DREADNOUGHT RESOURCES LTD — Capital/Financing Update 2013

Aug 18, 2013

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

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

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

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

Name of entity

ERO MINING LIMITED

ABN

40 119 031 864

We (the entity) give ASX the following information.

Part 1 - All issues

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

• ⁺Class of ⁺securities issued or to $\mathbf{1}$ be issued
• Number of ⁺securities issued or $\overline{z}$ to be issued (if known) or maximum number which may be issued

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

• (a) Ordinary fully paid shares (b) Options exercisable at \$0.006 on or before 24 September 2014

• (a) $541,706,916$ (maximum) (b) 270,853,458 (maximum)
• (a) Ordinary shares will rank pari passu with existing ordinary shares
• (b) Quoted options exercisable at \$0.006 on or before 24 September 2014

⁺ See chapter 19 for defined terms.

Do the ⁺securities rank equally $\overline{4}$ in all respects from the +issue date with an existing *class of quoted *securities?

If the additional *securities do not rank equally, please state:

• the date from which they do
• the extent to which they participate for the next dividend, (in the case of a trust. distribution) or interest payment
• the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment
• Issue price or consideration 5
• Purpose of the issue 6 (If issued as consideration for the acquisition of assets, clearly identify those assets)

6a Is the entity an $*$ eligible entity that has obtained security holder approval under rule 7.1A?

If Yes, complete sections 6b - 6h in relation to the *securities the subject of this Appendix 3B, and comply with section 6i

• 6b The date the security holder resolution under rule 7.1A was passed
• 6c Number of ⁺securities issued without security holder approval under rule 7.1

with existing ordinary fully paid shares.

$(a)$ Yes

$(a)$ \$0.003

(b) Nil. Options are free attaching on the basis of one option for every two shares subscribed for.

(b) No. If the options are exercised the

resulting shares will rank pari passu

Shares and options issued pursuant to a pro rata non-renounceable entitlement issue lodged with ASIC on 19 August 2013

No

⁺ See chapter 19 for defined terms.

• $6d$ Number of ⁺securities issued with security holder approval under rule 7.1A
• Number of ⁺securities issued 6e with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting)
• Number of ⁺securities issued 6f under an exception in rule 7.2
• 6g If ⁺securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the *issue date and both values. Include the source of the VWAP calculation.
• If *securities were issued under $6_h$ rule $7.1A$ for non-cash consideration, state date on which valuation $\circ$ f consideration was released to ASX Market Announcements
• 6i Calculate the entity's remaining issue capacity under rule 7.1 and rule 7.1A - complete Annexure 1 and release to ASX Market Announcements
• ⁺Issue dates $\overline{7}$

Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A.

Cross reference: item 33 of Appendix 3B.

8 Number and ⁺class of all *securities quoted on ASX (including the ⁺securities in section 2 if applicable)

Number	+ Class
1,354,267,290	Fully paid ordinary shares
270, 853, 458	Options exercisable at \$0.006 on or before 24 September
	2014

24 September 2014

• See chapter 19 for defined terms.

		Number	+ Class
9	Number and + class of all *securities not quoted on ASX (including the + securities in section 2 if applicable)	441,666	Options exercisable at 2.8 cents, expiring 3 February 2014

Dividend policy (in the case of a $\sqrt{\text{N/A}}$
trust, distribution policy) on the ${\bf 10}$ increased capital (interests)

Part 2 - Pro rata issue

11	holder Ĭs security approval required?	No
12	Is the issue renounceable or non- renounceable?	Non-renounceable
13	Ratio in which the "securities will be offered	Two shares for every three existing shares held together with one free attaching
		option for every two new shares subscribed for
14	+ Class of + securities to which the	(a) Ordinary fully paid shares
	offer relates	(b) Options exercisable at \$0.006 on or before 24 September 2014
15	+Record date determine to entitlements	27 August 2014
16	Will holdings different on registers (or subregisters) be calculating aggregated for	N/A
	entitlements?
17	Policy for deciding entitlements in relation to fractions	Fractional entitlements will be rounded up to the nearest whole number

⁺ See chapter 19 for defined terms.

$\mathbf{18}$ Names of countries in which the entity has security holders who will not be sent new offer documents

Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7.

Closing date for receipt of 19 acceptances or renunciations

Only shareholders with a registered address in Australia or New Zealand are eligible to participate

16 September 2013. The directors reserve the right to extend the closing date, subject to the Corporations Act 2001 and the ASX Listing Rules

⁺ See chapter 19 for defined terms.

20	Names of any underwriters	Robert Kennedy (or his nominee), Joseph Houldsworth (or his nominee), Ewan Vickery (or his nominee) and Ian Witton (or his nominee)
21	Amount of any underwriting fee or commission	Nil
22	Names of any brokers to the issue	N/A
23	Fee or commission payable to the broker to the issue	N/A
24	Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of security holders	N/A
25	If the issue is contingent on security holders' approval, the date of the meeting	N/A
26	Date entitlement and acceptance form and offer documents will be sent to persons entitled	2 September 2013
27	If the entity has issued options, and the terms entitle option holders participate tо on exercise, the date on which notices will be sent to option holders	16 August 2013
28	Date rights trading will begin (if applicable)	N/A
29	Date rights trading will end (if applicable)	N/A
30	How do security holders sell their entitlements in full through a broker?	N/A
31	How do security holders sell part of their entitlements through a broker and accept for the balance?	N/A

⁺ See chapter 19 for defined terms.

How do security holders dispose $32$ of their entitlements (except by sale through a broker)?

⁺Issue date 33

$N/A$

24 September 2014

Part 3 - Quotation of securities

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

• Type of *securities 34 (tick one)
• $(a)$ ⁺Securities described in Part 1
• All other *securities

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

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35

$(b)$

• If the 'securities are 'equity securities, the names of the 20 largest holders of the additional ⁺securities, and the number and percentage of additional ⁺securities held by those holders
• 36 If the 'securities are 'equity securities, a distribution schedule of the additional *securities setting out the number of holders in the categories $1 - 1,000$ $1,001 - 5,000$ 5,001 - 10,000 10,001 - 100,000 100,001 and over

37

A copy of any trust deed for the additional ⁺securities

⁺ See chapter 19 for defined terms.

Entities that have ticked box 34(b)
38	Number of + securities for which + quotation is sought
39	+ Class of + securities for which quotation is sought
40	Do the + securities rank equally in all respects from the + issue date with an existing + class of quoted *securities? If the additional + securities do not rank equally, please state: the date from which they do the extent to which they $\bullet$ participate fоr the next dividend, (in the case of a trust, distribution) or interest payment the extent to which they do ٠ not rank equally, other than in relation to the next dividend, distribution interest or payment
41	Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another + security, clearly identify that other 'security)
42	Number + class of and all + securities quoted on ASX. (including the + securities in clause 38)	Number	+ Class

$\ddot{\phantom{a}}$

⁺ See chapter 19 for defined terms.

Quotation agreement

• *Quotation of our additional *securities is in ASX's absolute discretion. ASX $\mathbf{1}$ may quote the *securities on any conditions it decides.
• We warrant the following to ASX. $\overline{a}$
• The issue of the 'securities to be quoted complies with the law and is not for an illegal purpose.
• There is no reason why those 'securities should not be granted tquotation.

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

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

• If we are a trust, we warrant that no person has the right to return the $\bullet$ *securities to be quoted under section 1019B of the Corporations Act at the time that we request that the 'securities be quoted.
• We will indemnify ASX to the fullest extent permitted by law in respect of any 3 claim, action or expense arising from or connected with any breach of the warranties in this agreement.
• We give ASX the information and documents required by this form. If any $\overline{4}$ information or document is not available now, we will give it to ASX before *quotation of the *securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

$\mathcal{L}$ (Condpany secretary)

Date: 19 August 2013

Sign here:

Print name: JUSTIN NELSON

== == == == ==

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

⁺ See chapter 19 for defined terms.