EV RESOURCES LTD — Capital/Financing Update 2013

Sep 17, 2013

ASX ANNOUNCEMENT

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18 September 2013

South East Asia signs $10m facility Agreement

South East Asia Resources Limited (ASX: SXI ) ( Company ) is pleased to announce that it has executed a Bond Subscription Agreement with PA Broad Opportunity IV Limited (Subscriber) for the provision of up to A$10 million by way of unsecured bonds, convertible into shares.

The key terms of the bonds are set our below:

The conversion price for the bonds is the lower of:

• (a) 125%of the average of the closing price per share for the 25 trading days immediately prior to the date on which the bond is issued; or

• (b) 90% of the average of the closing price per share in any 5 consecutive trading days during the 25 trading days immediately preceding the relevant conversion date of the bonds.

The conversion price, at all times, cannot be lower than A$0.015 and if the conversion price determined from either (a) or (b) above is below A$0.015, then the conversion price would be equal to A$0.015 for that particular conversion.

The Bonds are unsecured and have a maturity date of 5 years. The financing is subject to appropriate shareholder and regulatory approvals.

The Company has today issued the Initial Tranche Bonds of A$500,000. The net proceeds from the issue of the Initial Tranche of Bonds, 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 retire existing debt/liabilities and 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. The Company has also today issued 15 million shares in satisfaction of the A$300,000 fee for agreeing the Bond Subscription Agreement.

With this facility in place and the expected contributions from the first coal shipment expected next month, as announced on 3 September 2013, the Company is in a very strong position to progress towards execution of additional projects and build shareholders' wealth.

Further details of this financing package are set out in in Annexure A attached and the Cleansing Statement issued today.

END

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.

South East Asia Resources Limited ACN 009 144 503

311-313 Hay Street Subiaco, Western Australia 6008 T:+61 (0) 8 6489 0600 www.southeastasiaresources.com.au

Annexure A

A summary of the key terms and conditions of the Bond Agreement is 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).

• (a) ( 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.

• (b) ( 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 without limitation:

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

  • (ii) 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 ASIC Class Order [CO 10/322] 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 not being suspended from trading at the initial completion date or delisted;

  • (v) the execution and delivery to the Subscriber of the Shareholders' Undertakings;

  • (vi) there being no breach of the Bond Agreement or material adverse change occuring 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;

  • (vii) no Material Adverse Change having occurred between the date of the Bond Agreement and the Initial Completion Date;

  • (viii) there has been no halt or suspension of trading in the Ordinary Shares on ASX for a period exceeding two (2) consecutive Trading Days at any time during the period of (3) months preceding the Initial Completion Date, and ASX has not ended quotation of the Ordinary Shares or removed the Issuer from the official list of ASX;

  • (ix) no new law or regulation or any change or prospective change in the existing law or regulation (including in respect of any laws or regulations relating to Taxation or exchange controls), or any change in the interpretation of application thereof by any court or other competent authority in or affecting Australia which may affect the Transaction Documents or the transactions contemplated under them; and

  • (x) the form and substance of an initial disclosure letter being satisfactory in forma and substance to the Subscriber.

• (c) ( Subsequent Tranches of Bonds ): Either party may request that a subsequent Tranche of $500,000 worth 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

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6 subsequent tranches, provided all conditions for subsequent issues are met, the Company must comply with a request from the Subscriber.

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

  • (iii) 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;

  • (iv) any necessary Shareholder approval of the issue must have been obtained; 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 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.

• (e) ( Conditions Precedent for Subsequent Tranches of Bonds ): In addition to similar conditions as apply for the initial issue of Bonds, all necessary approvals and consents must continue to be in place and the Company must not be in breach of a warranty or undertaking.

• (f) ( 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. The representations and warranties made by the Company to the Subscriber include representations and warranties as to, among other things:

  • (i) subject to obtaining Shareholder approval and listing approval, the Company has full power and authority to enter into and perform its obligations under the Bond Agreement and the Terms of the Bonds;

  • (ii) the Company has complied with all relevant laws in connection with the issue of the Bonds and any converted Shares; and

  • (iii) the Company is not subject to any actual or threatened litigation that might result in any material adverse change that would materially and adversely affect the ability of the Company perform its obligations under the Bond Agreement.

• (g) ( 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.

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

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

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

  - B. does not perform a material obligation under the Bond Agreement or Terms of Bonds; and 

• (iii) can be terminated by the Subscriber and the Issuer in the event that no request for Conversion of or subscription for any Bond occurs within 12 months after the previous conversion of or subscription for a Bond (whichever is the later); and

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

• (i) ( Indemnity ): The Company indemnifies the Subscriber and holds the Subscriber harmless from and against all and any actions, proceedings, claims, liabilities, losses, costs and expenses (including, without limitation, 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.

• (j) ( Exclusivity ): The Company must ensure that neither it nor its affiliates and representatives solicit, discuss, negotiate with any person other than the Subscribers in relation to any competing proposal except with the prior written consent of the Subscriber.

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