EV RESOURCES LTD — Capital/Financing Update 2013

Sep 17, 2013

ASX ANNOUNCEMENT

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18 September 2013

Cleansing Statement

Issued under section 708(12C)(e) of the Corporations Act 2001(Cth)

(as inserted by ASIC Class Order [CO 10/322])

This Cleansing Statement has been prepared for the purposes of Section 708(12C)(e) of the Corporations Act (as inserted by ASIC Class Order [CO 10/322]) (Class Order) to enable fully paid ordinary shares (Shares) in the capital of South East Asia Resources Limited ACN 009 144 503(Company) to be issued on the conversion of redeemable 6% coupon convertible bonds in the capital of the Company (Bonds) issued to PA Broad Opportunity IV Limited (PABO) and its affiliates (together, the Subscriber), to be on-sold to retail investors.

This Cleansing Statement is important and should be read in its entirety.

1. Contents of this Cleansing Statement

This Cleansing Statement sets out the following:

• (a) the background to this Cleansing Statement; (b) in relation to the Bonds:

• (i) the effect of the offer of the Initial Tranche of Bonds and the Shares on the Company;

• (ii) a summary of the rights and liabilities attaching to the Initial Tranche of Bonds; and

• (iii) a summary of the rights and liabilities attaching to the Shares; and

• (c) information that:

• (i) has been excluded from a continuous disclosure notice in accordance with the ASX Listing Rules; and

• (ii) is information that investors and their professional advisors would reasonably require for the purpose of making an informed assessment of:

A. the assets and liabilities, financial position and performance, profits and losses and prospects of the Company; and

• B. the rights and liabilities attaching to the Initial Tranche of Bonds; and

• C. additional information including content relating to the Company’s status as a disclosing entity and where documents may be obtained

South East Asia Resources Limited ACN 009 144 503

311-313 Hay Street Subiaco, Western Australia 6008 T:+61 (0) 8 9381 5819 F: +61 (0) 8 9388 3701 www.southeastasiaresources.com.au

2. Background to this Cleansing Statement

Background to the Bond Agreement

On 18 September 2013, the Company and PABO entered into a bond subscription agreement pursuant to which the Company agreed to issue, and PABO agreed to subscribe for, up to 20 tranches of Bonds, each tranche having an aggregate principal amount of $500,000 ( Bond Agreement ). This Cleansing Statement relates to the issue of the Initial Tranche of Bonds having a face value of $500,000 which are to be issued today, 18 September 2013.

Details of the Issue

• (a) ( Purpose ): The principal purpose of issuing the Bonds to the Subscriber is to fund working capital requirements for the growth of the business to a mining and resources ownership and trading business, focusing on activities in South East Asia and Australia and the retirement of existing liabilities.

• (b) ( PABO): PABO is an affiliate of PAG, the Asia focussed alternative investment fund management group.

• (c) ( Value ): The Initial Tranche of Bonds is for an amount of $500,000.

• (d) ( Convertible Securities and Conversion Price): The Subscriber has the option of converting the Bonds to Shares at the Conversion Price in accordance with the Terms of the Bonds, the minimum Conversion Price being $0.015 per Share.

• (e) ( Quotation): The Bonds will be unlisted. The Company will apply to ASX on the relevant conversion date for official quotation of the Shares issued upon conversion.

• (f) ( ASIC Class Order): The Company is issuing this Cleansing Statement under ASIC Class Order [CO 10/322] so that the Subscriber can on-sell Shares issued from conversion of the Initial Tranche of Bonds to retail investors without disclosure within 12 months of the date of issue of the Shares arising from conversion.

A summary of the Terms of the Bonds and a summary of the terms and conditions of the Bond Agreement is set out in section 4 of this Cleansing Statement.

Shareholders’ Undertaking

PABO has entered into Undertaking Agreements with shareholders who hold in aggregate 27% of the issued share capital of the Company on the date of this Cleansing Statement ( Covenantors ) as a condition precedent to the Bond Agreement, whereby the Covenantors, if permitted by the ASX Listing Rules and any applicable laws, will, amongst other things, vote in favour of certain resolutions to be proposed at any shareholders meeting required under the Bond Agreement in relation to the Bonds, including a resolution to approve the issue of subsequent tranches of the Bonds.

No Offer or Invitation

The offer of the Initial Tranche of Bonds is an offer to the Subscriber only and is not made to, and may not be accepted by shareholders generally or any person other than the Subscriber. Therefore, no offer or invitation is made pursuant to this Cleansing Statement for any person to subscribe for or apply to acquire any Bonds or Shares.

Queries

If you have any queries regarding this Cleansing Statement please contact the Company Secretary on +618 6489 0600.

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3. Effect of the offer of the Bonds and the Shares on the Company

Effect on the cash and liabilities of the Company

The principal effects of the issue of the Initial Tranche of the Bonds on the Company will be to:

• (a) increase the Company's cash reserves by $500,000 upon the issue of the Bonds (before any expenses associated with the issue of the Bonds); and

• (b) give rise to the Company having a liability for the amount of the face value of the Bonds plus all accrued and unpaid interest (Redemption Amount) which may be repayable on the maturity date of the Bonds or upon the occurrence of certain events of default (as outlined in section 4); and

• (c) if the Bonds are converted, either whole or in part, increase the number of Shares on issue as a consequence of the issue of Shares on conversion of the Bonds (Conversion Shares).

Pro Forma Balance Sheet

The issue of the Initial Tranche of Bonds will have an effect on the Company’s financial position. Set out below is the consolidated (unaudited) balance sheet of the Company as at 30 June 2013 and the consolidated balance sheet of the Company (pro-forma) as at 30 June 2013, incorporating the effects of the issue of the Initial Tranche of Bonds and prepared on the basis of the accounting policies normally adopted by the Company and the assumptions set out below.

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Pro forma - Unaudited Financial Position

Current Assets Cash and cash equivalents Trade and other receivables Prepayments Total Current Assets Non-Current Assets Receivables Property, plant and equipment Exploration and evaluation expenditure Other financial assets Total Non-Current Assets Total Assets Current Liabilities Trade and other Payables Borrowings Other current liabilities Total Current Liabilities Non-Current Liabilities Interest Bearing Borrowings Total Non-Current Liabilities Total Liabilities Net Assets Equity Issued Capital Reserves Accumulated losses Parent entity interest	Unaudited Consolidated ProForma Consolidated 30-Jun-13 30-Jun-13 $ $
	25,082 525,082 531,358 531,358 85,468 85,468
	641,908 1,141,908
	7,877 7,877 3,086 3,086 20,814,044 20,814,044 11,189 11,189
	20,836,197 20,836,197
	21,478,105 21,978,105
	8,630,357 8,630,357 3,785,179 3,785,179 279,446 279,446
	12,694,982 12,694,982
	- 500,000
	- 500,000
	12,694,982 13,194,982
	8,783,122 8,783,122
	27,534,309 27,534,309 (3,000,415) (3,000,415) (15,716,698) (15,716,698)
	8,817,196 8,817,196
Minority equity interest Total Equity	(34,074) (34,074)
	8,783,122 8,783,122

The pro-forma financial information is presented in an abbreviated form in so far as it does not include all of the disclosures required by the Australian Accounting Standards applicable to annual financial statements and is not audited.

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The pro-forma, unaudited balance sheet excludes movements from carrying out general business operations and has been prepared on the basis and assumption that there has been and will be no material movements in the assets and liabilities of the consolidated group between 30 June 2013 and the date of this Cleansing Statement.

Source and Application of Funds

The issue of the Initial Tranche of Bonds will raise $500,000. The net proceeds of the issue of the Initial Tranche of Bonds, expected to amount to approximately $470,000 after deducting legal fees and the estimated expenses incurred in connection with the issue of the Initial Tranche of Bonds, will be used by the Company to fund working capital requirements for the growth of the business as a mining and resources ownership and trading business, focusing on activities in South East Asia and Australia, and retire existing debt/liabilities.

Impact on the Maturity Profile of the Company’s Debt

The Initial Tranche of Bonds represents a medium term liability of the Company and, unless redeemed, converted or purchased and cancelled in accordance with their terms, is due for repayment on 18 September 2018.

As at 31 August 2013, the Company has borrowings totalling $3,700,000 maturing from 31 December 2013 to 30 May 2015.

Restrictions on the Company’s Activities

The Bond Agreement imposes certain restrictions on the activities of the Company either through specific undertakings or events of default but also through conversion adjustments under the Terms of the Bonds. The Terms of the Bonds are summarised in section 4.

The Company’s ability to grant convertible securities or effect changes in its share capital is restricted for the duration of the period within which any Bonds remain outstanding.

Impact on Capital Structure of Issue of Bonds and Shares on conversion of Bonds

As a result of the issue of the Initial Tranche of Bonds the maximum number of Shares that may be issued on conversion of the Initial Tranche of Bonds is 33,333,333 (assuming a conversion price of $0.015 being the minimum conversion price under the Bond Agreement), which will increase the number of Shares on issue from 223,452,277 Shares to approximately 271,785,610 Shares. This would result in PABO holding approximately 17.78% of the Company’s enlarged issued share capital, including the Fee Shares issued to PABO.

Effect on capital structure

The effect of the issue of the Initial Tranche of Bonds on the capital structure of the Company is set out below (assuming a conversion price of $0.015, being the minimum Conversion Price under the Bond Agreement).

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Impact on capital structure of issue of Initial Tranche of Bonds:

Security	Pre issue of Initial Tranche of Bonds	Post issue of Initial Tranche of Bonds2	Assuming full conversion of Initial Tranche of Bonds3
Shares quoted on ASX	223,452,2771	238,452,277	271,785,610
Convertible Bonds	0	50 Bonds of $10,000 each (totalling $500,000)	0
Convertible Notes convertible at an average price of $0.03 per Share	$1,700,000	$1,700,000	$1,700,000
Performance Shares not quoted on ASX	120,000,000	120,000,000	120,000,000
Options (all incentive) not quoted on ASX	35,000,000	35,000,000	35,000,000

1. The Company has an obligation to seek shareholder approval for the issue of up to a further 220 million shares upon the occurrence of Milestones 2 and 3 of the SEAE acquisition as detailed in the Notice of General Meeting dated 22 August 2012.

2. Assuming no additional securities are issued by the Company or convertible securities exercised.

3. Assuming no additional securities are issued by the Company, other than Shares issued upon conversion of the Initial Tranche of Bonds and the Fee Shares.

4. The Bonds are subject to adjustment to the conversion price in accordance with part 4 of the Terms of Bonds. Such adjustments are not taken into account in this calculation of Shares in existence upon full conversion of the Bonds.

The number of new Shares to be issued to PABO (if any) will depend on whether the Initial Tranche is converted in whole or in part, and the conversion price at the time of conversion, as described in section 4 below (the minimum being $0.015 per Share).

If all of the Initial Tranche of Bonds are converted (and assuming no other present dilutive securities are converted or exercised, such as options, performance shares or deferred consideration shares), assuming a conversion price of $0.015 (being the minimum conversion price under the Bond Agreement) 33,333,333 new Shares would be issued to PABO, which would give PABO a relevant interest in approximately 17.78% of the expanded total number of Shares on issue, including the Fee Shares issued to PABO.

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4. Rights and liabilities attaching to the Bonds

Terms of Bonds

A summary of the key terms and conditions of the Initial Tranche of the Bonds is set out below:

• (a) ( Issue ): Redeemable 6% coupon convertible Bonds to an aggregate principal value of $500,000.

• (b) ( Interest ): Interest accrues daily at the rate of 6% per annum (with default interest at the rate of 15% per annum from the due date) and is payable in arrears every 6 months from the date of issue of the Bonds (or on the earlier conversion or redemption of the Bonds). Failure to pay interest is deemed an event of default.

• (c) ( Maturity ): Unless previously redeemed or converted, a Bond will be redeemed on the date falling 5 years from the date of issue of the Bonds at 100 per cent of its principal amount.

• (d) ( Form and Denomination ): The Bonds will be in registered form, in denominations of $10,000 or integral multiples of $10,000 in excess thereof.

• (e) ( Certificates ): A certificate will be issued for the Bonds.

• (f) ( Register of Subscribers ): The Company must keep a register of subscribers for the Bonds.

• (g) ( Transferability ): The Bonds are transferable.

• (h) ( Conversion Right ): The Subscriber has the right to convert Bonds into Shares at any time during the Conversion Period. The number of Shares to be delivered upon conversion shall be determined by dividing the principal amount of the Bond by the Conversion Price.

• (i) ( Conversion Period ): The period beginning on and including the date of issue of the Bond and ending at close of business on the date immediately preceding the Maturity Date.

• (j) ( Conversion Price ): The price at which Shares will be issued upon conversion of a Bond, as adjusted from time to time (the Conversion Price ) will be equal to the lower of:

• (i) 125% of the average of the closing prices per Share for the 25 consecutive trading days immediately prior to the date the Bond is issued ( Fixed Conversion Price) ; and

• (ii) 90% of the lowest average of the closing prices per Share in any 5 consecutive trading days during the 25 consecutive trading days immediately preceding the conversion date,

but subject to a minimum conversion price of $0.015 and subject any adjustments required the terms of the Bonds.

• (k) ( Adjustment to Fixed Conversion Price ): The Fixed Conversion Price will be subject to adjustment if one of the following events occur which affects the Company’s shares: Consolidation, subdivision or reclassification; capitalisation of profits or reserves; capital distribution, pro-rata rights issues and share issues which are less than 95% of the current market price; and modification to rights of conversion.

• (l) ( Adjustment to Minimum Conversion Price ) If the Fixed Conversion Price is adjusted, the minimum Conversion Price shall be correspondingly adjusted so as to ensure that

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the economic value of the Bonds and the rights under the Bond Agreement to the Bondholders shall be the same after such adjustment to the Fixed Conversion Price as it was immediately prior to such adjustment.

• (m) ( Minimum Conversion ): Unless otherwise agreed by the Issuer, the minimum principal amount of the Bonds to be converted in any single conversion is $100,000.

• (n)

• ( AUD ): Payment by the Subscriber must be made in Australian Dollars.

• (o) ( Redemption by Company ): The Company may redeem the Bonds early if it meets certain criteria in relation to taxation.

• (p) ( Redemption by Subscriber ): The Subscriber may redeem some or all of the Bonds at any time after one year from the date of issue of the Bonds by notice in writing to the Company.

• (q) ( Early Redemption ) The Subscriber may redeem all of the Bonds in certain circumstances including, without limitation:

• (i) there is a change in the control of the Company;

• (ii) the Company is delisted from ASX;

• (iii) the Company becomes the subject of an insolvency event; or

• (iv) one of the following events occur:

  • A. the Company fails to repay any amount of the principal amount or interest within 5 Business Days of becoming due and payable;

  • B. failure by the Company to pay interest in accordance with the terms of the Bonds;

  • C. the Company fails to issue and deliver converted Shares within 5 Business Days after a Bond is converted;

  • D. the Company does not comply with the Terms of the Bonds or the Bond Agreement, which default is incapable of remedy, or if capable of remedy, is not remedied within 30 days after written notice of such default being given to the Company;

  • E. any representation or warranty made or given by the Company in the Agreement or the terms of the Bonds is or becomes incorrect;

  • F. any necessary consents or approvals are withdrawn;

  • G.

• if there is any event of default;

• H. the Company or any subsidiary is insolvent, an order is given to wind up the Company or any subsidiary;

• I. where any other debt is accrued in an amount in excess of $1,000,000 and not paid when that debt becomes due (including any grace periods);

• J. a legal process is levied, enforced or sued out against the property of the Company or a subsidiary which adversely

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affects the ability of the Company to perform its obligations under the Bond Agreement, and is not discharged or stayed within 30 days;

K. a financier takes possession of the assets of the Company or any subsidiary;

• L. any material present or future security on or over the assets of the Issuer or any of the other Group Companies in favour of any person becomes enforceable, and any step (including the taking of possession or the appointment of a receiver, manager or similar officer) is taken to enforce that security;

• M. the Issuer or any of the other Group Companies shall transfer or otherwise dispose of all or substantially all of its assets to any person, firm or corporation, otherwise than in the case of a reconstruction whether by way of scheme of arrangement or otherwise for which the prior approval of the Bondholders has been obtained;

• N. trading in the Ordinary Shares on the ASX is halted or suspended for a period exceeding ten (10) consecutive Trading Days;

• O. there shall occur or threaten to occur a Material Adverse Change or any material change or development involving a prospective material change, in national or international monetary, financial, political or economic Conditions (including any disruption to trading generally, or trading in any securities of the Issuer on any stock exchange or in any over-the-counter market) or currency exchange rates or foreign exchange controls which would in the Bondholders' view be likely to prejudice materially the assets, business, legal position, financial Condition, liabilities or prospects of the Company or the Group or results of operations of the Company or the Group; or

• P. any law prevents the Company from complying with any of its obligations under the Terms of the Bonds or the Bond Agreement.

• (r) ( Governing Law ): The Bonds will be governed by the laws of Western Australia.

Bond Agreement

A summary of the key terms and conditions of the Bond Agreement are set out below:

• (a) ( Bonds Issue ): Subject to certain conditions being met, the Company will issue the Subscriber with Bonds of a minimum aggregate value of $500,000 (being the Initial Tranche of Bonds) and a maximum aggregate value of $10,000,000 (being the full 20 tranches of Bonds).

• (b) ( Timing ): Bonds can be subscribed for and issued during the period of 5 years from the issue of the Initial Tranche of Bonds. No request for Bonds can be made after 5 years from the date of the issue of the Initial Tranche of Bonds. The Initial Tranche of Bonds must be issued by 30 September 2013 or such other date agreed by the Company and the Subscriber ( Initial Completion Date ).

• (c) ( Conditions Precedent for Initial Bonds ): The initial issue of Bonds under the Bond Agreement is subject to a number of conditions precedents being met or waived, including:

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• (i) the closing trading price of Shares on the trading day immediately preceding the Initial Completion Date being equal to or above $0.015;

• (ii) the daily volume weighted average trading price of the Shares during the 10 trading days immediately preceding the Initial Completion Date being equal to or above $0.015;

• (iii) either the Company complies with the Class Order or a prospectus for the Shares issued on conversion having been issued and lodged with ASIC;

• (iv) there being no injunction against the issue, no market disruption, no adverse change in legislation and the Company's shares not being suspended from trading at the Initial Completion Date and the Company not being delisted; and

• (v) there being no breach of the Bond Agreement or material adverse change occurring that would have an adverse material adverse effect on the assets, business, financial condition, liabilities, prospects or results of operations of the Company and its subsidiaries that could reasonably result in or could reasonably be expected to result in the inability of the Company to redeem any outstanding Bonds.

• (d) ( Subsequent Tranches of Bonds ): Either party may request that a subsequent tranche of $500,000 of Bonds be issued. Provided the other party accepts the request and all conditions for subsequent issues are met, subsequent tranches up to a cumulative amount of $9,500,000 may be issued over a 5 year period. However in the case of the first 6 subsequent tranches provided and all conditions for subsequent issues are met, the Company must comply with a request from the Subscriber.

• (e) ( Conditions for a Request for Subsequent Tranches of Bonds ): A request for a subsequent issue of a tranche of Bonds is conditional on, among other things:

• (i) only a single tranche being issued at a time (unless otherwise agreed);

• (ii) the closing price of Shares on the trading day immediately preceding the date of the request being equal to or above $0.015;

• (iii) the daily volume weighted average price of the Shares during the 10 trading days immediately preceding the date of the request being equal to or above $0.015;

• (iv) the immediately preceding tranche of Bonds having been fully converted into Shares (unless otherwise agreed). At this stage, the Company has not agreed any circumstances in which more than a single tranche of Bonds could be issued, or where a tranche could be issued before all the Bonds in the previous tranche had been converted; and

• (v) a request may not be made if, upon issue, the Subscriber and its associates will have an interest in more than 19.9% of the share capital of the Company. This has the effect of imposing a cap on the interest in Shares the Subscriber can obtain through the Bond Agreement.

• (f) ( Conditions Precedent for Subsequent Tranches of Bonds ): The issue of subsequent tranches of Bonds under the Bond Agreement is subject to the approval of the shareholders of the Company and other conditions similar to those that apply to the issue of the initial trance of Bonds. In addition, all necessary approvals and consents must continue to be in place and the Company must not be in breach of a warranty or undertaking under the Bond Agreement.

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• (g) ( Representations ): The Company has provided the Subscriber warranties with respect to, among other things, the legal, business and financial condition of the Company and its subsidiaries and the power of the Company to enter into, and comply with its obligations under, the Bond Agreement and the Terms of the Bonds.

• (h) ( Undertakings ): The Company has given undertakings that as long as Bonds are outstanding the Company will carry on its business in the ordinary course, not allot or grant any other convertible securities, not increase, reduce or otherwise change its share capital, not allow an insolvency event to occur to the Company or amend its constitution.

• (i) ( Termination ): The Bond Agreement:

• (i) can be terminated by the Subscriber if the issue of the Initial Tranche of Bonds is not completed by 30 September 2013 or such other date agreed by the Company and the Subscriber;

• (ii) can be terminated by the Subscriber if at any time prior to the payment of the price for a tranche of Bonds the Company:

  • A. breaches any warranty or representation under the Bond Agreement or the Terms of the Bonds; or

  • B. does not perform an obligation under the Bond Agreement or the Terms of the Bonds or any other event of default occurs;

• (iii) can be terminated by the Subscriber of the Company if no request for subscription or conversion of any Bonds occurs within 12 months after the previous subscription or conversion;

• (iv) will terminate automatically 5 years after the date the Initial Tranche of Bonds is issued.

• (j) ( Indemnity ): The Company indemnifies the Subscriber from and against all and any actions, proceedings, claims, liabilities, losses, costs and expenses (including all costs and expenses incurred in disputing or defending any of the foregoing on a full indemnity basis) which may be made or brought against the Subscriber or which the Subscriber may suffer or incur as a result of or in relation to any misrepresentation or alleged misrepresentation by the Company or any breach or alleged breach of the representations, warranties, undertakings and agreements on its part or any failure by it to perform its obligations under the Bond Agreement.

• (k) ( Exclusivity ): The Company must ensure that neither it nor its affiliates and representatives solicit, discuss or negotiate with any person other than the Subscriber in relation to any proposal that involves the issue of bonds, debentures or other debt securities with features substantially similar to the Bonds to be issued under the Bond Agreement .

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5. Rights and liabilities attaching to the Shares

The following is a summary of the more significant rights and liabilities attaching to Shares to be issued on conversion of the Bonds. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders. To obtain such a statement, persons should seek independent legal advice.

Full details of the rights and liabilities attaching to Shares are set out in the Constitution, a copy of which is available for inspection at the Company’s registered office during normal business hours. The rights, privileges and restrictions attaching to Shares can be summarised as follows:

• (a) ( General meetings ): Shareholders are entitled to be present in person, or by proxy, attorney or representative to attend and vote at general meetings of the Company. Shareholders may requisition meetings in accordance with Section 249D of the Corporations Act and the Constitution of the Company.

• (b) ( Voting rights ): Subject to any rights or restrictions for the time being attached to any class or classes of Shares, at general meetings of Shareholders or classes of shareholders:

• (i) each Shareholder entitled to vote may vote in person or by proxy, attorney or representative;

• (ii) on a show of hands, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder has one vote; and

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

• (c) ( Dividend rights ): Subject to the rights of persons (if any) entitled to shares with special rights to dividend the Directors may declare a final dividend out of profits in accordance with the Corporations Act and may authorise the payment or crediting by the Company to the Shareholders of such a dividend. The Directors may authorise the payment or crediting by the Company to the Shareholders of such interim dividends as appear to the Directors to be justified by the profits of the Company. Subject to the rights of persons (if any) entitled to shares with special rights as to dividend all dividends are to be declared and paid according to the amounts paid or credited as paid on the Shares in respect of which the dividend is paid. Interest may not be paid by the Company in respect of any dividend, whether final or interim.

• (d) ( Winding-up ): If the Company is wound up, the liquidator may, with the authority of a special resolution of the Company, divide among the Shareholders in kind the whole or any part of the property of the Company, and may for that purpose set such value as he considers fair upon any property to be so divided, and may determine how the division is to be carried out as between the Shareholders or different classes of Shareholders. The liquidator may, with the authority of a special resolution of the Company, vest the whole or any part of any such property in trustees upon such trusts for the benefit of the contributories as the liquidator thinks fit, but so that no shareholder is compelled to accept any shares or other securities in respect of which there is any liability. Where an order is made for the winding up of the Company or it is resolved by special resolution to wind up the Company, then on a distribution of assets to members, Shares classified by ASX as restricted securities at the time of the commencement of the winding up shall rank in priority after all other shares.

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

• (f) ( Variation of rights ): Pursuant to Section 246B of the Corporations Act, the Company may, with the sanction of a special resolution passed at a meeting of shareholders vary or abrogate the rights attaching to shares.

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

6. Continuous disclosure

The Company is a "disclosing entity" (as defined in section 111AC of the Corporations Act) for the purposes of the Corporations Act and, as such, is subject to regular reporting and disclosure obligations.

Aside from the information contained in this Cleansing Statement and documents previously lodged by the Company with the ASX pursuant to its continuous obligations, there is no additional information that:

• (a) has been excluded from a continuous disclosure notice in accordance with the Listing Rules; and

• (b) is information that investors and their professional advisers would reasonably require for the purpose of making an informed assessment of:

• (i) the assets and liabilities, financial position and performance, profits and losses and prospects of the Company; and

• (ii) the rights and liabilities attaching to the Bonds or Shares to be issued on conversion of the Bonds.

7. Additional information

Right to obtain documents

Copies of documents lodged with ASIC in relation to the Company, including the Constitution, may be obtained from, or inspected at, an ASIC office. In addition, the Company will make available to you free of charge at any time copies of:

• (a) the Company’s Annual Report for the year ended 30 June 2012; and

• (b) the Company’s Half Year Report for the period ended 31 December 2012;

• (c) any continuous disclosure notices given by the Company after lodgement of that Annual Report and before release of this Cleansing Statement which are:

16/09/2013	Update Proposed Acquisition of Tasmanian Coal Project
03/09/2013	Indonesian Coking Coal Production and Sales
31/07/2013	Update proposed acquisition Tasmanian coal project & App 3B

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31/07/2013	Quarterly Activities Report
31/07/2013	Quarterly Cashflow Report
07/06/2013	Amended Appendix 3B
31/05/2013	Appendix 3B and 708A Notice
30/05/2013	Proposed Acquisition of Tasmanian Coal Project
26/04/2013	Quarterly Cashflow Report
26/04/2013	Quarterly Activities Report
15/03/2013	Half Year Accounts
21/02/2013	Clarification to Proposed Acquisition of Coal Project
20/02/2013	Proposed Acquisition of Tasmanian Coal Project
31/01/2013	Quarterly Activities Report
31/01/2013	Quarterly Cashflow Report
25/01/2013	Appendix 3B
24/12/2012	Change of Company Name & ASX Code
24/12/2012	Completion of SEAE Acquisition & Appendix 3B
18/12/2012	SEAE Update, Coking Coal Agreement
10/12/2012	Completion of Share Placement / Update on Acquisition
05/12/2012	Victory West to raise $750,000 via placement
05/12/2012	SEAE Acquisition $3M Advance Funding/Off-take Arrangement
30/11/2012	Results of Annual General Meeting 2012
31/10/2012	Quarterly Cashflow Report
31/10/2012	Quarterly Activities Report
29/10/2012	Notice of Annual General Meeting/Proxy Form
16/10/2012	Update on SEAE Project Pipeline
04/10/2012	Results of Meeting
04/10/2012	Company Presentation October 2012

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

The announcements are also available through the ASX website http://www.asx.com.au or the Company’s website www.southeastasiaresources.com.au.

ASIC

This Cleansing Statement is issued under Section 708(12C)(e) of the Corporations Act (as inserted by ASIC Class Order [CO10/322]) to enable Shares issued upon conversion of the Initial Tranche of Bonds to be on-sold to retail investors.

The offer of the Bonds took place outside Australia or if within Australia solely to professional or sophisticated investors under section 708 of the Corporations Act.

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The Company’s sole purpose in issuing Shares on conversion of the Bonds will be to meet its contractual obligations under the Terms of the Bonds.

Consents

The issue of this Cleansing Statement has been approved by the Directors of the Company. Each Director has consented to the issue of this Cleansing Statement, and has not withdrawn that consent.

No Responsibility

Neither ASX nor the ASIC take responsibility for the contents of this Cleansing Statement.

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Glossary

$ means Australian dollars.

ASIC means the Australian Securities and Investments Commission.

ASX means ASX Limited (ACN 008 624 691).

ASX Listing Rules means the Listing Rules of the ASX.

Board means the board of Directors of South East Asia Resources Limited unless the context indicates otherwise.

Bond means a redeemable 6% coupon convertible bond issued under the Bond Agreement.

Bond Agreement means the agreement entitled “Bond Subscription Agreement” dated 18 September 2013 between South East Asia Resources Limited and PA Broad Opportunity IV Limited.

Business Day means a day (excluding a Saturday or Sunday) on which commercial banks are open for business in Hong Kong and Perth.

Class Order means ASIC Class Order [CO10/322].

Cleansing Statement means this cleansing statement.

Company means South East Asia Resources Limited ACN 009 144 503.

Constitution means the constitution of the Company as at the date of this Cleansing Statement.

Conversion Price has the meaning given to it in the Terms of the Bonds.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the directors of the Company as at the date of this Cleansing Statement.

General Meeting means a general meeting of Shareholders to be held not later than 30 November 2013.

Initial Completion Date means the date for the completion of the issue of the Initial Tranche of Bonds, which will be five Business Days after the fulfilment of the conditions precedent for the Initial Tranche of Bonds, or such other date as may be agreed in writing by the Company and the Subscriber.

Initial Tranche of Bonds means the initial tranche of Bonds issued on the date of this Cleansing Statement.

PABO or Subscriber means PA Broad Opportunity IV Limited.

Notice of Meeting means the notice of meeting dated not later than 30 November 2013 for the General Meeting.

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

Shareholder means a shareholder of the Company.

Subscriber means PABO and its affiliates.

Terms of the Bonds means the terms and conditions of the Bonds set out in the Bond Agreement, a summary of which is contained in this Cleansing Statement.

END

Further enquires:

South East Asia Resources Luke Martino Company Secretary Phone: (+618) 9381 5819

About South East Asia Resources Limited

South East Asia Resources is a resources focused resource exploration company listed on the Australian Securities Exchange (ASX code: SXI) and Frankfurt Stock Exchange (FSE code: R1E), with a vision to find, prove and extract value from world class resource projects in South East Asia. The Company is building a resources portfolio with its cornerstone project Malala Molybdenum Project in the Toli Toli Province in North Sulawesi, Indonesia and interests in the Penajam East Coal Project in Penajam Regency of East Kalimantan, Indonesia.

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