attend and vote at the Meeting, may appoint a person to act as its representative at the Meeting by providing that person with:
	a letter or certificate, executed in accordance with the body corporate's constitution, (a) authorising the person as the representative; or
	a copy of the resolution, certified by the secretary or a director of the body corporate, (b) appointing the representative.

ECSI Limited ACN 004 240 313 (Company)

Explanatory Statement

$\mathbf 1$ Background

$1.1$ Introduction

This Explanatory Statement has been prepared for the information of Shareholders in relation to the business to be conducted at the Meeting.

The purpose of this Explanatory Statement is to provide Shareholders with all information known to the Company which is material to a decision on how to vote on the Resolutions set out in the accompanying Notice. It explains the Resolutions and identifies the Board's reasons for putting them to Shareholders.

$1.2$ Action to be taken by Shareholders

Shareholders should read this Explanatory Statement and the Independent Expert's Report carefully before deciding how to vote on the Resolutions set out in the Notice.

All Shareholders are invited and encouraged to attend the Meeting. If Shareholders are unable to attend in person, the attached Proxy Form should be completed, signed and returned to the Company in accordance with the instructions contained in the Proxy Form and the Notice. Lodgement of a Proxy Form will not preclude a Shareholder from attending and voting at the Meeting in person.

$1.3$ Summary of Transaction

Background $(a)$

Currently, ECSI's principal activity is the implementation of an enhanced security monitoring system and access control system as part of the National Alarm Response System in China (NAR System).

The Directors of ECSI have been evaluating the Company's continuing involvement in the NAR System and examining other investment opportunities.

$(b)$ Transaction

On 13 April 2011, the Company announced that it had signed a term sheet regarding the acquisition of interests in certain uranium tenements in Africa, including the Hoasib Project.

On 8 July 2011, the Company made a further announcement regarding the results of further negotiation regarding the African tenements.

On 27 January 2012, the Company provided a further update to the market detailing the outcome of its due diligence investigations, advising on the progress of ongoing negotiations and announcing the proposed acquisition of certain Hungarian coal permits.

The agreements reached were as follows:

African Transaction $(i)$

Green Mineral Resources Pty Ltd is 70% owned by Africa Uranium Limited (AUL) and 30% owned by Bastos Foundation (Pty) Ltd (Bastos).

Green Mineral Resources Pty Ltd is the owner of the Hoasib Project.

The Company intends to acquire all of the shares in Green Mineral Resources Pty Ltd held by AUL by the issue of 32,000,000 Shares (on a post-Consolidation basis) at an issue price of \$0.20 (on a post-Consolidation basis), equating to total implied consideration of \$6,400,000.

The Company also intends to acquire all of the shares in Green Mineral Resources Pty Ltd held by Bastos Foundation (Pty) Ltd by the issue of 13,714,286 Shares (on a post-Consolidation basis) at an issue price of \$0.20 (on a post-Consolidation basis), equating to total implied consideration of \$2,742,857.

Hungarian Transaction $(ii)$

Synclean Energy Kft (SEK) and Synclean Resources Kft (SRK) between them own a total of seven Hungarian coal permits. located across two different regions of Hungary covering an area of approximately $738 \text{ km}^2$ .

SEK and SRK are wholly-owned subsidiaries of Synclean Energy PLC (SPLC).

Mutual Wide Corporation Limited (Mutual Wide) currently holds an option to acquire from Synclean Energy PLC all of the issued shares in its whollyowned subsidiary SRK.

The Company has entered into a formal agreement with Mutual Wide under which Mutual Wide has agreed to assign its rights under the option to the Company and the Company has agreed to issue 30,300,000 Shares (on a post-Consolidation basis) at an issue price of \$0.20 (on a post-Consolidation basis) equating to an implied consideration of \$6,060,000 (Mutual Wide Share Issue).

The Company intends to acquire from SPLC all of the shares in SEK by the issue of 20.250.000 Shares (on a post-Consolidation basis) at an issue price of \$0.20 (on a post-Consolidation basis), equating to a total implied consideration of \$4,050,000.

The Company intends to acquire from SPLC all of the shares in SRK by the issue of 20,250,000 Shares (on a post-Consolidation basis) at an issue price of \$0.20 (on a post-Consolidation basis), equating to a total implied consideration of \$4,050,000.

Consolidation $(c)$

All Shares to be issued as part of the Transaction are to be issued after the Company receives written conditional approval from ASX for the re-quotation of its Shares.

The Company will need to consolidate its share capital in order to comply with ASX Listing Rule 2.1 Condition 2 before such conditional approval will be granted. ASX Listing Rule 2.1 Condition 2 requires that the issue price of securities for which an entity seeks quotation be at least \$0.20 cash.

Therefore, the number of Shares to be issued as consideration under the Transaction, has been calculated by dividing the number of Shares that would otherwise be issued by the ratio of the post-Consolidation Share price to the consolidation ratio.

Compliance with Chapters 1 and 2 of the Listing Rules $(d)$

The Directors have formed the view that, although the Company intends to continue its existing business of implementing security systems, if the Transaction proceeds, it will constitute a significant change in the nature and scale of the Company's operations. Therefore, the Company will be required under Listing Rule 11.1.3 to comply with all of the requirements of chapters 1 and 2 of the Listing Rules.

Essentially, this will involve the Company complying with all of the requirements that must be satisfied for an entity to gain admission to the official list of ASX and the requirements for quotation of securities upon admission

Shareholders should note that, notwithstanding shareholder approval, the issue of Shares proposed under Resolutions 5, 6, 8 and 9 will be subject to the Company obtaining ASX approval for the reinstatement of its securities to quotation.

Impact of Transaction on the Company's capital structure $(e)$

The effect on the capital structure of the Company of the Transaction, Consolidation and the issues of Shares contemplated by the Resolutions can be summarised as follows (assuming that \$2 million is raised under the capital raising contemplated by Resolution 5):

Securities	Shares	Options
Currently on issue (pre-Consolidation)	570,536,387	130,688,888
Post-consolidation	22,821,455	5,227,555
African Transaction:
To be issued to AUL	32,000,000
To be issued to Bastos	13,714,286
Hungarian Transaction:
To be issued to SEK	20,250,000
To be issued to SRK	20,250,000
To be issued to Mutual Wide	30,300,000
To be issued under prospectus	10,000,000
Total	149,335,741	5,227,555

$\overline{2}$ . Special business

$2.1$ Approval of prior placement on 20 June 2011

The Company is seeking approval of the prior placement of shares for the purposes of Listing Rule 7.4.

Chapter 7 of the Listing Rules limits a company's capacity to enlarge its share capital by the issue of equity securities without shareholder approval.

Specifically. Listing Rule 7.1 provides that a company must not, without shareholder approval, issue or agree to issue more than 15% of its existing capital in any 12 month period, unless an exemption applies.

Listing Rule 7.4 provides that an issue of securities made without approval under 7.1 is treated as having been made with approval for the purposes of rule 7.1 if:

the issue did not breach 7.1; and $\mathbf{v}$
holders of ordinary securities subsequently approve it. $\mathbf{v}$

The Company therefore seeks the approval of Shareholders to the prior placement of Shares in order to allow the Company maximum flexibility to raise future capital through the issue of new Shares.

Listing Rule 7.5 prescribes certain content requirements for a notice of meeting issued pursuant to Listing Rule 7.4. The following information is provided in this Notice for that purpose:

ASX Listing Rule Requirement	Terms of issue
Number of securities allotted	65 million Shares
Price at which the securities were issued	\$0.007
Terms of the securities	Fully paid ordinary shares
Names of allottees	Mr Jiandong Wang
Intended use of funds raised	Funds raised by the placement were used to fund transaction costs associated with the African Transaction and to provide working capital.

$2.2$ Approval of prior placement of Shares on 13 February 2012

The Company is seeking approval of the prior placement of shares for the purposes of Listing Rule 7.4.

Chapter 7 of the Listing Rules limits a company's capacity to enlarge its share capital by the issue of equity securities without shareholder approval.

Specifically, Listing Rule 7.1 provides that a company must not, without shareholder approval, issue or agree to issue more than 15% of its existing capital in any 12 month period, unless an exemption applies.

Listing Rule 7.4 provides that an issue of securities made without approval under 7.1 is treated as having been made with approval for the purposes of rule 7.1 if:

the issue did not breach 7.1; and $\mathbf{v}$
holders of ordinary securities subsequently approve it. $\lambda$

The Company therefore seeks the approval of Shareholders to the prior placement of Shares in order to allow the Company maximum flexibility to raise future capital through the issue of new Shares.

Listing Rule 7.5 prescribes certain content requirements for a notice of meeting issued pursuant to Listing Rule 7.4. The following information is provided in this Notice for that purpose:

ASX Listing Rule Requirement	Terms of issue
Number of securities allotted	24 million Shares
Price at which the securities were issued	\$0.005
Terms of the securities	Fully paid ordinary shares
Names of allottees	"Sophisticated investors" (within the meaning given to that term in the Corporations Act), being clients of, or introduced to the Company by, Bell Potter Securities Limited
Intended use of funds raised	Funds raised by the placement were used to fund transaction costs associated with the African Transaction and the Hungarian Transaction and to provide working capital.

$2.3$ Approval of prior placement of Shares on 8 May 2012

The Company is seeking approval of the prior placement of shares for the purposes of Listing Rule 7.4.

Chapter 7 of the Listing Rules limits a company's capacity to enlarge its share capital by the issue of equity securities without shareholder approval.

the issue did not breach 7.1; and $\mathbf{y}$
holders of ordinary securities subsequently approve it. $\mathbf{v}$

The Company therefore seeks the approval of Shareholders to the prior placement of Shares in order to allow the Company maximum flexibility to raise future capital through the issue of new Shares.

Listing Rule 7.5 prescribes certain content requirements for a notice of meeting issued pursuant to Listing Rule 7.4. The following information is provided in this Notice for that purpose:

ASX Listing Rule Requirement	Terms of issue
Number of securities allotted	40 million Shares
Price at which the securities were issued	\$0.005
Terms of the securities	Fully paid ordinary shares
Names of allottees	"Sophisticated investors" (within the meaning given to that term the Corporations Act), being clients of, or introduced to the Company by, Bell Potter Securities Limited
Intended use of funds raised	Funds raised by the placement were used to fund transaction costs associated with the African Transaction and the Hungarian Transaction and to provide working capital.

Share consolidation $2.4$

$(a)$ General

The Company proposes to consolidate its Share capital through the conversion of every 25 Shares into 1 Share (Consolidation).

Under section 254H of the Corporations Act, a company may consolidate its share capital if the Consolidation is approved by an ordinary resolution of shareholders at a general meeting.

Reasons $(b)$

The Consolidation is required as part of the Company's proposed re-listing on ASX.

As a condition of the proposed re-listing, the Company must issue a prospectus.

Condition 2 of ASX Listing Rule 2.1 provides that for a company seeking approval for its shares to be listed on the ASX, the issue price or sale price of all the shares for which a company seeks quotation must be at least \$0.20 each.

The volume weighted average price at which the Shares were traded on ASX during the 5 trading days up to 29 May 2012 was \$0.008. The Company therefore proposes to consolidate its Shares so that the current share price is more closely aligned to the \$0.20 price at which Shares are to be offered under the prospectus.

Effect of the Consolidation $(c)$

Listing Rule 7.20 requires that if an entity proposes to reorganise its capital, it must advise shareholders of certain matters which are set out below.

Effect on the number of securities and the amount unpaid (if any) on the $(i)$ securities

The proposed Consolidation will reduce the number of Shares on issue from approximately 570.5 million Shares to approximately 22.8 million Shares.

As the Consolidation applies equally to all Shareholders, individual shareholdings will be reduced in the same ratio as the total number of Shares (subject only to the rounding of fractions). Therefore, the Consolidation will have no material effect on the percentage interest of each individual Shareholder in the Company.

Similarly, the aggregate value of each Shareholder's holding (and the Company's market capitalisation) should not change (other than minor changes as a result of rounding) as a result of the Consolidation alone. assuming the Share price remains consistent.

Shareholders should note that the reduction of Share capital, if approved, will also have an effect on the Company's share price.

As at the date of this Notice, there are no unpaid amounts on the securities on issue.

$(ii)$ Treatment of any fractional entitlement

Where the consolidation of a Shareholder's holding results in an entitlement to a fraction of a Share, the fraction will be rounded up to the next whole number of Shares.

Treatment of any convertible securities on issue (iii)

As at the date of this Notice, the company has 1 convertible note on issue, which is convertible into 10 million Shares (Convertible Note) and approximately 131 million options on issue (Options).

To undertake the Consolidation, Listing Rule 7.21 requires that any convertible notes on issue must also be reorganised so that the holders of convertible notes do not receive a benefit that Shareholders do not receive. Accordingly, the number of Shares which can be issued upon conversion of the Convertible Note will be reduced at a ratio of 1 Share for every 25 Shares so that, if the Consolidation is approved, the Convertible Note will be convertible into 400,000 Shares.

Similarly, Listing Rule 7.22.1 requires that the Options must be consolidated in the same ratio as the Shares and that the exercise price for the Options must be amended in inverse proportion to that ratio.

$(d)$ Timing

If the Consolidation is approved, the Consolidation will take effect in accordance with the following timetable (as set out in the Listing Rules).

Event	$Date^*$
Company announces Consolidation and dispatches Notice	18 June 2012
Meeting	15 August 2012
Company announces to ASX that Shareholders have approved Consolidation	Day 0
Last day for ASX trading of shares on a pre-Consolidation basis	Day 1
Trading in consolidated Shares commences on a deferred settlement basis	Day 2
Last day for Company to register transfers on a pre- Consolidation basis	Day 6
First day for Company to register Shares on a post- Consolidation basis	Day 7
First day for Company to issue holdings statements for Shares on a post-Consolidation basis

Despatch of new holding statements for consolidated Shares	Day 11
Deferred settlement trading ends
Normal T+3 trading in consolidated Shares starts (provided the Company informs ASX before 12.00 pm that despatch has occurred)	Day 12
Settlement of trades conducted on a deferred settlement basis and first settlement of trades conducted on the normal $T+3$ basis	Day 15

* The above dates are indicative only and are subject to change without notice.

However, Shareholders should note that ASX will suspend trading in Shares from the day of the Meeting until the Company has complied with all of the requirements of Chapters 1 and 2 of the Listing Rules.

The passing of Resolution 4 is conditional upon, and subject to, Resolutions 5 to 10 being passed by Shareholders.

$2.5$ Approval of the issue of shares under the Prospectus

Resolution 5 seeks Shareholder approval for the allotment and issue of Shares raising up to a total of \$2,000,000 (Capital Raising).

The Company intends to conduct the Capital Raising through the issue of a prospectus as part of its compliance with Chapters 1 and 2 of the Listing Rules for the purpose of Listing Rule 11.1.3 (Prospectus). Under the Prospectus, the Company proposes to issue up to 10,000,000 Shares at an issue price of \$0.20 per Share.

Listing Rule 7.1 approval $(a)$

The Company is seeking approval for the proposed issue of Shares under the Prospectus for the purpose of Listing Rule 7.1.

Chapter 7 of the Listing Rules limits a company's capacity to enlarge its share capital by the issue of equity securities without shareholder approval.

The Shares to be issued under the Prospectus will comprise approximately 6.70% of the Company's existing capital (on a post-Consolidation basis). Although the proposed issue of Shares will not breach Listing Rule 7.1 per se, Shareholder approval is sought in order to refresh the Company's placement power and give it maximum flexibility to raise capital in the future.

Listing Rule 7.3 prescribes certain content requirements for a Notice of Meeting issued pursuant to Listing Rule 7.1. The following information is provided in this Notice for that purpose:

ASX Listing Rule requirement	Shares to be issued under the Prospectus

Number of securities allotted	Up to 10,000,000
Price at which the securities were issued	\$0.20
Terms of the securities	Fully paid ordinary Shares
Names of allottees	Persons subscribing for Shares under the Prospectus
Intended use of funds raised	Funds raised will be used to provide working capital for the Company. Full details of the use of the subscription monies will be set out in the Prospectus.
Date of allotment	Not later than 3 months after the date of the Meeting (unless a longer period is allowed by ASX).

The effect of Resolution will be to allow the Directors to issue the Shares under the Prospectus during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company's annual 15% placement capacity.

The passing of Resolution 5 is conditional upon, and subject to, Resolutions 4 and 6 to 10 being passed by Shareholders.

$2.6$ Approval of the change to nature and scale of activities

$(a)$ Background

The Company is required to seek Shareholder approval to its proposed change in nature and scale of activities.

Assuming Shareholders approve Resolution 6, the Company must comply with Chapters 1 and 2 of the Listing Rules.

$(b)$ Listing Rule 11.1

Chapter 11 provides that a listed company that proposes to make a significant change to the nature or scale of its activities must provide full details to ASX as soon as practicable and:

provide to ASX information regarding the change and its effect on future $(i)$ potential earnings, and any information that ASX asks for;
if ASX requires, obtain the approval of holders of its shares to the change; $(ii)$ and
if ASX requires, meet the requirements in Chapters 1 and 2 of the Listing $(iii)$ Rules as if the Company were applying for admission to the official list of ASX.

ASX may also suspend quotation of the Shares until the Company has satisfied the requirements of Listing Rule 11.1.

ASX has informed the Company that the proposed change in the nature and scale of activities will require:

Shareholder approval; and $(i)$
compliance with the requirements set out in Chapters 1 and 2 of the Listing $(ii)$ Rules.

The Company is preparing the Prospectus, as required by the Listing Rules, to provide information about the Company and its business, and this will be lodged with ASIC as set out in the Key Dates section of this Notice. The Prospectus will also facilitate the offer of the Shares referred to in Resolution 5.

If Resolution 6 is passed, the Company will have obtained, in compliance with Listing Rule 11.1.2. Shareholder approval to the change in the nature and scale of its activities to the extent described in this Explanatory Statement.

If Resolution 6 is not passed, the Company will not be permitted to change the nature and scale of its activities and the Transaction will not proceed.

The passing of Resolution 6 is conditional upon, and subject to, Resolutions 4 to 5 and 7 to 10 being passed by Shareholders.

$2.7$ Approval of the African Transaction

Listing Rule 7.1 approval $(a)$

The Company is seeking approval of the African Transaction for the purposes of Listing Rule 7.1.

Chapter 7 of the Listing Rules limits a company's capacity to enlarge its share capital by the issue of equity securities without shareholder approval.

Collectively, the Shares to be issued as part of the African Transaction will comprise approximately 30.61% of the Company's existing capital (on a post-Consolidation basis). The proposed issue of Shares would therefore breach Listing Rule 7.1 unless Shareholder approval is obtained.

The Company therefore seeks the approval of Shareholders to enable it to issue the Shares as part of the proposed African Transaction.

Listing Rule 7.3 prescribes certain content requirements for a Notice of Meeting issued pursuant to Listing Rule 7.1. The following information is provided in this Notice for that purpose:

ASX Listing Rule requirement	Acquisition from AUL	Acquisition from Bastos
Number of securities	32,000,000	13.714.286

allotted
Price at which the securities were issued	Implied price of \$0.20 per Share	Implied price of \$0.20 per Share
Terms of the securities	Fully paid ordinary Shares Escrowed	Fully paid ordinary Shares Not subject to escrow
Names of allottees	Africa Uranium Limited	Bastos Foundation (Pty) Ltd
Intended use of funds raised	No funds will be raised by the issue of securities. They are to be used as consideration to acquire AUI 's 70% interest in the issued capital of Green Mineral Resources Pty Ltd.	No funds will be raised by the issue of securities. They are to be used as consideration to acquire Bastos' 30% interest in the issued capital of Green Mineral Resources Pty Ltd.
Date of allotment	Upon completion of the share acquisition but in any event no later than 3 (unless a longer period is allowed by ASX).	Upon completion of the share acquisition but in any event no later than 3 (unless a longer period is allowed by ASX).

Section 611 (item 7) approval $(b)$

The Company is seeking approval of the African Transaction for the purposes of section 611 (item 7) of the Corporations Act.

Section 606 of the Corporations Act prohibits the acquisition by a person of voting shares in a company where, because of the acquisition, that person's (or someone else's) voting power in the company:

increases from 20% or below to more than 20%; or
increases from a starting point that is above 20% and below 90%,

unless a specific exemption applies.

If the African Transaction proceeds, AUL will hold an aggregated voting power of 21.43% in the Company.

Section 611 (item 7) of the Corporations Act provides an exception to the general prohibition under section 606 where the acquisition is approved by a resolution of shareholders.

It is a further requirement of section 611 (item 7) that the following disclosures are made regarding the proposed African Transaction:

Corporations Act requirement	African Transaction
Identity of purchasers	Africa Uranium Limited

Full particulars of Shares to be issued to purchasers	32,000,000 Shares will be issued to AUL to acquire that company's 70% interest in Green Mineral Resources Pty Ltd which holds certain rights to mining tenements in Namibia.
Identify associations and qualifications of person who are intended to become a Director of the Company	There will be no change to the directors of the Company.
Statement of intentions regarding the future of the Company	If the Transaction proceeds: The Company intends to undertake ۰ exploration activity on the newly acquired Hungarian mining tenements and the Hoasib Project simultaneously with operating the existing security business. The ASX Listing Rules require the Company to satisfy the requirements of chapters 1 and 2 in order to be re- quoted, under which the Company will be required to effectively re- apply for admission to the Official List. The Company will therefore issue and a lodge a prospectus with ASIC in accordance with Chapter 6D of the Corporations Act. Existing employment arrangements will remain unchanged. No property will be transferred. There is no currently existing ٠ intention to redeploy the assets of the Company.
Terms of the Transaction	Refer to section 1.3(i) of this Explanatory Statement.
Date for completion of the Transaction	The Completion Date under the Share Purchase Agreement but in any event no later than 3 months after the date of the Meeting (unless a longer period is allowed by ASIC).
Reasons for the Transaction	Refer to section 1.3(i) of this Explanatory Statement.
Interests of Directors	Nil.
Intention to change dividend or other financial policies	There is no intention to change the dividend or other financial policies of the Company at

$\bar{z}$

	_________
	this time.

the contract of the contract of the contract of the contract of the contract of . .	_

Shareholders should not that the issue of Shares under Resolution 7 is subject to the Company's compliance with Chapters 1 and 2 of the Listing Rules and obtaining the approval of ASX for reinstatement of its securities to quotation.

The passing of Resolution 7 is conditional upon, and subject to, Resolutions 4 to 6 and 8 to 10 being passed by Shareholders.

$2.8$ Approval of the Hungarian Transaction

Listing Rule 7.1 approval $(a)$

The Company is seeking approval of the Hungarian Transaction for the purposes of Listing Rule 7.1.

Chapter 7 of the Listing Rules limits a company's capacity to enlarge its share capital by the issue of equity securities without shareholder approval.

Collectively, the Shares to be issued as part of the Hungarian Transaction will comprise approximately 27.12% of the Company's existing capital (on a post-Consolidation basis). The proposed issue of Shares would therefore breach Listing Rule 7.1 unless Shareholder approval is obtained.

The Company therefore seeks the approval of Shareholders to enable it to issue the Shares as part of the Hungarian Transaction.

Listing Rule 7.3 prescribes certain content requirements for a Notice of Meeting issued pursuant to Listing Rule 7.1. The following information is provided in this Notice for that purpose:

	SEK	SRK
Number of securities allotted	20,250,000	20,250,000
Price at which the securities were issued	Implied price of \$0.20 per Share	Implied price of \$0.20 per Share
Terms of the securities	Fully paid ordinary Shares	Fully paid ordinary Shares
Names of allottees	Synclean Energy PLC	Synclean Energy PLC
Intended use of funds raised	No funds will be raised by the issue of securities. They are to be used as consideration to acquire Synclean Energy PLC's 100% interest in the capital	No funds will be raised by the issue of securities. They are to be used as consideration to acquire Synclean Energy PLC's 100% interest in the capital

	of Synclean Energy Kft.	of Synclean Resources Kft.
Date of allotment	Upon completion of the share acquisition but in any event no later than 3 months after the date of the Meeting (unless a longer period is allowed by ASX).	Upon completion of the share acquisition but in any event no later than 3 months after the date of the Meeting (unless a longer period is allowed by ASX).

Section 611 (item 7) approval $(b)$

The Company is seeking approval of the Hungarian Transaction for the purposes of section 611 (item 7) of the Corporations Act.

increases from 20% or below to more than 20%; or
increases from a starting point that is above 20% and below 90%,

unless a specific exemption applies.

If the Hungarian Transaction proceeds, Synclean Energy PLC will hold an aggregated voting power of 27.12% in the Company.

Section 611 (item 7) of the Corporations Act provides an exception to the general prohibition under section 606 where the acquisition is approved by a resolution of shareholders.

It is a further requirement of section 611 (item 7) that the following disclosures are made regarding the proposed Hungarian Transaction:

Corporations Act requirement	SEK transaction	SRK transaction
Identity of purchasers	Synclean Energy PLC	Synclean Energy PLC
Full particulars of Shares to be issued to purchasers	20,250,000 Shares will be issued to Synclean Energy PLC to acquire that company's 100% interest in SEK which holds certain rights to mining tenements in Hungary.	20,250,000 Shares will be issued to Synclean Energy PLC to acquire that company's 100% interest in SRK which holds certain rights to mining tenements in Hungary.
Identify associations and qualifications of person who are intended to become a Director of the Company	There will be no change to the directors of the Company.	There will be no change to the directors of the Company.

Statement of intentions regarding the future of	If the Transaction proceeds:	If the Transaction proceeds:
the Company	The Company $\bullet$ intends to undertake exploration activity on the newly acquired Hungarian mining tenements and the Hoasib Project simultaneously with operating the existing security business.	The Company $\bullet$ intends to undertake exploration activity on the newly acquired Hungarian mining tenements and the Hoasib Project simultaneously with operating the existing security business.
	The ASX Listing Ô Rules require the Company to satisfy the requirements of chapters 1 and 2 in order to be re- quoted, under which the Company will be required to effectively re-apply for admission to the Official List. The Company will therefore issue and a lodge a prospectus with ASIC in accordance with Chapter 6D of the Corporations Act.	The ASX Listing $\bullet$ Rules require the Company to satisfy the requirements of chapters 1 and 2 in order to be re- quoted, under which the Company will be required to effectively re-apply for admission to the Official List. The Company will therefore issue and a lodge a prospectus with ASIC in accordance with Chapter 6D of the Corporations Act.
	Existing employment ۰ arrangements will remain unchanged.	Existing employment $\bullet$ arrangements will remain unchanged.
	No property will be ۰ transferred.	No property will be $\bullet$ transferred.
	There is no currently $\bullet$ existing intention to redeploy the assets of the Company.	There is no currently ۰ existing intention to redeploy the assets of the Company.
Terms of the Transaction	Refer to section 1.3(ii) of this Refer to section 1.3(ii) of this Explanatory Statement. Explanatory Statement.
Date for completion of the Transaction	The Completion Date under The Completion Date under the Quota Purchase the Quota Purchase Agreement but in any event Agreement but in any event no later than 3 months after no later than 3 months after the date of the Meeting the date of the Meeting (unless a longer period is (unless a longer period is allowed by ASIC). allowed by ASIC).
Reasons for the	Refer to section 1.3(ii) of this Explanatory Statement.	Refer to section 1.3(ii) of this Explanatory Statement.

$\bar{\mathcal{A}}$

Transaction
Interests of Directors	Nil.	Nil.
Intention to change dividend or other financial policies	There is no intention to change the dividend or other financial policies of the Company at this time.	There is no intention to change the dividend or other financial policies of the Company at this time.

Shareholders should note that the issue of Shares under Resolution 8 is subject to the Company's compliance with Chapters 1 and 2 of the Listing Rules and obtaining the approval of ASX for reinstatement of its securities to quotation.

The passing of Resolution 8 is conditional upon, and subject to, Resolutions 4 to 7 and 9 to 10 being passed by Shareholders.

2.9 Approval of the issue of Shares to Mutual Wide

Listing Rule 10.11 approval $(a)$

The Company is seeking approval of the issue of shares to Mutual Wide for the purposes of Listing Rule 10.11.

Chapter 10 of the Listing Rules contains certain provisions in relation to transactions between a company and "persons in a position of influence". Listing Rule 10.11 provides that a company must not issue equity securities to a "related party" without the approval of holders of ordinary securities by ordinary resolution.

The term "related party" is defined for these purposes to include a related party within the meaning of section 228 of the Corporations Act and a person whose relationship with the entity or a related party is, in ASX's opinion, such that approval should be obtained.

Section 228(7) provides that an entity is a related party of a public company if the entity acts in concert with a related party of the public company on the understanding that the related party will receive a financial benefit if the public company gives the entity a financial benefit.

Mutual Wide is controlled by associates of two of the Company's Directors, George Karafotias and Eric Jiang. Therefore, although it is not contemplated that either Director will receive a direct financial benefit as part of the Transaction, Mr Karafotias and Mr Jiang may benefit from future dealings with Mutual Wide. The Company has therefore taken the conservative approach of seeking Shareholder approval under Listing Rule 10.11 on the basis that Mutual Wide may be regarded as a related party of the Company by virtue of it "acting on concert" with Directors with respect to the Company for the purposes of section 228(7) of the Corporations Act.

Listing Rule 10.13.3 requires that any shares issued to a related party (or its associates) under Listing Rule 10.11 must be issued no more than one month after the general meeting.

On 12 June 2012, the Company made a submission to ASX seeking relief from the application of Listing Rule 10,13.3 so that the issue of securities to Mutual Wide in relation to the Transaction will be permitted up to 3 months after the Meeting.

On 20 June 2012, ASX agreed to waive Listing Rule 10.13.3 to the extent necessary to enable the Notice to approve the issue of up to 30,300,000 Shares to Mutual Wide on the terms set out in this section 2.9 within 3 months of the date of the Meeting.

Shareholders should note that under Exception 14 of Listing Rule 7.2, if Shareholder approval of the issue of Shares is obtained under Listing Rule 10.11, approval under Listing Rule 7.1 is not required. Accordingly, if Shareholders approve the issue of shares to Mutual Wide under Listing Rule 10.11, approval under Listing Rule 7.1 will not be required.

Therefore, following the approval of the issue of the Shares to Mutual Wide, the Company will still have the capacity to issue 15% of its expanded share capital over the next 12 months as those Shares once issued will be excluded from the calculation under Listing Rule 7.1.

Listing Rule 10.13 contains certain requirements as to the contents of a notice sent to Shareholders for the purposes of ASX Listing Rule 10.11 and the following information is included in this Explanatory Statement for that purpose:

Listing Rule requirement	Response the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the
Name of the Person	Mutual Wide Corporation Limited
Maximum number of securities to be issued (or formula for calculating securities to be issued)	30,300,000 Shares
Date by which entity will issue the securities	Upon completion of the Hungarian within 3 Transaction but in any event months of the date of the Meeting.
Relationship	Mutual Wide is controlled by associates of two of the Company's Directors, George Karafotias and Eric Jiang.
Issue price	\$0.20
Intended use of funds raised	No funds will be raised by the issue of securities. They are to be used as consideration to acquire Mutual Wide's option to acquire 100% of the capital of SRK.

$(b)$ Chapter 2E approval

Under Chapter 2E of the Corporations Act, a public company must not give a "financial benefit" to a "related party" unless one of the exceptions set out in sections 210 to 216 of the Corporations Act apply or shareholders have in a general meeting approved the giving of that financial benefit to the related party.

The term "related party" is defined for these purposes to include a related party within the meaning of section 228 of the Corporations Act. Section 228(7) provides that an entity is a related party of a public company if the entity acts in concert with a related party of the public company on the understanding that the related party will receive a financial benefit if the public company gives the entity a financial benefit.

A "financial benefit" for the purposes of the Corporations Act is also widely defined. It includes the public company issuing securities to the related party.

Mutual Wide is controlled by associates of two of the Company's Directors, George Karafotias and Eric Jiang. Therefore, although it is not contemplated that either Director will receive a direct financial benefit as part of the Transaction, Mr Karafotias and Mr Jiang may benefit from future dealings with Mutual Wide. The Company has therefore taken the conservative approach of seeking Shareholder approval under Chapter 2E of the Corporations Act on the basis that Mutual Wide may be regarded as a related party of the Company by virtue of it "acting on concert" with Directors with respect to the Company for the purposes of section 228(7) of the Corporations Act.

Section 219 of the Corporations Act sets out certain requirements as to the contents of an explanatory statement sent to shareholders for the purposes of Chapter 2E and the following information is included in this Explanatory Statement for that purpose:

Corporations Act requirement	Mutual Wide Share Issue
Names of Related Parties to whom financial benefits will be given	Mutual Wide Corporation Limited
Nature of financial benefits	The issue of up to 30,300,000 Shares to Mutual Wide
In relation to each Director, that Director's recommendation regarding the Resolution to approve the Mutual Wide Share Issue and the reasons for that recommendation	The assignment of the rights Mutual Wide has in respect of the option to acquire from Synclean Energy PLC all of the issued shares in SRK is necessary to enable the Company to undertake the Hungarian Transaction. Directors unanimously recommend that, in the context of the Company's current circumstances, the Shareholders should vote to approve the Mutual Wide Share Issue.
In relation to each Director, whether that Director has an interest in the outcome of the Mutual Wide Share Issue	Mutual Wide is controlled by associates of George Karafotias and Eric Jiang. Therefore, although neither Director will receive a direct financial benefit as part of the Transaction, Mr Karafotias and Mr Jiang may benefit from future dealings with Mutual Wide.

Section 611 (item 7) approval $(c)$

The Company is seeking approval of the Mutual Wide Share Issue for the purposes of section 611 (item 7) of the Corporations Act.

increases from 20% or below to more than 20%; or
increases from a starting point that is above 20% and below 90%,

unless a specific exemption applies.

If the Mutual Wide Share Issue proceeds, Mutual Wide will hold an aggregated voting power of 20.29% in the Company.

Section 611 (item 7) of the Corporations Act provides an exception to the general prohibition under section 606 where the acquisition is approved by a resolution of shareholders.

It is a further requirement of section 611 (item 7) that the following disclosures are made regarding the proposed Mutual Wide Share Issue:

Corporations Act requirement	Mutual Wide Share Issue
Identity of purchasers	Mutual Wide Corporation Limited
Full particulars of Shares to be issued to purchasers	30,300,000 Shares will be issued to Mutual Wide to acquire that company's rights in respect of an option to acquire SRK.
Identify associations and qualifications of person who are intended to become a Director of the Company	There will be no change to the directors of the Company.
Statement of intentions regarding the future of the Company	If the Transaction proceeds: The Company intends to ø undertake exploration activity on the newly acquired Hungarian mining tenements and the Hoasib Project simultaneously with operating the existing security business. The ASX Listing Rules require the Company to satisfy the requirements of chapters 1 and 2 in order to be re-quoted, under which the Company will be required to effectively re-apply for

	admission to the Official List. The Company will therefore issue and a lodge a prospectus with ASIC in accordance with Chapter 6D of the Corporations Act. Existing employment arrangements will remain unchanged. No property will be transferred. There is no currently existing intention to redeploy the assets of the Company.
Terms of the Transaction	Refer to section 1.3(ii) of this Explanatory Statement.
Date for completion of the Transaction	The Completion Date under the Quota Purchase Agreement but in any event no later than 3 months after the date of the Meeting (unless a longer period is allowed by ASIC).
Reasons for the Transaction	Refer to section 1.3(ii) of this Explanatory Statement.
Interests of Directors	Nil.
Intention to change dividend or other financial policies	There is no intention to change the dividend or other financial policies of the Company at this time.

The passing of Resolution 9 is conditional upon, and subject to, Resolutions 4 to 8 and 10 being passed by Shareholders.

2.10 Approval of the novation of the option

The Company is seeking approval of the assignment of the rights Mutual Wide has in respect of the option to acquire from Synclean Energy PLC all of the issued shares in SRK for the purposes of Listing Rule 10.1.

Chapter 10 of the Listing Rules contains certain provisions in relation to transactions between a company and "persons in a position of influence". Listing Rule 10.1 provides that a company must not acquire a "substantial asset" from a "related party" without the approval of holders of ordinary securities.

An asset is deemed to be substantial if its value, or the value of the consideration for it, is 5% or more of the equity interests of the entity. The shares to be issued to Mutual Wide as consideration to acquire that company's rights under the option to acquire SRK will constitute more than 5% of the equity in the Company.

As detailed in section 2.9 above, the Directors have taken the conservative view that Mutual Wide may be regarded as a related party of the Company by virtue of it "acting on concert" with Directors with respect to the Company for the purposes of section 228(7) of the Corporations Act.

Therefore, the Company seeks shareholder approval for the assignment of the option from Mutual Wide to the Company.

The passing of Resolution 10 is conditional upon, and subject to, Resolutions 4 to 9 being passed by Shareholders.

$\mathbf{3}$ Independent Expert's Report

Resolutions 5, 8 and 9, if passed, would permit an acquisition of Shares in accordance with Section 611 (item 7) of the Corporations Act.

If passed, the Company will be able to issue the Shares to AUL. Synclean Energy PLC and Mutual Wide, thereby increasing their respective voting power in the Company, without contravening section 606 of the Corporations Act.

ASIC policy encourages a company to provide to shareholders who are being asked to consider a proposal to pass a resolution under section 611 (item 7) of the Corporations Act an analysis of whether the proposal is fair and reasonable when considered from the perspective of the shareholders of the company.

The Directors have commissioned the Independent Expert to prepare the Expert's Report to analyse the proposed Transaction.

The purpose of the Expert's Report is to analyse whether the Transaction is fair and reasonable to non-associated Shareholders.

In addition. Resolution 10 requires a report from an independent expert as to whether the proposed novation of the option in favour of the Company is fair and reasonable to holders of the Company's ordinary securities whose votes are not to be disregarded.

The Expert's Report, prepared by the Independent Expert is set out in full attached to this Explanatory Memorandum. Shareholders should read the full text of the Expert's Report to assist them in determining how they wish to vote in respect of Resolutions 5, 8, 9 and 10.

In summary, the Expert's Report concludes that the proposed Transaction is fair and reasonable to non-associated Shareholders.

Other information 4.

4.1 Scope of disclosure

The Company is required to provide to Shareholders all information which is known to the Company that is reasonably required by Shareholders in order to decide whether or not it is in the Company's interests to pass the Resolutions.

The Company is not aware of any relevant information that is material to the decision on how to vote on the Resolutions other than as is disclosed in this Explanatory Statement or previously disclosed to Shareholders by notification to ASX.

$4.2$ Voting intentions and interests of Directors

The number of Shares in which each Director has an interest as at the date of this Notice of General Meeting is set out in the table below.

Director	No. of Shares
George Karafotias	516,656
Eric Jiang	Nil
Jeffrey Hua Yuen Tan	Nil
Ashley Kelly	11,750,000
Wilton Yao	Nil

To the extent they are entitled to vote on each of the Resolutions, each Director intends to vote all Shares held or controlled by him or her in favour of all of the Resolutions.

4.3 Recommendation by Directors

The Directors unanimously recommend that, in the context of the Company's current circumstances, the Shareholders should vote to approve the Resolutions to be put to the Meeting.

However, Shareholders must decide how to vote based on the matters set out in the Explanatory Statement.

$4.4$ Taxation

The Transaction may give rise to income tax implications for the Company.

Shareholders are advised to seek their own taxation advice as to the effect of the Resolutions on their personal position. Neither the Company, nor any of the Directors or any adviser to the Company accepts any responsibility for any individual Shareholder's taxation consequences on any aspect of the Transaction.

4.5 Glossary

Capitalised terms used in this Notice and Explanatory Statement have the following meanings:

AUL means African Uranium Limited;

AUL Share Purchase Agreement means the Share Purchase Agreement between the Company, AUL and ECSI Africa in respect of the acquisition by ECSI Africa of AUL's 70% interest in the capital of Green Minerals Resources, which owns the Hoasib Project;

Bastos means Bastos Foundation (Pty) Ltd;

Consolidation means the proposed consolidation of the Company's Share capital at a ratio of 1 Share for every 25 Shares;

Corporations Act means the Corporations Act 2001 (Cth);

Director(s) means directors of the Company;

ECSI or the Company means ECSI Limited;

ECSI Africa means ECSI Africa Pty Ltd, a wholly owned subsidiary of the Company:

ECSI Hungary means ECSI Hungary Pty Ltd, a wholly owned subsidiary of the Company;

Explanatory Statement means the explanatory statement that accompanies the Notice;

Hoasib Project means the Hoasib Project located in Swakopmund, Namibia currently owned by Green Mineral Resources Pty Ltd;

Independent Expert means RSM Bird Cameron;

Listing Rules means the listing rules of ASX Limited;

Meeting means the meeting of the Company to be held at Middletons. Level 25. Rialto South Tower, Melbourne, Victoria on 15 August 2012 at 9.00 am;

Mutual Wide means Mutual Wide Corporation Limited;

Notice means the notice convening the Meeting:

Resolution means a resolution to be voted on at the Meeting, details of which are set out in the Notice:

SEK means Synclean Energy Kft;

SEK Quota Purchase Agreement means the Quota Purchase Agreement between the Company, Syncelan Energy PLC and ECSI Hungary in respect of the acquisition by ECSI Hungary of the quota representing all of the issued capital in SEK;

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

Shareholder means a holder of Shares;

SRK means Synclean Resources Kft; and

SRK Quota Purchase Agreement means the Quota Purchase Agreement between the Company, Syncelan Energy PLC and ECSI Hungary in respect of the acquisition by ECSI Hungary of the quota representing all of the issued capital in SRK.

ECSI Limited

Financial Services Guide and Independent Expert's Report

21 June 2012

We have concluded that :

for the purposes of Section 611, Item 7 of the Corporations Act 2001, the Proposed Transactions are Fair and Reasonable for the ECSI; and Non-Associated Shareholders of Associated
for the purposes of Listing Rule 10.1, the Proposed Transactions are Fair and Reasonable to holders of the Company's ordinary securities whose votes are not to be disregarded.

RSM Bird Cameron Corporate Pty Ltd Level 8, Rialto South Tower 525 Collins Street Melbourne VIC 3000 PO Box 238 Collins Street West VIC 8007 T +61 3 9286 1800 F +61 3 9286 1999 www.rsmi.com.au

Financial Services Guide

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Independent Expert's Report

TABLE OF CONTENTS Page

1.	Introduction 5
2.	Summary and Conclusion 9
3.	Summary of Proposed Transactions 11
4.	Purpose of this Report 15
5.	Profile of ECSI 18
6.	Profile of the Assets 26
7.	Valuation Methodologies 30
8.	Valuation of ECSI (pre Proposed Transactions) 33
9.	Valuation of the Coal Assets and the Uranium Assets 39
10.	Valuation of the Merged Group 42
11.	Are the Proposed Transactions Fair 43
12.	Other Factors taken into Consideration in Forming our Opinion 44

Appendix 1 – Declarations and Disclaimers

		Appendix 2 – Sources of Information

Appendix 3 – Glossary of Terms

Appendix 4 – Sensitivity Analysis for Consolidation Ratio Scenarios

Appendix 5 – Overview of the Global Coal Industry

Appendix 6 Overview of the Global Uranium Industry
Appendix 7 Independent Valuation of the Hungarian Permits and the Hoasib Project

Direct Line: (03) 9286 1867 Email: [email protected]

21 June 2012

The Directors ECSI Limited Level 2, 145 Flinders Street MELBOURNE VIC 3000

Dear Sirs

Independent Expert's Report

1. Introduction

1.1. This Independent Expert's Report (the "Report" or "IER") has been prepared to accompany the Notice of Meeting and Explanatory Statement for shareholders for the General Meeting of ECSI Limited ("ECSI" or "the Company") to be held on 20 July 2012, at which shareholder approval will be sought for a number of resolutions relating to the proposed acquisition of a number of coal and uranium exploration tenements.
1.2. The resolutions relating to the proposed acquisition of the coal and uranium exploration tenements comprise of the following:

Resolution 4 – Consolidation

To consider, and if thought fit, to pass the following Resolution as an ordinary resolution:

Resolution 5 – Approval of the issue for prospectus capital raising

To consider and, if thought fit, to pass the following Resolution as an ordinary resolution:

"That, subject to resolutions 4, 6, 7, 8, 9 and 10 being passed, for the purposes of ASX Listing Rule 7.1 and all other purposes, approval is given for the issue, under a prospectus, of up to 10,000,000 Shares (on a post-Consolidation basis) in the capital of the Company, with Shares to be issued at an issue price of \$0.20 to raise an amount of up to \$2,000,000, and otherwise on the terms described in the Explanatory Statement."

Resolution 6 - Approval for the change in nature and scale of activities

To consider and, if thought fit, to pass the following Resolution as an ordinary resolution:

Resolution 7 – Approval of the African Transaction

To consider, and if thought fit, to pass the following Resolution as an ordinary resolution:

"That, subject to resolutions 4, 5, 6, 8, 9 and 10 being passed, for the purposes of ASX Listing Rule 7.1, ASX Listing Rule 11.1, section 611 (item 7) of the Corporations Act 2001 (Cth) and all other purposes, approval is given for the issue of:

up to 32,000,000 Shares (on a post-consolidation basis) in the capital of the Company to Africa Uranium Limited; and
up to 13,714,286 Shares (on a post-consolidation) basis in the capital of the Company to Bastos Foundation (Pty) Ltd,

for the acquisition of all the issued shares in the capital of Green Mineral Resources Pty Ltd and otherwise on the terms described in the Explanatory Statement."

Resolution 8 – Approval of the Hungarian Transaction

To consider and, if thought fit, to pass the following Resolution as an ordinary resolution:

"That, subject to resolutions 4, 5, 6, 7, 9 and 10 being passed, for the purposes of ASX Listing Rule 7.1, ASX Listing Rule 11.1, section 611 (item 7) of the Corporations Act 2001 (Cth) and all other purposes, approval is given for the issue of:

up to 20,250,000 Shares (on a post-consolidation basis) in the capital of the Company to Synclean Energy PLC to acquire the quota representing all of the registered capital of Synclean Energy Kft; and
up to 20,250,000 Shares (on a post-consolidation basis) in the capital of the Company to Synclean Energy PLC to acquire the quota representing all of the registered capital of Synclean Resources Kft and otherwise on the terms described in the Explanatory Statement."

Resolution 9 – Approval of the issue of shares to Mutual Wide

To consider and, if thought fit, to pass the following Resolution as an ordinary resolution:

"That, subject to resolutions 4, 5, 6, 7, 8 and 10 being passed, for the purposes of ASX Listing Rule 10.11, section 611 (item 7) of the Corporations Act 2001 (Cth), Chapter 2E of the Corporations Act 2001 (Cth) and all other purposes, approval is given for the issue of up to 30,300,000 Shares (on a postconsolidation basis) in the Capital of the Company to Mutual Wide Corporation Limited for the novation of the option to acquire Synclean Resources Kft and otherwise on the terms described in the Explanatory Statement."

Resolution 10 - Approval of the novation of the option from Mutual Wide

To consider and, if thought fit, to pass the following Resolution as an ordinary resolution:

1.3. Completion of the acquisition of the coal and uranium exploration tenements is conditional on approval of the Resolutions 4 to 10, and on the Company complying with the requirements of Chapters 1 and 2 of the Australian Securities Exchange ("ASX") Listing Rules and obtaining written conditional approval from the ASX for the re-quotation of its shares. To obtain this approval the Company, subject to the approval of Resolutions 5 to 9, the Company intends to undertake a consolidation of its shares post the acquisition of the coal and uranium exploration tenements, to comply with ASX Listing Rule 2.1 Condition 2 that requires that the issue price or sale price of all the securities for which an entity seeks quotation (except options) must be at least 20 cents in cash ("20 cent rule"), at a ratio of 25:1 ("the Consolidation Ratio").
1.4. The issue of 32,000,000 shares to Africa Uranium Limited ("AUL") proposed in Resolution 7, the issue of 40,500,000 shares to Synclean Energy PLC ("Synclean") proposed in Resolution 8, and the issue of 30,300,000 shares to Mutual Wide Corporation Limited ("Mutual Wide") proposed in Resolution 9 will result in Synclean, AUL and Mutual Wide each owning greater than 20% of the issued share capital of ECSI, under which Section 611, Item 7 of the Corporations Act 2001, requires the approval of shareholders not associated with the acquisition ("the Non-Associated Shareholders") in a general meeting.
1.5. The proposed novation of the option by Mutual Wide in favour the Company requires, under Listing Rule 10.1, the approval of shareholders whose votes are not to be disregarded. Listing Rule 10.1 provides that a company must not acquire a "substantial asset" from a related party without the approval of holders of ordinary securities.
1.6. The Directors of ECSI have requested that RSM Bird Cameron Corporate Pty Ltd, being independent and qualified for the purpose, express an opinion as to whether the proposed acquisitions as set out in Resolutions 7, 8 and 9 are fair and reasonable to the Non-Associated Shareholders in accordance with Section 611, Item 7 of the Corporations Act 2011.
1.7. In addition, the Directors of ECSI have requested that RSM Bird Cameron Corporate Pty Ltd, being independent and qualified for the purpose, express an opinion as to whether the proposed novation of the option in favour of the Company is fair and reasonable to holders of the Company's ordinary shares whose votes are not to be disregarded.
1.8. As Resolutions 4 to 10 are interdependent, we have considered the implications of Resolutions 4 to 10 as a whole in our assessment as to whether Resolutions 7, 8, 9 and 10 are fair and reasonable to Non-Associated Shareholders. Further, we have considered the implications of Resolutions 4 to 10 as a whole in our assessment as to whether Resolution 10 is fair and reasonable to holders of the Company's ordinary securities whose votes are not to be disregarded. For the purposes of this Report, Resolutions 4 to 10 are collectively defined as the Proposed Transactions.
1.9. The ultimate decision whether to approve the Proposed Transactions should be based on each Shareholder's assessment of their circumstances, including their risk profile, liquidity preference, tax position and expectations as to value and future market conditions. If in doubt about the Proposed

Transactions, or matters dealt with in this Report, Shareholders should seek independent professional advice.

2. Summary and Conclusion

2.1. In our opinion, and for the reasons set out in Sections 11 and 12 of this Report, for the purposes of Section 611, Item 7 of the Corporations Act 2001, the Proposed Transactions are Fair and Reasonable for the Non-Associated Shareholders of ECSI.
2.2. In our opinion, and for the reasons set out in Sections 11 and 12 of this Report, for the purposes of Resolution 10 and Listing Rule 10.1, the Proposed Transactions are Fair and Reasonable to holders of the Company's ordinary securities whose votes are not to be disregarded.

Fairness

2.3. In order to assess the fairness of the Proposed Transactions, we assessed the value of a share in ESCI prior to the announcement of the Proposed Transactions and a share in ESCI assuming the Proposed Transactions are completed to determine whether a Non-Associated Shareholder would be better off should the Proposed Transactions be approved. Our assessed values are summarised in the table below.

	Valuation
	Low \$	High \$	Preferred \$
Value per share prior to the Proposed Transaction	\$0.010	\$0.010	\$0.010
Value per share post the Proposed Transaction	\$0.235	\$0.497	\$0.366

Table 1: Valuation Summary

2.4. In our opinion, the value of a share in ESCI assuming the Proposed Transactions are approved is equal to or greater than the value of a share in ESCI prior to the announcement of the Proposed Transactions. In accordance with the guidance set out in Australian Securities and Investment Commission Regulatory Guide 111 – Content of Expert Reports ("ASIC RG 111"), and in the absence of any other relevant information, for the purposes of Section 611, Item 7 of the Corporations Act 2001, we consider the Proposed Transactions to be Fair to the Non-Associated Shareholders of ESCI. For the purposes of Resolution 10 and Listing Rule 10.1, we consider the Proposed Transactions to be Fair to holders of the Company's ordinary securities whose votes are not to be disregarded.

Reasonableness

2.5. In accordance with the guidance provided in RG 111, as the Proposed Transactions is fair, it must be reasonable. Notwithstanding this, we have also considered the following factors in relation to the reasonableness aspects of the Proposed Transaction:
The future prospects of the Company if the Proposed Transactions do not proceed.

ECSI currently holds investments in two security technology businesses based in China. These businesses have not generated any revenue for ECSI at the date of this Report. The Company has been actively seeking investment opportunities and will continue to do so if the Proposed Transactions do not proceed.

However the Company currently has cash of approximately \$142,000, therefore, given the administration costs of running a publicly listed company, it is unlikely that the company has sufficient cash to appraise additional opportunities. In the event that the Proposed Transactions are not approved it is likely that further capital raisings will be required to allow the Company to continue to operate as a going concern.

• Any other commercial advantages and disadvantages to the Non-Associated Shareholders as a consequence of the Proposed Transactions proceeding.

In our opinion, the key advantages of the Proposed Transactions are:

The Proposed Transactions are fair;
The acquisitions contemplated in the Proposed Transactions will provide shareholders with the opportunity to participate in the future development and potential exploration upside in relation to the coal and uranium exploration tenements;
Possible improvement in the liquidity of ECSI shares if the Proposed Transactions create increased interest in the Company and hence a more efficient market for shareholders to dispose of their shareholdings; and
Shareholders will diversify their interests to include an investment in the junior exploration sector; and

The key disadvantages of the Proposed Transactions are:

Dilution of existing ECSI shareholders' interests from 100.0% to 15.3% immediately following the Proposed Transactions;
The risk profile of ECSI will change as post the Proposed Transactions, ECSI will be exposed to the highly volatile junior exploration sector; and
It is likely that ECSI will need to undertake significant capital raisings in the future to fully appraise and exploit the mineral potential of the coal and uranium exploration tenements. Should the Non-Associated Shareholders not participate in any future capital raisings, their interests may be diluted further.
2.6. We are not aware of any alternative proposals which may provide a greater benefit to the Non-Associated Shareholders of ECSI at this time.
2.7. In the absence of any other relevant information and/or a superior offer, for the purposes of Section 611, Item 7 of the Corporations Act 2001, we consider that the Proposed Transactions are Reasonable for the Non-Associated Shareholders of ECSI. For the purposes of Resolution 10 and Listing Rule 10.1, we consider the Proposed Transactions to be Reasonable to holders of the Company's ordinary securities whose votes are not to be disregarded.

3. Summary of Proposed Transactions

3.1. On 27 January 2012, ECSI announced that it had entered into an agreement to purchase from Mutual Wide, an option ("Option") to acquire from Synclean, all of the issued shares in its wholly-owned Hungarian subsidiaries, Synclean Energy Kft ("Synclean Energy") and Synclean Resources Kft ("Synclean Resources") (the "Synclean Subsidiaries"), which collectively own seven Hungarian coal permits ("the Hungarian Permits" or "the Coal Assets").
3.2. On 27 January 2012, ECSI also announced that it had completed due diligence investigations (set out in further detail in announcements made on 8 July 2011 and 13 April 2011), and that the Company intended to proceed with the purchase of a 100% interest in the Hoasib Project, located in Swakopmund, Namibia ("the Hoasib Project" or "the Uranium Assets"), from AUL and Bastos Foundation (Pty) Ltd ("Bastos"). The Hoasib Project is wholly-owned by Green Minerals Resources Pty Ltd ("GMR"), an entity in which AUL has a 70% interest and Bastos holds the remaining 30% interest.

Consideration

3.3. As set out in paragraph 1.3, the Notice of Meeting sets out a Consolidation Ratio of 25:1 to determine the number of consideration shares to be issued, on a post-consolidation basis, should the Proposed Transactions be approved and completed. The 25:1 Consolidation Ratio is consistent with the Company's 30 day VWAP to 18 June of \$0.008 cents.
3.4. We have set out further detail and sensitivity analysis in Appendix 4 in relation to the number of consideration shares to be issued in respect of a number of alternative Consolidation Ratios.

Consideration – Resolution 7

3.5. The Hoasib Project is wholly-owned by GMR. The Company has entered into a share purchase agreement with AUL under which the Company has agreed to issue to AUL, 800,000,000 shares (preconsolidation basis) in the Company as consideration for AUL's 70% interest in GMR. The consideration represents 32,000,000 shares on a post-consolidation basis.
3.6. The Company has also entered into a share purchase agreement with Bastos under which the Company has agreed to issue to Bastos, 342,857,143 shares (pre-consolidation basis) in the Company in consideration for Bastos's 30% interest in GMR. The consideration represents 13,714,286 shares on a post-consolidation basis.

Consideration – Resolution 8

3.7. The exercise price of the Option to acquire the Synclean Subsidiaries is \$8.1 million and is payable as scrip. The number of shares ECSI will be required to issue (pre-consolidation basis) to Synclean to exercise the option is calculated as follows:

X = \$8,100,000 / Y

where:

X = the number of pre-consolidation shares to be issued to Synclean for the acquisition of the Synclean Subsidiaries; and

Y = ECSI share price on a pre-consolidation basis.

The number of shares ECSI will issue to Synclean to acquire the Synclean Subsidiaries is calculated, on a post-consolidation basis, as follows:

Z = X / Consolidation Ratio

Where Z = the number of shares to be issued to Synclean for the acquisition of the Synclean Subsidiaries on a post-consolidation basis

3.8. Accordingly, for the purposes of this Report, the consideration shares to be issued to Synclean for the acquisition of a 100% interest in the Synclean Subsidiaries is 1,012,500,000 shares in the Company on a pre-consolidation basis, and 40,500,000 shares in the Company on a post-consolidation basis. In the event that the ECSI share price changes, the number of shares to be issued to Synclean will change accordingly (refer Appendix 4 for further detail).

Consideration – Resolution 9

3.9. ECSI has entered into a formal agreement with Mutual Wide and Synclean under which Mutual Wide assigned to ECSI its rights to the Option to purchase all of the shares in the Synclean Subsidiaries from Synclean.
3.10. In consideration for the assignment of the Option, ECSI has agreed to issue the number of shares in the Company to Mutual Wide, calculated as follows:

A = B – (C / D)

where:

A = the number of shares in the Company to be issued to Mutual Wide

B = 1,770,000,000

C = \$8,100,000

D = the price per share in the Company immediately before consolidation

3.11. The calculation set out in paragraph 3.10 above shows that on a pre-consolidation basis, Mutual Wide will be issued the balance of 1,770,000,000 pre-consolidation shares less the pre-consolidation shares to be issued to Synclean. Accordingly, for the purposes of this Report, the shares to be issued to Mutual Wide are 757,500,000 shares in the Company on a pre-consolidation basis, and 30,300,000 on a postconsolidation basis.
3.12. If the Proposed Transactions are approved, the Company's shares will be suspended from trading from the date shareholder approval is given until the requirements in Chapters 1 and 2 of the ASX Listing Rules have been satisfied.
3.13. As part of the change in activities of the Company and the application of Chapters 1 and 2 of the ASX Listing Rules, the Company will have to consolidate its shares to comply with the 20 cent rule.
3.14. We have summarised the number of consideration shares to be issued for the Hungarian Permits and the Hoasib Project acquisition on a pre-consolidation basis, and a post-consolidation basis using the 25:1 post Consolidation Ratio. In the event that the final Consolidation Ratio changes, then the number of the shares to be issued to the relevant vendors will change accordingly. Refer to Appendix 4 for our sensitivity analysis on the Consolidation Ratio.

Change of activities

3.15. The completion of any one of the acquisition of the Coal Assets or Uranium Assets will constitute a change to the principal activities of the Company. Accordingly, the Company will be required to:
comply with the requirements of chapter 11 of the ASX Listing Rules;
obtain shareholder approval for the Proposed Transactions; and
issue a prospectus and otherwise satisfy the listing requirements of Chapters 1 and 2 of the ASX Listing Rules as though the Company was undertaking an initial public offering.
3.16. Subject to the approval of Resolution 5, the Directors intend to raise \$2,000,000 through the issue of 10,000,000 ordinary ECSI shares on a post consolidation basis at an issue price of \$0.20.

Impact of the Proposed Transactions on ECSI's share structure

3.17. The final number of shares to be issued as a result of the Proposed Transactions is dependent on the actual Consolidation Ratio which will not be known until approval from the ASX for the re-quotation of the Company's shares is received and is therefore unknown at the date of this Report. Accordingly, in the table below we have summarised the impact of the Proposed Transactions on ECSI's share structure assuming a Consolidation Ratio of 25:1.

	Number of shares	%
Issued share capital as at the date of this report pre consolidation	570,536,387	16.4%

Hungarian Permits
Shares issued to Synclean for the acquisition of a 100% interest in Synclean Energy Shares issued to Synclean for the acquisition of a 100% interest in Synclean Resources	506,250,000 506,250,000	14.5% 14.5%
Shares issued to Mutual Wide	757,500,000	21.7%
Hoasib Project
Shares issued to AUL for the acquisition of a 70% interest in GMR	800,000,000	23.0%
Shares issued to Bastos for the acquisition of a 30% interest in GMR	342,857,143	9.8%
Total shares on issue pre consolidation and post Proposed Transaction	3,483,393,530	100.0%
Consolidation on a 25:1 basis
Current shareholders	22,821,455	16.4%
Synclean	40,500,000	29.1%
Mutual Wide	30,300,000	21.7%
AUL	32,000,000	23.0%
Bastos	13,714,286	9.8%
Total shares on issue post consolidation and post Proposed Transaction	139,335,741	100.0%
Capital raising
Capital raising shares issued	10,000,000	6.7%
Current shareholders	22,821,455	15.3%
Synclean	40,500,000	27.1%
Mutual Wide	30,300,000	20.3%
AUL Bastos	32,000,000 13,714,286	21.4% 9.2%

Total shares on issue post consolidation, post Proposed Transaction and post capital raising	149,335,741	100.0%

Table 2: ECSI share structure pre and post the Proposed Transactions

3.18. Based on the approval of Resolutions 7 to 9, current shareholders' interests in ECSI will be diluted from 100% to 16.4%. Assuming that none of the current shareholders subscribe to the capital raising set out in Resolution 5, after the issue of 10,000,000 shares to raise \$2 million, current shareholders' interests will be further diluted to 15.3%.

Purpose of the Proposed Transactions

3.19. The Directors of ECSI consider that the Proposed Transactions will create value for shareholders and assist the Company in the next phase of its growth. The Directors believe that the Hungarian Permits and the Hoasib Project present an investment opportunity which provides the Company significant potential upside due to the explorative nature of the assets to be acquired, should provide additional liquidity in the Company's shares and are of such quality that they will assist the Company raise additional capital to fund exploration programs. The Directors are of the view that such exploration expenditure could add value to the exploration portfolio the Company is proposing to acquire.

4. Purpose of this Report

Corporations Act

4.1. Section 606(1) of the Corporations Act ("the Act") provides that, subject to limited specified exemptions, a person must not acquire a "relevant interest" in issued voting shares in a public company, if as a result of the acquisition any person's voting power in the company would increase from 20% or below to more than 20%. In broad terms, a person has a "relevant interest" in shares if that person holds shares or has the power to control the right to vote or dispose of shares. A person's voting power in a company is the number of voting shares in which the person (and its associates) holds, compared with the total number of voting shares in the company.
4.2. Completion of the Proposed Transactions will result in the following companies having a relevant interest of above 20%:
Synclean 27.1% interest;
AUL 21.4% interest; and
Mutual Wide 20.3%.

Therefore the Company will be in breach of Section 606(1) of the Act in the absence of an applicable exception.

4.3. Section 611, Item 7 of the Corporations Act provides an exemption to the rule noted in paragraph 4.1 above. Section 611, Item 7 allows a party (and its affiliates) to acquire a relevant interest in shares that would otherwise be prohibited under Section 606(1) of the Act if the proposed acquisition is approved in advance by a resolution passed at a general meeting of the Company; and:
i) no votes are cast in favour of the resolution by the proposed acquirers or respective associates; and
ii) there was full disclosure of all information that was known to the persons proposed to make the acquisition or their associates or known to the Company that was material to a decision on how to vote on the resolution.
4.4. Section 611 states that shareholders must be given all information that is material to the decision on how to vote at the meeting. RG 111 advises the commissioning of an Independent Expert's Report in such circumstances and provides guidance on the content.

Listing Rule 10.1

4.5. The Company is seeking approval of the assignment of the rights Mutual Wide has in respect of the option to acquire from Synclean all of the issued shares in Synclean Resources for the purposes of Listing Rule 10.1.
4.6. Chapter 10 of the Listing Rules contains certain provisions in relation to transactions between a company and "persons in a position of influence". Listing Rule 10.1 provides that a company must not acquire a "substantial asset" from a "related party" without the approval of holders of ordinary securities.
4.7. An asset is deemed to be substantial if its value, or the value of the consideration for it, is 5% or more of the equity interests of the entity. The shares to be issued to Mutual Wide as consideration to acquire that company's rights under the option to acquire Synclean Resources will constitute more than 5% of the equity in the Company.
4.8. The Directors have taken the view that Mutual Wide may be regarded as a related party of the Company by virtue of it "acting on concert" with Directors with respect to the Company for the purposes of section 228(7) of the Corporations Act.
4.9. Listing Rule 10.10.2 requires a report on the transaction from an independent expert. The report must state the expert's opinion as to whether the transaction is fair and reasonable to holders of the entity's ordinary securities whose votes are not to be disregarded.

Basis of Evaluation

4.10. In determining whether the Proposed Transactions are "fair and reasonable" we have given regard to the views expressed by ASIC in RG 111.
4.11. RG 111 provides ASIC's views on how an expert can help security holders make informed decisions about transactions. Specifically it gives guidance to experts on how to evaluate whether or not a proposed transaction is fair and reasonable.
4.12. RG 111 states that the expert report should focus on:
the issues facing the security holders for whom the report is being prepared; and
the substance of the transaction rather than the legal mechanism used to achieve it.
4.13. Approval required under Section 611, item 7Where an issue of shares by a company otherwise prohibited under section 606 is approved under item 7 of section 611 and the effect on the company's shareholding is comparable to a takeover bid, RG 111 states that the transaction should be analysed as if it was a takeover bid.
4.14. RG 111 applies the "fair and reasonable" test as two distinct criteria in the circumstance of a takeover bid, stating:
A takeover offer is considered "fair" if the value of the offer price or consideration is equal to or greater than the value of the securities that are the subject of the offer; and
A takeover offer is considered "reasonable" if it is fair or, where the offer is "not fair", it may still be "reasonable" if the expert believes that there are sufficient reasons for security holders to accept the offer.
4.15. Consistent with the guidelines in RG 111, in determining whether the Proposed Transactions are "fair and reasonable" to the Non-Associated Shareholders, the analysis undertaken is as follows:
A comparison of the fair value of an ordinary share in ECSI prior to and immediately following the Proposed Transactions, being the 'consideration' for Non-Associated Shareholders - fairness; and
A review of other significant factors which Non-Associated Shareholders might consider prior to approving the Proposed Transactions - reasonableness.
4.16. In particular, we have considered the advantages and disadvantages of the Proposed Transactions in the event that the Proposed Transactions proceed or do not proceed including:
The future prospects of the Company if the Proposed Transactions do not proceed; and
Any other commercial advantages and disadvantages to the Non-Associated Shareholders as a consequence of the Proposed Transactions proceeding.

Approval required under Listing Rule 10.1

4.17. When analysing related party transactions, RG 111 states that where the related party transaction is one component of a broader transaction or a series of transactions involving non-related parties (such as a control transaction), the expert should carefully consider what level of analysis of the related party is required. In this consideration, the expert should bear in mind whether the report has been sought to ensure that members are provided with sufficient information to decide whether to approve giving a financial benefit to the related party as well as the broader transaction.
4.18. RG 111 applies the fair and reasonable test as a two distinct criteria, stating that a proposed related party transaction is fair if the value of the financial benefit to be provided by the entity to the related party is equal to or less than the value of the consideration being provided to the entity.
4.19. A related party transaction is reasonable if it is fair. It might also be reasonable if, despite being not fair, the expert believes there are sufficient reasons for members to vote for the transaction.
4.20. RG 111.63 states that, generally an expert need only conduct one analysis of the whether the transaction is fair and reasonable, even if the report has been prepared for a reason other than the transaction being a related party (e.g. if item 7 s611 approval is also required).

5. Profile of ECSI

5.1. ECSI was created in 2002 through a back-door listing into the shell of Omni Group Limited ("Omni"). Omni was a telecommunications company which had been listed on the ASX since 1974, but suspended from trading following the appointment of an administrator.
5.2. ECSI is an electronic security technology company with an interest in a security business located in the Peoples Republic of China ("PRC") which developed a National Alarm Response ("NAR") system for use within certain Chinese cities. The NAR system provides a secure communications network for online monitoring of buildings, vehicles and personal residences.
5.3. In June 2004, ECSI was placed into voluntary administration and the shares suspended following a delay in the receipt of working capital funding. A Deed of Company Arrangement was agreed and the Company was released from administration in September 2004.
5.4. ECSI was re-instated to official quotation on 27 May 2010 following compliance with Chapter 12 of the Listing Rules.
5.5. On 16 July 2010, the Company announced the proposed acquisition of Chinaway Technology Development Ltd ("Chinaway"), a Chinese technology company from Alpha Wealth Financial Services Pty Ltd ("Alphawealth"), for a total consideration of \$200,000 cash and the issue of 6,666,667 shares in ECSI, contingent on financial milestones. In the audited financial statements for the year ended 30 June 2011, ECSI disclosed an impairment expense of \$200,000 relating to the non recoverable deposit of \$200,000 paid to Alphawealth as the acquisition of Chinaway did not proceed.
5.6. On 9 August 2010, the Company announced that it had signed a term sheet to acquire 100% of Alphacoal Capital Pty Ltd ("Alphacoal") for \$2,000,000 from Alphawealth. Alphacoal held an option to purchase either the business and assets of Qitaihe Puneng Coal Chemicals Company Limited ("Puneng") or the shares in Puneng from Vigor Holdings Ltd ("Vigor"). Puneng is a limited liability company, domiciled in the PRC, whose main activities are the processing of raw and float coal to produce coke and other byproducts. It owns and operates a large coking facility in Qitaihe City, Heilongjiang Province, China. ECSI paid Alphawealth a deposit of \$1,000,000 for the acquisition of Alphacoal, with the balance of \$1,000,000 subject to the completion of ECSI's due diligence. After significant due diligence, on 8 March 2011 the Company announced that the Directors had decided not to proceed with the acquisition of Puneng on the basis that they did not believe completion of the acquisition was in the best interests of the Company.
5.7. On 13 April 2011, the Company announced that it had signed term sheets for the acquisition of a number of interests in uranium tenements located in South Africa, Mauritania and Namibia (including the Hoasib Project) ("collectively, the African Sale Assets"). For total payment of \$200,000 to the vendors of the African Sale Assets, the Company was granted a 60 day exclusivity period to conduct due diligence investigations on the African Sale Assets.
5.8. On 27 January 2012, the Company announced that as a result of the due diligence investigations, ECSI has determined to proceed with the purchase of the Hoasib Project.
5.9. Further, on 27 January 2012, the Company also announced that it had entered into an agreement to purchase the seven Hungarian Permits. These proposed acquisitions represent a change in the principal activities of the Company and accordingly the Company will be seeking approval from the ASX that it complies with Chapters 1 and 2 of the ASX Listing Rules.

Financial Performance

5.10. The table below sets out the financial performance of ECSI for the three years ended 30 June 2011 and the half- year ended 31 December 2011.

	Ref.	Half-year ended 31-Dec-11 Reviewed \$	Year ended 30-Jun-11 Audited \$	Year ended 30-Jun-10 Audited \$	Year ended 30-Jun-09 Audited \$
Revenue	5.11	-	5,757	15,443	-
Corporate and administrative expenses	5.12	(153,086)	(237,543)	(110,247)	(80,020)
Company secretarial expenses		-	-	(23,514)	(10,000)
Consultants fees		-	-	(139,966)	-
Directors fees		-	(123,950)	(71,792)	(67,500)
Impairment expense		(72,959)	(1,200,000)	-	-
Due diligence		-	(538,986)	-	-
Finance costs		(789)	-	-	-
Loss before tax		(226,834)	(2,094,722)	(330,076)	(157,520)
Tax		-	-	-	-
Loss attributable to members of ECSI Limited		(226,834)	(2,094,722)	(330,076)	(157,520)
Other comprehensive income for the period		-	-	-	-
Total comprehensive loss for the period attributable to members of ECSI Limited	5.13	(226,834)	(2,094,722)	(330,076)	(157,520)

Source: ECSI audited financial statements for the three years ended 30 June 2011 and the reviewed financial statements for the half-year ended 31 December 2011

Table 3: Financial Performance for the three years ended 30 June 2011 and the half-year ended 31 December 2011

5.11. The Company generated interest on cash deposits for the two years ended 30 June 2011 but has not generated other revenue for the periods under review.
5.12. The impairment expense of \$1,200,000 relates to the \$1,000,000 deposit paid to Alphawealth, in relation to the proposed acquisition of Alphacoal and Puneng, and \$200,000 paid to Alphawealth in relation to the proposed acquisition of Chinaway. As at 30 June 2011, the Directors have determined that these deposits were no longer recoverable and have impaired both deposits to \$nil. The impairment expense of \$73,000 for the six months ended 31 December 2011, relates to the ATO's dispute of input tax credits arising from certain expenses incurred by the Company. The ATO has also imposed an \$18,000 penalty in relation to the disputed tax credits. The Company disclosed as a contingent liability, that, ECSI has formally objected to this penalty and the directors believe that this objection with the ATO will be resolved favourably.
5.13. For the half-year ended 31 December 2011, the Company disclosed a loss after tax of \$227,000. For the year ended 30 June 2011, the Company disclosed a loss after tax of \$2.1 million.

Financial Position

5.14. The table below sets out the financial position of ECSI as at 31 December 2011, 30 June 2011, and 30 June 2010.

	Ref.	As at 31-Dec-11 Reviewed \$	As at 30-Jun-11 Audited \$	As at 30-Jun-10 Audited \$
Current Assets Cash and cash equivalents Trade and other receivables Financial assets Prepayments	5.16	141,951 - - 11,428	254,267 58,843 - -	1,739,934 19,203 - -
Total Current Assets		153,379	313,110	1,759,137
Non-Current Assets Property, plant & equipment		-	452	2,260
Total Assets		153,379	313,562	1,761,397
Current Liabilities Trade and other payables Unsecured loan held at call from related party Convertible notes issued to related parties	5.17 5.17 5.18	9,639 141,383 50,000	134,371 - -	309,947 - -
Total Current Liabilities		201,022	134,371	309,947
Non-Current liabilities Trade and other payables		-	-	-
Total Liabilities		201,022	134,371	309,947
NET (LIABILITIES)/ASSETS	5.15	(47,643)	179,191	1,451,450
EQUITY Issued capital Accumulated losses		93,165,250 (93,212,893)	93,165,250 (92,986,059)	92,342,787 (90,891,337)
TOTAL EQUITY	5.15	(47,643)	179,191	1,451,450

Source: ECSI audited financial statements for the three years ended 30 June 2011 and the reviewed financial statements for the half-year ended 31 December 2011

Table 4: Financial Position of ECSI as at 30 June 2011 and 30 June 2010

5.15. ECSI disclosed net liabilities of \$48,000 as at 30 December 2011 as compared to net assets of \$179,000 as at 30 June 2011.
5.16. The decrease in cash and net assets during 2011 is predominantly due to the non refundable deposits of \$1,000,000 paid in relation to the Alphacoal and Puneng acquisitions which was written off during the period and a \$200,000 non refundable deposit paid in relation to the proposed purchase of Chinaway. ECSI also incurred \$539,000 in due diligence expenses during the 2011 financial year.
5.17. Trade and other payables principally relate to accrued directors' fees and loans from directors and director-related entities. For the six months ended 31 December 2011, the Company also obtained a related-party loan of \$141,000.
5.18. In October 2011 ECSI signed a convertible note agreement under which \$50,000 was advanced for a period of three months after the agreement date, secured by a fixed and floating charge up and until conversion by the lender. In the event of conversion (after shareholder approval is obtained), the Company is required to satisfy payment of the advance via subscription of shares at a price of 0.3 cents per share. At the date of this Report, conversion has not taken place.
5.19. On 16 July 2010, the Company raised \$221,753 through the issue of 8,870,135 ordinary shares at an issue price of 2.5 cents each.
5.20. On 9 September 2010 the Company raised \$185,900 through the issue of 10,327,778 ordinary shares at an issue price of 1.8 cents each.
5.21. On 20 June 2011, ECSI raised \$455,000 through the issue of 65,000,000 ordinary shares at an issue price of 0.7 cents each. Shareholder approval for this prior placement is being sought under Resolution 1 in the General Meeting.
5.22. On 13 February 2012, ECSI raised \$120,000 through the issue of 24,000,000 ordinary shares at an issue price of 0.5 cents each. Shareholder approval for this prior placement is being sought under Resolution 2 in the General Meeting.
5.23. On 8 May 2012, ECSI raised \$200,000 through the issue of 40,000,000 ordinary shares at an issue price of 0.5 cents each. Shareholder approval for this prior placement is being sought under Resolution 3 in the General Meeting.

Capital Structure

5.24. The capital structure of ECSI as at the date of this Report is set out below:

	Number
Total ordinary shares on issue	570,536,387
Total unlisted share options on issue	130,688,888

Table 5: Capital Structure as at 7 May 2012

5.25. The unlisted share options expire on 31 December 2012 and are exercisable at 3 cents. To undertake consolidation of the Company's shares to comply with the 20 cent rule, Listing Rule 7.22.1 requires that options must be consolidated in the same ratio as the shares and that the exercise price for the options must be amended in inverse proportion to that ratio.

5.26. The top 20 shareholders as at 18 April 2012 is summarised in the table below.

Shareholder	Number of Shares	%
MR JAMES EDWARD GREEN	56,344,730	10.6%
MR GRAEME ALLAN GREEN	34,918,929	6.6%
ROCZ PTY LTD	30,340,000	5.7%
YA FANG DUO INVESTMENT PTY LTD	19,800,000	3.7%
MRS HUIJUAN TENG	18,800,000	3.5%
XIAO BING LU	16,000,000	3.0%
MRS JEAN PERCY DALIAN DEVELOP ZONE GUANG SHUN ECONOMICAL TRADE CO LTD	12,000,000 11,709,603	2.3% 2.2%

ABN AMRO CLEARING SYDNEY NOMINEES PTY LTD	11,111,112	2.1%
MR ASHLEY WAYNE KELLY & MISS REBECCA MOUSLEY <the mollyKELLY S/F A/C>	10,550,000	2.0%
WU HUA AUCTION COMPANY LIMITED	10,000,000	1.9%
LIAO NING CONSTRUCTION GROUP LTD	10,000,000	1.9%
MR ZHONGMING WU	9,000,000	1.7%
MR SHANE ANTHONY MATCHETT & MRS MELITA ANGELA MATCHETT <sa + MA MATCHETT S/F A/C></sa	8,388,626	1.6%
MR ROSS STANLEY SUTHERLAND & MRS CAROLYN ANNE SUTHERLAND	8,000,000	1.5%
MRS ENEA STELLA & MR TONY STELLA <am &="" ben="" em="" fund<="" stella="" td="">	7,894,121	1.5%	7,894,121	1.5%
A/C> MR BO QIANG	7,500,000	1.4%
MR NOEL HOLLAND	6,500,000	1.2%
VESLEX PTY LTD	6,480,000	1.2%
GARANG PTY LTD	6,236,263	1.2%
	301,573,384	56.8%
Other shareholders	228,963,003	43.2%
Total	530,536,387	100.0%

Table 6: Top 20 shareholders as at 18 April 2012

5.27. The top 20 option holders are set out in the table below.

Options holder	Number of Options	%
JIN XIN INTERNATIONAL PTY LTD	11,111,111	8.5%
GARANG PTY LTD	9,722,222	7.4%
DR HOCK POH TAN & MRS ROSALIND TAN <dr hock="" poh="" superA/C>	8,888,888	6.8%
ONTEX HOLDING LIMITED	6,666,667	5.1%
MRS LIHUA ZHANG	6,666,667	5.1%
MS JENNY JIA MENG	5,555,556	4.3%
S NG PTY LTD	5,555,555	4.3%
HOCK POH TAN & ROSALIND TAN	3,888,888	3.0%
MR PETER GEBHARDT & MRS CARLENE GEBHARDT <petard superFUND A/C>	3,000,000	2.3%
SA CAPITAL FUNDS MANAGEMENT LIMITED	3,000,000	2.3%
MR COLIN LUDWIG	3,000,000	2.3%
FIRIKAMI PTY LTD	3,000,000	2.3%
DELLTA PTY LTD	2,800,000	2.1%
FAROC INVESTMENTS PTY LTD	2,800,000	2.1%
LEUCHTER INVESTMENTS PTY LTD	2,777,778	2.1%
CHU TEOH	2,777,778	2.1%
AUSTRALIAN TRADE ACCESS PTY LTD	2,000,000	1.5%
MR DANNY MAI	2,000,000	1.5%
GREGORY J WOOD & ASSOCIATES PTY LTD	2,000,000	1.5%
KS CAPITAL PTY LTD	2,000,000	1.5%
UANG PTY LTD	2,000,000	1.5%
	91,211,110	69.8%
Other shareholders	39,477,778	30.2%
Total	130,688,888	100.0%

Table 7: Top 20 option holders as at 18 April 2012

Share price performance

5.28. ECSI's daily closing share price and volumes traded are shown in the graph below for the period 31 May 2010 (the date ECSI re listed on the ASX) to 18 June 2012.

Figure 1: Daily Closing Share Price and Traded Volumes (Source: Bloomberg)

5.29. ECSI's shares traded between \$0.018 and \$0.026 immediately following the initial re-listing in May 2010. The Company's share price fluctuated between a low of \$0.01 and a high of \$0.023, in the period following the announcement of the Alphacoal and Puneng Transaction until 9 March 2011, when the Company announced it was not proceeding with the Alphacoal and Puneng Transaction.
5.30. On 5 April 2011, the Company entered a trading halt pursuant to the initial announcement it made regarding the proposed acquisition of the African Sale Assets, including the Hoasib Project on 13 April 2011. Following restatement of the Company's shares on 14 April 2011, the Company's share price declined, reaching a low of \$0.001 on 12 December 2011. Following further updates on the progress made on the proposed acquisition of the uranium assets in Africa made on 16 December 2011, the Company's share price increased to \$0.008.
5.31. On 27 January 2012, the Company announced the Proposed Transactions to acquire the Hungarian Permits and the Hoasib Project. Since the announcement of the Proposed Transactions, ECSI share price has fluctuated between a high of \$0.010 and a low of \$0.001.
5.32. Further information on the price and volume at which the Company's shares have traded is set out in section 8 of this Report

6. Profile of the Assets

Overview

6.1. In this section of our Report we provide an overview of the entities and mineral exploration assets ECSI will be acquiring as part of the Proposed Transactions. Further detail about the entities and mineral exploration assets is set out in the Notice of Meeting and Explanatory Statement.

GMR – Owner of the Hoasib Project

Overview

6.2. GMR is a company registered in Namibia. The Company's only significant asset is the Hoasib Project.
6.3. 70% of the issued share capital of GMR is owned by AUL, with the remaining 30% owned by Bastos. ECSI is proposing to acquire 100% of the issued share capital of GMR from AUL and Bastos.

Overview of the Hoasib Project

6.4. The Hoasib Project is located in the Namib Naukluft Park in western Namibia, covered by mineral concessions EPL 3664A and EPL 3364B. The mineral concession licences were renewed in November 2011 for a period of two years to 26 November 2013.
6.5. Namibia is considered to be a safe and stable country with an established uranium mining industry. The region surrounding the Hoasib Project hosts known uranium mines including the Langer Heinrich and Rossing mines operated by Australian domiciled Paladin Energy Limited and Rio Tinto Limited, respectively, as well as several projects currently under development. The Hoasib Project covers an area of 693 km² .

Financial position

6.6. The table below sets out a summary of the financial position of GMR as at 31 December 2010. The information has been sourced from the audited financial statements of GMR for the six months ended 31 December 2010. GMR's functional and presentational currency is Namibian dollars, for illustrative purposes we have converted the assets and liabilities of GMR into Australian Dollars at an exchange rate of \$1 : N\$6.743142 as quoted by XE Currency as at 31 December 2010.

	Ref	As at 31-Dec-10 Audited N\$	As at 31-Dec-10 Comparison \$
Current assets
Cash and cash equivalents		67	10
Non-Current Assets
Property, plant and equipment		49,127	7,285
Intangible assets	6.7	2,778,064	411,984
Deferred tax		62,986	9,341
Total non-current assets		2,890,177	428,610
Total assets		2,890,244	428,620
Current liabilities
Trade and other payables		5,809	861
Non-Current Liabilities
Loans from shareholders	6.8	2,379,476	352,873
Total liabilities		2,385,285	353,734
NET ASSETS	6.7	504,959	74,886

Total equity
Share capital		677,977	100,543
Accumulated losses		(173,018)	(25,658)
TOTAL EQUITY	6.7	504,959	74,885

Table 8: Financial Position of GMR as at 31 December 2010

6.7. GMR disclosed net assets of N\$505,000 (\$75,000) as at 31 December 2010. GMR disclosed N\$2.8 million (\$412,000) in exploration expenditure in relation to the Hoasib Project.
6.8. As at 31 December 2010, GMR disclosed loans owing to AUL and Bastos of \$2,082,371 and \$297,105, respectively, amounting to circa \$353,000. As part of the proposed sale of their interest in GMR, AUL and Bastos have agreed to forgive all loans GMR has outstanding to AUL and Bastos at completion of the sale of GMR to ECSI.
6.9. We have been advised that GMR has not produced financial statements more recent than that disclosed in the audited financial statements for the year ended 31 December 2010. We have been provided with a letter of representation from the directors of AUL dated 27 April 2012 confirming that GMR's net asset position has not changed since 31 December 2010.

Synclean Subsidiaries

6.10. Synclean Energy and Synclean Resources are companies registered in Budapest, Hungary. The Hungarian Permits to be acquired by ECSI are owned by the Synclean Subsidiaries.
6.11. The table below sets out a summary of the financial position of Synclean Energy as at 31 December 2011 and 29 February 2012. The information has been sourced from the audited financial statements of Synclean Energy for the year ended 31 December 2011 and the unaudited management accounts as at 29 February 2012. Synclean Energy's functional and presentational currency is Hungarian Forint ("HUF"). For illustrative purposes, we have converted the assets and liabilities of Synclean Energy into Australian Dollars at an exchange rate of \$1 : HUF247.9861, and \$1 : HUF232.5270 as quoted by XE Currency as at 31 December 2011, and 29 February 2012, respectively.

	Ref	As at 31-Dec-11 Audited HUF	As at 31-Dec-11 Comparison \$	As at 29-Feb-12 Unaudited HUF	As at 29-Feb-12 Comparison \$
Current assets Receivables Cash and cash equivalents Accrued and deferred assets		8,107,000 5,826,000 148,000	32,691 23,493 597	8,798,758 6,493,276 9,800	37,840 27,925 42
Total current assets		14,081,000	56,781	15,301,834	65,807
Non-Current Assets Intangible assets	6.13	3,695,000	14,900	3,947,339	16,976
Total non-current assets		3,695,000	14,900	3,947,339	16,976
Total assets		17,776,000	71,681	19,249,173	82,783
Current liabilities Trade and other payables Accrued and deferred liabilities	6.12	108,086,000 596,000	435,855 2,403	119,505,071 380,605	513,941 1,637
Total liabilities		108,682,000	438,258	119,885,676	515,578
NET ASSETS	6.14	(90,906,000)	(366,577)	(100,636,503)	(432,795)
Total equity Share capital Capital reserve Tied-up reserve Accumulated losses		500,000 848,000 150,718,000 (242,972,000)	2,016 3,420 607,768 (979,781)	500,000 847,405 157,423,749 (259,407,657)	2,150 3,644 677,013 (1,115,602)
TOTAL EQUITY	6.14	(90,906,000)	(366,577)	(100,636,503)	(432,795)

Table 9: Financial Position of Synclean Energy as at 31 December 2011 and 29 February 2012

6.12. As at 29 February 2012, Synclean Energy disclosed trade and other payables of HUF119.5 million (\$514,000).
6.13. As at 29 February 2012, Synclean Energy disclosed intangible assets of HUF3.9 million (\$17,000). This amount solely comprises of capitalised exploration expenses related to the Hungarian permits to be acquired by ECSI.
6.14. As at 29 February 2012, Synclean Energy disclosed net liabilities of HUF100.6 million (\$433,000).

6.15. The table below sets out a summary of the financial position of Synclean Resources as at 31 December 2011 and 29 February 2012. The information has been sourced from the audited financial statements of Synclean Resources for the year ended 31 December 2011 and the unaudited management accounts as at 29 February 2012. Synclean Resources' functional and presentational currency is Hungarian Forint ("HUF"). For illustrative purposes, we have converted the assets and liabilities of Synclean Resources into Australian Dollars at an exchange rate of \$1 : HUF247.9861, and \$1 : HUF232.5270 as quoted by XE Currency as at 31 December 2011, and 29 February 2012, respectively.

	Ref	As at 31-Dec-11 Audited HUF	As at 31-Dec-11 Comparison \$	As at 29-Feb-12 Unaudited HUF	As at 29-Feb-12 Comparison \$

Current assets
Receivables		290,000	1,169	5,000	22
Cash and cash equivalents		31,000	125	32,208	139
Total current assets		321,000	1,294	37,208	161
Non-Current Assets
Intangible assets	6.16	646,000	2,605	615,500	2,647

Total non-current assets		646,000	2,605	615,500	2,647
Total assets		967,000	3,899	652,708	2,808
Current liabilities
Trade and other payables	6.17	1,476,000	5,952	1,271,971	5,470
Accrued and deferred liabilities		141,000	569	-	-
Total liabilities		1,617,000	6,521	1,271,971	5,470
NET ASSETS	6.18	(650,000)	(2,622)	(619,263)	(2,663)

Total equity
Share capital		600,000	2,419	600,000	2,580
Accumulated losses		(1,250,000)	(5,041)	(1,219,263)	(5,244)
TOTAL EQUITY	6.18	(650,000)	(2,622)	(619,263)	(2,663)

Table 10: Financial Position of Synclean Resources as at 31 December 2011

6.16. As at 29 February 2012, Synclean Resources disclosed intangible assets of HUF616,000 (\$3,000). This amount solely comprises of capitalised exploration expenses related to the Hungarian Permits to be acquired by ECSI.
6.17. As at 29 February 2012, Synclean Resources disclosed net trade and other payables of HUF1.3 million (\$5,000). Trade and other payables primarily comprise amounts owing to Synclean Energy of HUF1.5 million, and net movements in other trade creditors.
6.18. As at 29 February 2012, Synclean Energy disclosed net liabilities of HUF619,000 (\$3,000).

7. Valuation Methodologies

7.1. In assessing the value of ECSI prior to and immediately following the Proposed Transactions, we have considered a range of valuation methodologies. RG 111 proposes that it is generally appropriate for an expert to consider using the following methodologies:
the discounted cash flow ("DCF") method and the estimated realisable value of any surplus assets;
the application of earnings multiples to the estimated future maintainable earnings or cash flows added to the estimated realisable value of any surplus assets;
the amount which would be available for distribution on an orderly realisation of assets;
the quoted price for listed securities; and
any recent genuine offers received.
7.2. We consider that the valuation methodologies proposed by RG 111 can be split into three valuation methodology categories, as follows:

Market Based Methods

7.3. Market based methods estimate the fair market value by considering the market value of a company's securities or the market value of comparable companies. Market based methods include:
Capitalisation of maintainable earnings;
The quoted price for listed securities; and
Industry specific methods.
7.4. The capitalisation of earnings methodology is generally considered a short form DCF, where an estimation of the Future Maintainable Earnings ("FME") of the business, rather than a stream of cash flows is capitalised based on an appropriate capitalisation multiple. Multiples are derived from the analysis of transactions involving comparable companies and the trading multiples of comparable companies.
7.5. The recent quoted price for listed securities method provides evidence of the fair market value of a company's securities where they are publicly traded in an informed and liquid market.
7.6. Industry specific methods usually involve the use of industry rules of thumb to estimate the fair market value of a company and its securities. Generally rules of thumb provide less persuasive evidence of the fair market value of a company than other market based valuation methods because they may not account for company specific risks and factors.

Discounted Cash Flow Methods

7.7. The DCF technique has a strong theoretical basis, valuing a business on the net present value of its future cash flows. It requires an analysis of future cash flows, the capital structure and costs of capital and an assessment of the residual value or the terminal value of the company's cash flows at the end of the forecast period. This method of valuation is appropriate when valuing companies where future cash flow projections can be made with a reasonable degree of confidence.

Asset Based Methods

7.8. Asset based methodologies estimate the fair market value of a company's securities based on the realisable value of its identifiable net assets. Asset based methods are particularly appropriate for businesses with relatively high asset values compared to earnings and cash flows, and include:-
orderly realisation of assets method;
liquidation of assets method; and
net assets on a going concern basis.
7.9. The value achievable in an orderly realisation of assets is estimated by determining the net realisable value of the assets of a company which would be distributed to security holders after payment of all liabilities, including realisation costs and taxation charges that arise, assuming the company is wound up in an orderly manner.
7.10. The liquidation of assets method is similar to the orderly realisation of assets method except the liquidation method assumes that the assets are sold in a shorter time frame.
7.11. The net assets on a going concern method estimates the market values of the net assets of a company but unlike the orderly realisation of assets method it does not take into account realisation costs.

Selection of Valuation Methodologies

Valuation of ECSI

7.12. ECSI does not currently generate trading revenues and its principal assets are cash and receivables. We consider that the most appropriate valuation methodology for valuing companies of this nature is on the basis of the fair value of their underlying assets. Our valuation has been based on the reviewed net assets of ECSI at 31 December 2011 adjusted for disclosed subsequent events.
7.13. We have also considered the implied value of an ECSI share based on recent trading prices for portfolio shareholding parcels of ECSI shares on the ASX. In accordance with RG 111, we have assessed the value of ECSI's shares on a 100% controlling interest. However, as set out in paragraph 8.16, we have not utilised the quoted price of ECSI's shares as we consider that the trading market of ECSI's shares are not deep enough to provide a fair market value.
7.14. In addition to the acquisition of the Hungarian and Namibian Assets, the Proposed Transactions involve consolidation of the Company's shares. Therefore we have valued a share in ECSI on a post consolidation basis, however, given the Consolidation Ratio is not known at the date of the Report we have provided a range of values based on a 25:1 Consolidation Ratio.

Valuation of ECSI immediately following the Proposed Transactions

7.15. In order to assess the value of an ECSI immediately following the Proposed Transactions, it is necessary to assess the fair value the assets being purchased by ECSI being as follows:
A 100% interest in Synclean Energy and Synclean Resources, owners of the Hungarian Permits; and
A 100% interest in GMR owner of the Hoasib Project.
7.16. In assessing the fair of the assets being acquired, in each transaction we have aggregated the following;
the value of exploration assets being acquired; and
the value of other assets and liabilities owned by the entities which are being acquired.
7.17. ASIC Regulatory Guides envisage the use by an independent expert of specialists when valuing specific assets. We determined the need for a specialist's involvement with regard to valuing the Hungarian Permits and the Hoasib Project and we engaged Al Maynard & Associates Pty Ltd ("Al Maynard") to prepare an independent technical report providing a value of the Hungarian Permits and the Hoasib Project.
7.18. Al Maynard's reports have been prepared in accordance with the requirements of the VALMIN code. We have satisfied ourselves as to Al Maynard's qualifications and independence from ECSI and have placed reliance on their report. Copies of Al Maynard's reports are attached at Appendix 7.

Valuation of Merged Group

7.19. To assess the Fairness of the Proposed Transactions, we have estimated the theoretical underlying value of ECSI, and a share in ECSI post the Proposed Transactions ("the Merged Group"). The value of the Merged Group is based on the combined values of ECSI, the Synclean Subsidiaries and GMR.

8. Valuation of ECSI (pre Proposed Transactions)

8.1. As stated at paragraphs 7.12 and 7.13, we have considered the recent quoted price of ECSI's listed securities to assess the value of ECSI prior to the Proposed Transactions. However, as set out in paragraph 8.16, we consider ECSI's shares to be too thinly traded to provide a fair market value.
8.2. We have therefore assessed the value of ECSI prior to the Proposed Transactions on the basis of the fair value of the underlying assets.

Quoted Price of Listed Securities

8.3. We have considered the quoted market price in our assessment of the fair value of an ECSI share prior to the Proposed Transactions.

Figure 2: Daily Closing Share Price and Traded Volumes Pre Announcement (Source: Bloomberg)

8.4. The assessment only reflects trading prior to the announcement of the proposed acquisition of a number of uranium assets in Africa, including the Hoasib Project, made on 13 April 2011, in order to avoid the influence of any movement in price that may have occurred as a result of the announcement.
8.5. The graph at Figure 2 shows the daily closing price and traded volumes of ECSI over the 90 trading day period ended 5 April 2011, being the date the Company entered a trading halt pending the initial announcement of the Proposed Transactions.
8.6. Over this period, ECSI shares have traded in a range from a low of \$0.006 on 17 March 2011 to a high of \$0.023 on 25 November 2010.
8.7. To provide further analysis of the market prices for ECSI shares, we have considered the Volume Weighted Average Price for the 5 day, 10 day, 30 day and 60 trading day periods to 5 April 2011:

	05-Apr-11	5 Days	10 Days	30 Days	60 Days
Closing price	\$0.0090	-	-	-	-
VWAP	-	\$0.0120	\$0.0120	\$0.0117	\$0.0136

Table 11: Volume Weighted Average Price of an ECSI share

8.8. An analysis of the volume in trading in ECSI shares for the 60 day trading period to 5 April 2011 is set out in the table below:

	High \$	Low \$	Value \$	Cumulative Volume	VWAP \$	Volume traded as % of total shares
1 trading day	0.0120	0.0120	600	50,000	0.0120	0.01%
5 trading days	0.0120	0.0080	35,191	3,379,596	0.0120	0.77%
10 trading days	0.0150	0.0080	119,083	11,159,118	0.0120	2.53%
30 trading days	0.0200	0.0080	282,677	21,493,178	0.0117	4.87%
60 trading days	0.0230	0.0080	673,655	44,619,398	0.0136	10.11%

Table 12: Traded Volumes of ECSI shares to 5 April 2011

8.9. The table shows that only 10.11% of ECSI's shares were traded in the 60 days pre 5 April 2011, indicating that there is a low level of liquidity in ECSI's shares.
8.10. Our assessment of a fair market value of an ECSI share based on the quoted market price, and therefore on the basis of a minority interest, is between \$0.0117 and \$0.0136.
8.11. The value above is indicative of the value of a marketable parcel of shares assuming the shareholder does not have control of ECSI. In the case of a section 611 acquisition, RG 111 states that the independent expert should calculate the value of a target's shares as if 100% control were being obtained. Therefore, in our assessment of the fair value of an ECSI share, we should include a premium for control.

8.12. RSM Bird Cameron has undertaken a survey of control premiums paid over a 5-year period to 30 June 2010 in 212 successful takeovers and schemes of arrangements of companies listed on the ASX ("RSM Bird Cameron Control Premium Study 2010"). The findings are summarised in the table below, showing the average control premium 20 days, 10 days and 2 days prior to announcement.

	Number of Transactions	20 Days Pre	10 Days Pre	2 Days Pre
Average control premium - All Industries	212	30.7%	25.6%	21.9%

Table 13: Average Control Premium over five years to 30 June 2010 (Source: RSM Bird Cameron Control Premium Study 2010)

8.13. We have selected a control premium of 25% to 30% and applied it to our assessed value of an ECSI share on a minority interest basis as follows.

	Low \$	High \$
Quoted market price value	0.0117	0.0136
Control premium	25%	30%
Quoted market price valuation including a premium for control	0.0146	0.0177

Table 14: Assessed Value of an ECSI Share

8.14. Our valuation of an ECSI share on the basis of the quoted market price including a premium for control is between \$0.0146 and \$0.0177 on a pre-consolidation basis. Given the Proposed Transactions involve a share consolidation, the table below sets out the impact of the Proposed Transactions on ECSI's share structure assuming the Consolidation Ratio of 25:1.

	Low \$	High \$
Value of an ECSI Share (Pre Consolidation)	0.0146	0.0177
Value of an ECSI Share (Post Consolidation)	0.365	0.443

Table 15: Assessed Value of ECSI share on a Post Consolidation basis on a quoted market price methodology

8.15. Our valuation of an ECSI share on the basis of the quoted market price prior to 13 April 2011 is in the range of \$0.365 to \$0.443 on a post-consolidation basis.
8.16. However, as set out in paragraph 8.9, ECSI's shares were not traded in significant volumes or on a regular basis in the 60 trading day period prior to 13 April 2011. Further as set out in Figure 1, ECSI's shares have not historically traded in significant volumes since May 2010. Therefore, we have not relied upon ECSI's quoted share price in our assessment of the fair value of an ECSI share prior to the Proposed Transactions.

Net Assets on a Going Concern Basis

8.17. Our assessment of the fair value of ECSI's net assets as shown in the table below, is based on the reviewed net assets of ECSI at 31 December 2011 as per the Company's reviewed financial statements filed with the ASX, adjusted for known events since that date and other fair value adjustments which we have identified through discussions with the Directors and from a review of the assets and liabilities of the Company as set out in these financial statements.

	As at 31-Dec-11 Reviewed \$	Subsequent event 1	Subsequent event 2	Subsequent event 3	Assesed Fair value \$
Current Assets Cash and cash equivalents Trade and other receivables Financial assets	141,951 11,428 -	(60,098) - -	120,000 - -	200,000 - -	401,853 11,428 -
Non-Current Assets Property, plant & equipment Total Assets	153,379 - 153,379	(60,098) - (60,098)	120,000 - 120,000	-	413,281 - 413,281
Current Liabilities Trade and other payables Unsecured loan held at call from related party Convertible notes issued to related parties Total Liabilities	9,639 141,383 50,000 201,022	- - - -	- - - -	- - -	9,639 141,383 50,000 201,022
NET ASSETS	(47,643)	(60,098)	120,000	-	212,259
Number of shares on issue (Pre Consolidation)	530,536,387		24,000,000	40,000,000	594,536,387
Value per share \$ (Pre Consolidation)	-0.0001				0.0004

Table 16: Assessed Value of ECSI on a net assets on a going concern basis

8.18. We summarise the adjustments we have made to the net assets of ECSI as at 31 December as follows:
8.18.1. We have been advised that for the period ended 31 March 2012, the Company's cash position has further decreased by \$60,000;
8.18.2. On 13 February 2012, ECSI raised \$120,000 (before issue costs) through the issue of 24,000,000 ordinary shares at an issue price of \$0.005 per share; and
8.18.3. On 8 May 2012, ECSI raised \$200,000 (before issue costs) through the issue of 40,000,000 ordinary shares at an issue price of \$0.005 per share.
8.19. We do not consider that ECSI owns any intangible assets of value which are not recognised in the financial statements. We are not aware of any unrecognised liabilities or commitments apart from the contingent liability of \$18,000 as disclosed by the Company as set out in paragraph 5.12, in relation to disputed tax credits with the ATO.
8.20. At the date of this Report, ECSI disclosed net assets of \$212,000. We consider that the value of an ECSI share on a pre-consolidation basis to be \$0.0004, and \$0.020 on a post-consolidation basis.
8.21. We have assessed that the 130,668,888 unlisted options on issue, with an exercise price of 3 cents (pre consolidation), or 5,226,756 unlisted options with an exercise price of 75 cents (post-consolidation), to be non-dilutionary as the exercise price is above our assessed value of an ECSI share. We have therefore not adjusted for these options in our assessment of the value of an ECSI share.
8.22. As a result of the Proposed Transactions, ECSI Shareholders will be giving away control of ECSI, therefore we have considered whether there is a requirement to apply a control premium to our valuation set out above. The net assets methodology assumes 100% ownership, therefore it already reflects the value of control and as such, no adjustment is required to this value.

Valuation Summary

8.23. A summary of our assessed values of an ECSI share prior to the Proposed Transactions on a post consolidation basis using a 25:1 Consolidation Ratio is shown below, together with the comparison of the quoted share price assessment.

	Low \$	High \$
Net assets on a going concern methodology
Value of an ECSI Share (Pre Consolidation)	0.0004	0.0004
Value of an ECSI Share (Post Consolidation)	0.010	0.010
Quoted market price value
Value of an ECSI Share (Pre Consolidation)	0.0130	0.0156
Value of an ECSI Share (Post Consolidation)	0.325	0.390
Preferred Valuation	0.010	0.010

Table 17: ECSI Valuation Summary prior to the Proposed Transactions

8.24. We have assessed the fair market value of an ECSI share on a controlling basis prior to the Proposed Transactions to be \$0.0004 on a pre-consolidation basis and \$0.01, on a post-consolidation basis.
8.25. The significant variance in value between the historic traded price and our assessed value of an ECSI share may reflect, amongst other factors:
8.25.1. that ECSI shares had been suspended from trading since an administrator was appointed to the Company in 2004 and only re-quoted in May 2010. Following re-listing ECSI has made it known to the market that it has been actively looking for investment opportunities. It is possible that investors are factoring into the market price some of the perceived upside that these investment opportunities may bring the Company; and
8.25.2. that the market for ECSI shares is not deep and therefore its share price may not be a reliable indicator of fair value as the market for those shares may not be fully efficient.

8.26. The table below sets out ECSI's trading activities after 13 April 2011, after the Company indicated its intention to acquire mineral exploration tenements.

Period post 13 April 2011	Closing price	High	Low	Value (\$)	Volume	VWAP	Volume traded as % of issued shares
18-Apr-11	0.010	0.010	0.010	500	50,000	0.010	0.01%
18-Apr-11 to 18-Jun-12	-	0.010	0.001	404,639	63,883,081	0.006	12.96%

Source: Bloomberg and RSM analysis

Table 18: ECSI trading activities (post announcement of Proposed Transactions)

8.27. Post announcement, ECSI's shares have traded at between \$0.010 and \$0.001, with a VWAP of \$0.006, which is 50.0% lower than the 1 day VWAP of \$0.012 and 42.3% lower than the 5 day VWAP of \$0.0104, prior to the announcement.
8.28. ECSI's share price has shown a declining trend since the announcement. Notwithstanding the low liquidity of ECSI traded shares, we consider that the length of time between the announcement and further developments in the proposed acquisitions may have lowered investor confidence. We note however, that ECSI's share price rose from circa \$0.004 at the end of April to \$0.009 at 14 May 2012, indicating an increase in investor confidence as a result of Company announcements regarding further progress made in advancing the Proposed Transactions.

9. Valuation of the Coal Assets and the Uranium Assets

9.1. We have assessed the value of the Coal and Uranium Assets based on the fair value of 100% of the shares in Synclean Energy, Synclean Resources, and GMR on a net assets on a going concern basis.
9.2. For the purposes of this Report, to assess the value of the mineral exploration assets being acquired as part of the Proposed Transactions, RSM Bird Cameron has engaged Al Maynard to value, in accordance with the VALMIN Code, the Hoasib Project (Uranium Assets) and the Hungarian Permits (Coal Assets). A full copy of the valuation report prepared by Al Maynard is included at Appendix 7. This report notes the difficulties in attributing a value to a mining tenement with no proven reserves; in determining the value of the mineral exploration assets, Al Maynard has therefore taken into account:
The general geological environment of the property;
Current market values for properties in similar or analogous locations; and
Current commodity prices.
9.3. The valuation methodology adopted by Al Maynard to value the Hungarian Permits and the Hoasib Project is the Empirical / Yardstick Method whereby a significant discount is applied to the target mineralisation range generated by a combination of previous bulk sampling and geophysical survey results.

Valuation of a combined 100% interest in Synclean Energy and Synclean Resources (owners of the Hungarian Permits)

9.4. We have assessed the value of a 100% interest in the ordinary share capital of the Synclean Subsidiaries (net of intercompany transactions), which ECSI is planning to acquire as part of the Proposed Transactions, in the range of \$16.0 million to 49.0 million, with a preferred mid-point valuation of \$32.5 million.

		Assessed value
Synclean Energy and Synclean Resources	Ref	Low \$	High \$	Preferred \$
Unaudited net assets as at 29 February 2012
Synclean Energy	6.14	(432,795)	(432,795)	(432,795)
Synclean Resources	6.18	(2,663)	(2,663)	(2,663)
		(435,458)	(435,458)	(435,458)
Fair value adjustments
Book value of Hungarian Permits (Synclean Energy)	9.5	(16,976)	(16,976)	(16,976)
Book value of Hungarian Permits (Synclean Resources)	9.5	(2,647)	(2,647)	(2,647)
Fair value of Hungarian Permits	9.5	16,470,000	49,410,000	32,940,000
Total fair value adjustments		16,450,377	49,390,377	32,920,377
Fair value of 100% interest in Synclean Energy and Synclean
Resources		16,014,919	48,954,919	32,484,919

Table 19: Valuation of shares in Synclean Energy and Synclean Resources

9.5. In assessing the fair value of 100% interest in the ordinary shares of the Synclean Subsidiaries, we have made an adjustment to the reported net assets of the companies as at 29 February 2012, to remove the book value of the Hungarian Permits in each company, and replace it with its fair value as assessed by Al Maynard.

Valuation of a 100% interest in GMR (owner of the Hoasib Project)

9.6. We have assessed the value of a 100% interest in the ordinary share capital of GMR, which ECSI is planning to acquire as part of the Proposed Transactions, in the range of \$18.8 million to \$25.0 million, with a preferred mid-point valuation of \$21.9 million, as set out in the table below.

			Assessed value
GMR	Ref	Low \$	High \$	Preferred \$
Audited net assets as at 31 December 2010	6.7	74,886	74,886	74,886
Fair value adjustments
Long term loan write-off	9.7.1	352,873	352,873	352,873
Book value of Hoasib Project	9.7.2	(411,984)	(411,984)	(411,984)
Fair value of Hoasib Project	9.7.2	18,800,000	25,000,000	21,900,000
Total fair value adjustments		18,740,889	24,940,889	21,840,889
Fair value of 100% interest in GMR		18,815,775	25,015,775	21,915,775

Table 20: Valuation of the shares in GMR

9.7. In assessing the fair value of 100% interest in the ordinary shares of GMR we have made the following adjustments to the reported net assets of the company as at 31 December 2010;
9.7.1. As set out in the letter of representation from the directors of AUL and Bastos, as part of the proposed sale of their interest in GMR, AUL and Bastos have agreed to forgive all loans GMR has outstanding to AUL and Bastos at completion. Therefore we have deducted the value of the loans owing by GMR to AUL as at 31 December 2010, of \$352,873 (N\$2,379,476) in our assessment of the fair value of the shares in GMR.
9.7.2. We have made an adjustment to remove the book value of the Hoasib Project and replace it with its fair value as assessed by Al Maynard.

Combined value of the Synclean Subsidiaries and GMR

9.8. We have valued the entities which ECSI are planning to acquire as part of the Proposed Transactions, on a combined basis to be in the range of \$34.8 million to \$74.0 million, with a preferred mid-point valuation of \$54.4 million, as summarised in the table below.

	Assessed value
	Ref	Low \$	High \$	Preferred \$
Fair value of 100% interest in the Synclean Subsidiaries (Hungarian Permits)	9.4	16,014,919	48,954,919	32,484,919
Fair value of 100% interest in GMR (Hoasib Project) Fair value of the Synclean Subsidiaries and GMR	9.6	18,815,775 34,830,694	25,015,775 73,970,694	21,915,775 54,400,694

Table 21: Summary of combined value of the Synclean Subsidiaries and GMR

10. Valuation of the Merged Group

10.1. To assess the Fairness of the Proposed Transactions, we have estimated the theoretical underlying value of ECSI prior to the Proposed Transactions and a share in the Merged Group.
10.2. The assessed value of the Merged Group has been calculated as the sum of parts of the value of ECSI pre the Proposed Transactions and the value ECSI and the combined entities after the Proposed Transactions, and after reflecting the impact of the share consolidation which are part of the Proposed Transactions. The table below sets out our assessment of the value of the Merged Group.

	Assessed value
Merged Group	Low \$	High \$	Preferred \$

Valuation of ECSI pre transaction	212,259	212,259	212,259
Valuation of Uranium and Coal Assets	34,830,694	73,970,694	54,400,694
Value of Merged Group	35,042,953	74,182,953	54,612,953

Table 22: Assessed value of the Merged Group

10.3. As discussed throughout this Report the final number of ECSI shares on issue following the Proposed Transactions and the share consolidation is unknown at the date of this Report.
10.4. We have summarised the number of consideration shares to be issued for the entities to be acquired on a pre consolidation basis and a post consolidation basis using a 25:1 post Consolidation Ratio. In the event that the final Consolidation Ratio changes, then the number of the shares to be issued to the relevant vendors will change.
10.5. The table below summarises the value of a share in the Merged Group immediately following the Proposed Transactions and share consolidation assuming a 25:1 Consolidation Ratio.

Merged Group	Low	Assessed value High	Preferred
Valuation of Merged Group post Proposed Transaction	\$35,042,953	\$74,182,953	\$54,612,953
Number of shares on issue post Proposed Transaction (Post Consolidation)	149,335,741	149,335,741	149,335,741
Value of an ECSI Share post Proposed Transaction (Post Consolidation)	\$0.235	\$0.497	\$0.366

Table 23: Assessed value of a share in the Merged Group post the Proposed Transactions

11. Are the Proposed Transactions Fair

11.1. The table below sets out our assessed values of an ECSI share prior to and immediately after the Proposed Transactions, using the Consolidation Ratio of 25:1.

	Valuation
	Low \$	High \$	Preferred \$
Value per share prior to the Proposed Transaction	\$0.010	\$0.010	\$0.010
Value per share post the Proposed Transaction	\$0.235	\$0.497	\$0.366

Table 24: Valuation Summary pre and post the Proposed Transactions

11.2. As the value of an ECSI share after the Proposed Transactions is greater than the value prior to the Proposed Transactions, and in the absence of any other relevant information, in our opinion, for the purposes of Section 611, Item 7 of the Corporations Act 2001, the Proposed Transactions are Fair to the Non-Associated Shareholders.
11.3. For the purposes of Resolution 10 and Listing Rule 10.1, in our opinion, the Proposed Transactions are Fair to holders of the Company's ordinary securities whose votes are not to be disregarded.

12. Other Factors taken into Consideration in Forming our Opinion

12.1. As the Proposed Transactions are fair, it is therefore considered to be reasonable in accordance with the guidance provided by the ASIC. However, we have also considered the following:
The future prospects of ECSI if the Proposed Transactions do not proceed; and
Other commercial advantages and disadvantages to the Non-Associated Shareholders as a consequence of the Proposed Transactions proceeding.

Stated Intentions of ECSI

12.2. As detailed in Section 4 of this Report, ECSI intends to formulate an exploration program for the Coal and Uranium Assets and should the Proposed Transactions be successful, commence exploration activities on the Coal and Uranium Assets.
12.3. The Proposed Transactions will require ECSI satisfying the requirements of Chapters 1 and 2 of the ASX Listing Rules, effectively re-applying for admission to the Official List. To complete this process, ECSI will have to consolidate its shares to comply with the 20 cent rule.
12.4. The Company will also raise additional funds on re-listing, which the Directors currently estimate will be \$2,000,000, through the issue of 10,000,000 ordinary ECSI shares at an issue price of \$0.20 each, on a post consolidation basis. The proceeds of this capital raising will be used to fund the initial exploration program.

Future Prospects of ECSI if the Proposed Transactions do not proceed

12.5. If the Proposed Transactions are not successful, ECSI will continue to actively seek investment opportunities.
12.6. As at the date of this Report, the Company disclosed a net asset position of \$212,000 and cash of circa \$402,000. In the absence of further capital raisings, the Company's opportunities for pursuing other investment opportunities will be limited by the lack of cash reserves.
12.7. As set out in paragraph 8.28, the Company's share price has shown a declining trend since the announcement of the Company's intention to pursue exploration tenement investment opportunities. In the event that the Proposed Transactions do not proceed, the Company's share price may further decline.

Advantages and Disadvantages

12.8. In assessing whether the Non-Associated Shareholders are likely to be better off if the Proposed Transactions proceed than if they do not, we have compared various advantages and disadvantages that are likely to accrue to the Non-Associated Shareholders.

Advantages

Advantage 1 – Proposed Transactions are Fair

12.9. RG 111 states that a transaction is reasonable if it is fair.

Advantage 2 – Opportunity for Growth

12.10. The acquisition will provide shareholders with the opportunity to participate in the future development of the Coal and Uranium Assets and any upside in value this development brings.

Advantage 3 – Possible Improvement in Liquidity

12.11. ECSI shares have been relatively illiquid since re-quoting in May 2010, as outlined in paragraph 8.9 of this Report. Completion of the Proposed Transactions may create increased interest in ECSI shares which could improve liquidity and enable shareholders to sell their shares efficiently.

Disadvantages

Disadvantage 1 – Dilution of Shareholders' Interests

12.12. Immediately after the Proposed Transactions, current shareholders' interest will be diluted from 100.0% to 15.3%.

Disadvantage 2 – Change in Risk Profile

12.13. The risk profile of ECSI will change should shareholders approve the Proposed Transactions and ECSI will effectively become a junior exploration Company, and as such its future share price in the short to medium term will be highly dependent on exploration success, which could result in increased volatility in ECSI's shares.

Disadvantage 3 – Requirement for Future Capital Raisings

12.14. Whilst the Company intends to conduct a capital raising of approximately \$2,000,000, it is likely that to enable a full appraisal of the mineral potential of the Coal and Uranium Assets, further capital raisings will be required. This may further dilute the interests of the Non-Associated Shareholders if they do not participate in these capital raisings.

Alternative Proposals

12.15. We are not aware of any alternative investment opportunities which ECSI are pursuing, or would pursue if the Proposed Transactions did not proceed, at this time.

Conclusion on Reasonableness

12.16. In the absence of any other relevant information and/or a superior offer, for the purposes of Section 611, Item 7 of the Corporations Act 2001, we consider that the Proposed Transactions are Reasonable for the Non-Associated Shareholders of ECSI.
12.17. For the purposes of Resolution 10 and Listing Rule 10.1, we consider the Proposed Transactions to be Reasonable to holders of the Company's ordinary securities whose votes are not to be disregarded.

12.18. An individual shareholder's decision in relation to the Proposed Transactions may be influenced by his or her individual circumstances. If in doubt, shareholders should consult an independent advisor.

Yours faithfully RSM BIRD CAMERON CORPORATE PTY LTD

G YATES J CROALL Director Director

Declarations and Disclosures

RSM Bird Cameron Corporate Pty Ltd holds Australian Financial Services Licence 255847 issued by ASIC pursuant to which they are licensed to prepare reports for the purpose of advising clients in relation to proposed or actual mergers, acquisitions, takeovers, corporate reconstructions or share issues.

Qualifications

Our report has been prepared in accordance with professional standard APES 225 "Valuation Services" issued by the Accounting Professional & Ethical Standards Board.

RSM Bird Cameron Corporate Pty Ltd is beneficially owned by the partners of RSM Bird Cameron (RSMBC) a large national firm of chartered accountants and business advisors.

Mr. Jason Croall and Mr Glyn Yates are directors of RSM Bird Cameron Corporate Pty Ltd. Both Mr Croall and Mr Yates are Chartered Accountants with extensive experience in the field of corporate valuations and the provision of independent expert's reports for transactions involving publicly listed and unlisted companies in Australia.

Reliance on this Report

This report has been prepared solely for the purpose of assisting the Non-Associated Shareholders of ECSI Limited in considering the Proposed Transactions. We do not assume any responsibility or liability to any party as a result of reliance on this report for any other purpose.

Reliance on Information

Statements and opinions contained in this report are given in good faith. In the preparation of this report, we have relied upon information provided by the Directors and management of ECSI Limited and we have no reason to believe that this information was inaccurate, misleading or incomplete. However, we have not endeavoured to seek any independent confirmation in relation to its accuracy, reliability or completeness. RSM Bird Cameron Corporate Pty Ltd does not imply, nor should it be construed that it has carried out any form of audit or verification on the information and records supplied to us.

The opinion of RSM Bird Cameron Corporate Pty Ltd is based on economic, market and other conditions prevailing at the date of this report. Such conditions can change significantly over relatively short periods of time.

In addition, we have considered publicly available information which we believe to be reliable. We have not, however, sought to independently verify any of the publicly available information which we have utilised for the purposes of this report.

We assume no responsibility or liability for any loss suffered by any party as a result of our reliance on information supplied to us.

Disclosure of Interest

At the date of this report, none of RSM Bird Cameron Corporate Pty Ltd, RSMBC, Jason Croall, Glyn Yates, nor any other member, director, partner or employee of RSM Bird Cameron Corporate Pty Ltd and RSMBC has any interest in the outcome of the Proposed Transactions, except that RSM Bird Cameron Corporate Pty Ltd are expected to receive a fee of approximately \$12,000 based on time occupied at normal professional rates for the preparation of this report. The fees are payable regardless of whether ECSI Limited receives Shareholder approval for the Proposed Transactions, or otherwise.

Consents

RSM Bird Cameron Corporate Pty Ltd consents to the inclusion of this report in the form and context in which it is included with the Explanatory Memorandum to be issued to Shareholders. Other than this report, none of RSM Bird Cameron Corporate Pty Ltd, RSM Bird Cameron Partners or RSMBC has been involved in the preparation of the Notice of General Meeting and Explanatory Statement. Accordingly, we take no responsibility for the content of the Notice of General Meeting and Explanatory Statement as a whole.

Sources of Information

In preparing this Report we have relied upon the following principal sources of information:

Drafts and final copies of the Notice of Meeting for ECSI;
ECSI Reviewed Financial Statements for the half-year ended 31 December 2011;
ECSI Audited Financial Statements for the three years ended 30 June 2011;
Audited GMR Financial Statements for the year ended 30 June 2010; and the six months ended 31 December 2010;
Audited Synclean Energy Financial Statements for the year ended 31 December 2011; and the management accounts for the two months ended 29 February 2012;
Audited Synclean Resources Financial Statements for the year ended 31 December 2011; and the management accounts for the two months ended 29 February 2012;
Shareholders agreements for Synclean Energy, Synclean Resources, and GMR;
Share Sale Agreements relating to acquisition of shares by ECSI in Synclean Energy, Synclean Resources and GMR;
ASX announcements of ECSI;
IBIS World database;
World Nuclear Organisation;
Bloomberg database; and
Discussions with Directors of ECSI.

Glossary of Terms and Abbreviations

Term	Definition
Act	Corporations Act
ASIC	Australian Securities & Investments Commission
ASX	Australian Securities Exchange
AUL	Africa Uranium Limited
Bastos	Bastos Foundation Pty Ltd
Cash flow	Cash that is generated over a period of time by an asset, group of assets, or business enterprise. It may be used in a general sense to encompass various levels of specifically defined cash flows. When the term is used, it should be supplemented by a qualifier (for example, "discretionary" or "operating") and a specific definition in the given valuation context
Company	ECSI Limited
Consolidation Ratio	The ratio by which ECSI will have to consolidate its shares to comply with ASX Listing Rule 2.1 Condition 2 that requires that the issue price or sale price of all the securities for which an entity seeks quotation (except options) must be at least 20 cents in cash
Cost of Capital	The expected rate of return that the market requires in order to attract funds to a particular investment
Discount Rate	A rate of return used to convert a future monetary sum into present value
Discounted Cash Flow Method (DCF)	A method within the income approach whereby the present value of future expected net cash flows is calculated using a discount rate
ECSI	ECSI Limited
Enterprise Value	Fair market value of a business on a cash free, debt free basis
Equity	The owner's interest in property after deduction of all liabilities
Fair value	The amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction
GMR	Green Minerals Resources Pty Ltd, owner of the Hoasib Project
Going concern	An ongoing operating business enterprise

Term	Definition
HUF	Hungarian Forint
Hungarian Permits or the Hungarian Assets or the Coal Assets	Seven Hungarian coal permits collectively owned by Synclean Energy and Synclean Resources, wholly-owned subsidiaries of Synclean Energy PLC
Hoasib Project or the Namibian Assets or the Uranium Assets	Mineral exploration tenements prospective for uranium, located in Swakopmund, Namibia. GMR owns a 70% interest in the assets, and Bastos the remaining 30%.
Merged Group	The value of the entity comprising the combined values of ECSI, the Synclean Subsidiaries, and GMR immediately following the Proposed Transactions
Mutual Wide	Mutual Wide Corporation Limited
N\$	Namibian Dollars
Proposed Transactions	The combination of the acquisition of the Coal and Uranium Assets, and the successful compliance with Chapters 1 and 2 of the ASX Listing Rules
RG 111	ASIC Regulatory Guide 111 "Content of expert Reports"
RG 112	ASIC Regulatory Guide 112 "Independence of Experts"
RSM Bird Cameron or RSMBCC	RSM Bird Cameron Corporate Pty Ltd
Synclean	Synclean Energy PLC
Synclean Energy Kft	Synclean Energy
Synclean Resources Kft	Synclean Resources
Synclean Subsidiaries	Collectively refers to Synclean Energy and Synclean Resources
VALMIN Code	The VALMIN code provides a fundamental set of principles to assist those involved in valuing mineral and petroleum assets in the preparation of independent expert reports. The VALMIN code is binding on members of the Australian Institute of Mining and Metallurgy when preparing independent expert required by the Corporations Act concerning mineral and petroleum assets and securities.
VWAP	Volume weighted average share price
\$	Australian Dollars
20 cent rule	ASX Listing Rule 2.1 Condition 2 that requires that the issue price or sale price of all the securities for which an entity seeks quotation (except options) must be at least 20 cents in cash

Sensitivity analysis for Consolidation Ratio Scenarios

As part of the change in activities of the Company and the application of Chapters 1 and 2 of the ASX Listing Rules, the Company will have to consolidate its shares to comply with the 20 cent rule. As consolidation is expected to take place after the approval of the Proposed Transactions, the Consolidation Ratio is not known at the date of this Report. For the purposes of this Report, we have utilised a Consolidation Ratio of 25:1. In the event that the final Consolidation Ratio changes, the number of the shares to be issued to the relevant vendors of the Hungarian Permits and the Hoasib Project will change accordingly.

The table below sets out three Consolidation Ratio scenarios using Consolidation Ratios of 40:1 (share price \$0.005), 25:1 (share price \$0.008) and 17:1 (share price \$0.012), respectively, to illustrate the sensitivity of the share structure of the Company post the Proposed Transactions on a pre and post consolidation basis.

	40:1		25:1		17:1
	Number of		Number of		Number of
	shares	%	shares	%	shares	%

Issued share capital as at the date of this report pre consolidation	570,536,387	16.4%	570,536,387	16.4%	570,536,387	16.4%
Hungarian Permits
Shares issued to Synclean for the acquisition of a 100% interest in
Synclean Energy Shares issued to Synclean for the acquisition of a 100% interest in	810,000,000	23.3%	506,250,000	14.5%	337,500,000	9.7%
Synclean Resources	810,000,000	23.3%	506,250,000	14.5%	337,500,000	9.7%
Shares issued to Mutual Wide	150,000,000	4.3%	757,500,000	21.7%	1,095,000,000	31.4%
Hoasib Project
Shares issued to AUL for the acquisition of a 70% interest in GMR	800,000,000	23.0%	800,000,000	23.0%	800,000,000	23.0%
Shares issued to Bastos for the acquisition of a 30% interest in GMR	342,857,143	9.8%	342,857,143	9.8%	342,857,143	9.8%
Total shares on issue pre consolidation and post Proposed
Transactions	3,483,393,530	100.0%	3,483,393,530	100.0%	3,483,393,530	100.0%
Consolidation Scenarios	Share price \$0.005		Share price \$0.008		Share price \$0.012
Current shareholders	14,263,410	16.4%	22,821,455	16.4%	33,560,964	16.4%
Synclean	40,500,000	46.5%	40,500,000	29.1%	39,705,882	19.4%
Mutual Wide AUL	3,750,000 20,000,000	4.3% 23.0%	30,300,000 32,000,000	21.7% 23.0%	64,411,765 47,058,824	31.4% 23.0%
Bastos	8,571,429	9.8%	13,714,286	9.8%	20,168,067	9.8%
Total shares on issue post consolidation and post Proposed
Transactions	87,084,838	100.0%	139,335,741	100.0%	204,905,502	100.0%
Capital raising
Capital raising shares issued	10,000,000	10.3%	10,000,000	6.7%	10,000,000	4.7%
Current shareholders	14,263,410	14.7%	22,821,455	15.3%	33,560,964	15.6%
Synclean	40,500,000	41.7%	40,500,000	27.1%	39,705,882	18.5%
Mutual Wide AUL	3,750,000 20,000,000	3.9% 20.6%	30,300,000 32,000,000	20.3% 21.4%	64,411,765 47,058,824	30.0% 21.9%
Bastos	8,571,429	8.8%	13,714,286	9.2%	20,168,067	9.4%
Total shares on issue post consolidation, post Proposed
Transactions and post capital raising	97,084,838	100.0%	149,335,741	100.0%	214,905,502	100.0%

Table 25: Sensitivity Analysis

As set out in the table above, movements in the Consolidation Ratio will result in changes to the percentage interest held by current shareholders, Mutual Wide, Synclean, AUL and Bastos.

Overview of the Global Coal Industry

Background¹

Coal is a combustible, sedimentary, organic rock, which is composed mainly of carbon, hydrogen and oxygen. It is formed from vegetation, which has been consolidated between other rock strata and altered by the combined effects of pressure and heat over millions of years to form coal seams. Coal is a fossil fuel and is far more plentiful than oil or gas, with around 118 years of coal remaining worldwide.

Coal is primarily used in electricity generation and in steel production. Fuel costs are the largest component in electricity generation, making the use of coal advantageous because of its relatively low cost compared with other fuels such as oil and natural gas. As the price of coal has historically been lower than the price of crude oil, coal is generally considered the cheapest fossil fuel on a contained heat basis.

Other advantages of coal include stable supply from a wide range of geographic locations, easy and safe storage, and ease of transportation by rail or ship. These factors have led to a dependence on coal by the electricitygenerating industry, especially by regulated utilities in energy importing countries. Moreover, with increasing demand for electricity and increased competition, utilities have generally increased the use of coal-burning power stations, instead of substituting these with more expensive power stations fuelled by oil and natural gas.

Coal Characteristics

Coal is characterized by its use as either "steam coal" or "metallurgical coal". Steam coal, also referred to as "steaming coal" or "thermal coal," is used by electricity generators and by industrial facilities to produce steam, electricity or both. Metallurgical coal describes various grades of coal used in the steel making process.

There are four types of coal by geological composition: lignite, sub-bituminous, bituminous and anthracite. Each has characteristics that make it more or less suitable for different uses. Energy content and sulphur content are two of the most important coal characteristics and help to determine the best use of particular types of coal, as well as being used to determine the price of different qualities of coal.

Mining Methods

Coal is mined using surface or underground methods. The most appropriate mining technique for a coal resource is determined by coal seam characteristics such as location and recoverable reserve base. Drill hole data is used initially to define the size, depth and quality of the coal reserve area before committing to a specific extraction method. It is generally easier to mine coal seams that are thick and located close to the surface than deep seams. Typically, coal mining operations will begin at the part of the coal seam that is easiest and most economical to mine. As a seam is mined, it generally becomes more difficult and expensive to mine because the seam may become thinner or may protrude more deeply into the earth, requiring removal of more material over the seam, known as the "overburden."

In the coal mining industry, the ratio of overburden to mineable coal is referred to as the "strip ratio". Once the raw coal is mined, it is crushed and often washed in preparation plants where the product consistency and energy

¹ World Coal Association, http://www.worldcoal.org/coal/

content are improved. This process involves crushing the coal to the required size, removing impurities and, where necessary, blending it with other coal to match customer specifications.

Hungarian Coal Industry²

Hungary is estimated to have 8.5 billion tonnes of coal reserves. Lignite and brown coal account for about 80% of the country's total coal reserves, making these the most important indigenous sources of energy.

Hungary's primary energy consumption in 2010 amounted to 36.3 Mtce. Natural gas had the biggest share in this total (38%), followed by oil (25%), nuclear energy (16%), and coal (11%). Energy consumption in Hungary is characterised by a high demand for natural gas. Domestic gas production meets only about 20% of this demand, which means that Hungary is highly dependent on gas imports. In future, energy policy will focus on diversifying gas supply and increasing security of supply.

In 2010, electricity produced from coal had a share of 17% in national gross electricity generation. Most of the coalbased electricity was generated by MÁTRAI ERÖMÜ ZRT ("MÁTRA"). MÁTRA is Hungary's biggest lignite-based power generator, with a market share of about 15%.

Hungary's lignite and brown coal resources are concentrated in the regions of Transdanubia and in northern and north-eastern Hungary. Due to an environmental moratorium on coal-fired power stations, which affects coal-fired power generation installations not fitted with flue-gas desulphurisation systems, MÁTRA's opencast mines at Visonta and Bükkábrány and the deep mine supplying the Vértes power station group are the only coal production sites still in operation since 2005. The Vértes power station is planned to be shut down, so the associated mining operations will be also phased out in the coming years. However, political considerations may override this economic decision.

Total lignite output in Hungary is currently circa 9 million tonnes. 95% of this is used for heat and power generation. The remaining coal goes to municipalities, households and other consumers.

Annual lignite production in Hungary is expected to remain relatively consistent to current levels until the end of the second trading period under the EU Emissions Trading Scheme. For the following period, from 2013, it remains to be seen how carbon-trading regulations and the development of prices will affect lignite-based power production in Hungary.

² European Association for Coal and Lignite, http://www.euracoal.be/pages/layout1sp.php?idpage=74

Overview of the Global Uranium Industry

Global uranium production³

The uranium mining industry is comprised of entities engaged in the extraction and refinement of uranium bearing ore to produce uranium oxide.

Uranium's primary use is as a fuel source for nuclear power stations, however secondary uses include medical, scientific, industrial and military applications. According to the World Nuclear Association, global uranium mining methods have been changing. In 1990, around 55% of world uranium oxide production came from underground mining however as at 2010 this figure has dropped to 28%. Other current mining methods include in situ leach ("ISL") mining (41%), conventional open pit (25%) and extraction as a by-product (5%).

Conventional mines have a mill where the ore is crushed, ground and then leached with sulphuric acid to dissolve the uranium oxides. At the mill of a conventional mine, or the treatment plant of an ISL operation, the uranium is then separated by ion exchange before being dried and packed, usually as uranium oxide. Some mills and ISL operations use carbonate leaching instead of sulphuric acid, depending on the ore body. Where uranium is recovered as a by-product, e.g. of copper or phosphate, the treatment process is more complex.

The World Nuclear Association estimates that 62% of the world's production of uranium originates from Kazakhstan, Canada and Australia. Kazakhstan is the largest producer, generating 33% of world uranium supply translating to approximately 18,000 tonnes in 2010. Canada produced almost 10,000 tonnes in 2010, Australia almost 6,000 tonnes and Namibia and Niger each produced in the vicinity of 4,000 - 4,500 tonnes of uranium. Australia holds the largest known recoverable reserves of uranium at 1.243 million tonnes, being 23% of all global reserves.

The World Nuclear Association suggests that as at 2010, combined global supply of uranium amounted to over 53,000 tonnes, meeting only 78% of world demand. Demand for uranium over the medium to long term is expected to increase significantly, with producer of industry reports IBISWorld estimating annual demand for uranium to reach around 107,000 tonnes by 2016, which represents an increase of over 100% compared to current demand levels.

³ World Nuclear Association, http://www.world-nuclear.org/info/inf23.html

Uranium pricing

The figure below sets out the historical spot uranium price.

Figure 3: Uranium spot price 2009-2012 (Source: Bloomberg)

From mid April 2010 to mid October 2010, world uranium prices fluctuated between US\$40 and US\$50 per pound. Strengthening global demand resulted in a sustained increase in prices from November 2010 to a peak of US\$73 per pound in late January 2011.

Following the 8.9 magnitude earthquake and subsequent tsunami in Japan that resulted in the Fukushima nuclear reactor disaster in March 2011, world uranium demand decreased sharply as Japan and some other countries either decommissioned old reactors or halted construction on new reactors, which resulted in a sharp decrease in the uranium price to reach US\$49 per pound on 16 March 2011. After rebounding back to \$61.5 just days after, uranium prices have subsequently stabilised and at the date of this Report, uranium traded at circa \$51 per pound.

Demand Determinants

The primary demand determinant for uranium is the demand for electricity generated by nuclear reactors. This is in turn is dependent on factors such as economic growth and the level of public confidence in the safety of nuclear reactor technology.

Critical Success Factors

IBISWorld considers the primary success factors for entities operating in the uranium mining industry to be as follows⁴ :

Access to high quality inputs Having access to high grade ore reserves lowers the unit cost of production enabling participants to be better able to withstand price downturns and to generate strong profits when prices are high.
Adherence to environmental requirements Adherence to stringent environmental monitoring is a requirement for all uranium miners.
Proximity/access to port facilities The export oriented nature of the industry makes access to ports critical.
Large supply contracts Large, long-term contracts ensure secure project start-up and the maintenance of secure marketing arrangements.

Outlook

Continued expansion of nuclear electricity generation is expected to increase the demand for uranium. According to the World Nuclear Association, China is expected to be the largest developer of nuclear reactors with 26 currently under construction, 52 planned for construction and a further 120 proposed. India, Russia, the United States and Ukraine are the other significant developers, with a collective 118 reactors proposed for construction. Across all nations, about 70 power stations are scheduled to commence operations between 2012 - 2016⁵ .

The increased demand is expected to lift the uranium spot price in the medium term with Bloomberg analyst forecasts indicating that the uranium spot price is expected to reach \$65 per pound by 2013.

Additionally, world uranium output is expected to increase with Kazakhstan lifting its annual production to 30,000 tonnes by 2018 and Australian annual production reaching 14,150 tonnes by 2016.

⁴ IBISWorld Industry Report B1318 – Uranium Mining in Australia, April 2012

⁵ World Nuclear Association, http://www.world-nuclear.org/info/inf23.html

Independent Valuation of the Hungarian Permits and the Hoasib Project by Al Maynard & Associates Pty Ltd

ECSI Limited

ACN 004 240 313

FOR ALL ENQUIRIES CALL:

03 9866 7889

(Outside Australia) +61 3 9866 7889

FACSIMILE

03 9866 5859

ALL CORRESPONDENCE TO:

Middletons, Level 25, Rialto South Tower, 525 Collins Street, Melbourne, Victoria, 3000

Your Address

This is your address as it appears on the company's share register. If this is incorrect, please mark the box with an "X" and make the correction on the form. Securityholders sponsored by a broker should advise your broker of any changes. Please note, you cannot change ownership of your securities using this form.

YOUR VOTE IS IMPORTANT

FOR YOUR VOTE TO BE EFFECTIVE IT MUST BE RECORDED BEFORE 9:00am on 13 August 2012

TO VOTE BY COMPLETING THE PROXY FORM

STEP 1 Appointment of Proxy

Indicate here who you want to appoint as your Proxy

If you wish to appoint the Chairman of the Meeting as your proxy, mark the box. If you wish to appoint someone other than the Chairman of the Meeting as your proxy please write the full name of that individual or body corporate. If you leave this section blank, or your named proxy does not attend the meeting, the Chairman of the Meeting will be your proxy. A proxy need not be a security holder of the company. Do not write the name of the issuer company or the registered securityholder in the space.

Proxy which is a Body Corporate

Where a body corporate is appointed as your proxy, the representative of that body corporate attending the meeting must have provided an "Appointment of Corporate Representative" prior to admission. An Appointment of Corporate Representative form can be obtained from the company's securities registry.

Appointment of a Second Proxy

You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you wish to appoint a second proxy, an additional Proxy Form may be obtained by telephoning the company's securities registry or you may copy this form.

To appoint a second proxy you must:

(a) complete two Proxy Forms. On each Proxy Form state the percentage of your voting rights or the number of securities applicable to that form. If the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded.
(b) return both forms together in the same envelope.

STEP 2 Voting Directions to your Proxy

You can tell your Proxy how to vote

To direct your proxy how to vote, place a mark in one of the boxes opposite each item of business. All your securities will be voted in accordance with such a direction unless you indicate only a portion of voting rights are to be voted on any item by inserting the percentage or number of securities you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on a given item, your proxy may vote as he or she chooses. If you mark more than one box on an item your vote on that item will be invalid.

STEP 3 Sign the Form

The form must be signed as follows:

Individual: This form is to be signed by the securityholder.

Joint Holding: where the holding is in more than one name, all the securityholders must sign.

Power of Attorney: to sign under a Power of Attorney, you must have already lodged it with the registry. Alternatively, attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: this form must be signed by a Director jointly with either another Director or a Company Secretary. Where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. Please indicate the office held by signing in the appropriate place.

STEP 4 Lodgement of a Proxy

This Proxy Form (and any Power of Attorney under which it is signed) must be received at an address given below not later than 48 hours before the commencement of the meeting at 9: 00 am on 15 August 2012. Any Proxy Form received after that time will not be valid for the scheduled meeting.

Proxies may be lodged using the reply paid envelope or:

BY MAIL - Middletons, Level 25, Rialto South Tower, 525 Collins Street, Melbourne, Victoria, 3000

BY FAX - 03 9866 5859

IN PERSON - Middletons, Level 25, Rialto South Tower, 525 Collins Street, Melbourne, Victoria, 3000

Attending the Meeting

If you wish to attend the meeting please bring this form with you to assist registration.

Address of Shareholders:

STEP 1 - Appointment of Proxy

I/We being a member/s of ECSI Limited and entitled to attend and vote hereby appoint

the Chairman of the Meeting (mark with an	OR
'X')

If you are not appointing the Chairman of the Meeting as your proxy please write here the full name of the individual or body corporate (excluding the registered Securityholder) you are appointing as your proxy.

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy at the Annual General Meeting of ECSI Limited to be held at Middletons, Level 25, Rialto South Tower, 525 Collins Street, Melbourne, Victoria, 3000 on 15 August at 09:00am and at any adjournment of that meeting, to act on my/our behalf and to vote in accordance with the following directions or if no directions have been given, as the proxy sees fit.

If the Chairman of the Meeting is appointed as your proxy or may be appointed by default, and you do not wish to direct your proxy how to vote in respect of a resolution, please mark this box. By marking this box, you acknowledge that the Chairman of the Meeting may vote as your proxy even if he has an interest in the outcome of the resolution and votes cast by the Chairman of the Meeting for those resolutions, other than as proxy holder, will be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy how to vote, the Chairman of the Meeting will not cast your votes on the resolution and your votes will not be counted in calculating the required majority if a poll is called. The Chair intends to vote all undirected proxies in favour of the resolution.

STEP 2 - Voting directions to your Proxy – please mark to indicate your directions

Ordinary Business		For	Against	Abstain*
Resolution 1	Approval of prior placement of Shares on 20 June 2011
Resolution 2	Approval of prior placement of Shares on 13 February 2012
Resolution 3	Approval of prior placement of Shares on 8 May 2012
Resolution 4	Consolidation
Resolution 5	Approval of the issue for prospectus capital raising
Resolution 6	Approval for the change in nature and scale of activities
Resolution 7	Approval of the African Transaction
Resolution 8	Approval of the Hungarian Transaction
Resolution 9	Approval of the issue of shares to Mutual Wide
Resolution 10	Approval of the novation of the option from Mutual Wide

In addition to the intentions advised above, the Chairman of the Meeting intends to vote undirected proxies in favour of each of the items of business. *If you mark the Abstain box for a particular item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

STEP 3 - PLEASE SIGN HERE This section must be signed in accordance with the instructions overleaf to enable your directions to be implemented.

Individual or Securityholder 1	Securityholder 2	Securityholder 3

Sole Director and Sole Company Secretary	Director	Director/Company Secretary

Contact Name ……………………………….…….. Contact Daytime Telephone ………………………………….. Date / / 2012

AI assistant

CONNEXION MOBILITY LTD — Proxy Solicitation & Information Statement 2012

64739_rns_2012-07-08_d2c9e66c-bd6b-4af8-ac53-8b3b3359fb2a.pdf

Company Update

ECSI Limited ACN 004 240 313

Notice of General Meeting

and

Explanatory Statement

and

Independent Expert's Report

and

Proxy Form

ECSI Limited ACN 004 240 313 (Company)

General information

Key dates for Shareholders

ECSI Limited ACN 004 240 313 (Company)

General Meeting: Agenda

Special Business

Approval of prior placement of Shares on 20 June 2011 $1.$

Voting exclusion statement on item 1:

$2.$ Approval of prior placement of Shares on 13 February 2012

Voting exclusion statement on item 2:

$\overline{3}$ . Approval of prior placement of Shares on 8 May 2012

Voting exclusion statement on item 3:

4. Consolidation

5. Approval of the issue for prospectus capital raising

Voting exclusion statement on item 5:

Approval for the change in nature and scale of activities 6.

Voting exclusion statement on item 6:

$\overline{7}$ . Approval of the African Transaction

Voting exclusion statement on item 7:

8. Approval of the Hungarian Transaction

Voting exclusion statement on item 8:

9. Approval of the issue of shares to Mutual Wide

Voting exclusion statement on item 9:

Voting exclusion statement on item 9:

10. Approval of the novation of the option from Mutual Wide

Voting exclusion statement on item 10:

ECSI Limited ACN 004 240 313 (Company)

Explanatory Statement

$\mathbf 1$ Background

$1.1$ Introduction

$1.2$ Action to be taken by Shareholders

$1.3$ Summary of Transaction

Background $(a)$

$(b)$ Transaction

African Transaction $(i)$

Hungarian Transaction $(ii)$

Consolidation $(c)$

Compliance with Chapters 1 and 2 of the Listing Rules $(d)$

Impact of Transaction on the Company's capital structure $(e)$

$\overline{2}$ . Special business

$2.1$ Approval of prior placement on 20 June 2011

$2.2$ Approval of prior placement of Shares on 13 February 2012

$2.3$ Approval of prior placement of Shares on 8 May 2012

Share consolidation $2.4$

$(a)$ General

Reasons $(b)$

Effect of the Consolidation $(c)$

Effect on the number of securities and the amount unpaid (if any) on the $(i)$ securities

$(ii)$ Treatment of any fractional entitlement

Treatment of any convertible securities on issue (iii)

$(d)$ Timing

The passing of Resolution 4 is conditional upon, and subject to, Resolutions 5 to 10 being passed by Shareholders.

$2.5$ Approval of the issue of shares under the Prospectus

Listing Rule 7.1 approval $(a)$

The passing of Resolution 5 is conditional upon, and subject to, Resolutions 4 and 6 to 10 being passed by Shareholders.

$2.6$ Approval of the change to nature and scale of activities

$(a)$ Background

$(b)$ Listing Rule 11.1

$2.7$ Approval of the African Transaction

Listing Rule 7.1 approval $(a)$

Section 611 (item 7) approval $(b)$

$2.8$ Approval of the Hungarian Transaction

Listing Rule 7.1 approval $(a)$

Section 611 (item 7) approval $(b)$

2.9 Approval of the issue of Shares to Mutual Wide

Listing Rule 10.11 approval $(a)$

$(b)$ Chapter 2E approval

Section 611 (item 7) approval $(c)$

CONNEXION MOBILITY LTD Proxy Solicitation & Information Statement 2012