First Graphene Ltd. - Capital/Financing Update 2014

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MRL CORPORATIO N LIMITED ACN 007 870 760

ENTITLEMENT ISSUE PROSPECTUS

For a non-renounceable en t itlement issue of four (4) Shares for every five (5) Share held by those Shareholders regist e red at the Record Date at an issue price o f $0.025 per Share to raise up to $1,485,462 (b a sed on the number of Shares on issue as at the date of this Prospectus) (Entitlement Issu e ).

and

In the event that the Shortfall from the Entitlement Issue is less than 20, 0 00,000 Shares, the Company will offer to the U nderwriter (or its nominees) such numb e r of Shares that is equal to the difference bet w een 20,000,000 Shares and the total avail a ble Shortfall at an issue price of $0.025 per Sh a re and otherwise on the same terms as the Entitlement Issue (Top-up Offer). The Entitlement Issue is full y underwritten by CPS Capital Group Pty Ltd (Underwriter). Refer to section 8.5 for details regarding the terms of the Underwriting A greement.

IMPORTANT NOTICE

This document is importan t and should be read in its entirety. If after reading this Prospectus you have any questions about the securities being o ffered under this Prospectus or any other ma t ter, then you should consult your stockbro k er, accountant or other professional adviser.

The Shares offered by this Pr o spectus should be considered as specula t ive.

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AFSL 294848

1.	CORPORATE DIRECTORY .............................................................................................. 1
2.	TIMETABLE ..................................................................................................................... 2
3.	IMPORTANT NOTES ....................................................................................................... 3
4.	DETAILS OF THE OFFERS ................................................................................................ 9
5.	PURPOSE AND EFFECT OF THE OFFER ......................................................................... 15
6.	RIGHTS AND LIABILITIES ATTACHING TO SECURITIES ................................................. 19
7.	RISK FACTORS ............................................................................................................ 23
8.	ADDITIONAL INFORMATION ...................................................................................... 30
9.	DIRECTORS’ AUTHORISATION .................................................................................... 40
10.	GLOSSARY .................................................................................................................. 41

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1. CORPORATE DIRECTORY

Directors

Registered Office

Peter Reilly (Non-Executive Chairman) Craig McGuckin (Managing Director) Denis Geldard (Non-Executive Director) Peter Hepburn-Brown (Non-Executive Director)

Suites 6 & 7 61 Hampden Road Nedlands W.A. 6009

Telephone: +61 1300 660 448 Facsimile: +61 1300 855 044

Company Secretary

Peter Richard Youd

Email: [email protected] Website: www.mrltd.com.au

Share Registry*

Solicitors

Automic Registry Services Level 1, 7 Ventnor Avenue West Perth W.A. 6005

Telephone: +61 8 9324 2099 Facsimile: +61 8 9321 2337

Steinepreis Paganin Lawyers and Consultants Level 4, The Read Buildings 16 Milligan Street Perth WA 6000

Auditor

Underwriter and Lead Manager

BDO Audit (WA) Pty Ltd 38 Station Street Subiaco WA 6008 Telephone: +61 8 6382 4600 Facsimile: +61 8 6382 4610

CPS Capital Group Pty Ltd Level 45 108 St Georges Terrace Perth WA 6000

This entity is included for information purposes only. It has not been involved in the preparation of this Prospectus and has not consented to being named in this Prospectus.

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2. TIMETABLE

Lodgement of Prospectus with the ASIC	Lodgement of Prospectus with the ASIC			25 March 2014
Lodgement of Prospectus & Appendix 3B with ASX				25 March 2014
Notice sent to Optionholders				25 March 2014
Notice sent to Shareholders				27 March 2014
Notice of Meeting sent to Shareholders				On or before 28 March 2014
Ex date				28 March 2014
Record Date for determining Entitlements				3 April 2014
Prospectus despatched to Shareholders			&	9 April 2014
Company announces despatch	has	been
completed
General Meeting to be held				28 April 2014
Closing Date of Entitlement Issue*				28 April 2014
Shares under Entitlement Issue quoted		on	a	29 April 2014
deferred settlement basis
ASX notified of under subscriptions of	Entitlement			1 May 2014
Issue
Despatch of holding statements for Shares		issued		6 May 2014
under the Entitlement Issue
Quotation of Shares issued under the	Entitlement			7 May 2014
Issue*
Closing date of Top-up Offer**				16 May 2014

*The Directors may extend the Closing Date of the Entitlement Issue by giving at least 6 Business Days’ notice to ASX prior to the Closing Date. As such the date the Shares are expected to commence trading on ASX may vary.

** The Top-up Offer is conditional on the Shortfall being less than 20,000,000 Shares and is subject to Shareholder approval at the General Meeting. If required, the Shares to be issued Top-up Offer will be placed to the Underwriters and distributed to clients of CPS Capital many of whom are sub-underwriters to the Entitlement Issue or who have otherwise agreed to assist with the completion of the Entitlement Issue on a progressive basis. Please refer to Section 4 of the Prospectus for further details.

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3. IMPORTANT NOTES

This Prospectus is dated 25 March 2014 and was lodged with the ASIC on that date. The ASIC and its officers take no responsibility for the contents of this Prospectus or the merits of the investment to which this Prospectus relates.

No Securities may be issued on the basis of this Prospectus later than 13 months after the date of this Prospectus.

No person is authorised to give information or to make any representation in connection with this Prospectus, which is not contained in the Prospectus. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with this Prospectus.

It is important that investors read this Prospectus in its entirety and seek professional advice where necessary. The Securities the subject of this Prospectus should be considered highly speculative.

Applications for Securities offered pursuant to this Prospectus can only be submitted on an original Entitlement and Acceptance Form, Shortfall Application Form, Top-up Offer Application Form, Form, Underwriter Placement Application Form or Director Options Application.

This Prospectus is a transaction specific prospectus for an offer of continuously quoted securities (as defined in the Corporations Act) and has been prepared in accordance with section 713 of the Corporations Act. It does not contain the same level of disclosure as an initial public offering prospectus. In making representations in this Prospectus regard has been had to the fact that the Company is a disclosing entity for the purposes of the Corporations Act and certain matters may reasonably be expected to be known to investors and professional advisers whom potential investors may consult.

3.1 Risk factors

Potential investors should be aware that subscribing for Securities in the Company involves a number of risks. The key risk factors of which investors should be aware are set out in section 7 of this Prospectus. These risks together with other general risks applicable to all investments in listed securities not specifically referred to, may affect the value of the Securities in the future. Accordingly, an investment in the Company should be considered highly speculative. Investors should consider consulting their professional advisers before deciding whether to apply for Securities pursuant to this Prospectus.

A summary of some of the key risks include:

Risk	Description	Reference in Prospectus
Potential for dilution	Upon implementation of the Entitlement Issue, assuming all Entitlements not subscribed for are placed under the Shortfall Offer, the Top-up Offer is not required no Options are exercised and the Underwriter Placement is approved by Shareholders, the number of Shares in the Company will increase from 74,273,104 currently on issue, to 146,191,587. This means that each Share will represent a	7.1(a)

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Risk	Description	Reference in Prospectus
	lower proportion of the ownership of the Company. Shareholders should note that if Shares are issued under the Top-up Offer the number of Shares on issue will increase further.
Sovereign and political risks	The Company’s projects are located in Sri Lanka. Accordingly, the Company will be subject to the risks associated with operating in those countries, including various levels of political, economic and other risks and uncertainties.	7.1(b)
Exploration risks	Exploration is inherently associated with risk. Notwithstanding the experience, knowledge and careful evaluation a company brings to an exploration project there is no assurance that recoverable mineral resources will be identified. Even if identified, there is no guarantee that it can be economically exploited.	7.1(c)
Operating risks	The current and future operations of the Company, including exploration, appraisal and possible production activities may be affected by a range of factors. These include, geological conditions, unanticipated operational ad technical difficulties, mechanical failures, industrial action, unavailability of equipment, unexpected shortages or increase in costs of consumable and equipment, ability to obtain a wide range of permits and restriction of access to infrastructure by authorities.	7.1(d)
Licence access risk	Under Sri Lankan legislation the Company may be required to enter into an agreement with relevant landowners for purpose of securing consent prior to commencing any exploration activities. Any delay in obtaining these consents may impact on the Company’s ability to carry out exploration activities within the affected areas.	7.1(e)
Exploration license risk	Risk that the Company may not be able to satisfy conditions in respect of its Licenses.	7.1(g)
Commodity price volatility	Substantially all of the Company’s revenues and cash flow (should the Company enter production) will be derived from the sale of graphite. Therefore, the financial performance of the Company would be exposed to	7.2(c)

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Risk	Description	Reference in Prospectus
	fluctuations in the graphite price rates. Graphite prices fluctuate and are affected by many factors beyond the control of the Company.
Additional requirements for capital	The Company’s capital requirements depend on numerous factors. Any additional equity financing will dilute shareholdings, and debt financing, if available, may involve restrictions on financing and operating activities. If the Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations, scale back its exploration programmes and may result in loss of tenure, as the case may be.	7.3(d)
Potential Acquisitions	The Company may make acquisitions of, or significant investments in, complementary companies or prospects. Any such transactions will be accompanied by risks commonly encountered in making such acquisitions including risks associated with operating in foreign jurisdictions.	7.3(h)

3.2 Underwriting

The Entitlement Issue is fully underwritten by the Underwriter. Refer to section 8.5 of this Prospectus for details of the terms of the underwriting.

In accordance with the terms of the Underwriting Agreement, the Underwriter has appointed sub-underwriters to sub-underwrite the Entitlement Issue.

3.3 Effect on control of the Company

In accordance with the terms of the Underwriting Agreement, the Underwriter will allocate the Shortfall to its sub-underwriters and/or clients and people who have otherwise agreed to assist with the completion of the Entitlement Issue such that neither CPS Capital, the sub-underwriters nor any of CPS Capital’s clients, individually, will have a voting power in the Company in excess of 20% after the issue of the Shortfall or if required, Shares under the Top-up Offer.

Mr Craig McGuckin who is a Director and substantial Shareholder of the Company and Mr Peter Youd, a previous Director, current Company Secretary and substantial Shareholder of the Company intend, subject to receipt of Shareholder approval to subscribe for up to 4,000,000 in Shortfall Shares each. This is intended to include the Shares the subject of their respective Entitlements. Please refer to section 3.5 for details of the potential effect on voting power.

Additionally Jason Peterson, a substantial Shareholder of the Company and director and shareholder of the Underwriter intends to sub-underwrite the

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Entitlement Issue to the extent of up to 13,818,480 Shares. Please refer to section 3.5 for details of the potential effect on his voting power.

3.4 Dilution

In addition, Shareholders should note that if they do not participate in the Entitlement Issue, their holdings are likely to be diluted by approximately 44.44% (as compared to their holdings and number of Shares on issue as at the date of the Prospectus). Examples of how the dilution may impact Shareholders is set out in the table below:

Holder	Holding as at Record date	% at Record Date	Entitlements under the Offer	Holdings if Offer not taken Up	% post Offer
Shareholder 1	10,000,000	13.46%	8,000,000	10,000,000	7.28%
Shareholder 2	5,000,000	6.73%	4,000,000	5,000,000	3.74%
Shareholder 3	1,500,000	2.02%	1,200,000	1,500,000	1.12%
Shareholder 4	400,000	0.54%	320,000	400,000	0.30%
Shareholder 5	50,000	0.07%	40,000	50,000	0.04%
Total	74,273,104			133,691,587

Notes:

The dilutionary effect shown in the table is the maximum percentage on the assumption that those Entitlements not accepted are placed under the Shortfall Offer.
This only shows the dilution effect of Shares being offer under the Entitlement Issue. Further dilution will occur if additional Shares are issued under the Top-up Offer and/or the Underwriter Placement and the CPS Placement which are subject to Shareholder approval is at the General Meeting. Further details of the General Meeting are contained at section 4.2.

3.5 Details of substantial holders

Based on publicly available information as at the date of this Prospectus, those persons which (together with their associates) have a relevant interest in 5% or more of the Shares on issue are set out below:

Shareholder	Shares	%
Jason Peterson	6,400,783	8.61
Mr Craig Robert and Mrs Lee Ann McGuckin	3,936,547	5.24
Peter Richard Youd	3,810,550	5.13

Jason Peterson, a substantial Shareholder of the Company and director and shareholder of the Underwriter has agreed with the Underwriter to subunderwrite the Entitlement Issue to the extent of up to 13,818,480 Shares. Mr Peterson will receive a sub-underwriting fee of $13,818 from the Underwriter. Additionally, Mr Peterson has advised the Company that he intends to take up his full Entitlement. After completion of the Entitlement Issue (assuming, Mr Peterson sub-underwrites the entire 13,818,480 and takes up his full Entitlement) then his shareholding and voting power in the Company will increase from 6,400,783 Shares and voting power of 8.61% as at the date of this Prospectus to

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approximately 25,339,889 Shares and voting power of 18.95% (this assumes all Shortfall Shares are placed under the Underwriting Agreement, the Top-up Offer is not required and no other Shares are issued or Options exercised).

Additionally, the substantial shareholders, Mr Craig McGuckin (who is also a Director) and Mr Peter Youd, (who is also a previous Director and the current Company Secretary of the Company) intend, subject to Shareholder approval, to subscribe for up to 4,000,000 Shortfall Shares each (which will be inclusive of their respective Entitlements).

After completion of the Entitlement Issue (assuming, subject to Shareholder approval, that Mr McGuckin subscribes for 4,000,000 Shortfall Shares (inclusive of his Entitlement)) then his shareholding and voting power in the Company will increase from 3,936,547 Shares and voting power of 5.24% as at the date of this Prospectus to approximately 7,936,547 Shares and voting power of 5.93% (this assumes all Shortfall Shares are placed under the Underwriting Agreement, the Top-up Offer is not required and no other Shares are issued or Options exercised).

After completion of the Entitlement Issue (assuming, subject to Shareholder approval, that Mr Youd subscribes for 4,000,000 Shortfall Shares (inclusive of his Entitlement)) then his shareholding and voting power in the Company will increase from 3,810,550 Shares and voting power of 5.13% as at the date of this Prospectus to approximately 7,810,550 and voting power of 5.84% (this assumes all Shortfall Shares are placed under the Underwriting Agreement, the Top-up Offer is not required and no other Shares are issued or Options exercised).

In the event all Entitlements are accepted and the maximum 20,000,000 Shares are issued under the Top-up Offer (not to any of the substantial Shareholders) there will be a dilution to the substantial holders on completion of the Offers.

For the avoidance of doubt these figures do not take into account any additional issue of Shares, including the Underwriter Placement or the CPS Placement, which will be issued by the Company subject to Shareholder approval at the General Meeting.

Shareholders should be aware that as per the terms of the Underwriting Agreement, the Underwriter Placement will be distributed to clients of CPS Capital many of whom are sub-underwriters to the Entitlement Issue or who have otherwise agreed to assist with the completion of the Entitlement Issue. Therefore, it is likely that the substantial Shareholders will be eligible to participate in the Underwriter Placement and this will increase the Shares held by substantial Shareholders. Accordingly, at the General Meeting the Company is seeking Shareholder approval for the participation of Mr McGuckin and Mr Youd in the Underwriter Placement in the following amounts:

(a) Mr McGuckin (or his nominee) to the extent of 650,000 Shares and 650,000 free attaching New Options; and
(b) Mr Youd (or his nominee) to the extent of 650,000 Shares and 650,000 free attaching New Options.

Further, the Company is seeking Shareholder approval at the General Meeting in order to issue:

(a) Mr McGuckin (or his nominee) with 5,000,000 Director Options; and
(b) Mr Youd (or his nominee) with 5,000,000 Director Options,

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which will be on the same terms as the New Options as set out in Section 6.2.

3.6 Directors’ Interests in Securities

The relevant interest of each of the Directors in the securities of the Company as at the date of this Prospectus, together with their respective Entitlement, is set out in the table below.

Director	Shares	Options	Entitlement	$
Peter Reilly1,2	1,649,179	1,351,7953	1,319,343	32,984
Craig McGuckin1,2	3,936,547	6,270,1093	3,149,2384	78,731
Denis Geldard1,2	676,000	Nil	540,800	13,520
Peter Hepburn- Brown1	112,000	Nil	89,600	2,240

Notes:

Peter Reilly

Subject to Shareholder approval at the General Meeting Mr Reilly will be issued 1,000,000 Director Options on the same terms and condition of the New Options.
Subject to Shareholder approval at the General Meeting Mr Reilly will be able to participate in the Underwriter Placement to up to 250,000 Shares and 250,000 attaching New Options.
351,795 Options are quoted and exercisable at 40 cents on or before 31 December 2014, 500,000 Options are quoted and exercisable at 20 cents on or before 17 October 2016, 500,000 Options are unquoted and exercisable at 20 cents on or before 17 October 2016.

Craig McGuckin

Subject to Shareholder approval at the General Meeting Mr McGuckin will be issued 5,000,000 Director Options.
Subject to Shareholder approval at the General Meeting Mr McGuckin will be able to participate in the Underwriter Placement to up to 650,000 Shares and 650,000 attaching New Options.
5,620,109 Options are unquoted and exercisable at 20 cents on or before 17 October 2016, 650,000 Options are quoted and exercisable at 20 cents on or before 17 October 2016.
As referred to in Sections 3.3 and 3.5 of the Prospectus, the Company is seeking Shareholder approval for Mr McGuckin to subscribe for up to 4,000,000 Shares in the Shortfall. These will include the Shares the subject of his Entitlement.

Denis Geldard

Subject to Shareholder approval at the General Meeting Mr Geldard will be issued 1,000,000 Director Options.
Subject to Shareholder approval at the General Meeting Mr Geldard will be able to participate in the Underwriter Placement to up to 250,000 Shares and 250,000 attaching New Options.

Peter Hepburn-Brown

Subject to Shareholder approval at the General Meeting Mr Hepburn-Brown will be issued 1,000,000 Director Options.

The Board recommends all Shareholders take up their Entitlement and advises that all Directors intend to take up their respective Entitlements, subject only to Mr McGuckin who’s intentions in respect of his Entitlement is set out in Sections 3.3 and 3.5 of this Prospectus.

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4. DETAILS OF THE OFFERS

4.1 Offers

The Company is making separate offers pursuant to this Prospectus. The purpose of the Offers and the use of the funds raised pursuant to the Offers are set out in Section 5 of this Prospectus.

The Entitlement Issue

The Entitlement Issue is being made as a non-renounceable entitlement issue of four (4) Shares for every five (5) Shares held by Shareholders registered at the Record Date at an issue price of $0.025 per Share. Fractional entitlements will be rounded up to the nearest whole number.

Based on the capital structure of the Company as at the date of this Prospectus, (and assuming no existing Options are exercised prior to the Record Date) a maximum of 59,418,483 Shares will be issued pursuant to this Entitlement Issue to raise up to $1,485,462.

As at the date of this Prospectus the Company has 48,252,604 Options on issue. Of these 25,054,053 may be exercised prior to the Record Date in order to participate in the Entitlement Issue. Please refer to section 5.4 of this Prospectus for information on the exercise price and expiry date of the Options on issue.

Top-up Offer

In the event that the Shortfall is less than 20,000,000 Shares, the Company will offer to the Underwriter (or its nominees) such number of Shares that is equal to the difference between 20,000,000 Shares and the total available Shortfall at an issue price of $0.025 per Share and otherwise on the same terms as the Entitlement Issue. The maximum amount that can be raised under the Top-up Offer is $500,000. The Company will be seeking Shareholder approval for the maximum Shares to be issued under the Top-up Offer at the General Meeting, as defined in section 4.2.

The Top-up Offer is only open to the Underwriter and any of its nominees. The Top-up Offer is a conditional offer.

Further details in relation to the Top-up Offer are set out in Sections 4.2 and 4.9 of this Prospectus.

All of the Shares offered under this Prospectus will rank equally with the Shares on issue at the date of this Prospectus. Please refer to section 6 for further information regarding the rights and liabilities attaching to the Shares.

4.2 General Meeting

At a general meeting of Shareholders scheduled to be held on or about 28 April 2014 (General Meeting), the Company will be seeking approval for the issue of the following securities:

(a) 12,500,000 Shares with a free attaching option for each Share issued (New Option) to be issued to the Underwriter or its nominees under the terms of the Underwriting Agreement (Underwriter Placement). It is anticipated that 5,500,000 of the Shares and free attaching New Options will be distributed to clients of CPS Capital many of whom are sub-underwriters to the Entitlement Issue or who have otherwise agreed

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to assist with the completion of the Entitlement Issue. Accordingly, certain Directors will be entitled to participate and the Company will seek Shareholder approval for such Director participation at the General Meeting, refer to the notes in section 3.6 for further details of the proposed participation. The remaining 7,000,000 Shares and free attaching New Options will be allocated to clients of CPS Capital. Refer to Section 6.2 for details of the terms of the New Options.

(b) 13,000,000 Options to the Directors and the Company Secretary (or their nominees) on the same terms and conditions as the New Options (Director Options);
(c) 3,000,000 Shares to CPS Capital, the Underwriter, (or its nominee) for corporate advisory services to be provided to the Company (CPS Placement); and
(d) up to 20,000,000 Shares to be issued pursuant to the Top-up Offer, if required.

As referred to in Sections 3.3 and 3.5 of the Prospectus, the Company will additionally be seeking Shareholder approval for Mr McGuckin and Mr Youd to subscribe for up to 4,000,000 Shares in the Shortfall, if any, which will be inclusive of their respective Entitlements.

4.3 Cleansing prospectus

An additional purpose of this Prospectus is to remove any trading restrictions under the Corporations Act on the sale of:

(a) the Shares and New Options (or any Shares issued upon the exercise of New Options) to be offered under the Underwriter Placement to the Underwriter (or its nominees) and distributed to clients of the Underwriter; and
(b) the Director Options (or any Shares issued upon the exercise of Director Options) issued to the Directors and Company Secretary (or their nominees).

The offer of Shares and New Options under the Underwriter Placement is subject to Shareholder approval at the General Meeting and is a separate offer made pursuant to this Prospectus and will remain open for up to one month following the Closing Date. The Shares and New Options will be issued under this Prospectus by completion of the Underwriter Placement Application Form accompanying this Prospectus. Only complete the Underwriter Placement Application Form if directed to by the Company or the Underwriter.

The offer of Director Options to the Directors and the Company Secretary (or their nominees) is subject to Shareholder approval at the General Meeting and is a separate offer made pursuant to this Prospectus and will remain open for up to one month following the Closing Date. The Director Options will be issued under this Prospectus by completion of the Director Options Application Form accompanying this Prospectus. Only complete the Director Options Application Form if directed to by the Company.

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4.4 Minimum subscription

The minimum subscription in respect of the Entitlement Issue is $1,485,462 as the Entitlement Issue is fully underwritten by the Underwriter. No Shares will be issued until the minimum subscription has been received. If the minimum subscription is not achieved within 4 months after the date of issue of this Prospectus, the Company will either repay the Application monies to the Applicants or issue a supplementary prospectus or replacement prospectus and allow Applicants one month to withdraw their Application and be repaid their Application monies.

There is no minimum subscription in respect of the Top-up Offer.

4.5 Acceptance of the Entitlement Issue

Your acceptance of the Entitlement Issue must be made on the Entitlement and Acceptance Form accompanying this Prospectus. Your acceptance must not exceed your Entitlement as shown on that form. If it does, your acceptance will be deemed to be for the maximum Entitlement.

You may participate in the Entitlement Issue as follows:

(a) if you wish to accept your full Entitlement:
(i) complete the Entitlement and Acceptance Form; and
(ii) attach your cheque, drawn on an Australian bank or bank draft made payable in Australian currency, for the amount indicated on the Entitlement and Acceptance Form; or
(b) if you only wish to accept part of your Entitlement:
(i) fill in the number of Shares you wish to accept in the space provided on the Entitlement and Acceptance Form; and
(ii) attach your cheque, drawn on an Australian bank or bank draft made payable in Australian currency, for the appropriate application monies (at $0.025 per Share); or
(c) if you do not wish to accept all or part of your Entitlement, you are not obliged to do anything.

4.6 Payment by cheque/bank draft

All cheques must be drawn on an Australian bank or bank draft made payable in Australian currency to “MRL Corporation Limited – Entitlement Issue Account” and crossed “Not Negotiable”.

Your completed Entitlement and Acceptance Form and cheque must reach the Company’s share registry no later than 5:00 pm (WST) on the Closing Date.

4.7 Payment by BPAY®

For payment by BPAY®, please follow the instructions on the Entitlement and Acceptance Form. You can only make a payment via BPAY® if you are the holder of an account with an Australian financial institution that supports BPAY® transactions. Please note that should you choose to pay by BPAY®:

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(a) you do not need to submit the Entitlement and Acceptance Form but are taken to have made the declarations on that Entitlement and Acceptance Form; and
(b) if you do not pay for your Entitlement in full, you are deemed to have taken up your Entitlement in respect of such whole number of Shares which is covered in full by your application monies.

It is your responsibility to ensure that your BPAY® payment is received by the share registry by no later than 5:00 pm (WST) on the Closing Date. You should be aware that your financial institution may implement earlier cut-off times with regards to electronic payment and you should therefore take this into consideration when making payment. Any application monies received for more than your final allocation of Shares (only where the amount is $1.00 or greater) will be refunded. No interest will be paid on any application monies received or refunded.

The Entitlement Issue is non-renounceable. Accordingly, a Shareholder may not sell or transfer all or part of their Entitlement.

4.8 Shortfall Offer

Any Entitlement not taken up pursuant to the Entitlement Issue will form the Shortfall Offer.

The Shortfall Offer is a separate offer made pursuant to this Prospectus and will remain open for up to three months following the Closing Date. The issue price for each Share to be issued under the Shortfall Offer shall be $0.025 being the price at which Shares have been offered under the Entitlement Issue.

The Directors reserve the right to issue Shortfall Shares at their absolute discretion in consultation with the Underwriter having consideration of the terms of the Underwriting Agreement. Shareholders should be aware that the Company is seeking Shareholder approval at the General Meeting in order for Mr McGuckin and Mr Youd to participate in the Shortfall. Accordingly, do not apply for Shortfall Shares unless instructed to do so by the Directors.

4.9 Top-up Offer

The Company has agreed that the Underwriter (and / or its nominees) will be entitled to subscribe for up to 20,000,000 Shares. The Underwriter is not a related party of the Company.

A maximum of 20,000,000 Shares can be offered pursuant to the Top-up Offer which could raise up to $500,000, before expenses. All proceeds raised from the Top-up Offer will be used in accordance with Section 5.1 of the Prospectus.

Only the Underwriter or other nominees directed by the Underwriter should complete the Top-up Offer Application Form.

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4.10 ASX listing

Application for Official Quotation of the Securities offered pursuant to this Prospectus will be made in accordance with the timetable set out at the commencement of this Prospectus. If ASX does not grant Official Quotation of the Securities offered pursuant to this Prospectus before the expiration of 3 months after the date of issue of the Prospectus, (or such period as varied by the ASIC), the Company will not issue any Securities and will repay all application monies for the Securities within the time prescribed under the Corporations Act, without interest.

The fact that ASX may grant Official Quotation to the Securities is not to be taken in any way as an indication of the merits of the Company or the Securities now offered for subscription.

4.11 Issue of Shares

Shares issued pursuant to the Entitlement Issue will be issued in accordance with the ASX Listing Rules and timetable set out at the commencement of this Prospectus.

Shares issued pursuant to the Shortfall Offer will be issued on a progressive basis. Where the number of Shares issued is less than the number applied for, or where no issue is made, surplus application monies will be refunded without any interest to the Applicant as soon as practicable after the closing date of the Shortfall Offer.

Shares issued pursuant to the Top-up Offer will be issued to the Underwriter (and/or its nominees). The Underwriter will allocate the Top-up Offer Securities to its sub-underwriters and/or clients on a progressive basis.

Pending the issue of the Shares or payment of refunds pursuant to this Prospectus, all application monies will be held by the Company in trust for the Applicants in a separate bank account as required by the Corporations Act. The Company, however, will be entitled to retain all interest that accrues on the bank account and each Applicant waives the right to claim interest.

Holding statements for Shares issued under the Entitlement Issue will be mailed in accordance with the ASX Listing Rules and timetable set out at the commencement of this Prospectus and for Shortfall Shares issued under the Shortfall Offer as soon as practicable after their issue.

4.12 Overseas shareholders

This Entitlement Issue does not, and is not intended to, constitute an offer in any place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer or to issue this Prospectus.

It is not practicable for the Company to comply with the securities laws of overseas jurisdictions having regard to the number of overseas Shareholders, the number and value of Shares these Shareholders would be offered and the cost of complying with regulatory requirements in each relevant jurisdiction. Accordingly, the Entitlement Issue is not being extended and Shares will not be issued to Shareholders with a registered address which is outside Australia or New Zealand.

The Entitlement Issue is being made in New Zealand pursuant to the Securities Act (Overseas Companies) Exemption Notice 2013.

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Shareholders resident in Australia or New Zealand holding Shares on behalf of persons who are resident overseas are responsible for ensuring that taking up an Entitlement under the Entitlement Issue does not breach regulations in the relevant overseas jurisdiction. Return of a duly completed Entitlement and Acceptance Form will be taken by the Company to constitute a representation that there has been no breach of those regulations.

4.13 Enquiries

Any questions concerning the Offers should be directed to Peter Youd, Company Secretary, on +61 (0)8 6143 5263 or + 61 1300 660 448.

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5. PURPOSE AND EFFECT OF THE OFFER

5.1 Purpose of the Offers

The purpose of the Entitlement Issue is to raise up to $1,485,462.

The funds raised from the Offer are planned to be used in accordance with the table set out below:

Item	Proceeds of the Entitlement Issue1	Full Subscription ($)	%
1.	Exploration on the Sri Lankan graphite projects • Capital equipment acquisitions • Drilling and assay work • EM survey and geophysical interpretations • Metallurgical studies on upgrading material • Other exploration activities	164,100 235,000 150,000 150,000 306,120	11.05 15.82 10.10 10.10 20.61
2.	Expenses of the Entitlement Issue2	118,500	7.98
3.	Working capital	361,742	24.35
	Total	1,485,462	100.0

Notes:

In addition to the Entitlement Issue, a maximum of 20,000,000 Shares can be offered pursuant to the Top-up Offer which could raise up to an additional $500,000. The Company has agreed to pay the Underwriters a 6% commission on the value of any Shares issued under the Top-up Offer (equivalent to a maximum of $30,000). Accordingly, the effect of the Top-up Offer could be to increase the cash reserves by a maximum additional amount of $470,000. Any proceeds raised from the Top-up Offer will be applied towards toward accelerating the exploration work to be conducted on the Company’s Sri Lankan project areas. This work would include EM surveys and defining additional drill hole locations.
Refer to section 8.9 of this Prospectus for further details relating to the estimated expenses of the Entitlement Issue.

The above table is a statement of current intentions as of the date of this Prospectus. As with any budget, intervening events (including exploration success or failure) and new circumstances have the potential to affect the manner in which the funds are ultimately applied. The Board reserves the right to alter the way funds are applied on this basis.

5.2 Effect of the Entitlement Issue

The principal effect of the Entitlement Issue, assuming all Entitlements not subscribed for are placed under the Shortfall Offer[1] and no Options are exercised prior to the Record Date, will be to:

(a) increase the cash reserves by $1,366,962 (after deducting the estimated expenses of the Entitlement Issue) immediately after completion of the Entitlement Issue; and

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(b) increase the number of Shares on issue from 74,273,104 as at the date of this Prospectus to 146,191,587 Shares and increase the number of Options on issue from 48,252,604 as at the date of this Prospectus to 60,752,604 Options following completion of the Entitlement Issue[2] .

Note:

The above figures assume that no Shares are offered under the Top-up Offer.
The above figures assume that the Securities pursuant to the Underwriter Placement, subject to Shareholder approval at the General Meeting, are issued. It does not include any of the other Securities to be issued upon Shareholder approval at the General Meeting.

5.3 Pro-forma balance sheet

The audit reviewed balance sheet as at 31 December 2013 and the unaudited pro-forma balance sheet as at 31 December 2013 shown below have been prepared on the basis of the accounting policies normally adopted by the Company and reflect the changes to its financial position.

The pro-forma balance sheet has been prepared assuming all Entitlements not subscribed for are placed under the Shortfall Offer, the Top-up Offer is not required and no Options are exercised prior to the Record Date and including expenses of the Entitlement Issue.

The pro-forma balance sheet has been prepared to provide investors with information on the assets and liabilities of the Company and pro-forma assets and liabilities of the Company as noted below. The historical and pro-forma financial information is presented in an abbreviated form, insofar as it does not include all of the disclosures required by Australian Accounting Standards applicable to annual financial statements.

	AUDIT REVIEWED 31 December 2013	PROFORMA 31 December 2013
CURRENT ASSETS
Cash1	1,280,938	2,647,904
Other current assets	452,752	452,752
TOTAL CURRENT ASSETS	1,733,690	3,100,656

NON-CURRENT ASSETS
Property, plant & equipment	4,283	4,283
Exploration	1,333,325	1,333,325
TOTAL NON-CURRENT ASSETS	1,337,608	1,337,608

TOTAL ASSETS	3,071,298	4,438,264

CURRENT LIABILITIES
Trade and other payables	569,044	569,044
TOTAL CURRENT LIABILITIES	569,044	569,044

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NON-CURRENT LIABILITIES
Loans from related parties	300,694	300,694
TOTAL NON-CURRENT LIABILITIES	300,694	300,694

TOTAL LIABILITIES	869,738	869,738

NET ASSETS	2,201,560	3,568,526

EQUITY
Issued capital	56,912,986	58,398,448
Reserves	1,790,518	1,672,022
Accumulated loss	(56,501,944)	(56,501,944)
TOTAL EQUITY	2,201,560	3,568,526

Notes:

In addition to the Entitlement Issue, a maximum of 20,000,000 Shares can be offered pursuant to the Top-up Offer which could raise up to an additional $500,000. The Company has agreed to pay the Underwriters a 6% commission on the value of any Shares issued under the Top-up Offer (equivalent to a maximum of $30,000). Accordingly, the effect of the Top-up Offer could be to increase the cash reserves by a maximum additional amount of $470,000.

5.4 Effect on capital structure

The effect of the Entitlement Issue on the capital structure of the Company, assuming all Entitlements not subscribed for are placed under the Shortfall Offer, the Top-up Offer is not required, Shareholder approval is obtained for the Underwriter Placement at the General Meeting and no Options are exercised prior to the Record Date, is set out below.

	Number
Shares currently on issue1	74,273,104
Shares offered pursuant to the Entitlement Issue	59,418,483
Shares to be issued under the Underwriter Placement as a success fee on completion of the Entitlement Issue2	12,500,000
Total Shares on issue after completion of the Entitlement Issue3,4	146,191,5874

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Options

	Number
Options currently on issue: Quoted exercisable at $0.20 on or before 5:00pm (AEST) on 17 October 2016 Unquoted exercisable at $0.20 on or before 5:00pm (AEST) on 17 October 20165 Quoted exercisable at $0.40 on or before 5:00pm (AEST) on 31 December 2014	18,000,000 23,198,551 7,054,053
New Options to be issued under the Underwriter Placement, as a success fee on completion of the Company’s Entitlement Issue2,6	12,500,000
Total Options on issue after completion of the Entitlement Issue4	60,752,6044

Notes:

Of these Shares, 5,000,000 Shares are escrowed until 18 October 2014, 24,094,190 are escrowed until 27 March 2015 and 5,000,000 are escrowed until 24 December 2015.
These Shares and Options will be issued subject to Shareholder approval at the General Meeting. Full details of the Underwriting Agreement, including fee arrangements, are set out in Section 8.5
Subject to Shareholder approval at the General Meeting, a maximum of 20,000,000 Shares can be issued pursuant to the Top-up Offer assuming that the Offer is fully subscribed. The issue of these Shares are subject to Shareholder approval at the General Meeting. Refer to Section 4.2 for further details.
Additionally, subject to Shareholder approval at the General Meeting the following Shares and New Options will be issued:
(i) 3,000,000 Shares as the CPS Placement; and
(ii) 13,000,000 Director Options on the same terms as the New Options,

for further details refer to section 4.2.

These Options are escrowed until 27 March 2015.
The New Options are to be issued on the terms and conditions as set out in Section 6.2.

The capital structure on a fully diluted basis as at the date of this Prospectus would be 122,525,708 Shares and immediately on completion of the Entitlement Issue (assuming all Entitlements not subscribed for are placed under the Shortfall Offer, the Top-up Offer is not required, the Securities pursuant to the Underwriter Placement are issued and no Options are exercised prior to the Record Date) would be 206,944,191 Shares.

Assuming the Entitlement Issue is fully subscribed, the maximum Shares under the Top-up Offer are issued, the Director’s Options and the CPS Placement are approved by Shareholders and issued, and no Options are exercised prior to the Record Date the capital structure on a fully diluted basis would be 231,744,191.

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6. RIGHTS AND LIABILITIES ATTACHING TO SECURITIES

6.1 Shares

The following is a summary of the more significant rights and liabilities attaching to Shares being offered pursuant to this Prospectus. 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.

(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 each Share held

(c) Dividend rights

Subject to the rights of any preference Shareholders and to the rights of the holders of any shares created or raised under any special arrangement as to dividend, the Directors may from time to time declare a dividend to be paid to the Shareholders entitled to the dividend which shall be payable on all Shares according to the proportion that the amount paid (not credited) is of the total amounts paid and payable (excluding amounts credited) in respect of such Shares.

The Directors may from time to time pay to the Shareholders any interim dividends as they may determine. No dividend shall carry interest as against the Company. The Directors may set aside out of the profits of the Company any amounts that they may determine as reserves, to be

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applied at the discretion of the Directors, for any purpose for which the profits of the Company may be properly applied.

Subject to the ASX Listing Rules and the Corporations Act, the Company may, by resolution of the Directors, implement a dividend reinvestment plan on such terms and conditions as the Directors think fit.

(d) Winding-up

If the Company is wound up, the liquidator may, with the authority of a special resolution, 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, 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.

(e)

Shareholder liability

As the Shares issued will be fully paid shares, they will not be subject to any calls for money by the Directors and will therefore not become liable for forfeiture.

(f) 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 and the ASX Listing Rules.

(g)

Future increase in capital

The issue of any new Shares is under the control of the Directors of the Company. Subject to restrictions on the issue or grant of Securities contained in the ASX Listing Rules, the Constitution and the Corporations Act (and without affecting any special right previously conferred on the holder of an existing share or class of shares), the Directors may issue Shares as they shall, in their absolute discretion, determine.

(h) Variation of rights

Under 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.

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(i) Alteration of constitution

In accordance with the Corporations Act, the Constitution can only be amended by a special resolution passed by at least three quarters of Shareholders present and voting at the general meeting. In addition, at least 28 days written notice specifying the intention to propose the resolution as a special resolution must be given.

6.2 New Options

The New Options will be granted on the terms set out below:

(a) Each Option entitles the holder to subscribe for one Share in the Company at an exercise price of 10 cents (Exercise Price).
(b) The Options will expire at 5:00 pm (AEST) on 31 May 2017 (Expiry Date). Any Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.
(c) The Company will apply for quotation of Options on ASX within 7 days after the date of the prospectus. If ASX does not grant official quotation of the Shares and Options within 3 months after the date of the Prospectus, the Company will not issue any Options.
(d) There is no obligation to exercise the Options.
(e) The Options may be exercised in whole or in part, and if exercised in part, multiples of 500 Options must be exercised on each occasion. Where less than 500 Options are held, all Options must be exercised together.
(f) A holder of Options may exercise its Options by lodging with the Company Secretary at the Company’s registered office, before the Expiry Date:
(i) A written notice of exercise of Options specifying the number of Options being exercised (Exercise Notice); and
(ii) A cheque or electronic funds transfer for the total Exercise Price for the number of Options being exercised.
(g) An Exercise Notice is only effective when the Company has received the full amount of the Exercise Price in cleared funds.
(h) Within 10 Business Days of receipt of the Exercise Notice accompanied by the appropriate Exercise Price, the Company will allot the number of Shares required under these terms in respect of the number of Options specified in the Exercise Notice.
(i) The Options are freely transferable.
(j) All Shares issued upon the exercise of Options will be fully paid and will rank pari passu in all respects with other issued Shares. The rights and liabilities attaching to the Shares issued upon exercise of the Options are set out above.

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(k) The Company will apply for Official Quotation by ASX of the Shares issued upon exercise of Options within 10 Business Days of issue of the Shares.
(l) If the Company offers Shares by way of a pro rata issue (except a bonus issue) to the holders of Shares (whether renounceable or nonrenounceable), the exercise price of a Options may be reduced in accordance with the formula set out in Listing Rule 6.22.2.
(m) If there is a bonus issue to the holders of Shares in the Company then the number of Shares over which each Option is exercisable will be increased by the number of Shares which the holder would have received under the bonus issue if the Option had been exercised before the record date for the bonus issue.
(n) In the event of any reorganisation (including a consolidation, subdivision, reduction, cancellation or return) of the issued capital of the Company, the rights of the Option holder will be changed to the extent necessary to comply with the Listing Rules applying to a reorganisation of capital at the time of the reorganisation.
(o) Options do not entitle the holder to:
(i) participate in a new issue of Shares or other Securities;
(ii) receive dividends; or
(iii) attend, or vote at, meetings of the Company,

without first exercising the Option.

(p) Other than as set out above, an Option does not confer the right to a change in the Exercise Price or a change in the number of underlying Securities over which the Option can be exercised.

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7. RISK FACTORS

The Shares offered under this Prospectus are considered highly speculative. An investment in our Company is not risk free and the Directors strongly recommend potential investors to consider the risk factors described below, together with information contained elsewhere in this Prospectus, before deciding whether to apply for Shares, and to consult their professional advisers before deciding whether to apply for Shares pursuant to this Prospectus.

There are specific risks which relate directly to our business. In addition, there are other general risks, many of which are largely beyond the control of the Company and the Directors. The risks identified in this section, or other risk factors, may have a material impact on the financial performance of the Company and the market price of the Shares and New Options.

The following is not intended to be an exhaustive list of the risk factors to which the Company is exposed.

7.1 Company specific

(a) Potential for significant dilution

Upon implementation of the Entitlement Issue, assuming all Entitlements not subscribed for are placed under the Shortfall Offer, the Top-up Offer is not required, Shareholder approval is obtained for the Underwriter Placement at the General Meeting and no Options are exercised prior to the Record Date the number of Shares in the Company will increase from 74,273,104 currently on issue to 146,191,587. This means that each Share will represent a significantly lower proportion of the ownership of the Company. Shareholders should note that if Shares under the Top-up Offer are issued the number of Shares on issue will increase further.

It is not possible to predict what the value of the Company or a Share will be following the completion of the Entitlement Issue being implemented and the Directors do not make any representation as to such matters.

The last closing price of Shares on ASX prior to the prospectus being lodged of $0.05 is not a reliable indicator as to the potential trading price of Shares after implementation of the Entitlement Issue.

(b) Sovereign and political risks associated with operating in Sri Lanka

The Company’s project is located in Sri Lanka and the Company will be subject to the risks associated with operating in that country, including various levels of political, economic and other risks and uncertainties.

Sri Lanka had been subject to a twenty six (26) year civil war which concluded in May 2009. Since the end of this conflict the government has enacted an ambitious program of economic development projects. In addition to efforts to reconstruct the economy the government has resettled more than 95% of those civilians displaced during the final phase of the conflict and released the vast majority of the Liberation Tigers of Tamil Eelam (LTTE) combatants captured by the Government Security Forces.

More general risks include economic, social or political instability or change, hyperinflation, currency non-convertibility or instability and

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changes of law affecting foreign ownership, government participation, taxation, working conditions, rates of exchange, exchange control, exploration licensing, export duties, repatriation of income or return of capital, environmental protection, mine safety, labour relations as well as government control over mineral properties or government regulations that require the employment of local staff or contractors or require other benefits to be provided to local residents.

Failure to comply strictly with applicable laws, regulations and local practices relating to mineral rights applications and tenure, could result in loss, reduction or expropriation of entitlements, or the imposition of additional local or foreign parties as joint venture partners with carried or other interests.

Outcomes in courts in Sri Lanka may be less predictable than in Australia, which could affect the enforceability of contracts entered into by the Company or its subsidiaries in Sri Lanka.

The occurrence of these various factors and uncertainties cannot be accurately predicted and could have an adverse effect on the operations or profitability of the Company.

(c) Limited exploration history and no guarantee of exploration success

Exploration has previously been conducted on the area of land the subject of the Licences however, the Company is yet to conduct its own exploration activities.

There can be no assurance that exploration of the Projects will result in the discovery of economic graphite deposits. Even if an apparently viable deposit is identified, there is no guarantee it can be economically exploited.

Further, there is a risk that the proposed exploration of the Licences may be adverseley affected by the operational factors referred to below.

Accordingly, no assurance can be given that the Company will achieve commercial viability through the successful exploration of the Projects.

Until the Company is able to realise value from its projects, it is likely to incur ongoing operating losses.

(d) Operating risks

The current and future operations of the Company, including exploration, appraisal and possible production activities may be affected by a range of factors.

Factors that may affect the operations of the Company, include:

(i) geological conditions;

(ii) unanticipated operational and technical difficulties encountered in geophysical surveys, drilling and production activities;

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(iii) mechanical failure of operating plant and equipment, industrial and environmental accidents, acts of terrorism or political or civil unrest and other force majeure events;
(iv) industrial action, disputation or disruptions;
(v) unavailability of aircraft or drilling equipment to undertake airborne electromagnetic and other geological and geophysical investigations;
(vi) unexpected shortages or increases in the costs of consumables, spare parts, plant and equipment;
(vii) prevention or restriction of access by reason of political unrest, outbreak of hostilities, and inability to obtain consents or approvals;
(viii) current exploration operations and future development of the Licences are subject to the Company’s ability to obtain a wide range of permits, licences, and approvals and there is no guarantee that such permits, licences and approvals will be granted or will be granted in a timely matter;
(ix) advancement of the exploration operations to mine development can be a lengthy process taking a number of years where the Company’s projects may be subject to new laws, regulations, and taxes which may have a material impact on the Company; and
(x) restriction of access to infrastructure by Sri Lankan authorities.

(e) Licence access risk

The right of the holder of an exploration license to enter onto the license to explore for minerals is subject to the consent of:

(i) the occupier of the land; and
(ii) where the land is proximate to certain specified locations, the ministry responsible for the protection of such locations.

Under Sri Lankan legislation, the Company may be required to enter into an agreement with the relevant landowner or occupier for the purpose of securing this consent prior to commencing any exploration activities on the affected areas within the Licenses.

Whilst the requirement to seek and obtain these consents is customary in Sri Lanka, any delay in obtaining these consents may impact on the Company’s ability to carry out exploration activities within the affected areas.

(f) Restricted areas within the Licences

Pursuant to the terms of the Licences, the holder of the Licence is not permitted to conduct exploration activities within any area belonging to the Sri Lankan Forest Department, nor any area specifically designated as ancient or protected monuments, archaeological reserves, national

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heritage wilderness areas, strict natural reserves, national parks, nature reserves, jungle corridors or botanical gardens.

Whilst the Company is not aware of the existence of any such restricted areas within the Licences, there is a risk that the Company’s proposed exploration activities on the Licences may be affected if any areas within the Licences fall within the above restricted categories.

(g) Exploration license title risk

There are a number of conditions that the Company must satisfy with respect to the Licences, including annual reporting requirements to keep the Licences in good standing. There is a risk that the Company (through its Sri Lankan subsidiary) may not be able to satisfy these requirements, in which case the Company may forfeit title to the Licences.

Licences are also subject to periodic renewal and may only be renewed a limited number of times for a limited period of time. While the Company anticipates that such renewals will be given as and when sought, there can be no assurance that these renewals will be given as a matter of course and that new conditions will not be imposed in connection therewith.

Furthermore, the Company will require an industrial mining licence in order to conduct mining operations in Sri Lanka. There can be no assurance, however, that such licences will be obtained on terms favourable to the Company or at all for the Company’s future intended mining and/or exploration targets in Sri Lanka.

7.2 Industry specific

(a) Environmental risks

The operations and proposed activities of the Company’s projects in Sri Lanka are subject to Sri Lankan laws and regulation concerning the environment. As with most exploration projects and mining operations, the Company’s activities are expected to have an impact on the environment. It is the Company’s intention to conduct its activities to the highest standard of environmental obligation, including compliance with all environmental laws.

(b) Infrastructure

Several of the Licences are located in areas that have access to limited infrastructure including roads, electricity, running water and health and emergency services.

The limited infrastructure may impact negatively on the economic viability of any deposits discovered by the Company in those regions and may require the Company to negotiate access to existing infrastructure and/or invest on the upgrade of existing infrastructure or development of new infrastructure.

(c) Graphite price volatility

Substantially all of the Company’s revenues and cash flow (should the Company enter production) will be derived from the sale of graphite.

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Therefore, the financial performance of the Company would be exposed to fluctuations in the graphite price. Historically, the graphite price has fluctuated widely and has experienced periods of significant decline.

Graphite prices are affected by numerous factors and events that are beyond the control of the Company. These factors and events include general economic activity, world demand, forward selling activity as well as general global economic conditions and political trends.

If graphite prices should fall below or remain below the Company’s costs of production for any sustained period due to these or other factors and events, the Company’s exploration and proposed production could be delayed or even abandoned. A delay in exploration or production or the abandonment of one or more of the Company's projects may require the Company to write-down its graphite assets and may have a material adverse effect on the Company's production, earnings and financial position.

7.3 General risks

(a) Foreign exchange risk

The Company will be exposed to the volatility and fluctuations of the exchange rate between the United States dollar, the Sri Lanka rupee and the Australian dollar. Global currencies are affected by a number of factors that are beyond the control of the Company. These factors include economic conditions in the relevant country and elsewhere and the outlook for interest rates, inflation and other economic factors. These factors may have a positive or negative effect on the Company's exploration, project development and production plans and activities together with the ability to fund those plans and activities.

(b) Economic

General economic conditions, introduction of tax reform, new legislation, movements in interest and inflation rates and currency exchange rates may have an adverse effect on the Company’s exploration, development and production activities, as well as on its ability to fund those activities.

(c) Market conditions

Share market conditions may affect the value of the Company’s quoted securities regardless of the Company’s operating performance. Share market conditions are affected by many factors such as:

(i) general economic outlook;
(ii) introduction of tax reform or other new legislation;
(iii) interest rates and inflation rates;
(iv) changes in investor sentiment toward particular market sectors;
(v) the demand for, and supply of, capital; and
(vi) terrorism or other hostilities.

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The market price of securities can fall as well as rise and may be subject to varied and unpredictable influences on the market for equities in general and resource exploration stocks in particular. Neither the Company nor the Directors warrant the future performance of the Company or any return on an investment in the Company.

(d) Additional requirements for capital

The Company’s capital requirements depend on numerous factors. Depending on the Company’s ability to generate income from its operations, the Company may require further financing in addition to amounts raised under the Entitlement Issue or the Top-up Offer, if required. Any additional equity financing will dilute shareholdings, and debt financing, if available, may involve restrictions on financing and operating activities. If the Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations and scale back its exploration programmes as the case may be. There is however no guarantee that the Company will be able to secure any additional funding or be able to secure funding on terms favourable to the Company.

(e) Insurance risks

The Company intends to insure its operations in accordance with industry practice. However, in certain circumstances, the Company’s insurance may not be of a nature or level to provide adequate insurance cover. The occurrence of an event that is not covered or fully covered by insurance could have a material adverse effect of the business, financial condition and results of the Company.

Insurance against all risks associated with mining exploration and production is not always available and where available the costs can be prohibitive.

(f) Competition risk

The industry in which the Company will be involved is subject to domestic and global competition. While the Company will undertake all reasonable due diligence in its business decisions and operations, the Company will have no influence or control over the activities or actions of its competitors, whose activities or actions may, positively or negatively, affect the operating and financial performance of the Company’s projects and business.

(g) Government and policy changes

Government action or policy change, both in Australia and Sri Lanka, particularly in relation to lands and infrastructure, compliance with environmental regulations, taxation and royalties, may adversely affect the Company’s operations and financial performance.

(h) Potential acquisitions

As part of its business strategy, the Company intends to make acquisitions of, or significant investments in, complementary companies or projects. Any such future transactions would be accompanied by the risks commonly encountered in making such acquisitions.

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(i) Reliance on key personnel

The responsibility of overseeing the day-to-day operations and the strategic management of the Company depends substantially on its senior management and its key personnel. There can be no assurance given that there will be no detrimental impact on the Company if one or more of these employees cease their employment.

7.4 Speculative investment

The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by investors in the Company. The above factors, and others not specifically referred to above, may in the future materially affect the financial performance of the Company and the value of the Shares offered under this Prospectus

Therefore, the Securities to be issued pursuant to this Prospectus carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those Shares.

Potential investors should consider that the investment in the Company is speculative and should consult their professional advisers before deciding whether to apply for Shares pursuant to this Prospectus.

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8. ADDITIONAL INFORMATION

8.1 Litigation

As at the date of this Prospectus, the Company is not involved in any legal proceedings and the Directors are not aware of any legal proceedings pending or threatened against the Company.

8.2 Continuous disclosure obligations

The Company is a “disclosing entity” (as defined in section 111AC of the Corporations Act) for the purposes of section 713 of the Corporations Act and, as such, is subject to regular reporting and disclosure obligations. Specifically, like all listed companies, the Company is required to continuously disclose any information it has to the market which a reasonable person would expect to have a material effect on the price or the value of the Company’s securities.

This Prospectus is a “transaction specific prospectus”. In general terms a “transaction specific prospectus” is only required to contain information in relation to the effect of the issue of securities on a company and the rights attaching to the securities. It is not necessary to include general information in relation to all of the assets and liabilities, financial position, profits and losses or prospects of the issuing company.

This Prospectus is intended to be read in conjunction with the publicly available information in relation to the Company which has been notified to ASX and does not include all of the information that would be included in a prospectus for an initial public offering of securities in an entity that is not already listed on a stock exchange. Investors should therefore have regard to the other publicly available information in relation to the Company before making a decision whether or not to invest.

Having taken such precautions and having made such enquires as are reasonable, the Company believes that it has complied with the general and specific requirements of ASX as applicable from time to time throughout the 3 months before the issue of this Prospectus which required the Company to notify ASX of information about specified events or matters as they arise for the purpose of ASX making that information available to the stock market conducted by ASX.

Information that is already in the public domain has not been reported in this Prospectus other than that which is considered necessary to make this Prospectus complete.

The Company, as a disclosing entity under the Corporations Act states that:

(a) it is subject to regular reporting and disclosure obligations;
(b) copies of documents lodged with the ASIC in relation to the Company (not being documents referred to in section 1274(2)(a) of the Corporations Act) may be obtained from, or inspected at, the offices of the ASIC; and
(c) it will provide a copy of each of the following documents, free of charge, to any person on request between the date of issue of this Prospectus and the Closing Date:

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(i) the annual financial report most recently lodged by the Company with the ASIC;
(ii) any half-year financial report lodged by the Company with the ASIC after the lodgement of the annual financial report referred to in (i) and before the lodgement of this Prospectus with the ASIC; and
(iii) any continuous disclosure documents given by the Company to ASX in accordance with the ASX Listing Rules as referred to in section 674(1) of the Corporations Act after the lodgement of the annual financial report referred to in (i) and before the lodgement of this Prospectus with the ASIC.

Copies of all documents lodged with the ASIC in relation to the Company can be inspected at the registered office of the Company during normal office hours.

Details of documents lodged by the Company with ASX since the date of lodgement of the Company’s latest annual financial report and before the lodgement of this Prospectus with the ASIC are set out in the table below.

Date	Description of Announcement
17/03/2014	Exciting Initial Analytical Results
17/03/2014	Details of Share Registry
17/03/2014	Half Yearly Report and Accounts
11/03/2014	Change of Director's Interest Notice
06/03/2014	Entitlement Issue
06/03/2014	Appointment & Resignation of Company Secretary
27/02/2014	Update on Sri Lankan Activities
27/02/2014	Change in substantial holding
26/02/2014	Change in substantial holding
25/02/2014	Final Director’s Interest Notice
25/02/2014	Ceasing to be an alternate director
21/02/2014	Change in substantial holding
21/02/2014	Change of Director’s Interest Notice
14/02/2014	Becoming a substantial holder
14/02/2014	Change in substantial holding
14/02/2014	Change of Director’s Interest Notice
14/02/2014	Change of Director’s Interest Notice
13/002/2014	Initial Director’s Interest Notice
07/02/2014	Director’s Appointment
31/01/2014	Quarterly Cashflow Report
31/01/2014	Quarterly Activities Report
20/01/2014	Becoming a substantial holder

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Date	Description of Announcement
02/01/2014	Update on Sri Lankan Activities
20/12/2013	Reinstatement info – Top 20- Distribution Schedule – Trading Policy
20/12/2013	Constitution
20/12/2013	Appendix 1A & Information Form and Checklist
20/12/2013	ASX Circular – Reinstatement to Official Quotation
20/12/2013	Reinstatement to Official Quotation – 24 December 2013
18/12/2013	Change of Director’s Interest Notice
18/12/2013	Change of Director’s Interest Notice
18/12/2013	Appendix 3B
18/12/2013	Appendix 3B
18/12/2013	Results of Meeting
10/12/2013	Update on Sri Lankan Activities
19/11/2013	Supplementary Prospectus
18/11/2013	Notice of Annual General Mee11/11/2013ting/Proxy Form
11/11/2013	Initial Director’s Interest Notice
11/11/2013	Initial Director’s Interest Notice
11/11/2013	Change of Officeholders
11/11/2013	Final Director’s Interest Notice
11/11/2013	Extension of closing date of offer
30/10/2013	Quarterly Activities Report
30/10/2013	Quarterly Cashflow Report
22/10/2013	Appendix 3B
22/10/2013	Settlement of Sri Lankan Transaction
10/10/2013	Extension of closing date for Offer of Securities
09/10/2013	Results of Meeting

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 Company’s website www.mrltd.com.au.

8.3 Market price of shares

The Company is a disclosing entity for the purposes of the Corporations Act and its Shares are enhanced disclosure securities quoted on ASX.

The highest, lowest and last market sale prices of the Shares on ASX during the three months immediately preceding the date of lodgement of this Prospectus with the ASIC and the respective dates of those sales were:

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Highest	$0.1			31 December 2013
Lowest	$0.027	6,	7	and 27 February 2014
Last	$0.05			24 March 2014

8.4 Material contracts

The following are summaries of the significant terms of the material agreements which relate to the business of the Company.

8.5 Underwriting and Lead Manager Agreement

By an agreement between the Underwriter and the Company (Underwriting Agreement), the Underwriter agreed to act as Lead Manager and fully underwrite the Entitlement Issue for 59,418,483 Shares (Underwritten Securities).

Pursuant to the Underwriting Agreement, the Company has agreed to

(a) pay the Underwriter an underwriting fee of 6% of the value of the Underwritten Securities being $89,127;
(b) issue to the Underwriter (or its nominees) the Underwriter Placement, subject to Shareholder approval at the General Meeting. Refer to section 4.2 further details of the Underwriter Placement; and

Additionally, the Company will also pay the Underwriter for any expenses and disbursements incurred by the Underwriter under the Entitlement Issue to a maximum of $5,000.

The Company and the Underwriter have also agreed that if the Shortfall is less than 20,000,000 Shares the Company will offer the Underwriter (and/or its nominees) the Top-up Offer. Refer to section 4.2 and 4.9 for further details on the Top-up Offer. The Underwriter will receive a 6% commission on the value of any Shares issued under the Top-up Offer.

The Underwriter may at any time in accordance with the terms of the Underwriting Agreement appoint sub-underwriters.

The obligation of the Underwriter to underwrite the Entitlement Issue is subject to certain events of termination. The Underwriter may terminate its obligations under the Underwriting Agreement if:

(a) Shareholder Approval: the Company does not obtain shareholder approval, if required, for the issue of securities pursuant to the Top-up Offer, if the Shortfall is less than $500,000;
(b) Share Price: the share price of the Company trading on the ASX under the ASX code of “MRF” finishes trading for two consecutive trading days with a closing share price that is less than $0.025;
(c) Indices fall: the S&P ASX 200 Index is at any time after the date of this Agreement 5% or more below its respective level as at the close of business on the Business Day prior to the date of the Underwriting Agreement;
(d) Prospectus: the Company does not lodge the Prospectus on the day of lodgement or the Prospectus or the Entitlement Issue is withdrawn by the Company;

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(e) No Listing Approval: the Company fails to lodge an Appendix 3B in relation to the Underwritten Securities with ASX by the time required by the Listing Rules, the Corporations Act or any other regulations;
(f) No Official Quotation: ASX has advised the Company that it will or may not grant official quotation to the underwritten securities on or prior to the shortfall notice deadline date;
(g) Supplementary Prospectus: the Underwriter reasonably forms the view that a supplementary or replacement document (as appropriate) must be lodged with ASIC under section 719 of the Corporations Act and the Company does not lodge a supplementary or replacement document (as the case may be) in the form and content and within the time reasonably required by the Underwriter or the Company lodged a supplementary prospectus without the written agreement of the Underwriter;
(h) Non-compliance with disclosure requirements): it transpires that the Prospectus does not contain all the information that investors and their professional advisers would reasonably require to make 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 underwritten securities;
(i) Misleading Prospectus: it transpires that there is a statement in the Prospectus that is misleading or deceptive or likely to mislead or deceive, or that there is an omission from the Prospectus (having regard to the provisions of Sections 711, 713 and 716 of the Corporations Act) or if any statement in the Prospectus becomes misleading or deceptive or likely to mislead or deceive or if the issue of the Prospectus is or becomes misleading or deceptive or likely to mislead or deceive;
(j) Restriction on issue: the Company is prevented from issuing the Underwritten Securities within the time required by the Underwriting Agreement, the Corporations Act, the Listing Rules, any statute, regulation or order of a court of competent jurisdiction by ASIC, ASX or any court of competent jurisdiction or any governmental or semi-governmental agency or authority;
(k) Withdrawal of consent to Prospectus: any person (other than the Underwriter) who has previously consented to the inclusion of its, his or her name in the Prospectus or to be named in the Prospectus, withdraws that consent;
(l) ASIC application: an application is made by ASIC for an order under Section 1324B or any other provision of the Corporations Act in relation to the Prospectus, the shortfall notice deadline date has arrived, and that application has not been dismissed or withdrawn;
(m) ASIC hearing: ASIC gives notice of its intention to hold a hearing under Section 739 of the Corporations Act in relation to the Prospectus to determine if it should make a stop order in relation to the Prospectus or ASIC makes an interim or final stop order in relation to the Prospectus under Section 739 of the Corporations Act;

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(n) Takeovers Panel: the Takeovers Panel makes a declaration that circumstances in relation to the affairs of the Company are unacceptable circumstances under Pt 6.10 of the Corporations Act, which in the Underwriter’s reasonable opinion has a Material Adverse Effect, as defined by the Underwriting Agreement;
(o) Hostilities: there is an outbreak of hostilities or a material escalation of hostilities (whether or not war has been declared) after the date of this agreement involving one or more of Australia, New Zealand, Indonesia, Japan, Russia, the United Kingdom, the United States of America, India, Pakistan, or the Peoples Republic of China, Israel or any member of the European Union other than hostilities involving Libya, Afghanistan, Iraq, Iran, Syria, Lebanon or Israel, or a terrorist act is perpetrated on any of those countries or any diplomatic, military, commercial or political establishment of any of those countries anywhere in the world and the Underwriter believes (on reasonable grounds) that the outbreak or escalation or terrorist act is likely to result in the S&P ASX 200 Index falling by the percentage contemplated by 10%;
(p) Authorisation: any authorisation which is material to anything referred to in the Prospectus is repealed, revoked or terminated or expires, or is modified or amended in a manner unacceptable to the Underwriter acting reasonably;
(q) Event of Insolvency: an Event of Insolvency, as defined in the Underwriting Agreement, occurs in respect of the Company or any of its subsidiaries;
(r) Indictable offence: a director or senior manager of the Company or any of its subsidiaries is charged with an indictable offence; or
(s) Termination Events: upon the occurrence of a Termination Event, as defined in the Underwriting Agreement, occurs.

The Underwriting Agreement also contains a number of indemnities, representations and warranties from the Company to the Underwriter that are considered standard for an agreement of this type.

8.6 Interests of Directors

Mr McGuckin, a Director of the Company, intends, subject to Shareholder approval at the General Meeting, to subscribe for up to 4,000,0000 Shares in the Shortfall (this is inclusive of his Entitlement). Refer to Sections 3.3 and 3.5 of this Prospectus for further details.

Refer to Section 3.6 for Directors’ interests in Securities of the Company.

Other than as set out in this Prospectus, no Director or proposed Director holds, or has held within the 2 years preceding lodgement of this Prospectus with the ASIC, any interest in:

(a) the formation or promotion of the Company;
(b) any property acquired or proposed to be acquired by the Company in connection with:
(i) its formation or promotion; or

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(ii) the Offer; or

the Offer,

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to a Director or proposed Director:

(a) as an inducement to become, or to qualify as, a Director; or
(b) for services provided in connection with:
(i) the formation or promotion of the Company; or
(ii) the Offer.

Remuneration

The remuneration of an executive Director is decided by the Board, without the affected executive Director participating in that decision-making process. The total maximum remuneration of non-executive Directors is subject to approval of Shareholders at a general meeting in accordance with the Constitution, the Corporations Act and the ASX Listing Rules, as applicable. The determination of non-executive Directors’ remuneration within that maximum will be made by the Board having regard to the inputs and value to the Company of the respective contributions by each non-executive Director. The current amount has been set at an amount not to exceed $300,000 per annum.

A Director may be paid fees or other amounts (ie non-cash performance incentives such as Options, subject to any necessary Shareholder approval) as the other Directors determine where a Director performs special duties or otherwise performs services outside the scope of the ordinary duties of a Director. In addition, Directors are also entitled to be paid reasonable travelling, hotel and other expenses incurred by them respectively in or about the performance of their duties as Directors.

The following table shows the total (and proposed) annual remuneration paid to both executive and non-executive directors.

Director	2011/2012 (Actual)	2012/2013 (Actual)	2013/2014 (as at date of Prospectus)
Craig Robert McGuckin	Nil	$107,000	$190,000
Peter Reilly	$47,500	$46,000	$46,000
Denis Geldard	Nil	Nil	$16,667
Peter Hepburn-Brown	Nil	Nil	$10,417

Notes:

Mr McGuckin was appointed on 10 December 2012.
Mr Geldard was appointed on 11 November 2013.
Mr Hepburn-Brown was appointed on 7 February 2014.

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8.7 Interests of experts and advisers

Other than as set out below or elsewhere in this Prospectus, no:

(a) person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Prospectus;
(b) promoter of the Company; or
(c) underwriter (but not a sub-underwriter) to the issue or a financial services licensee named in this Prospectus as a financial services licensee involved in the issue,

holds, or has held within the 2 years preceding lodgement of this Prospectus with the ASIC, any interest in:

(a) the formation or promotion of the Company;
(b) any property acquired or proposed to be acquired by the Company in connection with:
(i) its formation or promotion; or
(ii) the Offer; or
(c) the Offer,

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to any of these persons for services provided in connection with:

(a) the formation or promotion of the Company; or
(b) the Offer.

CPS Capital Group Pty Ltd will be paid an underwriting fee of approximately $89,128 in respect of the Entitlement Issue and subject to Shareholder approval, at the General Meeting, CPS Capital (and/or its nominees), will be issued the Underwriter Placement. The Underwriter will also be entitled to 6% commission on the value of any Shares issued under the Top-up Offer. Subject to Shareholder approval at the General Meeting, CPS Capital Group Pty Ltd will also be issued the CPS Placement for corporate advisory services to be provided to the Company. During the 24 months preceding lodgement of this Prospectus with the ASIC, CPS Capital Group Pty Ltd has been paid fees totalling $216,000 (excluding GST) by the Company. CPS Capital is a Shareholder of the Company and currently has an interest in 214,500 Shares and 107,250 Options. CPS Capital has indicated that it is not their present intention to subscribe for any of their Entitlement under the Entitlement Issue (being 171,600 Shares assuming CPS Capital does not exercise any of its Options prior to the Record Date).

Steinepreis Paganin has acted as the solicitors to the Company in relation to the Offer. The Company estimates it will pay Steinepreis Paganin $15,000 (excluding GST and disbursements) for these services. During the 24 months preceding lodgement of this Prospectus with the ASIC, Steinepreis Paganin has been paid fees totalling $116,128 (excluding GST and disbursements) for legal services provided to the Company.

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8.8 Consents

Each of the parties referred to in this section:

(a) does not make, or purport to make, any statement in this Prospectus other than those referred to in this section; and
(b) to the maximum extent permitted by law, expressly disclaim and take no responsibility for any part of this Prospectus other than a reference to its name and a statement included in this Prospectus with the consent of that party as specified in this section.

CPS Capital Group Pty Ltd has given its written consent to being named as underwriter to the Entitlement Issue in this Prospectus, in the form and context in which it is named. CPS Capital Group Pty Ltd has not withdrawn its consent prior to the lodgement of this Prospectus with the ASIC.

Steinepreis Paganin has given its written consent to being named as the solicitors to the Company in this Prospectus. Steinepreis Paganin has not withdrawn its consent prior to the lodgement of this Prospectus with the ASIC.

BDO Audit (WA) Pty Ltd has given its written consent to being named as the auditor of the Company in this Prospectus and the inclusion of the 31 December 2013 auditor reviewed balance sheet of the Company in Section 5.3. BDO Audit (WA) Pty Ltd has not withdrawn its consent prior to the lodgement of this Prospectus with the ASIC.

8.9 Expenses of the Entitlement Issue

In the event that all Entitlements are accepted, the total cash expenses of the Entitlement Issue are estimated to be approximately $118,500 (excluding GST) and are expected to be applied towards the items set out in the table below:

ASIC fees ASX fees1 Underwriting fees Legal fees Printing and distribution Miscellaneous Total	$ 2,225 5,947 89,128 15,000 1,200 5,000
	118,500

Notes:

ASX fees only include the ASX listing fees for the Shares pursuant to the Entitlement Issue. For avoidance of doubt they do not include the Listing fees for the Shares issued pursuant to the Top-up Offer or the Securities to be issued under the Underwriter Placement.

8.10 Electronic prospectus

If you have received this Prospectus as an electronic Prospectus, please ensure that you have received the entire Prospectus accompanied by the Application Forms. If you have not, please phone the Company on +61 1300 660 448 and the Company will send you, for free, either a hard copy or a further electronic copy of the Prospectus, or both. Alternatively, you may obtain a copy of this Prospectus from the Company’s website at www.mrltd.com.au.

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The Company reserves the right not to accept an Application Form from a person if it has reason to believe that when that person was given access to the electronic Application Form, it was not provided together with the electronic Prospectus and any relevant supplementary or replacement prospectus or any of those documents were incomplete or altered.

8.11 Financial forecasts

The Directors have considered the matters set out in ASIC Regulatory Guide 170 and believe that they do not have a reasonable basis to forecast future earnings on the basis that the operations of the Company are inherently uncertain. Accordingly, any forecast or projection information would contain such a broad range of potential outcomes and possibilities that it is not possible to prepare a reliable best estimate forecast or projection.

8.12 Clearing House Electronic Sub-Register System (CHESS) and Issuer Sponsorship

The Company will not be issuing share certificates. The Company is a participant in CHESS, for those investors who have, or wish to have, a sponsoring stockbroker. Investors who do not wish to participate through CHESS will be issuer sponsored by the Company. Because the sub-registers are electronic, ownership of securities can be transferred without having to rely upon paper documentation.

Electronic registers mean that the Company will not be issuing certificates to investors. Instead, investors will be provided with a statement (similar to a bank account statement) that sets out the number of Shares issued to them under this Prospectus. The notice will also advise holders of their Holder Identification Number or Security Holder Reference Number and explain, for future reference, the sale and purchase procedures under CHESS and issuer sponsorship.

Further monthly statements will be provided to holders if there have been any changes in their security holding in the Company during the preceding month.

8.13 Privacy Act

If you complete an application for Securities, you will be providing personal information to the Company (directly or by the Company’s share registry). The Company collects, holds and will use that information to assess your application, service your needs as a holder of equity securities in the Company, facilitate distribution payments and corporate communications to you as a Shareholder and carry out administration.

The information may also be used from time to time and disclosed to persons inspecting the register, bidders for your securities in the context of takeovers, regulatory bodies, including the Australian Taxation Office, authorised securities brokers, print service providers, mail houses and the Company’s share registry.

You can access, correct and update the personal information that we hold about you. Please contact the Company or its share registry if you wish to do so at the relevant contact numbers set out in this Prospectus.

Collection, maintenance and disclosure of certain personal information is governed by legislation including the Privacy Act 1988 (Cth) (as amended), the Corporations Act and certain rules such as the ASX Settlement Operating Rules. You should note that if you do not provide the information required on the application for Shares, the Company may not be able to accept or process your application.

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9. DIRECTORS’ AUTHORISATION

This Prospectus is issued by the Company and its issue has been authorised by a resolution of the Directors.

In accordance with section 720 of the Corporations Act, each Director has consented to the lodgement of this Prospectus with the ASIC.

_______ Craig Robert McGuckin Managing Director For and on behalf of MRL Corporation Limited

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10. GLOSSARY

$ means the lawful currency of the Commonwealth of Australia.

Applicant means a Shareholder who applies for Shares pursuant to the Offer or a Shareholder or other party who applies for Shortfall Shares pursuant to the Shortfall Offer.

Application Form means an Entitlement and Acceptance Form, Shortfall Application Form, Top-up Offer Application Form, Underwriter Placement Application Form or Director Option Application Form as the context requires.

ASIC means the Australian Securities and Investments Commission.

ASX means ASX Limited (ACN 008 624 691) or the financial market operated by it as the context requires.

ASX Listing Rules means the listing rules of the ASX.

ASX Settlement Operating Rules means the settlement rules of the securities clearing house which operates CHESS.

Board means the board of Directors unless the context indicates otherwise.

Business Day means Monday to Friday inclusive, except New Year’s Day, Good Friday, Easter Monday, Christmas Day, Boxing Day and any other day that ASX declares is not a business day.

Closing Date means the closing date for the Entitlement Issue specified in the timetable set out at the commencement of this Prospectus (unless extended).

Company means MRL Corporation Limited (ACN 007 870 760)

Constitution means the constitution of the Company as at the date of this Prospectus.

Corporations Act means the Corporations Act 2001 (Cth).

CPS Capital or CPS Capital Group Pty Ltd means CPS Capital Group Pty Ltd (ACN 088 055 636).

CPS Placement has the meaning of the term given in Section 4.2 of the Prospectus.

Director Options has the meaning of the term given in Section 4.2 of the Prospectus.

Director Options Application Form means the Underwriter Placement application form either attached to or accompanying this Prospectus to be completed only at the direction of the Company.

Directors means the directors of the Company as at the date of this Prospectus.

Entitlement means the entitlement of a Shareholder who is eligible to participate in the Entitlement Issue.

Entitlement Issue means the non-renounceable entitlement issue the subject of

this Prospectus.

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Entitlement and Acceptance Form means the entitlement and acceptance form either attached to or accompanying this Prospectus.

General Meeting means the Company shareholder meeting to be held on 28 April 2014 as set out in Section 4.2 of the Prospectus.

Licences means the Company’s exploration licences located in Sri Lanka.

New Option means an Option issued on the terms set out in section 6.2 of this Prospectus.

Offers means both the Entitlement Issue or the Top-up Offer and Offer means either, as the context requires.

Official Quotation means official quotation on ASX.

Option means an option to acquire a Share.

Optionholder means a holder of an Option.

Prospectus means this prospectus.

Record Date means the record date for the Entitlement Issue specified in the timetable set out at the commencement of this Prospectus.

Securities means Shares and/or Options.

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

Shareholder means a holder of a Share.

Shortfall means the Shares not applied for under the Offer (if any).

Shortfall Application Form means the shortfall application form either attached to or accompanying this Prospectus.

Shortfall Offer means the offer of the Shortfall on the terms and conditions set out in section 4.8 of this Prospectus.

Shortfall Shares means those Shares issued pursuant to the Shortfall.

Top-up Offer means the offer of up to 20,000,000 Shares as set out in section 4.9 of this Prospectus.

Top-up Offer Application Form means the Top-up Offer application form either attached to or accompanying this Prospectus to be completed only at the direction of the Company or Underwriter.

Underwriter means CPS Capital.

Underwriter Placement has the meaning given to that term in Section 4.2 of the Prospectus.

Underwriter Placement Application Form means the Underwriter Placement application form either attached to or accompanying this Prospectus to be completed only at the direction of the Underwriter or the Company.

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Underwriting Agreement means the underwriting agreement between the Company and CPS Capital to fully underwrite the Entitlement Issue as is summarised at Section 8.5 of the Prospectus.

WST means Western Standard Time as observed in Perth, Western Australia.

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AI assistant

First Graphene Ltd. — Capital/Financing Update 2014

35640_rns_2014-03-25_3da8bd73-9478-446a-82f4-7077da6a8205.pdf

MRL CORPORATIO N LIMITED ACN 007 870 760

ENTITLEMENT ISSUE PROSPECTUS

and

IMPORTANT NOTICE

CONTENTS

1. CORPORATE DIRECTORY

Directors

Registered Office

Company Secretary

Share Registry*

Solicitors

Auditor

Underwriter and Lead Manager

2. TIMETABLE

3. IMPORTANT NOTES

3.1

Risk factors

3.2 Underwriting

3.3 Effect on control of the Company

3.4

Dilution

3.5 Details of substantial holders

3.6 Directors’ Interests in Securities

Notes:

Peter Reilly

Craig McGuckin

Denis Geldard

Peter Hepburn-Brown

4. DETAILS OF THE OFFERS

4.1 Offers

The Entitlement Issue

Top-up Offer

4.2 General Meeting

4.3 Cleansing prospectus

4.4 Minimum subscription

4.5 Acceptance of the Entitlement Issue

4.6 Payment by cheque/bank draft

4.7 Payment by BPAY®

4.8 Shortfall Offer

4.9

Top-up Offer

4.10 ASX listing

4.11

Issue of Shares

4.12 Overseas shareholders

4.13 Enquiries

5. PURPOSE AND EFFECT OF THE OFFER

5.1 Purpose of the Offers

5.2 Effect of the Entitlement Issue

5.3 Pro-forma balance sheet

5.4 Effect on capital structure

Shares

Options

Notes:

6. RIGHTS AND LIABILITIES ATTACHING TO SECURITIES

6.1 Shares

(a) General meetings

(b) Voting rights

(c) Dividend rights

(d) Winding-up

(e)

Shareholder liability

(f) Transfer of shares

(g)

Future increase in capital

(h) Variation of rights

(i) Alteration of constitution

6.2 New Options

7. RISK FACTORS

7.1 Company specific

(a) Potential for significant dilution

(b) Sovereign and political risks associated with operating in Sri Lanka

(c) Limited exploration history and no guarantee of exploration success

(d) Operating risks

(e) Licence access risk

(f) Restricted areas within the Licences

(g) Exploration license title risk

First Graphene Ltd. Capital/Financing Update 2014