Future Metals NL — Capital/Financing Update 2011

Jul 4, 2011

5 July 2011

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Manager of Company Announcements ASX Limited Level 8 Exchange Plaza 2 The Esplanade PERTH WA 6000

By E-Lodgement

Prospectus

Red Emperor Resources NL (ASX: RMP | AIM: RMP) is pleased to advise that the Company will undertake a capital raising at $0.35 per share pursuant to its recompliance prospectus to raise A$1,000,000.

The Company has appointed Max Capital as the lead manager for the raising and has agreed with Max Capital to accept a level of shareholder applications. Anyone wishing to participate in the raising should download the prospectus from the Company's website and return completed application forms as soon as possible. Please note the Company cannot guarantee that all applications will be accepted. A copy of the prospectus is attached.

For and on behalf of the Board

BOARD & MANAGEMENT

Mr Greg Bandy EXECUTIVE DIRECTOR

Mr Jason Bontempo NON-EXECUTIVE DIRECTOR

Mr Stephen Brockhurst NON-EXECUTIVE DIRECTOR

Ms Shannon Robinson COMPANY SECRETARY

REGISTERED OFFICE 945 Wellington Street West Perth WA 6005

POSTAL ADDRESS PO Box 1263 West Perth WA 6872

CONTACT DETAILS

Tel: +61 8 9322 7600 Fax: +61 8 9322 7602

WEBSITE

www.redemperorresources.com

Greg Bandy Executive Director

Background

SHARE REGISTRY Computershare Level 2 45 St Georges Terrace Perth WA 6000 Tel: 1300 555 159

Red Emperor Resources NL (ASX: RMP) is a natural resources exploration company with interests in the frontier state of Puntland, Somalia, the Republic of Georgia and Western Australia.

NOMINATED ADVISER

• In Puntland, Red Emperor holds a 20% working interest in two licences encompassing the highly prospective Dharoor and Nugaal valleys in 2011. These two exploration areas cover nearly 40,000km[2] and have independently been assessed to potentially contain over 19.9 billion barrels of oil in-place. Red Emperor’s joint venture partner and PSA operator Africa Oil Corp. (TSXV: AOI) has signed a letter of intent with a drilling subcontractor and expects the first well to be drilled in Dharoor in Q3, 2011.

• In the Republic of Georgia, Red Emperor has a 20% working interest in onshore blocks VIa and VIb, covering approx. 6,500km[2] . Partner Range Resources Ltd (ASX: RRS; AIM: RRL) last year funded a 410km 2D seismic program with independent consultants RPS Energy identifying 68 potential structures containing an estimated 2.045 billion barrels of oil-in-place (on a mean 100% basis). Mobilisation has commenced with the first exploration well due to spud July 2011.

• The Company also has a 25% interest in the Jillewarra Project free carried until bankable feasibility study, which is a copper and gold project in Western Australia.

Cairn Financial Advisers LLP 61 Cheapside London EC2V 6AX Tel: +44 (0) 207 148 7900 Fax: +44 (0) 207 148 7909

ASX CODE RMP

AIM CODE RMP

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RED�EMPEROR�RESOURCES�NL� ACN�124�734�961�

PROSPECTUS�

By�this�Prospectus,�the�Company�invites�investors�to�apply�for�2,857,143�Shares�at�an�issue�price�of�$0.35� each�to�raise�$1,000,000.���

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Lead�Manager�

IMPORTANT�INFORMATION�

The�Offer�is�conditional�on�certain�Resolutions�being�passed�at�the�General�Meeting�of�Shareholders�to�be� held�on�15�July�2011�and�the�Company’s�successful�re�compliance�with�Chapters�1�and�2�of�the�ASX�Listing� Rules.���

This�Prospectus�is�a�re�compliance�prospectus�for�the�purposes�of�satisfying�Chapters�1�and�2�of�the�ASX� Listing�Rules�and�to�satisfy�ASX�requirements�for�re�admission�to�the�Official�List�following�a�change�to�the� nature�and�scale�of�the�Company’s�activities.��

This�is�an�important�document�that�should�be�read�in�its�entirety.��If�you�do�not�understand�it�you�should� consult�your�professional�advisers�without�delay.��The�Shares�offered�by�this�Prospectus�should�be� considered�speculative.�

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CHANGE�IN�NATURE�AND�SCALE�OF�ACTIVITIES�AND�RE�COMPLIANCE�WITH�CHAPTERS�1�AND�2� OF�THE�ASX�LISTING�RULES�

The�Offer�is�conditional:�

• on�the�Company�obtaining�Shareholder�approval�for�a�change�in�nature�and�scale�of�its�activities�at� the�General�Meeting�of�Shareholders�to�be�held�on�15�July�2011;�and��

• the�Company’s�successful�re�compliance�with�Chapters�1�and�2�of�the�ASX�Listing�Rules.���

ASX�requires�the�Company�to�re�comply�with�Chapters�1�and�2�of�the�ASX�Listing�Rules.��This�Prospectus�is� issued�to�assist�the�Company�to�re�comply�with�these�requirements.�

The�Company�will�be�suspended�from�Official�Quotation�from�the�time�of�the�General�Meeting�and�will�not� be�reinstated�until�it�has�successfully�recompiled�with�Chapters�1�and�2�of�the�ASX�Listing�Rules.���

There�is�a�risk�that�the�Company�may�not�be�able�to�meet�ASX’s�requirements�for�re�instatement�to�the� Official�List.���

In�the�event�the�Company�does�not�obtain�Shareholder�approval�or�the�Company�does�not�receive � conditional�approval�for�re quotation�on�ASX,�then�the�Company�will�not�proceed�with�the�Offer�and�will repay�all�application�moneys�received.

IMPORTANT�NOTICE�

This�Prospectus�is�dated�5�July�2011�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�the� Prospectus�relates.�

The�expiry�date�of�this�Prospectus�is�at�5.00pm�WST�on�that�date�which�is�13�months�after�the�date�this� Prospectus�was�lodged�with�the�ASIC�( Expiry�Date ).��No�securities�may�be�issued�on�the�basis�of�this� Prospectus�after�the�Expiry�Date.�

Application�will�be�made�to�ASX�within�seven�(7)�days�after�the�date�of�this�Prospectus�for�Official� Quotation�of�the�Shares�the�subject�of�this�Prospectus.�

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

This�Prospectus�does�not�constitute�an�offer�in�any�place�in�which,�or�to�any�person�to�whom,�it�would�not� be�lawful�to�make�such�an�offer�or�invitation.��No�action�has�been�taken�to�register�or�qualify�the�Shares�or� the�Offer�or�to�otherwise�permit�a�public�offering�of�the�Shares�in�any�jurisdiction�outside�Australia.�

The�distribution�of�this�Prospectus�in�jurisdictions�outside�Australia�may�be�restricted�by�law�and�persons� who�come�into�possession�of�this�Prospectus�should�seek�advice�on�and�observe�any�of�these�restrictions.�� Failure�to�comply�with�these�restrictions�may�violate�securities�laws.��Applicants�who�are�resident�in� countries�other�than�Australia�should�consult�their�professional�advisers�as�to�whether�any�governmental�or� other�consents�are�required�or�whether�any�other�formalities�need�to�be�considered�and�followed.�

This�Prospectus�does�not�constitute�an�offer�in�any�place�in�which,�or�to�any�person�to�whom,�it�would�not� be�lawful�to�make�such�an�offer.�

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WEB�SITE�–�ELECTRONIC�PROSPECTUS�

A�copy�of�this�Prospectus�can�be�downloaded�from�the�website�of�the�Company�at� www.redemperorresources.com.��Any�person�accessing�the�electronic�version�of�this�Prospectus�for�the� purpose�of�making�an�investment�in�the�Company�must�be�an�Australian�resident�and�must�only�access�the� Prospectus�from�within�Australia.�

The�Corporations�Act�prohibits�any�person�passing�onto�another�person�an�Application�Form�unless�it�is� attached�to�a�hard�copy�of�this�Prospectus�or�it�accompanies�the�complete�and�unaltered�version�of�this� Prospectus.�Any�person�may�obtain�a�hard�copy�of�this�Prospectus�free�of�charge�by�contacting�the� Company�on�+61�8�9322�7600.�

COMPETENT�PERSON’S�STATEMENT

The�technical�information�provided�in�this�Prospectus�in�relation�to�the�Georgian�Project�has�been�compiled� by�RPS�Energy�Services�Pty�Ltd�( RPS ).��RPS�is�an�independent�consultancy�specialising�in�petroleum�reservoir� evaluation�and�economic�analysis.��Except�for�the�provision�of�professional�services�on�a�fee�basis,�RPS�does� not�have�a�commercial�arrangement�with�any�other�person�or�company�involved�in�the�interest�that�are�the� subject�of�the�technical�report�("Report").��This�Report�was�compiled�by�Mr.�Andy�Kirchin,�a�Director�of�RPS.�� Mr.�Kirchin�has�also�evaluated�the�previous�reports�and�data�available�to�compile�this�Report.��Mr.�Kirchin� has�24�years�of�oil�and�gas�experience�and�holds�a�B.Sc.�(Hons),�Geophysics�with�Geology�from�the� University�of�Liverpool.��Mr.�Kirchin�is�a�member�of�the�European�Association�of�Geoscientists�and� Engineers�and�the�Petroleum�Exploration�Society�of�Great�Britain.��Other�RPS�employees�involved�in�this� work�hold�at�least�a�degree�in�geology,�geophysics,�petroleum�engineering�or�a�related�subject�and�have�at� least�five�years�of�relevant�experience�in�the�practice�of�geology,�geophysics�or�petroleum�engineering.�

The�technical�information�provided�in�this�Prospectus�in�relation�to�the�Puntland�Projects�has�been� compiled�by�Gaffney,�Cline�&�Associates�( GCA ).��GCA�is�an�independent�international�energy�advisory�group� of�almost�50�years'�standing,�whose�expertise�includes�petroleum�reservoir�evaluation�and�economic� analysis.��The�technical�report�in�relation�to�the�Puntland�Projects�included�in�section�5�of�this�Prospectus� has�been�compiled�by�employees�of�GCA.��Persons�who�participated�in�the�compilation�of�the�report� includes�Mr.�Brian�Rhodes�and�Dr.�Stephen�Wright.��All�hold�at�least�a�bachelor's�degree�in�geoscience,� petroleum�engineering�or�related�discipline.��Mr.�Rhodes�holds�a�B.Sc.�(Hons)�Geology,�is�a�member�of�the� Energy�Institute,�the�Petroleum�Exploration�Society�of�Great�Britain,�the�Society�of�Petroleum�Engineers�and� the�European�Association�of�Geoscientists�and�Engineers,�and�has�more�than�36�years�industry�experience.�� Dr.�Wright�has�more�than�25�years�of�Industry�experience�holds�a�B.Sc.�(Hons)�Geology�from�Kings�College,� University�of�London�and�a�D.Phil�from�University�of�Oxford,�he�is�a�fellow�of�the�Geological�Society�of� London�and�a�member�of�the�Petroleum�Exploration�Society�of�Great�Britain.��GCA�has�not�authorised�or� caused�the�issue�of�the�Prospectus�and�takes�no�responsibility�for�any�part�of�the�Prospectus,�other�than� references�to�its�name�and�the�inclusion�of�the�technical�report�in�the�Prospectus�in�the�form�and�context�in� which�it�appears.���

DIAGRAMS�

Diagrams�in�this�Prospectus�have�been�prepared�by�officers�of�the�Company�and�are�illustrative�only�and� may�not�be�drawn�to�scale.��Unless�otherwise�stated,�all�data�contained�in�charts,�graphs�and�tables�is� based�on�information�available�at�the�date�of�this�Prospectus.�

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DISCLAIMER�

No�person�is�authorised�to�give�any�information�or�to�make�any�representation�in�connection�with�the�Offer� described�in�this�Prospectus�that�is�not�contained�in�this�Prospectus.�Any�information�not�so�contained�may� not�be�relied�upon�as�having�been�authorised�by�the�Company�or�any�other�person�in�connection�with�the� Offer.�You�should�rely�only�on�information�in�this�Prospectus.�

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CONTENTS�

1.	INVESTMENTOVERVIEW...........................................................................................................................1
2.	CORPORATEDIRECTORY..........................................................................................................................10
3.	DETAILSOFTHEOFFER............................................................................................................................11
4.	COMPANYOVERVIEW..............................................................................................................................14
5.	INDEPENDENTTECHNICALREPORTS.......................................................................................................18
6.	INVESTIGATINGACCOUNTANT’SREPORT...............................................................................................71
7.	SOLICITOR’SREPORTS..............................................................................................................................88
8.	RISKFACTORS........................................................................................................................................124
9.	MATERIALCONTRACTS..........................................................................................................................132
10.	ADDITIONALINFORMATION..................................................................................................................135
11.	ADDITIONALMATTERS..........................................................................................................................146
12.	DIRECTORS’AUTHORISATION................................................................................................................150
13.	GLOSSARY..............................................................................................................................................151

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1. INVESTMENT�OVERVIEW�

Important�Notice�

This�Section�is�not�intended�to�provide�full�information�for�investors�intending�to�apply�for�Shares� offered�pursuant�to�this�Prospectus.��This�Prospectus�should�be�read�and�considered�in�its�entirety.� The�Shares�offered�under�this�Prospectus�carry�no�guarantee�in�respect�of�return�of�capital,�return�on� investment,�payment�of�dividends�or�the�future�value�of�the�Shares.�

THE�COMPANY��

BUSINESS�MODEL�–�EXPLORATION�COMPANY�

Red�Emperor�Resources�NL�is�a�public�company�listed�on�the�official�list�of�ASX�(ASX�code:�RMP)�and� on�the�official�list�of�AIM�(AIM�code:�RMP).�

The�Company�presently�operates�as�a�mineral�exploration�company;�with�a�25%�free�carried�interest� in�its�Jillewarra�Project,�which�is�a�copper�and�gold�exploration�project�in�Western�Australia.���

The�Company�has�recently�acquired�a�20%�interest�in�the�Puntland�Projects�and�a�20%�interest�in�the� Georgian�Project.����

In�addition�to�the�existing�Projects,�the�Company�will�review�other�acquisition�opportunities�to� secure�new�projects�in�the�resources�sector�that�meet�the�Company’s�objectives�and�strategies.�

Full�details�in�respect�of�the�Company�and�its�Project�are�set�out�in�Section�4.�

The�Company’s�main�objectives�on�completion�of�the�Offer�are:�

• Continue�to�identify�and�evaluate�new�resource�opportunities�which�can�enhance�shareholder� value;�

• Seek�to�maximise�the�value�of�all�the�Company’s�assets;�

• Applying�the�Company's�funds�in�an�efficient�manner�and�providing�above�average�and� sustainable�returns�through�both�capital�appreciation�and�the�payment�of�dividends�when�in�a� position�to�do�so;�

• Fostering�and�maintaining�a�culture�of�ownership,�care,�professional�excellence�and�respect� from�shareholders.�

RECENT�AIM�LISTING�

On�23�June�2011�the�Company�was�admitted�to�the�official�list�of�the�Alternative�Investment�Market� of�the�London�Stock�Exchange�("AIM").���

PROJECTS��

In�June�2010�the�Company�entered�into�an�agreement�to�acquire�up�to�a�20%�interest�in�two�licences� encompassing�the�prospective�Dharoor�and�Nugaal�valleys�in�Puntland�( Puntland�Projects )�subject�to� the�satisfaction�of�certain�conditions�( Puntland�Acquisition�Agreement ).��The�Company�elected�to� earn�a�20%�interest�in�each�of�the�Puntland�Projects�and�received�ministerial�consent�to�the�farm�in� in�January�2011.���

Red Emperor Resources NL Prospectus

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In�May�2011�the�Company�entered�into�agreements�to�earn�a�20%�working�interest�in�the�Georgian� Project�( Georgian�Acquisition Agreement ).���

The�Company�continues�to�hold�a�25%�interest�in�the�Jillewarra�Project�free�carried�until�bankable� feasibility�study,�which�is�a�copper�and�gold�project�in�Western�Australia.�

CHANGE�IN�NATURE�AND�SCALE�OF�ACTIVITIES��

As�a�result�of�the�magnitude�of�the�Company’s�proposed�investment�pursuant�to�the�Puntland� Acquisition�Agreement�and�the�Georgian�Acquisition�Agreement,�it�is�required�to�obtain�Shareholder� approval�for�a�change�of�nature�of�activities�and�to�comply�with�Chapters�1�and�2�of�the�ASX�Listing� Rules�as�if�it�were�seeking�admission�to�the�Official�List.��

This�Prospectus�is�issued�to�assist�the�Company�to�comply�with�these�requirements.�

KEY�RISKS��

The�business,�assets�and�operations�of�the�Company�are�subject�to�certain�risk�factors�that�have�the� potential�to�influence�the�operating�and�financial�performance�of�the�Company�in�the�future.�These� risks�can�impact�on�the�value�of�an�investment�in�the�securities�of�the�Company.��

The�Company�aims�to�manage�these�risks�by�carefully�planning�its�activities�and�implementing�risk� control�measures.��Some�of�the�risks�are,�however,�highly�unpredictable�and�the�extent�to�which�they� can�effectively�manage�them�is�limited.���

Set�out�below�are�specific�risks�that�the�Company�is�exposed�to,�and�that�may�have�a�direct�influence� on�the�Company�and�its�activities�or�assets.��

RiskArea	Risks
ChangeinNatureand ScaleofActivities	AnyfurtherinvestmentbytheCompanyinthePuntlandorGeorgian Projects(includingthoseinvestmentstobemadepursuanttothe PuntlandAcquisitionAgreementandtheGeorgianAcquisition Agreement)willconstituteachangeinthenatureandscaleofthe Company’sactivitiesand,accordingly,theCompanyisrequiredtore� complywithChapters1and2oftheASXListingRulesasifitwere seekingadmissiontotheOfficialListofASXforthefirsttime. ThereisariskthattheCompanymaynotbeabletomeetthe requirementsoftheASXforreinstatementtotheOfficialList.Should thisoccur,theSharesofferedunderthisProspectus(andthe Company’sexistingissuedShares)willnotbeabletobetradedon theASXuntilsuchtimeasthoserequirementscanbemet,ifatall.
ExplorationandProject Developmentrisks	Thebusinessofnaturalgasandoilexploration,andproject developmentinvolvesrisksbyitsverynature.Toprosper,itdepends onthesuccessfulexplorationappraisalanddevelopmentofeconomic oilandgasreserves.Operations,suchasdrilling,designand constructionofproductionfacilitiesandpipelines,competent operationalandmanagerialperformanceandefficientdistribution andmarketingservicesarerequiredtobesuccessful.Inparticular, explorationisaspeculativeendeavourandoperationscanbe hamperedbyforcemajeurecircumstances,engineeringdifficulties,

Red Emperor Resources NL Prospectus

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RiskArea	Risks
	costoverrunsandotherunforeseenevents. TheproposeddevelopmentexpenditureoftheCompanyisbasedon certainassumptionswithrespecttothemethodandtimingof developmentandfeasibilitywork.Bytheirnature,theseestimates andassumptionsaresubjecttosignificantuncertaintiesand, accordingly,theactualcostsmaymateriallydifferfromthese estimatesandassumptions.Accordingly,noassurancecanbegiven thatthecostestimatesandtheunderlyingassumptionswillbe realisedinpractice. Afailuretodiscoveraneconomicreserve,ortosuccessfullyproduce fromsuchareserve,willadverselyaffecttheCompany’sperformance andhavearesultingeffectonthevalueoftheCompany’sinvestment inthePuntlandProjectsandtheGeorgianProject.
SovereignRisk	ThePuntlandandGeorgianProjectsinvolveconductingexploration activitiesinPuntlandandtheRepublicofGeorgiarespectively,bythe projectoperator.Anycircumstancesoreventwhichnegatively impactsthedevelopmentofeithercountrycouldmateriallyaffect thefinancialperformanceoftheCompany. Thereisnoassurancethatfuturepoliticalandeconomicconditionsin PuntlandorGeorgiawillnotresultintherespectiveGovernment adoptingdifferentpoliciesregardingforeigndevelopmentand ownershipofmineralresources.Anychangesinpolicymayresultin legislativechangesaffectingownershipofassets,title,taxation,rates ofexchange,environmentalprotection,labourrelations,repatriation ofincomeandreturnoncapital,allofwhichmayaffecttheabilityto developtheeitherthePuntlandProjectsortheGeorgianProject.It shouldbenoted,however,thatbothPuntlandandGeorgiahave operatedunderrelativelystablepoliticalregimesduringthetimein whichtheproductionsharingagreementsforeachprojecthavebeen inplace. Theoccurrenceofthesevariousfactorsanduncertaintiescannotbe accuratelypredictedandcouldhaveanadverseeffectonthe operationsorprofitabilityoftheCompany.TheCompanyhasmade itsinvestmentandstrategicdecisionsbasedontheinformation currentlyavailabletotheDirectors,howevershouldtherebeany materialchangeinthepolitical,economic,legalandsocial environmentsineitherPuntlandorGeorgia,theDirectorsmay reassessinvestmentdecisionsandcommitmentstoassetsin Puntland.
OilandGasPriceVolatility	Oilandgaspricesaffectedbynumerousfactorsandevents Fluctuationsinoilandgaspricesand,inparticular,amaterialdecline inthepriceofoilorgas,mayhaveamaterialadverseeffectonthe Company’sbusinessandthereforethevalueoftheCompany’s investmentinthePuntlandProjectsandtheGeorgianProject.

Red Emperor Resources NL Prospectus

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RiskArea	Risks
Futurerequirementsfor capital	TherecanbenoguaranteesthatthefundsraisedbythisOfferwillbe sufficienttosuccessfullyachievealloftheCompany’sobjectives. ThefundsraisedbytheOfferwillbeusedtocarryoutworkonthe Company’sprojectsasdetailedinthisProspectus.IftheCompany incursunexpectedcostsorisunabletogeneratesufficientoperating income,furtherfundingmayberequired. TheCompanymayrequireadditionalfundingtocarryoutfurther exploration,undertakefeasibilitystudies,developprojectoperations and/oracquirenewprojects.Anyadditionalfinancingthroughshare issuesmaydilutetheinterestsofShareholdings.
ExchangeRaterisk	AnyrevenuereceivedbytheCompanywouldlikelybeinUSdollars derivedfromthesaleofgasandasubstantialportionofthe Company’soperatingexpenseswouldalsobeincurredinUSdollars. GasissoldintheUSmarketandaroundtheworldbasedprincipally onaUSdollarprice.Furthermore,theincomeandexpenditure accountswillbepreparedinAustraliandollars(AUD).Therefore Australiandollarreportedrevenuewillbedirectlyimpactedby movementsintheUSdollargaspriceandtheUSD/AUDexchange rates.MovementsintheUSD/AUDexchangeratesmayadverselyor beneficiallyaffecttheCompany’sresultsoroperationsandcash flows.

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�and�Shareholders�should�refer�to�the�risk�factors�set�out�in�full�in� Section�8�of�this�Prospectus�before�making�a�decision�to�subscribe�for�Securities�under�this� Prospectus.��

THE�OFFER�

Summary�of�the�Offer�

By�this�Prospectus,�the�Company�invites�investors�to�apply�for�2,857,143�Shares�at�an�issue�price�of� $0.35�each�to�raise�$1,000,000.���

The�Shares�offered�under�this�Prospectus�will�rank�equally�with�the�existing�Shares�on�issue.��Refer�to� Section�3�for�further�details�in�relation�to�the�Offer.���

Red Emperor Resources NL Prospectus

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Indicative�Timetable�

Event					Date
DispatchofNoticeofGeneralMeetingtoShareholders					15June2011
LodgementofProspectuswithASIC					5July2011
OfferOpeningDate					5July2011
OfferClosingDate					5:00pmWSTon11July2011
TradinginSecuritiessuspendedbyASX					15July2011
GeneralMeeting					15July2011
Dispatch of holding statements announcementofdispatch	to	Shareholders	and		15July2011
TradinginSecuritiesreinstatedbyASX(subjecttosatisfactionof Chapters1and2oftheASXListingRules).					21July2011

This�indicative�timetable�is�subject�to�change�the�Directors�reserve�the�right�to�amend�the�timetable� at�any�time,�subject�to�the�ASX�Listing�Rules.��

Purpose�of�the�Offer�and�Use�of�Proceeds�

The�purpose�of�this�Offer�is�to:��

• (a) meet�the�requirements�of�ASX�and�re�comply�with�Chapters�1�and�2�of�the�ASX�Listing�Rules;� and�

• (b) provide�for�capital�for�expenditure�commitments�on�the�Georgian�Project,�general�working� capital�and�to�review�additional�project�opportunities.�

On�completion�of�the�Offer,�the�Board�believes�the�Company�will�have�sufficient�capital�to�achieve� these�objectives.�

If�the�Offer�is�fully�subscribed,�the�Company�will�have�$14,456,715�available�(including�cash�on�hand� before�the�Offer�of�$13,456,715).��The�Company�intends�to�apply�funds�raised�from�the�Offer� together�with�the�Company’s�existing�funds�in�the�two�years�after�listing�on�ASX�as�follows,�assuming� the�Offer�raises�the�minimum�subscription�of�$1,000,000:�

Source&UseofFunds	Year1	Year2	Total
TotalraisedundertheOffer			$1,000,000
ExplorationexpenditureontheGeorgian Project1	$450,000	$270,000	$720,000
ExpensesofOffer2	$280,000	�	$280,000
Total	$730,000	$270,000	�

Notes:�

1�Refer�to�Section�4�for�further�details.��

2�Refer�to�Expenses�of�the�Offer�section�below�for�further�details.�

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

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Capital�Structure�

The�capital�structure�of�the�Company�following�completion�of�the�Offer�is�summarised�below:�

Shares	Number
SharesonissueatdateofProspectus1	147,616,114
SharestobeissuedonShareholderApproval	2,000,000
SharesnowofferedpursuanttotheOffer2	2,857,143
TotalSharesonissueatcompletionoftheOffer3	152,473,257

OptionsNumber	Number
OptionsonissueatdateofProspectus	Nil
OptionstobeissuedonShareholderApproval3	12,916,565
Optionsnowoffered	Nil
TotalOptionsonissueatcompletionoftheOffer	12,916,565

Notes:�

1 This�does�not�include�the�7,500,000�partly�paid�shares�currently�on�issue�(which�were�issued�paid�up�to�$0.01).� 2 Assumes�the�Offer�is�fully�subscribed�

3 Refer�to�Section�10.6�of�this�Prospectus�for�further�information.�

Full�details�of�the�terms�and�conditions�of�the�Shares,�partly�paid�Shares�and�Options�are�set�out�in� Section�10�of�this�Prospectus.��

SUBSTANTIAL�SHAREHOLDERS�

There�are�no�Shareholders�holding�5%�or�more�of�the�Shares�on�issue�both�as�at�the�date�of�this� Prospectus�or�on�completion�of�the�Offer�(assuming�full�subscription).��

The�Company�will�announce�to�the�ASX�details�of�its�top�20�Shareholders�(following�completion�of� the�Offer)�prior�to�the�Shares�re�commencing�to�trade�on�ASX.�

FINANCIAL�INFORMATION�

Further�financial�information�for�the�Company�is�included�in�the�Investigating�Accountant’s�Report�in� section�6�of�this�Prospectus.�

DIRECTORS�AND�KEY�MANAGEMENT�

Mr�Greg�Bandy�–�Executive�Director�

Mr�Bandy�is�a�senior�advisor�at�Patersons�Securities.��He�has�over�ten�years'�experience�with�capital� markets�and�formerly�held�an�executive�board�position�with�Empire�Beer�Group�Limited�(now� renamed�Car�Parking�Technologies�Limited).�He�brings�with�him�an�intimate�knowledge�of�equities� and�corporate�transactions�as�well�as�an�array�of�opportunities�to�the�Company.�

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Mr�Jason�Bontempo�–�Non�Executive�Director�

Mr�Bontempo�has�worked�in�Investment�Banking�and�Corporate�Advisory�since�qualifying�as�a� chartered�accountant�with�Ernst�&�Young�in�1997.�Mr�Bontempo�has�worked�for�investment�banks�in� Australia�and�the�UK�and�has�been�closely�involved�with�the�advising�and�financing�of�companies�in� the�resources�industry�specialising�in�asset�sales�and�ASX�listings.�

Mr�Stephen�Brockhurst�–�Non�Executive�Director��

Mr�Brockhurst�has�12�years’�experience�in�the�finance�and�corporate�advisory�industry�and�has�been� responsible�for�the�preparation�of�the�due�diligence�process�and�prospectus'�on�a�number�of�initial� public�offers�with�capital�raising�in�excess�of�$150�million.��Mr�Brockhurst�experience�includes� corporate�and�capital�structuring,�corporate�advisory�and�Company�secretarial�services,�capital� raising,�ASX�and�ASIC�compliance�requirements.��Mr�Brockhurst�is�currently�a�Director�of�a�number�of� other�listed�companies.�

Company�Secretary�

Ms�Shannon�Robinson��

Ms�Robinson�is�a�senior�advisor�at�Grange�Consulting�and�provides�corporate�advice�in�relation�to� mergers�and�acquisitions,�capital�raisings,�listing�of�companies�on�ASX,�due�diligence�reviews�and� legal�compliance,�takeovers�and�managing�legal�issues�associated�with�client�transactions.�� Ms�Robinson�acts�as�Company�Secretary�for�a�number�of�ASX�listed�and�unlisted�companies.�� Ms�Robinson�is�a�corporate�lawyer�and�an�associate�of�the�Institute�of�Chartered�Secretaries�and� Administrators�(ICSA)�and�Chartered�Secretaries�Australia�(CSA)�and�a�member�of�AMPLA.�

Management�and�Consultants�

The�Company�is�aware�of�the�need�to�have�sufficient�management�to�properly�supervise�the� exploration�and�(if�successful)�for�the�development�of�the�projects�in�which�the�Company�has,�or�will� in�the�future�have,�an�interest�and�the�Board�will�continually�monitor�the�management�roles�in�the� Company.��As�the�Company’s�projects�require�an�increased�level�of�involvement�the�Board�will�look� to�appoint�additional�management�and/or�consultants�when�and�where�appropriate�to�ensure� proper�management�of�the�Company’s�projects.�

Disclosure�of�Interests�

Directors�are�not�required�under�the�Company’s�Constitution�to�hold�any�Shares.���

As�at�the�date�of�this�Prospectus,�the�annual�remuneration�(exclusive�of�superannuation)�and�the� relevant�interests�of�each�of�the�Directors�in�Shares�and�Options�are�as�set�out�in�the�table�below:�

Director	Annual Remuneration	Shares	Options1
MrGregBandy	$120,000	Nil	3,000,000
MrJasonBontempo	$30,000	Nil	1,000,000
MrStephenBrockhurst	$30,000	250,001	500,000

Notes:��

1.�The�issue�of�these�Options�are�subject�to�Shareholder�Approval�at�the�General�Meeting�being�held�on�15�July�2011.��

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AGREEMENTS�WITH�DIRECTORS�OR�RELATED�PARTIES�

The�Company’s�policy�in�respect�of�related�party�arrangements�is:�

• (a) a�Director�with�a�material�personal�interest�in�a�matter�is�required�to�give�notice�to�the�other� Directors�before�such�a�matter�is�considered�by�the�Board;�and�

• (b) for�the�Board�to�consider�such�a�matter,�the�Director�who�has�a�material�personal�interest�is� not�present�while�the�matter�is�being�considered�at�the�meeting�and�does�not�vote�on�the� matter.�

Executive�Services�Agreement�–�Mr�Greg�Bandy��

The�Company�has�entered�into�an�executive�services�agreement�with�Mr�Bandy.�Pursuant�to�which� Mr�Bandy�agrees�is�engaged�as�the�Company’s�Executive�Director.��Under�the�terms�of�the�agreement� Mr�Bandy�is�entitled�to�be�paid�a�salary�of�$120,000�per�annum�(plus�the�statutory�requirement�of�an� additional�9%�in�superannuation).���

Restriction�Agreement�

In�association�with�the�AIM�Listing,�on�24�May�2011�Mr�Stephen�Brockhurst,�who�holds�a�total�of� 250,001�Shares,�entered�into�a�restriction�agreement�with�Cairn,�Old�Park�Lane�and�the�Company� pursuant�to�which�Mr�Brockhurst�has�undertaken�to�Cairn�and�the�Company�that�he�will�not,�without� the�prior�written�permission�of�Cairn�and�Old�Park�Lane,�dispose�of�any�interests�in�Shares�held�by� him�(subject�to�certain�limited�exceptions�including,�disposals�by�way�of�acceptance�of�a�takeover� offer�for�the�entire�issued�share�capital�of�the�Company)�until�one�year�from�the�AIM�Listing�Date.�

Indemnity,�Insurance�and�Access�Deeds��

The�Company�has�entered�an�Indemnity,�Insurance�and�Access�Deed�with�each�Director.���

The�Deeds�provide�that:�

• each�Director�is�indemnified�by�the�Company�against�any�liability�incurred�in�that�capacity�as� an�officer�of�the�Company�to�the�maximum�extent�permitted�by�law�subject�to�certain� exclusions;�

• the�Company�must�keep�a�complete�set�of�company�documents�until�the�later�of:�

• the�date�which�is�seven�years�after�the�Director�ceases�to�be�an�officer�of�the�Company;� and�

• the�date�after�a�final�judgment�or�order�has�been�made�in�relation�to�any�hearing,� conference,�dispute,�enquiry�or�investigation�in�which�the�Director�is�involved�as�a�party,� witness�or�otherwise�because�the�Director�is�or�was�an�officer�of�the�Company�( Relevant� Proceedings );�

• the�Director�has�the�right�to�inspect�and/or�copy�a�company�document�in�connection�with� Relevant�Proceedings�during�the�period�referred�to�above;��

• the�Company�must�maintain�an�insurance�policy�insuring�the�Director�against�liability�as�a� director�and�officer�of�the�Company�while�the�Director�is�an�officer�of�the�Company�and�until� the�later�of:�

• the�date�which�is�seven�years�after�the�Director�ceases�to�be�an�officer�of�the�Company;� and��

• the�date�any�Relevant�Proceedings�commenced�before�the�date�referred�to�above�have� been�finally�resolved,����

unless�the�Company�reasonably�determines�that�the�type�of�coverage�is�no�longer�available.�

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Expenses�of�the�Offer�

The�total�expenses�of�the�Offer�are�estimated�to�be�approximately�$280,000�and�are�expected�to�be� applied�towards�the�items�set�out�in�the�table�below:�

ItemofExpenditure	Amount
LeadManagerfee	$60,000
ASICfees	$2,137
ASXFees	$84,642
CorporateAdvisorfees	$60,000
Legalfees	$40,000
Technicalexpertfees	$15,000
Investigatingaccountantfees	$15,000
Distributionandotherexpenses	$3,221
Total	$280,000

CORPORATE�GOVERNANCE�

To�the�extent�applicable,�in�light�of�the�Company’s�size�and�nature,�the�Company�has�adopted�The� Corporate�Governance�Principles�and�Recommendations�(2nd�Edition)�as�published�by�ASX�Corporate� Governance�Council�( Recommendations ).�

The�Company’s�main�corporate�governance�policies�and�practices�as�at�the�date�of�this�Prospectus� are�outlined�in�Section�10�of�this�Prospectus�and�the�Company’s�compliance�and�departures�from�the� Recommendations�are�set�out�in�Section�10�of�this�Prospectus.�

In�addition,�the�Company’s�full�Corporate�Governance�Plan�is�available�from�the�Company’s�website� (www.redemperorresources.com).��

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2. CORPORATE�DIRECTORY�

Directors

Mr�Greg�Bandy� Executive�Director

Mr�Jason�Bontempo� Non�Executive�Director

Mr�Stephen�Brockhurst� Non�Executive�Director

Registered�Office

945�Wellington�Street� West�Perth�WA�6005�

Telephone:��+61�8�9322�7600� Facsimile:��+61�8�9322�7602�

Website

www.redemperorresources.com

Share�Registry[*]

Computershare�Investor�Services� Level�2,�45�St�Georges�Terrace� Perth�WA�6000�

Telephone:��1300�787�272� Facsimile:��+61�8�9323�2033�

Corporate�Advisor�

Grange�Consulting�Pty�Ltd� 945�Wellington�Street� West�Perth��WA��6005�

Investigating�Accountant��

BDO�Corporate�Finance�(WA)�Pty�Ltd� 38�Station�Street� Subiaco��WA��6008�

Lawyers�in�Australia

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

International�Lawyers

Anjarwalla�Collins�&�Haidermota� Emaar�Square,�Building�4� Level�2,�Unit�206�Downtown�Burj� Dubai,�UAE�

BGI�Advisory�Services�Georgia�Limited� 18�Rustaveli�Avenue� II�floor� Tbilisi�0108� Georgia�

Independent�Technical�Expert

Gaffney,�Cline�&�Associates� Bentley�Hall,�Blacknest�Alton� Hampshire� United�Kingdom��GU34�4PU�

RPS�Energy�Services�Pty�Ltd� 38�Station�Street� Subiaco��WA��6008�

Lead�Manager

Max�Capital�Pty�Ltd� 945�Wellington�Street� West�Perth��WA��6005�

*�This�entity�is�included�for�information�purposes�only�and�has�not�been�involved�in�the�preparation�of�this�Prospectus.�

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3. DETAILS�OF�THE�OFFER�

3.1 Summary�of�the�Offer�

By�this�Prospectus,�the�Company�invites�investors�to�apply�for�2,857,143�Shares�at�an�issue�price�of� $0.35�each�to�raise�$1,000,000.���

The�Shares�offered�under�this�Prospectus�will�rank�equally�with�the�existing�Shares�on�issue.��

3.2 Applications��

Applications�for�Shares�offered�under�this�Prospectus�must�be�made�using�the�Application�Form.� Alternatively,�complete�a�paper�copy�of�the�electronic�Application�Form�that�accompanies�the� electronic� version� of� the� Prospectus� which� can� be� found� and� downloaded� from� www.redemperorresources.com.���

Payment�for�the�Shares�must�be�made�in�full�at�the�issue�price�of�$0.35�per�Share.��Applications�for� Shares�must�be�for�a�minimum�of�10,000�Shares�and�thereafter�in�multiples�of�1,000�Shares.� Applicants�who�receive�a�general�offer�should�return�their�completed�Application�Form�together�with� application�monies�in�full�prior�to�5.00pm�(WST)�on�the�Closing�Date�to�the�Company�to:�

applicationmoniesinfullpriorto5.00pm(W	ST)onthe	ClosingDatetotheCompanyto:
Postedto:		Deliveredto:
RedEmperorResourcesNL		RedEmperorResourcesNL
c/�ComputershareInvestorServicesPtyLtd		c/�ComputershareInvestorServicesPtyLtd
GPOBoxD182		Level2,45StGeorgesTerrace
PerthWA6840		PerthWA6000
Australia		Australia

Refer�to�the�instructions�on�the�back�of�the�Application�Form�when�completing�your�application.� Cheques�should�be�made�payable�to�“Red�Emperor�Resources�NL�–�Share�Offer�Account”�and�crossed� “Not�Negotiable”.��All�cheques�must�be�in�Australian�currency.�

An�original�completed�and�lodged�Application�Form,�together�with�a�cheque�for�the�application� monies,�constitutes�a�binding�and�irrevocable�offer�to�subscribe�for�the�number�of�Shares�specified�in� the�Application�Form.�The�Application�Form�does�not�have�to�be�signed�to�be�a�valid�application.�An� application�will�be�deemed�to�have�been�accepted�by�the�Company�upon�allotment�of�the�Shares.��

The�Offer�may�be�closed�at�an�earlier�date,�and�time,�at�the�discretion�of�the�Directors,�without�prior� notice.�Applicants�are�therefore�encouraged�to�submit�their�Application�Forms�as�early�as�possible.� The�Company�reserves�the�right�to�extend�the�Offer�or�accept�late�applications.�

3.3 Allotment��

Subject�to�ASX�granting�conditional�approval�for�the�Company�to�be�admitted�to�the�Official�List�and� the�Company�raising�the�minimum�subscription�under�the�Offer�(being�the�full�subscription),� allotment�of�Shares�offered�by�this�Prospectus�will�take�place�as�soon�as�practicable�after�the�Closing� Date.��Prior�to�allotment,�all�application�monies�shall�be�held�by�the�Company�on�trust.��The�Company,� irrespective�of�whether�the�allotment�of�Shares�takes�place,�will�retain�any�interest�earned�on�the� application�monies.�

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The�Directors�reserve�the�right�to�allot�Shares�in�full�for�any�application�or�to�allot�any�lesser�number� of�Shares�or�to�decline�any�application.��Where�the�number�of�Shares�allotted�is�less�than�the�number� applied�for,�or�where�no�allotment�is�made,�the�surplus�application�monies�will�be�returned�by� cheque�to�the�applicant�as�soon�as�practicable�after�the�allotment�date.�

3.4

ASX�Listing�

The�Company�will�apply�to�ASX�within�seven�(7)�days�after�the�date�of�this�Prospectus�for�admission� to�the�Official�List�and�for�Official�Quotation�of�the�Shares�offered�under�this�Prospectus.��If�ASX�does� not�grant�permission�for�Official�Quotation�of�the�Shares�within�three�(3)�months�after�the�date�of� this�Prospectus,�or�such�longer�period�as�is�permitted�by�the�Corporations�Act,�none�of�the�Shares� offered�by�this�Prospectus�will�be�allotted�or�issued.�In�that�circumstance,�all�applications�will�be� dealt�with�in�accordance�with�the�Corporations�Act.�

3.5 Restricted�Securities�

Subject�to�the�Company�being�admitted�to�the�Official�List,�certain�of�the�securities�on�issue�may�be� classified�by�the�ASX�as�restricted�securities�and�will�be�required�to�be�held�in�escrow�for�such�time�as� prescribed�by�ASX.��During�the�period�in�which�these�securities�are�prohibited�from�being�transferred,� trading�in�Shares�may�be�less�liquid�which�may�impact�on�the�ability�of�a�Shareholder�to�dispose�of�his� or�her�Shares�in�a�timely�manner.�

The�Company�will�announce�to�the�ASX�full�details�of�the�quantity�and�duration�for�the�securities� required�to�be�held�in�escrow�prior�to�re�quotation�of�the�Company�on�ASX.�

3.6 Dividend�Policy�

The�Company�does�not�yet�have�a�dividend�policy.�The�Company�anticipates�that�significant� expenditure�will�be�incurred�in�the�exploration�of�the�Company’s�Projects.��These�activities�are� expected�to�dominate�the�two�year�period�following�the�issue�of�this�Prospectus.��Accordingly,�the� Company�has�no�immediate�intention�to�declare�or�distribute�dividends�and�does�not�expect�to� declare�any�dividends�during�that�period.�Payment�of�future�dividends�will�depend�upon�the�future� profitability�and�financial�position�of�the�Company.�

3.7 Restrictions�on�the�Distribution�of�the�Prospectus�

This�Prospectus�does�not,�and�is�not�intended�to,�constitute�an�offer�in�any�place�or�jurisdiction,�or�to� any�person�to�whom,�it�would�not�be�lawful�to�make�such�an�offer�or�to�issue�this�Prospectus.��The� distribution�of�this�Prospectus�in�jurisdictions�outside�Australia�may�be�restricted�by�law�and�persons� who�come�into�possession�of�this�Prospectus�should�seek�advice�on�and�observe�any�such�restrictions.�� Any�failure�to�comply�with�such�restrictions�may�constitute�a�violation�of�applicable�securities�laws.�� No�action�has�been�taken�to�register�or�qualify�these�Shares�or�otherwise�permit�a�public�offering�of� the�Shares�the�subject�of�this�Prospectus�in�any�jurisdiction�outside�Australia.�

It�is�the�responsibility�of�applicants�outside�Australia�to�obtain�all�necessary�approvals�for�the� allotment�and�issue�of�the�Shares�pursuant�to�this�Prospectus.��The�return�of�a�completed�Application� Form�will�be�taken�by�the�Company�to�constitute�a�representation�and�warranty�by�the�applicant�that� all�relevant�approvals�have�been�obtained.�

3.8 Minimum�Subscription�

The�minimum�subscription�in�respect�of�the�Offer�is�$1,000,000.�

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If�the�minimum�subscription�has�not�been�raised�within�4�months�after�the�date�of�this�Prospectus,� the�Company�will�either�repay�the�application�monies�to�Applicants�or�issue�a�supplementary�or� replacement�prospectus�to�allow�Applicants�one�month�to�withdraw�their�Application�Form�and�be� repaid�their�application�money.��No�interest�will�be�paid�on�this�money.�

3.9 No�Underwriting��

This�Offer�is�not�underwritten.��

3.10 CHESS�

The�Company�will�apply�to�participate�in�the�Clearing�House�Electronic�Subregister�System�(CHESS).�� CHESS�is�operated�by�ASX�Settlement�Pty�Ltd�(ASX�Settlement),�a�wholly�owned�subsidiary�of�ASX,�in� accordance�with�the�Listing�Rules�and�the�ASX�Settlement�Operating�Rules.�

Under�CHESS,�the�Company�will�not�issue�certificates�to�investors.��Instead,�Share�and�Option�holders� will�receive�a�statement�of�their�holdings�in�the�Company.��If�an�investor�is�broker�sponsored,�ASX� Settlement�will�send�a�CHESS�statement.�

3.11 Forecast�Financial�Information�

Given�the�speculative�nature�of�oil�and�gas�exploration�and�the�fact�the�Projects�are�in�an�early�stage� of�exploration,�there�are�significant�uncertainties�associated�with�forecasting�future�revenues�and� expenses�of�the�Company.��On�this�basis�and�after�considering�ASIC�Regulatory�Guide�170,�the� Directors�believe�that�reliable�financial�forecasts�for�the�Company�cannot�be�prepared�and� accordingly�have�not�included�financial�forecasts�in�this�Prospectus.�

3.12 Privacy�Statement�

If�you�complete�an�application�for�Shares,�you�will�be�providing�personal�information�to�the�Company.�� The�Company�collects,�holds�and�will�use�that�information�to�assess�your�application,�service�your� needs�as�a�Shareholder�and�to�facilitate�distribution�payments�and�corporate�communications�to�you� as�a�Shareholder.�

The�information�may�also�be�used�from�time�to�time�and�disclosed�to�persons�inspecting�the�register,� including�bidders�for�your�Shares�in�the�context�of�takeovers;�regulatory�bodies,�including�the� Australian�Taxation�Office;�authorised�securities�brokers;�print�service�providers;�mail�houses�and�the� Share�Registry.�

You�can�access,�correct�and�update�the�personal�information�the�Company�hold�about�you.��If�you� wish�to�do�so,�please�contact�the�Share�Registry�at�the�relevant�contact�number�set�out�in�this� Prospectus.�

Collection,�maintenance�and�disclosure�of�certain�personal�information�are�governed�by�legislation� including�the�Privacy�Act�1988�(as�amended),�the�Corporations�Act�and�certain�rules�such�as�the�ASX� Settlement�and�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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4. COMPANY�OVERVIEW��

4.1

Company�Overview�

The�Company�is�an�ASX�listed�(ASX:�RMP)�and�AIM�listed�(AIM:�RMP)�exploration�company.��The� Company's�principal�activities�focused�on�identifying�and�exploring�oil�and�gas�in�Puntland�and�the� Republic�of�Georgia.��The�Company�also�holds�a�25%�free�carried�interest�in�the�Jillewarra�Project� which�it�farmed�down�in�November�2010.�

In�Puntland,�Red�Emperor�holds�a�20%�working�interest�in�two�licences�encompassing�the� prospective�Dharoor�and�Nugaal�valleys�in�2011.��These�two�exploration�areas�cover�nearly� 40,000km[2] .��Red�Emperor’s�joint�venture�partner�and�PSA�operator�Africa�Oil�Corp.�(TSXV:�AOI)� ( Africa�Oil )�has�signed�a�letter�of�intent�with�a�drilling�subcontractor�and�expects�the�first�well�to�be� drilled�in�Dharoor�in�Q3,�2011.�

In�the�Republic�of�Georgia,�Red�Emperor�has�a�20%�working�interest�in�onshore�blocks�VIa�and�VIb,� covering�approx.�6,500km[2] .��Joint�venture�partner�Range�Resources�(ASX:�RRS;�AIM:�RRL)�has� completed�a�410km�2D�seismic�program�with�independent�consultants�RPS�Energy�identifying� 68�potential�structures�containing�an�estimated�2.045�billion�barrels�of�oil�in�place�(on�a�mean�100%� basis).��Mobilisation�has�commenced�with�the�first�exploration�well�due�to�spud�June�2011.�

The�Company�also�has�a�25%�interest�in�the�Jillewarra�Project�free�carried�until�bankable�feasibility� study,�which�is�a�copper�and�gold�project�in�Western�Australia.��The�Company�does�not�intend�to� focus�on�this�project�at�this�stage.�

4.2 Puntland�Project�

Pursuant�to�the�Puntland�Acquisition�Agreement,�the�Company�will�earn�a�20%�interest�in�onshore� petroleum�projects�which�are�located�in�the�Dharoor�Valley�and�the�Nugaal�Valley�of�Puntland� ( Puntland�Farmin )�by�contributing�30%�of�the�costs�of�drilling�the�one�exploration�well�on�the� Dharoor�Valley�to�the�work�programme.��The�drilling�is�anticipated�to�commence�drilling�in�the�third� quarter�of�2011.��Followed�by,�the�drilling�of�a�second�exploration�well�on�either�the�Dharoor�Valley� block�or�the�Nugaal�Valley�block�as�determined�by�the�operator,�Africa�Oil.��Red�Emperor�has�an� option�but�not�an�obligation�to�participate�in�the�second�well.��Further�details�of�the�Puntland� Acquisition�Agreement�are�set�out�in�Section�9.3�

The�government�of�Puntland�has�formally�approved�the�Company's�farmin�to�earn�a�20%�interest�in� the�Puntland�Projects.�

Exploration�

A�summary�of�the�history�of�the�Puntland�Projects�is�set�out�below.�

Dharoor�and�Nugaal�Valleys

In�2006�the�Puntland�Government�granted�Range�Resources�Ltd�(ASX:�RRS)�("Range")�certain�mineral� and�hydrocarbon�rights�which�included�the�highly�prospective�Nugaal�and�Dharoor�exploration�blocks.�� In�2007�Range�brought�in�partner�Africa�Oil�to�finance�and�help�to�develop�the�Nugaal�and�Dharoor� oil�prospects.��Africa�Oil�operates�the�licences�covered�by�the�production�sharing�agreements�in� respect�of�the�two�blocks.�

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Prior�to�Red�Emperor's�farm�in,�the�joint�venture�invested�significant�funds�on�seismic�acquisition�and� interpretive�works�designed�to�identify�the�most�prospective�drill�targets�in�both�the�Nugaal�and� Dharoor�exploration�blocks.��The�targets�identified�are�the�subject�of�the�current�exploration� program.���

Puntland

Somalia�is�situated�in�the�most�north�eastern�part�of�Africa,�known�as�‘the�Horn�of�Africa’.��The� Democratic�State�of�Puntland�is�located�in�the�north�eastern�sector�of�Somalia�and�covers� approximately�212,000km[2] .��

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Somalia,�and�in�particular�Puntland,�remain�one�of�the�last�under� explored�countries�that�have�high�potential�for�vast�reserves�of� hydrocarbons.��During�the�late�1980’s�the�state�was�divided�into�a� number�of�concessions�for�oil�exploration.��Significant�exploration� was�undertaken�but�this�effectively�ceased�due�to�political� instability�that�arose�in�1991.��

The�rationale�concerning�prospectivity�in�Puntland�is�based�on�the� proposition�that�the�Cretaceous�and�Jurassic�age�Nugaal�and� Dharoor�basins�in�Puntland�are�extensions�of�the�prolific� producing�Marib�Shawba�and�Sayun�Masila�Basins�in�Yemen.��It�is� believed�these�basins�were�contiguous�before�the�Gulf�of�Aden� opened�and�therefore�the�prospects�and�plays�are�likely�similar�to� those�in�Yemen.�

The�legal�structure�of�Puntland�consists� of�the�judiciary,�legislative�(House�of� Representatives)�and�the�executive�(the� president�and�his�nominated�council�of� ministries)�branches�of�government.�� They�have�had�two�peaceful�elections�in� the�past�5�years�with�the�current� President,� Abdirahman� Mohamud� Farole�(a�former�PhD�candidate�in�the� history� department� at� La� Trobe� University� in� Melbourne)� fully� supportive�of�the�development�of�the� natural�assets�believed�to�exist�in� abundance�both�on�and�off�the�shores� of�Puntland.��

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Present�
Pre�Rift�
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Exploration�Program�Currently�Underway

Red�Emperor’s�joint�venture�partner�and�PSA�operator,�Africa�Oil,�has�signed�a�letter�of�intent�with�a� drilling�subcontractor�and�expects�the�first�well�to�be�drilled�in�Dharoor�in�Q3,�2011.�

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Participants�in�Puntland�Projects�

The�joint�venture�partners�on�the�Puntland�Projects�are�as�follows:�

Participant	Interest
RedEmperorResourcesNL	20%
AfricaOilCorp.(Operator)	60%
RangeResourcesLtd	20%

4.3 Georgian�Project���

Pursuant�to�the�Georgian�Acquisition�Agreement,�the�Company�will�contribute�40%�of�the�costs�of� drilling�two�exploration�wells,�capped�at�US$5.6�million,�to�earn�a�20%�interest�in�the�Georgian� Project.�

The�Company�has�entered�into�the�Georgian�Acquisition�Agreement�with�Strait�Oil�&�Gas�(UK)�Limited� ( Strait )�and�Range�to�acquire�a�20%�interest�in�the�Georgian�Project.�

Pursuant�to�the�Georgian�Acquisition�Agreement�the�Company�was�issued�shares�equal�to�20%�of�the� issued�capital�of�Strait�subject�to�the�provision�of�up�to�US$5.6m�funding�for�a�2�well�drill�program.�� The�shares�are�to�be�held�by�the�Company's�wholly�owned�subsidiary,�Georgian�Oil�Pty�Ltd.�

The�interests�of�the�joint�venture�partners�on�the�Georgian�Project�are�as�follows:�

Participant	Interest
RedEmperorResourcesNL	20%
RangeResourcesLtd	40%
OthershareholdersinStrait	40%

Rig�mobilisation�has�commenced�with�spudding�of�the�first�exploration�well�confirmed�for�early�July� 2011.�

Exploration�

A�summary�of�the�history�of�the�Georgian�Project�is�set�out�below.�

Blocks�VIa�and�VIb�Background

A�significant�number�of�wells�were�drilled�in�Georgia�during�the�Soviet�era�(mainly�in�the�1980’s�and� 1990’s)�in�and�adjacent�to�blocks�VIa�and�VIb.��A�review�of�all�available�data�in�2008/2009�by�the� operator,�Strait,�and�recognised�international�oil�and�gas�consultants�RPS�Group�(RPS)�found�that� very�few�of�the�200�wells�were�drilled�with�the�specific�objective�of�finding�oil�and�gas�reservoirs.�� Certain�wells�were�drilled�to�relatively�shallow�depths,�to�further�define�structural�features�identified� from�surface�geological�mapping,�and�to�assist�in�planning�the�location�and�design�of�water�reservoirs.�� Deeper�wells�were�drilled�for�the�purpose�of�detailed�identification�of�the�stratigraphy�of�the�area.�� Many�of�these�wells�found�oil�and�gas�shows,�in�which�case�they�were�shut�in�and�abandoned� without�testing.��

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2D�Seismic�Programme�and�Subsequent�Results

In�March�2010�Range�and�Strait�completed� 410km�of�2D�seismic�across�the�two�blocks�in� satisfaction�of�Phase�II�of�the�Production� Sharing�Contract�("PSC").��The�initial�results� from�the�draft�report�of�seismic�interpretation,� field�mapping�and�evaluation�completed�by�RPS� were�released�by�Range�to�the�ASX�on�18� November�2010.��RPS�identified�a�total�of�68� structural�culminations�across�the�two�blocks� each�of�which�potentially�contains�stacked� reservoirs.��Total�combined�best�estimate�of� gross�unrisked�oil�in�place�across�these�68� identified�structural�culminations�amounts�to� 2,045�million�barrels.��

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Of�the�68�identified�prospective�targets�across�the�two�blocks,�6�structures�have�been�prioritized�as� being�ready�for�drilling.�Of�these�6�structures,�total�gross�unrisked�oil�in�place�has�been�estimated�at� 728�million�barrels.�

Exploration�Program�Currently�Underway

Rig�mobilisation�has�commenced�with�site�preparation�near�completion�and�spudding�confirmed�for� July�2011.��The�Mukhiani�Well�is�targeting�the�Vani�3�prospect�which�has�the�following�potential� STOIIP:�

	**Vani3Prospect– **	STOIIP*(MMbbls)
P90	P50	P10	Mean
41.7	92.7	178.2	115.2

*STOIIP�shown�here�assumes�that�the�Vani�3�Prospect�contains�3�stacked�reservoirs�based�on�current� stratigraphic�understanding.�Any�given�well�may�encounter�1,�2,�or�3�such�potential�reservoirs�depending�on� the�degree�of�relative�uplift�and/or�erosion�at�any�given�Prospect�location.�

The�recently�completed�geochemical�helium�survey�undertaken�by�Range�confirmed�the�suitability�of� the�first�drill�location�with�oil�exploration�and�development�prospectivity�complementing�the�earlier� seismic�work�completed�on�the�target.�

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5. INDEPENDENT TECHNICAL REPORTS

FAO: The Directors

Red Emperor Resources NL 945, Wellington Street West Perth Western Australia 6005

Cairn Financial Advisers LLP 61, Cheapside London, UK EC2V 6AX 4 July 2011

Re: Independent Geologist’s Report on the Exploration of Blocks VIa and VIb, Onshore Georgia.

Dear Sirs,

RPS Energy Services Pty Ltd (‘RPS’) was asked by Red Emperor Resources NL (‘Red Emperor’ or the ‘Company’) to provide a Independent Geologist’s Report (“Report”), regarding the exploration and prospectivity of Blocks VIa and VIb, onshore Georgia.

This Report in relation to the exploration of Blocks VIa and VIb, onshore Georgia, has been prepared for due diligence purposes and for the inclusion in a prospectus (“Prospectus”) to be issued by Red Emperor dated on or about 1 July 2011 for the offer of 2,857,143 ordinary shares in the Company each at an issue price of A$0.35 per share to raise approximately A$1,000,000. The Prospectus is being prepared in accordance with Red Emperor’s re-compliance with the Listing Rules of the Australian Securities Exchange.

In accordance with your instructions to us, we confirm that we:

1. are professionally qualified and a member in good standing of a organisation of engineers and/or geoscientists including Society of Petroleum Engineers, Society of Petroleum Evaluation Engineers, American Association of Petroleum Geologists, Geological Society and the European Association of Geoscientists and Engineers.

2. have at least five years’ relevant experience in the estimation, assessment and evaluation of oil and gas assets;

3. are independent of the Company, its directors, senior management and advisers;

4. will be remunerated by way of a time-based fee and not by way of a fee that is linked to the Admission or value of the Company;

5. are not a sole practitioner;

6. have the relevant and appropriate qualifications, experience and technical knowledge to appraise professionally and independently the assets, being all assets, licences, joint ventures or other arrangements owned by the Company and its subsidiary undertakings (the “Group”) or proposed to be exploited or utilised by it (“Assets”) and liabilities, being all liabilities, royalty payments, contractual agreements and minimum funding requirements relating to the Group’s work

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programme and Assets (“Liabilities”);

1. consider that the scope of this Report is appropriate, given the Group’s Assets and Liabilities and includes and discloses all information required to be included therein, and

2. Save as disclosed in this Report, there has been no material change in the data and information provided herein.

Neither RPS, nor any of its directors, staff or sub-consultants who contributed to this Report has any interest in the Company; or any of the advisers to the Company; or the Assets; or the outcome of the Offer.

In compiling this Report we have used the definitions and guidelines set out in the Petroleum Resources Management System (“PRMS”) by the Society of Petroleum Engineers, World Petroleum Council, American Association of Petroleum Geologists, and Society of Petroleum Evaluation Engineers in 2007 as the internationally recognised Standard required.

Background

Blocks VIa and VIb, onshore Georgia, are operated by Strait Oil & Gas Limited (“Strait Oil & Gas” or “Strait”). Red Emperor plans to acquire a 20% participating interest in these two licences in return for providing up to US$5.6 MM funding for the drilling of two wells which are planned for the second and third quarters of 2011. The licences were granted to Strait Oil & Gas Ltd as a three-phase Product Sharing Agreement (‘PSA’) on 29[th] March 2007 with a 25 year period.

• Phase I – Geological assessment work – completed November 2007.

• Phase II – Environmental survey / Seismic Planning, Acquisition and Mapping – completed December 2010.

• Phase III – Drilling of two wells and subsequent development in the event of successful discovery and appraisal – In progress.

In January 2008, RPS released a Report which described a scoping evaluation of Blocks VIa and VIb that we made on behalf of Strait Oil and Gas. The Report was necessarily somewhat ‘high level’ since the data available was old, frequently with no geo-reference or scale and poorly supported by input data such as seismic or wells. Nonetheless, several potential structures were identified that conformed with what was known from surface geology, from historical mapping and from field-work done by RPS’ representative at the time. The main conclusions from the January 2008 Report were that the Georgia licences appeared to have relatively favourable fiscal terms and that the next phase of work should include the acquisition and interpretation of some 2D seismic data.

In October 2008, Range Resources farmed in to a 50% interest in the licences in return for funding Phase II and Phase III to the drilling of commercial wells. Approximately 400 km of 2D seismic was acquired by Geophysical Institute of Israel (GII) at the end of 2009, into 2010, over the two blocks, 281 km over Block VIa and 116 km over Block VIb. Processing was carried out by Spectrum Geophysics in Woking, England. In addition, some 201 km of 1980s vintage of seismic were obtained and vectorised to add to the database. This older scanned seismic was generally of lesser quality than the modern data.

Using the combined 2009/10 and rastorised seismic data, another geological mapping visit by an RPS explorationist and satellite structural mapping conducted by NPA-Fugro, a further exploration Report was delivered to Strait Oil & Gas in December 2010. The

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exploration focus of this Report means that it was designed to identify and present every possible opportunity whether these are sufficiently delineated to be a “drill-ready” prospect or more loosely defined leads or concepts. It was not intended to provide RPS’ opinion of the likely hydrocarbon potential of the Blocks, for which, in our view, there remains insufficient data to determine with any confidence.

This Report critically reviews the leads and prospects presented in the December 2010 Report and sets them in the context of the forward work program and general exploration maturity of the licences in question.

A summary of the assets in question is shown as Table 1 below.

Licence	Operator	Interest (Red Emperor)	Status	Licence Expiry Date	Licence Area	Comments
Block VIa	Strait Oil & Gas	20%*	Exploration	29/03/32	3300 km2	Seismic commitments complete; single well commitment remains in addition to the well expected Q2 2011
Block VIb	Strait Oil & Gas	20%*	Exploration	29/03/32	3240 km2	As above

• Red Emperor plans to acquire a 20% participating interest in these two licences in return for providing up to US$5.6 MM funding for the drilling of two wells which are planned for the second quarter of 2011.

Table 1: Summary Table of Assets

Description of general prospectivity, risk and maturity of play

The Rioni Basin in Georgia, where the Strait Oil & Gas licences are located, lies in the centre of the Black Sea, Caucasus and Caspian Region (see Figure 1). This is a complex area of deep sedimentary basins and young mountain chains, formed by tectonic activity along the southern margin of the Scythian Platform, from the Late Precambrian to the present day.

Historically, the exploration for oil and gas in Georgia has been limited in scale, and only some 23 fields of small to modest size have been found to date, mostly in the Tertiary and Cretaceous sedimentary sections. However, the main objectives in the Strait Oil licence areas are in older Jurassic strata and there is little information available as regards field analogues. This is compounded by the fact that despite the large number of wells drilled for various purposes in the area (a mixture of mainly geological wellbores for coal exploration and water-wells with only a few actually targeted at exploring for hydrocarbons), there is only a limited amount of data available that provides any insight as to likely reservoir properties that can be utilised in resource estimates.

A geological database has been constructed (NPA-Fugro) to incorporate previously published and proprietary surface geology maps, location of seeps, observed structural surface features such as faults, anticlines and synclines and inferred structural features from satellite imagery. It is noted that the official (State certified) surface geological map was found to have some inaccuracies during field work carried out by RPS and NPAFugro in August 2010.

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Figure 1: Location map

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Figure 2: Areas of interest and location of seismic lines

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The geological mapping has been augmented by seismic interpretation of some 200 km of scanned and rastorised 1980’s vintage 2D paper data, together with the 400 km of 2D data recently acquired on behalf of Strait by the Geophysical Institute of Israel (‘GII’) at the end of 2009, into 2010. On the basis of this interpretation, four areas of immediate interest have been identified: Vani, Kursebi, Sach and Chiatura (see Figure 2). Figure 2 also shows the locations of the old and new seismic lines and it is clear that the density of coverage is still somewhat sparse, mainly utilising existing roads and tracks as is common for early-stage exploratory seismic. Consequently, although some potential structural closures have been identified, there remains considerable uncertainty as to the integrity and size of such potential closures. RPS would expect further seismic to be acquired, on a more targeted area, in the event of any encouraging results from the imminent drilling program.

In our opinion, the database and work carried out to-date is appropriate for a frontier exploration play. There is evidence of a working hydrocarbon system although the location of the ‘kitchen’ and timing of expulsion of hydrocarbons is poorly defined. Moderate to poor reservoir facies, particularly in the Jurassic and possibly early Cretaceous, have been studied at outcrop and are prognosed to be at suitable depths of burial under the Strait licences to form potential reservoirs. Structural elements are loosely defined but some encouragement has been drawn from the recent seismic interpretation. The juxtaposition of reservoir quality rocks and overlying seal is, as yet, unproven.

The combination of the individual ‘risk’ components above means that for any given prognosed target reservoir the geological probability of success (‘GPoS’) is very low (of the order of 1 in 20) at this time. However, it is possible that any given well may penetrate multiple stacked reservoirs each one with its own chance of success. This stacking of possible target reservoirs has a consolidation effect on the overall GPoS and a risk of approximately 8% (or 1 in 12) has been assigned. This coincides with Otis and Schneidermann’s ‘Rule of Thumb’ for Geological Risk Assessment[1] which describes a GPoS of 1 in 12 as “high risk” and an appropriate level of risk for a new play in an emerging or frontier area.

Discussion of drill-ready prospects

The two areas that have been high-graded for initial drilling are the Vani area and the Kursebi area.

The Vani area:

Figure 3 shows a Near Base Cretaceous depth structure map over the Vani area based on the 2010 seismic interpretation exercise, on which are marked a number of structural leads and prospects. Only three of the culminations (V1, V2 & V3) are deemed to have sufficient seismic coverage to make the presence of a structural closure more likely than not and these are therefore described as ‘drill ready’ and went into the selection process for the upcoming 2-well drilling program.

Over most of the area, uplift has been such that it is highly unlikely that any traps other than lowest most Cretaceous or older will be preserved with sufficient seal capacity to contain hydrocarbons. Only the extreme south of the Vani is an exception which is currently mapped as having the Base Tertiary sufficiently buried to set up potential traps.

1 Otis, R.M. & Schneidermann, N. 1997. “A Process for Evaluating Exploration Prospects”, AAPG Bulletin 81 (7) pp.1087-1109.

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Figure 3: Schematic showing the Near Base Cretaceous depth structure and the Vani area Leads and Prospects

The V-1 and V-2 prospects therefore have stacked potential targets in the Lower Tertiary / Upper Cretaceous, Lower Cretaceous and Jurassic intervals (Figure 4) whilst V-3 is considered too shallow to be likely to preserve any Lower Tertiary / Upper Cretaceous traps.

There is insufficient data to assign anything other than a generic pool-size to each of the potential reservoir levels. The key input parameters to the volumetrics are shown below with the main ‘prospect specific’ variation being the range of potential areal closure based on the recent mapping. The range of uncertainty assigned to the areal closure has been deliberately set wide to take into account possible structural closure but also the potential for only partial ‘fill-to-spill’. The other reservoir parameters have been set generically based on the limited data available at this time. In the event that the planned new wells encounter reservoirs at any or all stratigraphic levels, a more detailed volumetric analysis will be justified and necessary.

The range of area of closure/fill described above for the Vani prospects and the generic reservoir parameters used to calculate indicative volumetrics are shown below. These areas and reservoir parameters have been probabilistically combined in REP™ which uses a MonteCarlo approach with 20,000 realisations.

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Figure 4: Stratigraphy of Block VI area

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Prospect	Minimum*	Most Likely	Maximum
V-1	1 km2	5 km2	15 km2
V-2	1 km2	4 km2	10 km2
V-3	2 km2	7 km2	18 km2

• The minimum area takes into account that any given structure may not be ‘fill-to-spill’

Table 2: Range of areal closure / fill

Reservoir Parameter	Minimum	Most Likely	Maximum
Net Pay Thickness	1 m	10 m	30 m
Porosity	8%	15%	22%
Sw	30%	40%	50%
FVF (Bo)	1.18	1.24	1.29
Recovery Factor	25%	30%	35%

Table 3: Generic reservoir parameters for calculation of indicative volumetrics for Vani and Kursebi

Prospect		STOIIP* (MMbbls)	STOIIP* (MMbbls)	STOIIP* (MMbbls)
	P90	P50	P10	Mean
V-1	9.5	27.2	63.7	32.8
V-2	7.7	20.9	46.3	24.6
V-3	13.9	30.9	59.4	38.4

• The STOIIP shown represents the potential range of outcomes for a single stratigraphic pool.

Table 4: Vani Prospects Indicative Volumetric Analysis for a generic reservoir

Prospect	STOIIP (MMbbls)**	STOIIP (MMbbls)**	STOIIP (MMbbls)**		Prospective Resources (MMbbls)**	Prospective Resources (MMbbls)**	Prospective Resources (MMbbls)**	Prospective Resources (MMbbls)**
	P90	P50	P10	Mean	P90	P50	P10	Mean
V-1	28.5	81.6	191.1	98.4	8.5	24.5	57.6	29.6
V-2	23.1	62.7	138.9	73.8	6.9	18.8	42.0	22.1
V-3	41.7	92.7	178.2	115.2	12.5	27.7	54.0	34.5
			Total	287.4				86.1

** STOIIP/Prospective Resources shown here assumes that each Vani Prospect contains 3 stacked reservoirs based on current stratigraphic understanding. Any given well may encounter 1, 2 or 3 such potential reservoirs depending on the degree of relative uplift and/or erosion at any given Prospect location.

Table 5: Potential STOIIP per Prospect (Vani Area)

The Kursebi Area:

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Figure 5 shows a Deep Intra Jurassic depth structure map over the Kursebi area based on the 2010 seismic interpretation exercise, on which are marked a number of structural leads and prospects. Similar to Vani, only three of the culminations (K-1, K-2 & K-6) are deemed to have sufficient seismic coverage to make the presence of a structural closure more likely than not and these are therefore described as ‘drill ready’ and went into the selection process for the upcoming 2-well drilling program.

The uplift over Kursebi is more pronounced than Vani and the reservoir targets are limited to Jurassic strata. Similar to Vani the chance of multiple reservoir targets exists but this is still highly uncertain at this time.

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Figure 5: Schematic showing the Deep Intra Jurassic depth structure and the Kursebi area Leads and Prospects

Again, there is insufficient data to assign anything other than a generic pool-size to each of the potential reservoir levels. The key input parameters to the volumetrics are shown below with the main ‘prospect specific’ variation being the range of potential areal closure based on the recent mapping. The range of uncertainty assigned to the areal closure has been deliberately set wide to take into account possible structural closure but also the potential for only partial fill-to-spill. The other reservoir parameters have been set generically based on the limited data available at this time. In the event that the planned new wells encounter reservoirs at any or all stratigraphic levels, a more detailed volumetric analysis will be justified and necessary.

The range of area of closure / fill for the Kursebi prospects are shown in Table 6 below

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and the generic reservoir parameters (same as used for Vani) used to calculate indicative volumetrics are shown in Table 3.

Prospect	Minimum*	Most Likely	Maximum
K-1	2 km2	9 km2	24 km2
K-2	3 km2	13 km2	32 km2
K-6	2 km2	8 km2	20 km2

• The minimum area takes into account that any given structure may not be ‘fill-to-spill’

Table 6: Range of areal closure / fill

Prospect		STOIIP*	(MMbbls)	(MMbbls)
	P90	P50	P10	Mean
K-1	17.2	47.6	108.0	56.5
K-2	24.7	67.3	149.0	76.2
K-6	16.1	42.4	92.9	49.6

• The STOIIP shown represents the potential range of outcomes for a single stratigraphic pool. Any given well may encounter 1 or 2 such potential reservoirs depending on the degree of relative uplift and/or erosion at any given Prospect location.

Table 7: Kursebi Prospects Indicative Volumetric Analysis for a generic reservoir

Prospect	STOIIP (MMbbls)**	STOIIP (MMbbls)**	STOIIP (MMbbls)**		Prospective Resources (MMbbls)**	Prospective Resources (MMbbls)**	Prospective Resources (MMbbls)**	Prospective Resources (MMbbls)**
	P90	P50	P10	Mean	P90	P50	P10	Mean
K-1	34.4	95.2	216.0	113.0	10.3	28.6	65.0	33.8
K-2	49.4	134.6	298.0	152.4	14.8	40.4	90.2	47.4
K-6	32.2	84.8	185.8	99.2	9.6	25.4	56.0	29.8
			Total	364.6				111.0

** STOIIP/Prospective Resources shown here assumes that each Kursebi Prospect contains 2 stacked reservoirs based on current stratigraphic understanding and mapping. Any given well may encounter 1 or 2 such potential reservoirs depending on the degree of relative uplift and/or erosion at any given Prospect location.

Table 8: Potential STOIIP per Prospect (Kursebi Area)

Conclusions

Red Emperor has a right to earn a 20% participating interest in two frontier exploration licences (Blocks VIa and VIb) onshore Georgia. Two exploration wells are to be drilled in the second and third quarters of 2011, which will provide the first modern hydrocarbon exploration data in the area. The wells will provide much needed calibration of the stratigraphic column in the Vani and Kursebi areas. In the event that the wells find oil, this may occur in multiple stacked reservoirs but these are only generically identified at this point in time. Table 9 presents a summary of the potential STOIIP range in the event that three reservoirs are discovered in the Vani Prospects and two reservoirs are discovered in the Kursebi Prospects. These volumes are based on the early-stage mapping that has been carried out thus far. Insufficient data exists to accurately predict

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recovery factors but a reasonable expectation, based on regional knowledge and the sorts of reservoir that is expected, would be 30% +/- 5%.

The prospects are typical of what would be expected for a new play in an emerging or frontier area and carry a combined geological probability of success (or chance of discovery) of approximately 8% or 1 in 12, which in turn approximates to the world-wide wild-cat average success rate.

RPS has only calculated potential volumes in the event that oil is discovered since it is oil that would be most economically attractive in the event of success.

STOIIP Volumes in MMbbls		Gross	(100%)		Net Attributable (20%)	Net Attributable (20%)	Net Attributable (20%)	Net Attributable (20%)	Risk Factor (GPoS)	Operator
	Low Est.	Best Est.	High Est.	Mean	Low Est.	Best Est.	High Est.	Mean
V-1	28.5	81.6	191.1	98.4	5.7	16.3	38.2	19.7	8%	Strait Oil & Gas
V-2	23.1	62.7	138.9	73.8	4,6	12.5	27.8	14.8
V-3	41.7	92.7	178.2	115.2	8.3	18.5	35.6	23.0
K-1	34.4	95.2	216.0	113.0	6.9	19.0	43.2	22.6
K-2	49.4	134.6	298.0	152.4	9.9	26.9	59.6	30.5
K-6	32.2	84.8	185.8	99.2	6.4	17.0	37.2	19.8
Total STOIIP	209.3	551.6	1208.0	652.0	37.2	97.7	241.6	130.4

Table 9: Summary Table of STOIIP (Assumes 3 reservoirs are encountered in the Vani Prospects and 2 reservoirs are encountered in the Kursebi Prospects)

Prosp. Resource Volumes in MMbbls		Gross	(100%)		Net Attributable (20%)	Net Attributable (20%)	Net Attributable (20%)	Net Attributable (20%)	Risk Factor (GPoS)	Operator
	Low Est.	Best Est.	High Est.	Mean	Low Est.	Best Est.	High Est.	Mean
V-1	8.5	24.5	57.6	29.6	2.1	5.7	13.0	6.8	8%	Strait Oil & Gas
V-2	6.9	18.8	42.0	22.1	3.0	8.1	18.0	9.5
V-3	12.5	27.7	54.0	34.5	1.9	5.1	11.2	6.0
K-1	10.3	28.6	65.0	33.8	1.7	4.9	11.5	5.9
K-2	14.8	40.4	90.2	47.4	1.4	3.8	8.4	4.4
K-6	9.6	25.4	56.0	29.8	2.5	5.5	10.8	6.9
Total STOIIP	62.5	165.4	364.8	197.1	12.5	33.1	73.0	39.4

Table 10: Summary Table of Prospective Resources (Assumes 3 reservoirs are encountered in the Vani Prospects and 2 reservoirs are encountered in the Kursebi Prospects)

The tables above consider only the identified “drill-ready” prospects in the Vani and Kursebi areas. As discussed in the December 2010 exploration Report, there are many more Leads which need further seismic coverage to firm up into Prospects. Whilst the total mean STOIIP assigned to all the identified leads and prospects in the Dec 2010 Exploration Report is highly indicative and subject to verification by further data acquisition, the in-place volumes associated with the currently identified leads and prospects is 2.045 Bbbls (410 MMbbls attributable to Red Emperor) assuming stacked reservoirs per culmination. In the event of a discovery or positive indications of reservoir

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APPENDIX A: GLOSSARY OF TECHNICAL TERMS

AAPG	American Association of Petroleum Geologists
API	American Petroleum Institute
B	Billion
bbls	Barrels
Bo(g)i	initial formation volume factor for oil(orgas)
cf	Cubic feet
Entitlement Volumes	the volumes of oil and/or gas which a Contractor receives under the terms of a PSA or its WorkingInterest
ft	Feet
FVF	Formation Volume Factor
GIIP	Gas InitiallyIn Place
GPoS	Geological Probabilityof Success
GOC	Gas-oil contact
GOR	Gas: Oil Ratio
GRV	gross rock volume
IRR	internal rate of return
k(e)	(effective) permeability
kg	Kilogram
km	Kilometre
m	metres
M	thousand
MD	measured depth
mD	(permeabilityin)millidarcies
MM	million
Mstb	thousand stock tank barrels
MMstb	million stock tank barrels
MMscf/d	millions of standard cubit feetper day
MMstb	million stock tank barrels
N:G	Net togross ratio
NPV	Netpresent value
OWC	oil-water contact
ppm	Partsper million
PVT	Pressure, Volume & Temperature
RF	RecoveryFactor
Rw	Water resistivity

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sqkm	square kilometres
stb	Stock tank barrels
scf	standard cubic feet
SPE	Societyof Petroleum Engineers
SPEE	Societyof Petroleum Evaluation Engineers
STOIIP	Stock Tank Oil InitiallyIn Place
Sw	Water Saturation
TD	Total Depth
TVD	True vertical depth
TVDSS	true vertical depth(sub-sea)
WPC	World Petroleum Council

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6. INVESTIGATING ACCOUNTANT'S REPORT

RED EMPEROR RESOURCES NL Investigating Accountant’s Report

4 July 2011

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4 July 2011

The Directors Red Emperor Resources NL 945 Wellington Street WEST PERTH WA 6005

Dear Sirs

INVESTIGATING ACCOUNTANT’S REPORT

1. Introduction

We have prepared this Investigating Accountant’s Report (“ Report ”) on historical financial information of Red Emperor Resources NL (“ Red Emperor ” or “ the Company ”) for inclusion in the Prospectus. Broadly, the Prospectus will offer up to 2,857,143 shares at an issue price of $0.35 each to raise $1,000,000 before costs (“ the Offer ”).

2. Basis of Preparation

This Report has been prepared to provide investors with information on the Statement of Comprehensive Income, Statement of Changes in Equity and the Statement of Financial Position and the pro-forma Statement of Financial Position as noted in Appendices 1, 2 and 3.

This Report does not address the rights attaching to the shares to be issued in accordance with the Prospectus, nor the risk associated with the investment, and has been prepared based on the complete Offer being achieved. Neither BDO Corporate Finance (WA) Pty Ltd nor its related entities (“ BDO ”) has not been requested to consider the prospects for the Company, the shares on offer and related pricing issues, nor the merits and risks associated with becoming a shareholder and accordingly has not done so, and does not purport to do so. BDO accordingly takes no responsibility for these matters or for any matter or omission in the Prospectus, other than responsibility for this Report. Risk factors are set out in the Prospectus.

Expressions defined in the Prospectus have the same meaning in this Report.

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3. Background

Red Emperor Resources NL was incorporated in April 2007 and listed on the Australian Securities Exchange ( “ASX” ) on 16 August 2007. It was also admitted to the official list of the Alternative Investment Market of the London Stock Exchange ( “AIM” ) on 23 June 2011. Red Emperor is a natural resource exploration company with oil and gas interests.

The Company entered into an agreement, subject to certain conditions, in June 2010 to acquire up to a 20% interest in two licences within the Dharoor and Nugaal valleys in Puntland, Somalia ( “Puntland Projects” ). This agreement received ministerial consent to the farm-in in January 2011 and the Company will contribute 30% of the costs of drilling exploration wells to earn a 20% interest in the Puntland Projects.

In May 2011 the Company entered into formal agreements in respect to the earn-in of a working interest in two onshore oil and gas blocks in the Republic of Georgia ( “Georgian Project” ). The Company will contribute 40% of the costs of drilling two exploration wells, capped at US$5.6 million. In return for this the Company will receive a 20% interest in the issued share capital of Strait Oil and Gas (UK) Limited ( “Strait” ). In the event the Company does not provide the funding on or before 31 December 2012, the Company shall transfer its 20% interest in Strait back to Strait for the total amount of US$1.

The Company also has a 25% interest in the Jillewarra Project free carried until bankable feasibility study, which is a copper and gold project in Western Australia.

4. Scope

You have requested BDO to prepare an Investigating Accountant's Report covering the following financial information:

• Red Emperor’s reviewed statement of Comprehensive Income for the 10 month period ended 30 April 2011;

• The Statement of Financial Position, Statement of Changes in Equity and the pro-forma Statement of Financial Position as at 30 April 2011 reflecting the actual position as at that date, major transactions between that date and the date of our report and the proposed capital raising under the Prospectus; and

• the accounting policies applied by Red Emperor in preparing its financial statements.

The historical financial information set out in the appendices to this Report has been extracted from the financial statements of the Company for the period from 1 July 2010 to 30 April 2011.

The Directors are responsible for the preparation of the historical financial information including determination of the adjustments.

We have conducted our review of the historical financial information in accordance with the Australian Auditing and Assurance Standard ASRE 2405 “Review of Historical Financial Information Other than a Financial Report”. We made such inquiries and performed such procedures as we, in our professional judgment, considered reasonable in the circumstances including:

• a review of work papers, accounting records and other documents pertaining to balances in existence at 30 April 2011;

• a review of the assumptions used to compile the pro-forma Statement of Financial Position;

• a review of the adjustments made to the pro-forma historical financial information;

• a comparison of consistency in application of the recognition and measurement principles in Accounting Standards and other mandatory professional reporting requirements in Australia,

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and the accounting policies adopted by the Company disclosed in the appendices to this Report; and

• enquiry of Directors and others.

These procedures do not provide all the evidence that would be required in an audit, thus the level of assurance provided is less than given in an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.

Our review was limited primarily to an examination of the historical financial information, the pro-forma financial information, analytical review procedures and discussions with both management and directors. A review of this nature provides less assurance than an audit and, accordingly, this Report does not express an audit opinion on the historical information or proforma financial information included in this Report or elsewhere in the Prospectus.

In relation to the information presented in this Report:-

• support by another person, corporation or an unrelated entity has not been assumed;

• the amounts shown in respect of assets do not purport to be the amounts that would have been realised if the assets were sold at the date of this Report; and

• the going concern basis of accounting has been adopted.

5. Conclusion

Statement on Historical Financial Information

Based on our review, which was not an audit, nothing has come to our attention which would cause us to believe the historical financial information as set out in the Appendices to this report does not present fairly the financial performance for the period ended 30 April 2011 or the financial position as at 30 April 2011 in accordance with the measurement and recognition requirements (but not all of the disclosure requirements) of applicable Accounting Standards and other mandatory professional reporting requirements in Australia.

Statement of Pro-forma Financial Information

Based on our review, which was not an audit, nothing has come to our attention which would cause us to believe the pro-forma financial information does not present fairly the financial position of the Company as at 30 April 2011, in accordance with the measurement and recognition requirements (but not all of the disclosure requirements) of applicable Accounting Standards and other mandatory professional reporting requirements in Australia as if the proforma transactions had occurred on that date.

6. Subsequent Events

Apart from the matters dealt with in this Report, and having regard to the scope of our Report, to the best of our knowledge and belief, no other material transactions or events outside of the ordinary business of the Company have come to our attention that would require comment on, or adjustment to, the information referred to in our Report or that would cause such information to be misleading or deceptive. We have been informed of the following subsequent events since 30 April 2011:

• The Company made a payment of approximately $2,556,969 on 28 June 2011 in relation to the Georgian Project;

• The Company made two payments totalling approximately $215,477 in relation to expenses associated with Red Emperor’s listing on AIM; and

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• On 15 July 2011 the Company will hold a general meeting to approve a Share Placement of 2,000,000 shares at an issue price of $0.20. This Share Placement has not been reflected in our report.

7. Assumptions Adopted in Compiling the Pro-forma Statement of Financial Position

The pro-forma Statement of Financial Position post issue is shown in Appendix 2. This has been prepared based on the reviewed financial statements as at 30 April 2011 and the transactions and events relating to the issue of shares under this Prospectus:

• Issue of 2,857,143 ordinary shares at an issue price of $0.35 each pursuant to the Prospectus to raise $1,000,000; and

• Capital raising costs of the Offer totalling approximately $280,000, which are to be offset against the contributed equity.

8. Disclosures

BDO Corporate Finance (WA) Pty Ltd is the corporate advisory arm of BDO in Perth.

Neither BDO Corporate Finance (WA) Pty Ltd nor BDO, nor any director or executive or employee thereof, has any financial interest in the outcome of the proposed transaction except for the normal professional fee due for the preparation of this Report.

Consent to the inclusion of the Investigating Accountant’s Report in the Prospectus in the form and context in which it appears, has been given. At the date of this Report, this consent has not been withdrawn.

Yours faithfully

BDO Corporate Finance (WA) Pty Ltd

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Sherif Andrawes

Director

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APPENDIX 1

RED EMPEROR RESOURCES NL

STATEMENT OF COMPREHENSIVE INCOME

	Reviewed for the period from 1-Jul-10 to 30-Apr-11 $
Interest and other revenue Employee benefits expense Exploration expenditure Travel and entertainment Shareholder relation costs Finance expense Occupancy costs Other expenses Total expenses Net profit/(loss)	148,068
	148,068 (144,941) (691,501) (143,250) (157,738) (8,956) (4,000) (855,812)
	(2,006,198)
	(1,858,130)

The Statement of Comprehensive Income is to be read in conjunction with the notes to and forming part of the historical financial information set out in Appendix 4.

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APPENDIX 2

RED EMPEROR RESOURCES NL

STATEMENT OF FINANCIAL POSITION

Reviewed as at Subsequent Pro-forma Pro-forma 30-Apr-11 Adjustments Adjustments After Issue Notes $ $ $ $	Reviewed as at Subsequent Pro-forma Pro-forma 30-Apr-11 Adjustments Adjustments After Issue Notes $ $ $ $
CURRENT ASSETS Cash and cash equivalents 2 Trade and other debtors Other financial assets Loans receivable TOTAL CURRENT ASSETS NON-CURRENT ASSETS Exploration expenditure 3 TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other creditors TOTAL CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS / (LIABILITIES) EQUITY Share capital 4 Reserves Accumulated losses 5 TOTAL EQUITY	10,732,488 (2,772,446) 720,000 8,680,042 229,997 - - 229,997 2,434,230 - - 2,434,230 60,000 - - 60,000
	13,456,715 (2,772,446) 720,000 11,404,269 777,906 2,556,969 - 3,334,875
	777,906 2,556,969 - 3,334,875
	14,234,621 (215,477) 720,000 14,739,144
	36,070 - - 36,070
	36,070 - - 36,070
	36,070 - - 36,070
	14,198,551 (215,477) 720,000 14,703,074
	19,911,015 - 720,000 20,631,015 25,580 - - 25,580 (5,738,044) (215,477) - (5,953,521)
	14,198,551 (215,477) 720,000 14,703,074

The pro-forma Statement of Financial Position after Issue is as per the Statement of Financial Position before Issue adjusted for the transactions relating to the issue of shares pursuant to this Prospectus. The Statement of Financial Position is to be read in conjunction with the notes to and forming part of the historical financial information set out in Appendix 4.

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APPENDIX 3

RED EMPEROR RESOURCES NL

STATEMENT OF CHANGES IN EQUITY

Notes	Reviewed as at Subsequent Pro-forma Pro-forma 30-Apr-11 Adjustments Events After issue $ $ $ $
Balance at the start of the period Comprehensive income for the period Profit/(Loss) for the period 5 Total comprehensive income for the period Transactions with equity holders in their capacity as equity holders Contributed equity, net of transaction costs 4 Reserves Total transactions with equity holders Balance	(3,879,914) - - (3,879,914) (1,858,130) (215,477) - (2,073,607)
	(1,858,130) (215,477) - (2,073,607) 19,911,015 - 720,000 20,631,015 25,580 - - 25,580
	19,936,595 - 720,000 20,656,595
	14,198,551 (215,477) 720,000 14,703,074

The Statement of Changes in Equity is to be read in conjunction with the notes to and forming part of the historical financial information set out in Appendix 4.

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APPENDIX 4

RED EMPEROR RESOURCES NL

NOTES TO AND FORMING PART OF THE HISTORICAL FINANCIAL INFORMATION

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies adopted in the preparation of the historical financial information included in this Report have been set out below.

(a) Basis of preparation of historical financial information

The historical financial information has been prepared in accordance with the recognition and measurement, but not all the disclosure requirements of the Australian equivalents to International Financial Reporting Standards (“ AIFRS ”), other authoritative pronouncements of the Australian Accounting Standards Board, Australian Accounting Interpretations and the Corporations Act 2001.

The financial information has also been prepared on a historical cost basis, except for derivatives and available-for-sale financial assets that have been measured at fair value. The carrying values of recognised assets and liabilities that are hedged are adjusted to record changes in the fair value attributable to the risks that are being hedged. Non-current assets and disposal group’s held-for-sale are measured at the lower of carrying amounts and fair value less costs to sell.

(b) Going Concern

The historical financial information has been prepared on a going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business.

The ability of the Company to continue as a going concern is dependent on the Company being able to raise additional funds as required to meet ongoing commitments and for working capital. The Directors may need to raise additional capital or realise assets as required to further explore and evaluate the current opportunities. The Directors believe that the Company will continue as a going concern. As a result the financial information has been prepared on a going concern basis. However should the Company be unsuccessful in undertaking additional raisings or realising assets, the entity may not be able to continue as a going concern. No adjustments have been made relating to the recoverability and classification of liabilities that might be necessary should the Company not continue as a going concern.

(c) Reporting Basis and Conventions

The report is also prepared on an accrual basis and is based on historic costs and does not take into account changing money values or, except where specifically stated, current valuations of non-current assets.

The following is a summary of the material accounting policies adopted by the company in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.

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(d) Income Tax

The income tax expense or benefit (revenue) for the period is the tax payable on the current period's taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax base of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.

The charge for current income tax expenses is based on the profit for the year adjusted for any non-assessable or disallowed items. It is calculated using tax rates that have been enacted or are substantively enacted by the balance sheet date.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognized from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the economic entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

(e) Cash and Cash Equivalents

Cash and cash equivalents includes cash at bank and in hand, deposits held at call with financial institutions, other short-term highly liquid deposits with an original maturity of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the statement of financial position.

(f) Trade and other receivables

Trade receivables are recognised as the amount receivable and are due for settlement no more than 90 days from the date of recognition. Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off against the receivable directly unless a provision for impairment has previously been recognised.

A provision for impairment of receivables is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. Loans granted are recognised at the amount of consideration given or the cost of services provided to be reimbursed.

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(g) Revenue Recognition

Revenues are recognised at fair value of the consideration received net of the amount of GST.

Interest

Revenue is recognised as interest accrues using the effective interest method. The effective interest method uses the effective interest rate which is the rate that exactly discounts the estimated future cash receipts over the expected life of the financial asset.

(h) Provisions

Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events; it is more likely than not that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses.

(i) Trade and Other Payables

Liabilities are recognised for amounts to be paid in the future for goods or services received, whether or not billed to the Company. Trade accounts payable are normally settled within 30 days of recognition.

(j) Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between proceeds (net of transaction costs) and the redemption amount is recognised in the statement of comprehensive income over the period of the borrowings using the effective interest method.

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the statement of financial position date.

(k) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of GST except where GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item.

Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

Cash flows are included in the statement of cash flow on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authorities are classified as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

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(l) Exploration and Evaluation Expenditure

Exploration and evaluation expenditure, including costs of acquiring the licences, are capitalised as exploration and evaluation assets on an area of interest basis. Costs incurred before the Company has obtained the legal rights to explore the area are recognised in the statement of comprehensive income.

Exploration and evaluation assets are only recognised if the rights of the area of interest are current and either:

• I. The expenditures are expected to be recouped through successful development and exploitation or from sale of the area of interest; or

• II. Activities in the area of interest have not at the reporting date, reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the areas of interest are continuing.

Exploration and evaluation assets are assessed for impairment if (i) sufficient date exists to determine technical feasibility and commercial viability, and (ii) facts and circumstances suggest that the carrying amount exceeds the recoverable amount. For the purpose of impairment testing, exploration and evaluation assets are allocated to cash-generating units to which the exploration activity relates. The cash generating unit shall not be larger than the area of interest.

Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to mining property and development assets within property, plant and equipment.

When an area of interest is abandoned or the directors decide that it is not commercial, and accumulated costs in respect of that area are written off in the financial period the decision is made.

(m) Impairment of assets

At each reporting date, the Company reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the income statement.

Impairment testing is performed annually for goodwill and intangible assets with indefinite lives. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Financial Assets

A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset.

Non-Financial Assets

The carrying amounts of the non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated. For goodwill and intangible assets that have indefinite

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lives or that are not yet available for use, recoverable amount is estimated at each reporting date.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from other assets and groups. Impairment losses are recognised in the statement of comprehensive income. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.

(n) Contributed Equity

Ordinary shares are classified as equity.

Costs directly attributable to the issue of new shares or options are shown as a deduction from the equity proceeds, net of any income tax benefit. Costs directly attributable to the issue of new shares or options associated with the acquisition of a business are included as part of the purchase consideration.

(o) Financial Instruments

Recognition

Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are stated at amortised cost using the effective interest rate method.

Financial liabilities

Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation.

(p) Employee Benefits

Wages and Salaries, Annual Leave and Sick Leave

Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be settled within 12 months of the statement of financial position date are recognised in respect of employees' services rendered up to statement of financial position date and measured at amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when leave is taken and measured at the actual rates paid or payable. Liabilities for wages and salaries are included as part of Other Payables and liabilities for annual and sick leave are included as part of Employee Benefit Provisions.

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Long Service Leave

Liabilities for long service leave are recognised as part of the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees to the statement of financial position date using the projected unit credit method. Consideration is given to expect future salaries and wages levels, experience of employee departures and periods of service. Expected future payments are discounted using national government bond rates at the statement of financial position date with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

Share-based payments transactions

The Company provides benefits to employees (including directors) of the Company in the form of share options. The fair value of options granted is recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the period during which the employee becomes unconditionally entitled to the options. The fair value of the options granted is measured using Black Scholes valuation model, taking into account the terms and conditions upon which the options were granted.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, on a straight line basis over the period from grant date to the date on which the relevant employees become fully entitled to the award (“vesting date”). The amount recognised as an expense is adjusted to reflect the actual number that vest.

The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share.

(q) Accounting estimates and judgements

In the process of applying the accounting policies, management has made certain judgements or estimations which have an effect on the amounts recognised in the financial information.

The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:

Valuation of share based payment transactions

The valuation of share-based payment transactions is measured by reference to the fair value of the equity instruments at the date at which they are granted.

Options

The fair value of options issued is determined using the Black-Scholes model, taking into account the terms and conditions upon which the options were granted.

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NOTE 2. CASH AND CASH EQUIVALENTS	Reviewed Pro-forma 30-Apr-11 After issue $ $	Reviewed Pro-forma 30-Apr-11 After issue $ $
Cash and cash equivalents Adjustments arising from the pro-forma cash balance are summarised as follows: Reviewed balance of Red Emperor at 30 April 2011 Subsequent event adjustments: Expenses incurred in relation to Georgian Project Expenses incurred in relation to AIM listing Pro-forma adjustments: Proceeds from shares issued under this Prospectus Capital raising costs Pro-forma Balance	10,732,488 8,680,042
		10,732,488 (2,556,969) (215,477)
		(2,772,446) 1,000,000 (280,000)
		720,000
		8,680,042

NOTE 3. EXPLORATION EXPENDITURE	Reviewed Pro-forma 30-Apr-11 After issue $ $	Reviewed Pro-forma 30-Apr-11 After issue $ $
Exploration expenditure Adjustments arising from the pro-forma exploration expenditure are summarised as follows: Reviewed balance of Red Emperor at 30 April 2011 Subsequent event adjustments: Expenses incurred in relation to Georgian Project Pro-forma Balance	777,906 3,334,875
		777,906 2,556,969
		2,556,969
		3,334,875

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NOTE 4. CONTRIBUTED EQUITY	Reviewed Pro-forma 30-Apr-11 After issue $ $
Contributed equity Adjustments arising from the pro-forma contributed equity are summarised as follows: Fully paid ordinary share capital at 30 April 2011 Pro-forma adjustments: Proceeds from shares issued under this Prospectus Capital raising costs Pro-forma Balance	19,911,015 20,631,015
	Number of shares $ 147,616,114 19,911,015 2,857,143 1,000,000 - (280,000)
	2,857,143 720,000
	150,473,257 20,631,015

The Company currently has 7,500,000 partly paid shares, not included above, on issue as at the date of this report. Each partly paid share is issued at a price of $0.25, of which $0.0001 is paid, with the balance of the issue price subject to a call on 31 December 2012.

NOTE 5. ACCUMULATED LOSSES	Reviewed Pro-forma 30-Apr-11 After issue $ $	Reviewed Pro-forma 30-Apr-11 After issue $ $
Accumulated Losses Adjustments arising from the pro-forma accumulated losses are summarised as follows: Reviewed balance of Red Emperor at 30 April 2011 Subsequent event adjustments: Expenses incurred in relation to AIM listing Pro-forma Balance	(5,738,044) (5,953,521)
		(5,738,044) (215,477)
		(215,477)
		(5,953,521)

NOTE 6: RELATED PARTY DISCLOSURES

Transactions with Related Parties and Directors Interests are disclosed in the Prospectus.

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NOTE 7: COMMITMENTS AND CONTINGENCIES

Puntland Project

The Company will contribute 30% of the costs of drilling one exploration well on the Dharoor Valley block to earn a 20% interest. The funding of 30% of all drilling costs shall apply for the initial US$25 million total gross drilling costs only and thereafter the Company shall pay 20% of all related drilling costs in proportion to its interest. Red Emperor has an option but not an obligation to participate in a second well on either the Dharoor Valley block or the Nugaal Valley block on the same basis. The Company’s contribution is estimated to be approximately US$7 million for the initial exploration well.

Georgian Project

Pursuant to the Georgian Acquisition Agreement, the Company will contribute 40% of the costs of drilling two exploration wells, capped at US$5.6 million. In return, The Company will earn a 20% interest in the issued share capital of Strait Oil and Gas (UK) Limited ( “Strait” ). In the event the Company does not provide the funding on or before 31 December 2012, the Company shall transfer its 20% interest in Strait back to Strait for the total amount of UD$1.

Issue of Options to Old Park Lane Capital plc

The Company has agreed, subject to obtaining Shareholder approval, to allot and issue up to 3,690,403 Options to Old Park Lane Capital plc, subject to admission of the Company to the official list of AIM. Each Option will be exercisable at the same price as those Shares issued pursuant to the first UK share placement and exercisable within 30 months of issue.

Old Park Lane will also be paid a monthly fee of £2,500.

Issue of Options to Cairn Financial Advisers LLP

The Company has agreed, subject to obtaining Shareholder approval, to allot and issue up to 1,476,162 Options to Cairn Financial Advisers LLP, subject to admission of the Company to the official list of AIM. Each Option will be exercisable at the price being the mid-market trading price on the day of admission to AIM exercisable within two years of issue.

At the date of the report no other material commitments or contingent liabilities exist that we are aware of, other than those disclosed in the prospectus.

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7. SOLICITOR'S REPORTS

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8. RISK�FACTORS�

8.1 Introduction�

THE�RISKS�CONTAINED�BOTH�IN�THE�INVESTMENT�OVERVIEW�SECTION�AND�THIS�SECTION�8� SHOULD�BE�CONSIDERED�CAREFULLY�BY�POTENTIAL�INVESTORS.�

The�Shares�offered�under�this�Prospectus�should�be�considered�speculative�because�of�the�nature�of� the�Company’s�business.��

Whilst�the�Directors�recommend�the�Offer,�there�are�numerous�risk�factors�involved�in�the� Company’s�operations.�The�following�is�a�summary�of�the�more�material�matters�to�be�considered.� However,�this�summary�is�not�exhaustive�and�potential�investors�should�examine�the�contents�of�this� Prospectus�in�its�entirety�and�consult�their�professional�advisors�before�deciding�whether�to�apply�for� the�Shares.��

There�are�numerous�widespread�risks�associated�with�investing�in�any�form�of�business�and�with� investing�in�the�share�market�generally.�There�is�also�a�range�of�specific�risks�associated�with�the� Company’s�activities�and�its�involvement�in�the�oil�and�gas�industry.��These�risk�factors�are�largely� beyond�the�control�of�the�Company�and�its�Directors�because�of�the�nature�of�the�proposed�activities� of�the�Company.��

Based�on�the�information�available,�a�non�exhaustive�list�of�risk�factors�which�may�affect�the� Company’s�financial�position,�prospects�and�the�price�of�its�listed�securities�include�the�following.�

8.2 KEY�RISKS��

The�Key�Risks�identified�in�the�Investment�Overview�section�of�the�Prospectus�are�as�follows:��

RiskArea

Risks

ChangeinNatureandScaleofActivities

AnyfurtherinvestmentbytheCompanyinthe PuntlandorGeorgianProjects(includingthose investmentstobemadepursuanttothePuntland AcquisitionAgreementandtheGeorgianAcquisition Agreement)willconstituteachangeinthenatureand scaleoftheCompany’sactivitiesand,accordingly,the Companyisrequiredtore�complywithChapters1and 2oftheASXListingRulesasifitwereseeking admissiontotheOfficialListofASXforthefirsttime. ThereisariskthattheCompanymaynotbeableto meettherequirementsoftheASXforreinstatementto theOfficialList.Shouldthisoccur,theSharesoffered underthisProspectus(andtheCompany’sexisting issuedShares)willnotbeabletobetradedontheASX untilsuchtimeasthoserequirementscanbemet,ifat all.

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RiskArea	Risks
ExplorationandProjectDevelopment risks	Thebusinessofnaturalgasandoilexploration,and projectdevelopmentinvolvesrisksbyitsverynature. Toprosper,itdependsonthesuccessfulexploration appraisalanddevelopmentofeconomicoilandgas reserves.Operations,suchasdrilling,designand constructionofproductionfacilitiesandpipelines, competentoperationalandmanagerialperformance andefficientdistributionandmarketingservicesare requiredtobesuccessful.Inparticular,explorationisa speculative endeavour and operations can be hamperedbyforcemajeurecircumstances,engineering difficulties,costoverrunsandotherunforeseenevents. Theproposeddevelopmentexpenditureofthe Companyisbasedoncertainassumptionswithrespect tothemethodandtimingofdevelopmentand feasibilitywork.Bytheirnature,theseestimatesand assumptionsaresubjecttosignificantuncertainties and,accordingly,theactualcostsmaymateriallydiffer fromtheseestimatesandassumptions.Accordingly, noassurancecanbegiventhatthecostestimatesand theunderlyingassumptionswillberealisedinpractice. Afailuretodiscoveraneconomicreserve,orto successfullyproducefromsuchareserve,willadversely affecttheCompany’sperformanceandhavearesulting effectonthevalueoftheCompany’sinvestmentinthe PuntlandProjectsandtheGeorgianProject.
SovereignRisk	ThePuntlandandGeorgianProjectsinvolveconducting explorationactivitiesinPuntlandandtheRepublicof Georgiarespectively,bytheprojectoperator.Any circumstancesoreventwhichnegativelyimpactsthe developmentofeithercountrycouldmateriallyaffect thefinancialperformanceoftheCompany. Thereisnoassurancethatfuturepoliticaland economicconditionsinPuntlandorGeorgiawillnot resultintherespectiveGovernmentadoptingdifferent policiesregardingforeigndevelopmentandownership ofmineralresources.Anychangesinpolicymayresult inlegislativechangesaffectingownershipofassets, title,taxation,ratesofexchange,environmental protection,labourrelations,repatriationofincomeand returnoncapital,allofwhichmayaffecttheabilityto developtheeitherthePuntlandProjectsorthe GeorgianProject.Itshouldbenoted,however,that bothPuntlandandGeorgiahaveoperatedunder relativelystablepoliticalregimesduringthetimein whichtheproductionsharingagreementsforeach projecthavebeeninplace.

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RiskArea	Risks
	The occurrence of these various factors and uncertaintiescannotbeaccuratelypredictedandcould haveanadverseeffectontheoperationsor profitabilityoftheCompany.TheCompanyhasmade itsinvestmentandstrategicdecisionsbasedonthe informationcurrentlyavailabletotheDirectors, howevershouldtherebeanymaterialchangeinthe political,economic,legalandsocialenvironmentsin eitherPuntlandorGeorgia,theDirectorsmayreassess investmentdecisionsandcommitmentstoassetsin Puntland.
OilandGasPriceVolatility	Oilandgaspricesaffectedbynumerousfactorsand events Fluctuationsinoilandgaspricesand,inparticular,a materialdeclineinthepriceofoilorgas,mayhavea materialadverseeffectontheCompany’sbusinessand thereforethevalueoftheCompany’sinvestmentinthe PuntlandProjectsandtheGeorgianProject.
Futurerequirementsforcapital	Therecanbenoguaranteesthatthefundsraisedby thisOfferwillbesufficienttosuccessfullyachieveallof theCompany’sobjectives. ThefundsraisedbytheOfferwillbeusedtocarryout workontheCompany’sprojectsasdetailedinthis Prospectus.IftheCompanyincursunexpectedcostsor isunabletogeneratesufficientoperatingincome, furtherfundingmayberequired. TheCompanymayrequireadditionalfundingtocarry outfurtherexploration,undertakefeasibilitystudies, developprojectoperationsand/oracquirenew projects.Anyadditionalfinancingthroughshareissues maydilutetheinterestsofShareholdings.
ExchangeRaterisk	AnyrevenuereceivedbytheCompanywouldlikelybe inUSdollarsderivedfromthesaleofgasanda substantialportionoftheCompany’soperating expenseswouldalsobeincurredinUSdollars.Gasis soldintheUSmarketandaroundtheworldbased principallyonaUSdollarprice.Furthermore,the incomeandexpenditureaccountswillbepreparedin Australiandollars(AUD).ThereforeAustraliandollar reportedrevenuewillbedirectlyimpactedby movementsintheUSdollargaspriceandtheUSD/AUD exchangerates.MovementsintheUSD/AUDexchange ratesmayadverselyorbeneficiallyaffectthe

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RiskArea	Risks
	Company’sresultsoroperationsandcashflows.

INVESTORS�SHOULD�NOTE�THAT�DETAIL�RELATING�TO�THESE�RISK�FACTORS�HAS�NOT�BEEN� REPEATED�IN�THIS�SECTION.�

SPECIFIC�RISKS��

8.3 Counterparty�and�Contractual�Risk��

Pursuant�to�the�Puntland�Acquisition�Agreement�and�Georgian�Acquisition�Agreements�(summarised� in�Sections�9.3,�9.22�and�9.1)�the�Company�has�acquired�interests�in�the�Puntland�Projects�and�the� Georgian�Project.�

Various�contracts�the�Company�(and�its�subsidiaries)�are�a�party�to�are�governed�by�jurisdictions� outside�Australia.��Legal�action�instituted�in�Australia�or�overseas�can�be�costly.��There�is�a�risk�that� the�Company�may�not�be�able�to�seek�the�legal�redress�that�it�could�expect�under�Australian�law;�and� generally�there�can�be�no�guarantee�that�a�legal�remedy�will�ultimately�be�granted�on�the� appropriate�terms.�

INDUSTRY�RISKS��

8.4 Exploration�and�Development�Risks�

The�business�of�oil�and�gas�exploration,�project�development�and�production,�by�its�nature,�contains� elements�of�significant�risk�with�no�guarantee�of�success.��Ultimate�and�continuous�success�of�these� activities�is�dependent�on�many�factors�such�as:��

• (a) the�discovery�and/or�acquisition�of�economically�recoverable�reserves���

• (b) access�to�adequate�capital�for�project�development���

• (c) design�and�construction�of�efficient�development�and�production�infrastructure�within�capital� expenditure�budgets���

• (d) securing�and�maintaining�title�to�interests���

• (e) obtaining�consents�and�approvals�necessary�for�the�conduct�of�oil�and�gas�exploration,� development�and�production��and�

• (f) access�to�competent�operational�management�and�prudent�financial�administration,�including� the�availability�and�reliability�of�appropriately�skilled�and�experienced�employees,�contractors� and�consultants.��

Whether�or�not�income�will�result�from�the�projects�undergoing�exploration�and�development� programs�depends�on�successful�exploration�and�establishment�of�production�facilities.��Factors� including�costs,�actual�hydrocarbons�and�formations,�flow�consistency�and�reliability�and�commodity� prices�affect�successful�project�development�and�operations.��

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Drilling�activities�carry�risk�as�such�activities�may�be�curtailed,�delayed�or�cancelled�as�a�result�of� weather�conditions,�mechanical�difficulties,�shortages�or�delays�in�the�delivery�of�drill�rigs�or�other� equipment.��In�addition,�drilling�and�operations�include�reservoir�risk�such�as�the�presence�of�shale� laminations�in�the�otherwise�homogeneous�sandstone�porosity.�

Industry�operating�risks�include�fire,�explosions,�unanticipated�reservoir�problems�which�may�affect� field�production�performance,�industrial�disputes,�unexpected�shortages�or�increases�in�the�costs�of� consumables,�spare�parts,�plant�and�equipment,�mechanical�failure�or�breakdown,�blow�outs,�pipe� failures�and�environmental�hazards�such�as�accidental�spills�or�leakage�of�liquids,�gas�leaks,�ruptures,� discharges�of�toxic�gases�or�geological�uncertainty�(such�as�lack�of�sufficient�sub�surface�data�from� correlative�well�logs�and/or�formation�core�analyses.��The�occurrence�of�any�of�these�risks�could� result�in�legal�proceedings�against�the�Company�and�substantial�losses�to�the�Company�due�to�injury� or�loss�of�life,�damage�to�or�destruction�of�property,�natural�resources�or�equipment,�pollution�or� other�environmental�damage,�cleanup�responsibilities,�regulatory�investigation,�and�penalties�or� suspension�of�operations.��Damage�occurring�to�third�parties�as�a�result�of�such�risks�may�give�rise�to� claims�against�the�Company.��

There�is�no�assurance�that�any�exploration�on�current�or�future�interests�will�result�in�the�discovery� of�an�economic�deposit�of�oil�or�gas.��Even�if�an�apparently�viable�deposit�is�identified,�there�is�no� guarantee�that�it�can�be�economically�developed.���

8.5 Price�Volatility�

Substantially�all�of�the�Company’s�revenues�and�cash�flows�(should�the�Company's�projects�enter� production)�will�be�derived�from�the�sale�of�oil�and/or�gas.��Therefore,�the�financial�performance�of� the�Company�would�be�exposed�to�fluctuations�in�the�gas�price.��Historically,�the�gas�price�has� fluctuated�widely�and�has�experienced�periods�of�significant�decline.��Prices�for�oil�and/or�gas�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�oil�or�gas�prices�should�fall�below�or�remain�below�the�Company’s�cost�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�event�abandoned.��A�delay�in�exploration�or�production�or�the� abandonment�of�one�of�more�of�the�project�licences�may�require�the�Company�to�write�down�its� reserves�and�resources�and�may�have�a�material�adverse�effect�on�the�Company’s�production,� earnings�and�financial�position.�

8.6 Joint�Venture�Parties,�Agents�and�Contractors�

The�Directors�are�unable�to�predict�the�risk�of�financial�failure�or�default�by�a�participant�in�any�earn� in�agreement�or�joint�venture�to�which�the�Company�is�currently�a�party�to,�may�become�a�party�to,� or�the�insolvency�or�managerial�failure�by�which�any�of�the�contractors�to�be�used�in�the�future�by� the�Company�in�any�of�its�activities�or�the�insolvency�or�other�managerial�failure�by�any�of�the�other� service�providers�to�be�used�in�the�future�by�the�Company�for�any�activity.�

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8.7 Title�risk��

Interests�in�licences�in�Puntland�and�the�Republic�of�Georgia�are�governed�by�the�respective�State� and�Federal�legislation�and�are�evidenced�by�the�granting�of�licences�or�leases.��Each�licence�or�lease� is�for�a�specific�term�and�carries�with�it�annual�expenditure�and�reporting�commitments,�as�well�as� other�conditions�requiring�compliance.��Consequently,�the�project�operator�could�lose�title�to�or�its� interest�in�the�leases�if�licence�conditions�are�not�met�or�if�insufficient�funds�are�available�to�meet� expenditure�commitments.�

8.8

Regulatory�Risk�

The�project�operator's�proposed�drilling�operations�and�exploration�and�development�activities�are� subject�to�extensive�laws�and�regulations�relating�to�numerous�matters,�including�various�resource� licence�consent�conditions�pertaining�to�environmental�compliance�and�rehabilitation,�taxation,� social�and�labour�relations,�health�and�worker�safety,�waste�disposal,�water�use,�protection�of�the� environment,�successful�land�claims�and�heritage�matters,�protection�of�endangered�and�protected� species�and�other�matters.��The�project�operator�regularly�requires�permits�from�regulatory� authorities�to�authorise�the�operations.��These�permits�relate�to�exploration,�development,� production�and�rehabilitation�activities.�

Obtaining�necessary�permits�can�be�a�time�consuming�process�and�there�is�a�risk�that�the�project� operator�may�not�obtain�these�permits�on�acceptable�terms,�in�a�timely�manner�or�at�all.��The�costs� and�delays�associated�with�obtaining�necessary�permits�and�complying�with�these�permits�and� applicable�laws�and�regulations�could�materially�delay�or�restrict�the�project�operator�from� proceeding�with�the�development�of�a�project�or�the�operation�or�further�development�of�a�reserve.�� Any�failure�to�comply�with�applicable�laws�and�regulations�or�permits,�even�if�inadvertent,�could� result�in�material�fines,�penalties�or�other�liabilities.��In�extreme�cases,�failure�could�result�in� suspension�of�activities�or�forfeiture�of�resource�tenements.��

8.9 Estimates�of�Oil�and�Gas�Resources�

The�oil�and/or�gas�reserve�estimates�for�the�Company’s�interests�in�assets�are�estimates�only�and�no� assurance�can�be�given�that�any�particular�yield�of�oil�or�gas�from�reserves�will�in�fact�be�realised�or� that�an�identified�reserve�will�ever�qualify�as�a�commercially�developable�oil�or�gas�resource�that�can� be�economically�developed.��

The�estimating�of�oil�and�gas�reserves�is�a�subjective�process�and�the�accuracy�of�reserve�and� resource�estimates�is�a�function�of�the�quantity�and�quality�of�available�data�and�the�assumptions� used�and�judgements�made�in�interpreting�engineering�and�geological�information.��There�is� significant�uncertainty�in�any�reserve�or�resource�estimate�and�the�actual�reserves�encountered�and� the�economic�viability�of�developing�a�reserve�may�differ�materially�from�the�Company’s�estimates.�� The�exploration�of�oil�and�gas�is�speculative�in�nature�and�is�frequently�unsuccessful.��The�Company� may�be�unable�to�successfully�discover�and�exploit�new�reserves�to�replace�those�they�plan�to� develop�to�ensure�the�ongoing�viability�of�the�Company’s�operations.�

Estimated�oil�and/or�gas�reserves�may�have�to�be�recalculated�based�on�changes�in�oil�or�gas�prices,� respectively,�further�exploration�of�development�activity�or�actual�production�experience.��This�could� have�a�material�adverse�impact�on�the�estimates�of�the�volume,�estimated�yield�or�other�important� factors�that�influence�reserve�or�resource�estimates.��Market�price�fluctuations�for�oil�or�gas,� increased�production�costs�or�reduced�yields,�or�other�factors�may�render�the�reserves�of�the� Company�uneconomical�or�unprofitable�to�develop�at�a�particular�site�or�sites.��

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GENERAL�RISKS��

8.10 Insurance��

Insurance�against�all�risks�associated�with�oil�and�gas�production�is�not�always�available�or�affordable.�� The�Company�and�the�project�operator�will�maintain�insurance�where�it�is�considered�appropriate�for� its�needs�however�it�will�not�be�insured�against�all�risks�either�because�appropriate�cover�is�not� available�or�because�the�Directors�consider�the�required�premiums�to�be�excessive�having�regard�to� the�benefits�that�would�accrue.���

8.11 Environmental,�Health�and�Safety�Matters�

The�exploration�and�future�production�operations�will�be�subject�to�extensive�health�and�safety�and� environmental�laws�and�regulations�which�could�impose�significant�costs�and�burdens�on�(the�extent� of�which�cannot�be�predicted).�Financial�provisions�for�the�estimated�costs�of�rehabilitating� disturbances�caused�by�exploration�and�production�activities�will�be�made�by�the�Company�over�the� life�of�the�operation.�Applicable�laws�and�regulations�provide�for�penalties�and�other�liabilities�for� violation�of�such�standards�and�establish,�in�certain�circumstances,�obligations�to�rehabilitate�current� and�former�facilities�and�locations�where�operations�are�or�were�conducted.�Permission�to�operate� could�be�withdrawn�temporarily�where�there�is�evidence�of�serious�breaches�of�health�and�safety� and�environmental�laws�and�regulations�and�even�permanently�in�the�event�of�extreme�breaches.�

Oil�and�gas�exploration�and�production�operations�have�inherent�risks�and�liabilities�associated�with� safety�and�damage�to�the�environment�and�the�disposal�of�waste�products�occurring�as�a�result�of�oil� and�gas�exploration�and�production.�The�occurrence�of�any�such�safety�or�environmental�incident� could�delay�production�or�increase�production�costs.�The�Company’s�proposed�operations�have�been� designed�to�comply�with�known�or�reasonably�predictable�conditions,�however,�it�is�not�possible�to� predict�all�prevailing�conditions�that�may�affect�the�Company’s�operations�at�all�times�in�the�future.� Events�such�as�unpredictable�rainfall�may�impact�on�the�Company’s�ongoing�compliance�with� environmental�legislations,�regulations�and�licences.�Significant�liabilities�could�be�imposed�on�the� Company�for�damages,�clean�up�costs�or�penalties�in�the�event�of�certain�discharges�into�the� environment,�environmental�damage�caused�by�previous�operations�or�non�compliance�with� environmental�laws�or�regulations.�

8.12 Economic�Risks�

Factors�such�as�inflation,�currency�fluctuations,�interest�rates,�supply�and�demand�of�capital�and� industrial�disruption�have�an�impact�on�business�costs,�commodity�prices�and�stock�market�prices.� The�Company’s�operating�costs,�possible�future�revenues�and�future�profitability�can�be�affection�by� these�factors,�which�are�beyond�the�control�of�the�Company.�

8.13 Future�Capital�Needs�

Significant�future�funding�will�be�required�by�the�Company�to�support�its�payment�obligations�under� the�Puntland�Acquisition�Agreement�and�the�Georgian�Acquisition�Agreement�to�develop�the�Projects.�� In�particular,�in�the�event�the�Company�elects�to�participate�in�the�exploration�well�for�the�Nugaal� Project,�the�Company�may�need�to�raise�further�funding.��There�can�be�no�assurance�that�such� funding�will�be�available�on�satisfactory�terms�or�at�all.��Any�additional�equity�financing�will�dilute� shareholdings,�and�debt�financing,�if�available,�may�involve�restrictions�on�financing�and�operating� activities.�

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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,�which�may� adversely�affect�the�business�and�financial�condition�of�the�Company�and�its�performance.�

8.14 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.��

8.15 Reliance�on�Key�Personnel�

The�responsibility�of�overseeing�the�day�to�day�operations�and�the�strategic�management�of�the� Company�depends�substantially�on�its�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.�

8.16 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:�

• (a) general�economic�outlook;�

• (b) interest�rates�and�inflation�rates;�

• (c) currency�fluctuations;�

• (d) changes�in�investor�sentiment�toward�particular�market�sectors;�

• (e) the�demand�for,�and�supply�of,�capital;�and�

• (f) terrorism�or�other�hostilities.�

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.�

8.17 Investment�speculative�

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� Company’s�securities.�

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9. MATERIAL�CONTRACTS�

9.1 Georgian�Acquisition���Subscription�Agreement��

On�20�May�2011,�the�Company�entered�into�a�subscription�agreement�with�Strait�Oil�and�Gas�(UK)� Limited�( Strait )�to�acquire�a�20%�interest�in�the�Georgian�Project�( Subscription�Agreement ).��

Strait,�through�its�two�wholly�owned�subsidiaries,�holds�a�100%�interest�in�the�licenses�forming�the� Georgian�Project.�

Pursuant�to�the�Subscription�Agreement,�the�Company�has�agreed�to�contribute�towards�40%�of� expenses�incurred�in�relation�to�the�two�well�drilling�program�on�the�Georgian�Project�( Drilling� Program ),�up�to�a�maximum�budgeted�cost�of�US$5,600,000.00�( Funding ).�In�return�for�the�Company� agreeing�to�provide�the�Funding,�the�Company�acquired�a�20%�interest�in�the�issued�share�capital�of� Strait.�

As�a�term�of�the�Subscription�Agreement�the�Company�entered�into�the�Shareholders�Agreement� (details�as�set�out�in�Section�9.2�below)�to�govern�how�Strait�will�manage�its�affairs�and�carry�on�the� Georgian�Project.�

Once�the�Company�has�provided�the�maximum�amount�of�the�Funding,�any�additional�funding�for�the� Georgian�Project�will�be�pursuant�to�the�terms�of�the�Shareholders�Agreement.�

In�the�event�the�Company�does�not�complete�the�Funding�on�or�before�31�December�2012,�the� Company�shall�transfer�its�20%�interest�in�Strait�back�to�Strait�(or�as�Strait�otherwise�directs)�for�the� total�amount�of�one�US�dollar.�

9.2 Georgian�Acquisition�–�Shareholders�Agreement��

On�20�May�2011,�the�Company,�Range�Resources�Limited�( Range ),�Strait�and�the�existing�Strait� shareholders�(together,� Existing�Shareholders ),�entered�into�a�shareholders’�agreement� ( Shareholders�Agreement )�to�set�out�how�Strait�would�manage�its�affairs�and�carry�on�the�Georgian� Project.��

The�material�terms�of�the�Shareholders�Agreement,�in�relation�to�the�operation�and�internal� administration�of�Strait,�are�as�follows:���

• (a) the�issued�capital�of�Strait�will�be�held�in�the�following�proportions:�

Shareholder	%Shareholding
RedEmperorResourcesNL	20%
RangeResourcesLtd	40%
ExistingShareholders	40%

• (b) the�Strait�board�will�consist�of�2�directors�appointed�by�Range,�2�directors�appointed�by�the� Existing�Shareholders�and�1�director�appointed�by�the�Company;���

• (c) decisions�of�the�Strait�board�are�made�by�simple�majority�with�the�exception�of:�

• (i) the�declaration�of�any�capital�distributions�or�dividends;�

• (ii) the�amount�of�surplus�capital�funds�to�be�retained;�

• (iii) the�transfer,�sale�or�surrender�of�any�substantial�asset;�

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• (iv) any�expenditure�or�agreement�to�expend�amounts�or�incur�liability�greater�than� US$100,000;�and��

• (v) any�agreement�for�the�sale�or�disposal�of�Project�Property�greater�than�US$100,000,�

• (d) the�number�of�votes�held�by�directors�will�be�determined�by�dividing�the�relevant�Strait� Shareholder’s�interest�between�that�number�of�directors�that�represent�the�relevant�Strait� Shareholder;��and��

• (e) the�number�of�votes�held�by�the�Strait�Shareholders�will�be�in�proportion�to�their�shareholding� in�Strait.��

The�material�terms�of�the�Shareholders�Agreement�in�relation�to�the�operation�and�management�of� the�Georgian�Project,�are�as�follows:���

• (a) the�Company�will�fund�40%�of�the�costs�of�drilling�two�exploration�wells�("Drilling�Program"),� capped�at�US$5.6�million;��

• (b) after�completion�of�the�Drilling�Program�and�Phase�III,�if�further�funds�are�required�to�develop� the�Georgian�Project,�these�funds�may�be�raised�by:�

• (i) seeking�finance�from�Strait’s�banker�or�from�another�third�party�financier�on�reasonable� commercial�terms;�or��

• (ii) calling�on�Strait�shareholders�to�contribute�in�proportion�to�their�shareholdings�in�Strait,�

• (c) the�Existing�Shareholders�will�be�finance�carried�during�the�Drilling�Program�and�for�the� duration�of�Phase�III;�

• (d) the�Shareholders�Agreement�is�governed�by�the�laws�of�England.�

The�Shareholders�Agreement�otherwise�contains�clauses�which�are�standard�for�an�agreement�of�this� nature.�

9.3 Puntland�Acquisition�Agreement�

In�June�2010�the�Company�entered�into�an�agreement�to�acquire�up�to�a�20%�interest�in�two�licences� encompassing�the�Puntland�Projects�subject�to�the�satisfaction�of�certain�conditions.��The�Company� elected�to�earn�a�20%�interest�in�each�of�the�Puntland�Projects�and�received�ministerial�consent�to� the�farm�in�in�January�2011.�

To�earn�its�20%�interest�in�the�Puntland�Project�the�Company�will�fund�30%�of�the�initial� US$25�million�total�gross�drilling�costs.�Thereafter�the�Company�shall�fund�20%�of�all�related�drilling� costs�in�proportion�to�its�interest.��The�Company�has�an�option�but�not�an�obligation�to�participate�in� a�second�well�on�either�the�Dharoor�Valley�block�or�the�Nugaal�Valley�block�on�the�same�basis.��The� Company�must�exercise�its�option�to�participate�in�the�second�well�in�writing�within�5�days�of�the� Company�being�provided�with�the�final�well�logs�prepared�in�respect�of�the�first�exploration�well� drilled.��The�Company’s�contribution�is�estimated�to�be�approximately�US$7�million�for�the�initial� exploration�well.���

The�Puntland�Acquisition�Agreement�otherwise�contains�terms�and�conditions�which�are�standard�for� an�agreement�of�this�nature.�

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9.4 Lead�Manager�Mandate�

The�Company�has�signed�a�mandate�letter�engaging�Max�Capital�to�act�as�lead�manager�of�the�Offer.�� Under�the�terms�of�the�mandate�the�Company�will�pay�Max�Capital�a�6%�placement�fee�on�funds� raised�under�the�Prospectus.��Max�Capital�will�be�responsible�for�paying�all�capital�raising�fees�with� any�other�financial�service�licensees�and�any�sub�underwriters.��The�mandate�otherwise�contains� terms�and�conditions�which�are�standard�for�an�agreement�of�this�nature.�

9.5 Agreements�associated�with�the�AIM�Listing��

The�Company�entered�into�the�following�agreements�in�the�process�of�completing�the�AIM�Listing.�

(a)� Nominated�Advisor�Agreement�

A�Nominated�Adviser�agreement�dated�24�May�2011�between�the�Company�and�Cairn� Financial�Advisers�LLP�pursuant�to�which�the�Company�appointed�Cairn�to�act�as�its�Nominated� Adviser�for�the�AIM�Listing.��Pursuant�to�the�Nominated�Advisor�Agreement�the�Company�will� pay�Cairn�a�fee�of�£30,000�per�annum�(plus�any�applicable�VAT)�for�its�services�as�Nominated� Adviser.��Cairn’s�appointment�under�the�agreement�is�for�an�initial�period�of�one�year�from�the� AIM�Listing�Date�and�is�subject�to�termination�on�three�months’�notice�by�either�the�Company� or�Cairn.�

The�Nominated�Advisor�Agreement�contains�certain�undertakings�and�indemnities�given�by�the� Company,�in�respect�of�the�Company’s�compliance�with�all�applicable�laws�and�regulations�and� other�terms�and�conditions�standard�for�an�agreement�of�this�nature.�

(b)� Warrant�Agreement�

In�addition�to�the�Nominated�Advisor�Agreement�and�for�services�provided�by�Cairn�associated� with�the�AIM�Listing,�the�Company�has�agreed�to�grant�to�Cairn�(subject�to�shareholder� approval)�1,476,162�Nomad�Options.��

The�terms�and�conditions�of�the�warrants�are�set�out�in�section�10.6.�

(c)� Broker�Mandate�

An�engagement�letter�dated�27�August�2010�between�the�Company�and�Old�Park�Lane�under� which�Old�Park�Lane�has�agreed�to�act�as�the�Company’s�broker�in�relation�to�the�AIM�Listing,� for�18�months�from�the�AIM�Listing�Date�and�until�terminated�by�either�party�by�providing� three�months�written�notice.���

Old�Park�Lane�will�be�paid�a�monthly�fee�of�£2,500�and�will�be�granted�up�to�3,690,403�Broker� Options.��The�terms�and�conditions�of�the�Broker�Options�are�set�out�in�Section�10.6.��

In�addition,�Old�Park�Lane�will�be�issued�further�options�being�equal�to�6�per�cent�of�any�funds� raised�by�Old�Park�Lane�as�part�of�any�future�equity�fundraising�by�the�Company�undertaken�in� the�UK�(conditional�on�the�completion�of�such�fundraising�and�any�requisite�shareholder� approvals).��These�options�have�an�exercise�price�equal�to�the�issue�price�of�the�Ordinary� Shares�issued�pursuant�to�the�fundraising�and�can�be�exercised�at�any�time�in�the�five�years� following�the�date�of�grant.��Under�the�terms�of�the�Agreement,�the�Company�has�agreed�to� pay�Old�Park�Lane�a�commission�on�any�funds�raised�by�Old�Park�Lane�for�the�Company.��

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10. ADDITIONAL�INFORMATION�

10.1 Corporate�Governance�

The�Directors�monitor�the�business�affairs�of�the�Company�on�behalf�of�Shareholders�and�have� formally�adopted�a�corporate�governance�policy�which�is�designed�to�encourage�Directors�to�focus� their�attention�on�accountability,�risk�management�and�ethical�conduct.�

The�Company�has�adopted�comprehensive�systems�of�control�and�accountability�as�the�basis�for�the� administration�of�corporate�governance.��The�Board�is�committed�to�administering�the�policies�and� procedures�with�openness�and�integrity,�pursuing�the�true�spirit�of�corporate�governance� commensurate�with�the�Company's�needs.�

To�the�extent�applicable,�the�Company�has�adopted�The�Corporate�Governance�Principles�and� Recommendations�(2nd�Edition)� as�published�by�ASX�Corporate�Governance�Council� ( Recommendations ).�

In�light�of�the�Company’s�size�and�nature,�the�Board�considers�that�the�current�board�is�a�cost� effective�and�practical�method�of�directing�and�managing�the�Company.��As�the�Company’s�activities� develop�in�size,�nature�and�scope,�the�size�of�the�Board�and�the�implementation�of�additional� corporate�governance�policies�and�structures�will�be�reviewed.�

Full�details�of�the�corporate�governance�policies�adopted�by�the�Board�can�be�found�on�the� Company’s�website, www.redemperorresources.com.���

10.2 Remuneration�

The�Company’s�Constitution�provides�that�the�remuneration�of�non�executive�Directors�will�be�not� more�than�the�aggregate�fixed�sum�determined�by�a�general�meeting.��The�aggregate�remuneration� for�non�executive�Directors�has�been�set�at�an�amount�not�to�exceed�$250,000�per�annum.��Refer�to� the�Investment�Overview�section�at�the�beginning�of�this�prospectus�for�the�Directors’�current� remuneration.�

The�remuneration�of�executive�Directors�will�be�fixed�by�the�Directors�and�may�be�paid�by�way�of� fixed�salary�or�consultancy�fee.�

10.3 Departures�from�Recommendations�

Following�admission�to�the�Official�List�of�ASX,�the�Company�will�be�required�to�report�any�departures� from�the�Recommendations�in�its�annual�financial�report.�

The�Company’s�compliance�and�departures�from�the�Recommendations�as�at�the�date�of�this� Prospectus�are�set�out�on�the�following�pages.�

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COMMENT		TheCompany’sCorporateGovernancePlanincludesaBoardCharter,whichdisclosesthespecific responsibilitiesoftheBoard. TheBoarddelegatesresponsibilityfortheday�to�dayoperationsandadministrationoftheCompany totheexecutiveDirector.	TheCompany’sCorporateGovernancePlanincludesasectiononperformanceevaluationpractices adoptedbytheCompany. TheBoardhasestablishedformalprocessestoreviewitsownperformanceandtheperformanceof individualdirectors,anyexecutivedirectorsandanycommitteesoftheBoardatleastannually.	ExplanationofdeparturesfromPrinciplesandRecommendations1.1and1.2(ifany)aresetout above.TheCompanywillalsoexplainanydeparturesfromPrinciplesandRecommendations1.1and 1.2(ifany)initsfutureannualreports. Performanceevaluationofseniorexecutiveshastakenplaceandthisprocessisconductedannually. DetailsoftheseevaluationshavebeenpreviouslysetoutintheCompany’s2010annualreports. Futureannualreportswilldisclosewhethersuchaperformanceevaluationhastakenplaceinthe relevantreportingperiodandwhetheritwasinaccordancewiththeprocessdisclosed. TheCorporateGovernancePlan,whichincludestheBoardCharter,ispostedontheCompany’s website.		AmajorityoftheBoardareindependentdirectors.	Thechairisanindependentdirector.	TheCompanyhasanexecutivedirector(consideredtobetheChiefExecutiveOfficer)whoisseparate fromthechair.	NoformalnominationcommitteehasbeenestablishedbytheCompanyasyet.TheBoard,asawhole, currentlyservesasthenominationcommittee. TheCompany’sCorporateGovernancePlanincludesaNominationCommitteeCharter,whichdiscloses thespecificresponsibilitiesofthecommittee. Wherenecessary,theBoardseeksadviceofexternaladvisersinconnectionwiththesuitabilityof applicantsforBoardmembership.	TheCompany’sCorporateGovernancePlanincludesasectiononperformanceevaluationpractices adoptedbytheCompany. ThechairwillreviewtheperformanceoftheBoard,itscommittees(ifany)andindividualdirectorsto ensurethattheCompanycontinuestohaveamixofskillsandexperiencenecessaryfortheconductof itsactivities.	TheCompanyhasprovideddetailsofeachdirector,suchastheirskills,experienceandexpertise relevanttotheirpositioninthisProspectusandwillalsoprovidethesedetailsonitswebsiteandin
PRINCIPLESANDRECOMMENDATIONS	Laysolidfoundationsformanagementandoversight	Companiesshouldestablishthefunctionsreservedtotheboardand thosedelegatedtoseniorexecutivesanddisclosethosefunctions.	Companiesshoulddisclosetheprocessforevaluatingthe performanceofseniorexecutives.	Companiesshouldprovidetheinformationindicatedinthe_Guideto_ reportingonPrinciple1.	Structuretheboardtoaddvalue	Amajorityoftheboardshouldbeindependentdirectors.	Thechairshouldbeanindependentdirector.	Therolesofchairandchiefexecutiveofficershouldnotbeexercised bythesameindividual.	Theboardshouldestablishanominationcommittee.	Companiesshoulddisclosetheprocessforevaluatingthe performanceoftheboard,itscommitteesandindividualdirectors.	Companiesshouldprovidetheinformationindicatedinthe_Guideto_ reportingonPrinciple2.
	1.	1.1	1.2	1.3	2.	2.1	2.2	2.3	2.4	2.5	2.6

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futureannualreports. ExplanationofdeparturesfromPrinciplesandRecommendations2.1,2.2,2.3,2.4and2.5(ifany)are setoutabove.TheCompanywillalsoexplainanydeparturesfromPrinciplesandRecommendations 2.1,2.2,2.3,2.4and2.5(ifany)initsfutureannualreports. PerformanceevaluationoftheBoard,itscommitteesandindividualdirectorshastakenplacein previousyearstodateasthisprocessisconductedannually. Futureannualreportswilldisclosewhethersuchaperformanceevaluationhastakenplaceinthe relevantreportingperiodandwhetheritwasinaccordancewiththeprocessdisclosed. TheCorporateGovernancePlan,whichincludestheNominationCommitteeCharter,ispostedonthe Company’swebsite.		TheCompany’sCorporateGovernancePlanincludesa_‘CorporateCodeofConduct’_,whichprovidesa frameworkfordecisionsandactionsinrelationtoethicalconductinemployment.	TheCompany’sCorporateGovernancePlanincludesa_‘DiversityPolicy’_,whichprovidesaframework forestablishingmeasureableobjectivesforachievinggenderdiversityandfortheBoardtoassess annuallyboththeobjectivesandprogressinachievingthem.	Thisdisclosurehasnotyetbeenmadeasatthetimeofthepreviousannualreport,thediversitypolicy wasnotinplace. Futureannualreportswilldisclosethemeasureableobjectivesforachievinggenderdiversitysetby theboardinaccordancewiththediversitypolicyandprogressinachievingthem.	ThisdisclosurehasnotyetbeenmadeastheCompany’sfirstyearwiththediversitypolicyinplacehas notbeencompleted. Futureannualreportswilldisclosetheproportionofwomenemployeesinthewholeorganisation, womeninseniorexecutivepositionsandwomenontheboard.	ExplanationofdeparturesfromPrinciplesandRecommendations 3.1,3.2,3.3and3.4(ifany)areset outabove.TheCompanywillalsoexplainanydeparturesfromPrinciplesandRecommendations3.1, 3.2,3.3and3.4(ifany)initsfutureannualreports. TheCorporateGovernancePlan,whichincludestheCorporateCodeofConductandDiversityPolicy,is
	Promoteethicalandresponsibledecision�making	Companiesshouldestablishacodeofconductanddisclosethecode orasummaryofthecodeasto: � thepracticesnecessarytomaintainconfidenceinthecompany’s integrity � thepracticesnecessarytotakeintoaccounttheirlegal obligations and the reasonable expectations of their stakeholders � theresponsibilityandaccountabilityofindividualsforreporting andinvestigatingreportsofunethicalpractices.	Companiesshouldestablishapolicyconcerningdiversityand disclosethepolicyorasummaryofthatpolicy.Thepolicyshould includerequirementsfortheboardtoestablishmeasureable objectivesforachievinggenderdiversityandfortheboardtoassess annuallyboththeobjectivesandprogressinachievingthem.	Companiesshoulddiscloseineachannualreportthemeasureable objectivesforachievinggenderdiversitysetbytheboardin accordancewiththediversitypolicyandprogressinachievingthem.	Companiesshoulddiscloseineachannualreporttheproportionof womenemployeesinthewholeorganisation,womeninsenior executivepositionsandwomenontheboard.	Companiesshouldprovidetheinformationindicatedinthe_Guideto_ reportingonPrinciple3.
	3.	3.1	3.2	3.3	3.4	3.5

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postedontheCompany’swebsite.		Noformalaudit committeehasbeenestablishedbytheCompanyasyet.TheBoard,asawhole, currentlyservesastheauditcommittee. TheCompany’sCorporateGovernancePlanincludesanAuditCommitteeCharter,whichdisclosesthe specificresponsibilitiesofthecommittee.	TheCompanyingeneralmeetingisresponsiblefortheappointmentoftheexternalauditorsofthe Company,andtheBoardfromtimetotimewillreviewthescope,performanceandfeesofthose externalauditors. AstheoperationsoftheCompanydeveloptheBoardwillreassesstheformationoftheaudit committee.	TheCompany’sCorporateGovernancePlanincludesanAuditandRiskCommitteeCharter,which disclosesitsspecificresponsibilities.	ExplanationofdeparturesfromPrinciplesandRecommendations4.1,4.2and4.3(ifany)aresetout above.TheCompanywillalsoexplainanydeparturesfromPrinciplesandRecommendations4.1,4.2 and4.3(ifany)initsfutureannualreports. TheCorporateGovernancePlan,whichincludestheAudit&RiskCommitteeCharter,ispostedonthe Company’swebsite.		TheCompanyhasacontinuousdisclosureprograminplacedesignedtoensurethecompliancewith ASXListingRuledisclosureandtoensureaccountabilityataseniorexecutivelevelforcomplianceand factualpresentationoftheCompany’sfinancialposition.	TheCompanyhasnotcurrentlydepartedfromPrincipleandRecommendation5.1.TheCompanywill provideanexplanationofanydeparturesfromPrincipleandRecommendation5.1(ifany)initsfuture annualreports. TheCorporateGovernancePlan,whichincludesacontinuousdisclosureprogram,ispostedonthe Company’swebsite.		TheCompany’sCorporateGovernancePlanincludesashareholderscommunicationstrategy,which aimstoensurethattheshareholdersareinformedofallmajordevelopmentsaffectingtheCompany’s stateofaffairs.	TheCompanyhasnotcurrentlydepartedfromPrincipleandRecommendation6.1.TheCompanywill provideanexplanationofanydeparturesfromPrincipleandRecommendation6.1(ifany)initsfuture
	Safeguardintegrityinfinancialreporting	Theboardshouldestablishanauditcommittee.	Theauditcommitteeshouldbestructuredsothatit: � consistsonlyofnon�executivedirectors � consistsofamajorityofindependentdirectors � ischairedbyanindependentchair,whoisnotchairoftheboard � hasatleastthreemembers.	Theauditcommitteeshouldhaveaformalcharter.	Companiesshouldprovidetheinformationindicatedinthe_Guideto_ reportingonPrinciple4.	Maketimelyandbalanceddisclosure	Companiesshouldestablishwrittenpoliciesdesignedtoensure compliancewithASXListingRuledisclosurerequirementsandto ensureaccountabilityataseniorexecutivelevelforthatcompliance anddisclosethosepoliciesorasummaryofthosepolicies.	Companiesshouldprovidetheinformationindicatedin_Guideto_ ReportingonPrinciple5.	Respecttherightsofshareholders	Companiesshoulddesignacommunications policyforpromoting effectivecommunicationwithshareholdersandencouragingtheir participationatgeneralmeetingsanddisclosetheirpolicyora summaryofthatpolicy.	Companiesshouldprovidetheinformationindicatedinthe_Guideto_ reportingonPrinciple6.
	4.	4.1	4.2	4.3	4.4	5.	5.1	5.2	6.	6.1	6.2

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annualreports. TheCorporateGovernancePlan,whichincludesashareholderscommunicationstrategy,willbe postedontheCompany’swebsite.		TheCompany’sCorporateGovernancePlanincludesariskmanagementpolicy. TheBoarddeterminestheCompany’s“riskprofile”andisresponsibleforoverseeingandapproving riskmanagementstrategyandpolicies,internalcomplianceandinternalcontrol.	TheCompany’sCorporateGovernancePlanincludesariskmanagementpolicy. TheBoardwillrequireeithertheExecutiveDirectorortheChiefFinancialOfficertoprovideareportat therelevanttime.	TheBoardwillseekthisrelevantassurancefromtheExecutiveDirector orChiefFinancialOfficeratthe relevanttime.	TheCompanyhasnotcurrentlydepartedfromPrinciplesandRecommendations7.1,7.2and7.3.The CompanywillprovideanexplanationofanydeparturesfromPrinciplesandRecommendations7.1,7.2 and7.3(ifany)initsfutureannualreports. TheCorporateGovernancePlan,whichincludesariskmanagementpolicy,ispostedontheCompany’s website.		TheBoardhasnotestablishedaformalremunerationcommitteeatthispointintheCompany’s development.ItisconsideredthatthesizeoftheBoardalongwiththelevelofactivityoftheCompany rendersthisimpracticalandtheBoard,actingwithouttheaffecteddirectorparticipatinginthe decisionmakingprocess,currentlyservesasaremunerationcommittee. TheCompany’sCorporateGovernancePlanincludesaRemunerationCommitteeCharter,which disclosesitsspecificresponsibilities. Remunerationtotheexecutivedirectorsisbywayofsalaryonlyandtonon�executivedirectorsbyway
	Recogniseandmanagerisk	Companiesshouldestablishpoliciesfortheoversightand managementofmaterialbusinessrisksanddiscloseasummaryof thosepolicies.	Theboardshouldrequiremanagementtodesignandimplementthe riskmanagementandinternalcontrolsystemtomanagethe company’smaterialbusinessrisksandreporttoitonwhetherthose risksarebeingmanagedeffectively.Theboardshoulddisclosethat managementhasreportedtoitastotheeffectivenessofthe company’smanagementofitsmaterialbusinessrisks.	Theboardshoulddisclosewhetherithasreceivedassurancefrom thechiefexecutiveofficer(orequivalent)andthechieffinancial officer(orequivalent)thatthedeclarationprovidedinaccordance withsection295AoftheCorporationsActisfoundedonasound systemofriskmanagementandinternalcontrolandthatthesystem isoperatingeffectivelyinallmaterialrespectsinrelationtofinancial reportingrisks.	Companiesshouldprovidetheinformationindicatedin_Guideto_ ReportingonPrinciple7.	Remuneratefairlyandresponsibly	Theboardshouldestablisharemunerationcommittee.
	7.	7.1	7.2	7.3	7.4	8.	8.1

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ofdirectorfeesonly,withthelevelofsuchsalaryorfeesasthecontextrequires,havingbeensetby theBoardtoanamountitconsiderstobecommensurateforacompanyofitssizeandlevelofactivity. Thereiscurrentlynolinkbetweenperformanceandremuneration,however,itistheintentionofthe Boardtore�assessthisoncetheCompanycommencesoperations.Furthertherearenoschemesfor retirementbenefitsinexistence.	Althoughnoformalremunerationcommitteehasbeenestablished,theBoardcurrentlyservesasthe remunerationcommittee. TheBoardiscomprisedofamajorityofindependentdirectors,ischairedbyanindependentdirector andhasatleastthreemembers.	TheBoardhasdistinguishedthestructureofnonexecutivedirector’sremunerationfromthatof executivedirectorsandseniorexecutives. TheCompany’sconstitutionprovidesthattheremunerationofnon�executiveDirectorswillbenotbe morethantheaggregatefixedsumsetbytheconstitutionandsubsequentlyvariedbyresolutionata generalmeetingofshareholders. TheBoardisresponsiblefordeterminingtheremunerationofexecutivedirectorsandsenior executives(withouttheparticipationoftheaffecteddirector).ItistheBoard’sobjectivetoprovide maximumstakeholderbenefitfromtheretentionofahighqualityBoardandexecutiveteamby remuneratingexecutivedirectorsandseniorexecutivesfairlyandappropriatelywithreferenceto relevantemploymentmarketconditionsandbylinkingthenatureandamountofexecutivedirectors’ andseniorexecutivesemolumentstotheCompany’sfinancialandoperationalperformance.	ExplanationofdeparturesfromPrinciplesandRecommendations8.1,8.2and8.3(ifany)aresetout above.TheCompanywillalsoprovideanexplanationofanydeparturesfromPrinciplesand Recommendations8.1,8.2and8.3(ifany)initsfutureannualreports. TheCorporateGovernancePlan,whichincludestheRemunerationCommitteeCharter,ispostedon theCompany’swebsite.
	Theremunerationcommitteeshouldbestructuredsothatit: � consistsofamajorityofindependentdirectors � ischairedbyanindependentdirector � hasatleastthreemembers	Companiesshouldclearlydistinguishthestructureofnon�executive directors’remunerationfromthatofexecutivedirectorsandsenior executives.	Companiesshouldprovidetheinformationindicatedinthe_Guideto_ reportingonPrinciple8.
	8.2	8.3	8.4

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10.4 Rights�Attaching�to�Shares�

Full�details�of�the�rights�attaching�to�Shares�are�set�out�in�the�Company’s�Constitution,�a�copy�of� which�can�be�inspected,�free�of�charge,�at�the�Company’s�registered�office�during�normal�business� hours.��

The�following�is�a�broad�summary�of�the�rights,�privileges�and�restrictions�attaching�to�all�Shares.�� This�summary�is�not�exhaustive�and�does�not�constitute�a�definitive�statement�of�the�rights�and� liabilities�of�Shareholders.�

(a) General�Meetings�

Shareholders�are�entitled�to�be�present�in�person,�or�by�proxy,�attorney�or�representative�to� attend�and�vote�at�general�meetings�of�the�Company.�

Shareholders�may�requisition�meetings�in�accordance�with�Section�249D�of�the�Corporations� Act�and�the�Constitution�of�the�Company.�

(b) Voting�Rights�

Subject�to�any�rights�or�restrictions�for�the�time�being�attached�to�any�class�or�classes�of�shares,� at�general�meetings�of�shareholders�or�classes�of�shareholders:�

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

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

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

(c) Dividend�Rights�

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

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(d) Winding�Up�

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

(e) Transfer�of�Shares�

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

(f) Variation�of�Rights�

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

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

10.5 Rights�Attaching�to�Partly�Paid�Shares��

The�following�is�a�broad�summary�of�the�rights,�privileges�and�restrictions�attaching�to�all�Partly�Paid� Shares.��This�summary�is�not�exhaustive�and�does�not�constitute�a�definitive�statement�of�the�rights� and�liabilities�of�holders�of�Partly�Paid�Shares.�

• (a) Each�Partly�Paid�Share�is�issued�at�a�price�of�25�cents�of�which�$0.0001�is�paid,�with�the�balance� of�the�issue�price�subject�to�a�call�on�31�December�2012.��

• (b) The�holder�shall�have�the�right�to�pay�calls�in�advance�on�the�Partly�Paid�Shares�issued.�Any� notice�of�payment�of�calls�in�advance�by�the�holder�( Payment�Notice )�shall�be�in�writing�and� delivered�to�the�registered�office�of�the�Company.�The�Payment�Notice�shall�specify�the� number�of�Partly�Paid�Shares�in�respect�of�which�such�payment�is�being�made,�the�amount�per� share�which�is�being�paid�up,�and�shall�be�accompanied�by�the�appropriate�payment�for�the� number�of�partly�paid�shares�specified�in�the�Payment�Notice.��The�Directors�of�the�Company� must,�within�3�days�after�receipt�of�the�Payment�Notice,�accept�payment,�credit�the�amount� paid�up�and�issue�the�appropriate�holding�statement�for�fully�paid�shares�in�respect�of�any� shares�which�have�been�fully�paid�up.�

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• (c) The�Partly�Paid�Shares�will�not�be�subject�to�calls�by�the�Company�before�31�December�2012� (unless�with�the�consent�of�all�Partly�Paid�Shareholders)�and�any�of�the�Partly�Paid�Shares� which�are�not�fully�paid�up�pursuant�to�the�31�December�2012�call�shall�be�forfeited�(in� accordance�with�the�Constitution)�and�the�holder�shall�have�no�right�to�pay�up�and�shall�retain� no�rights�in�relation�thereto.�

• (d) A�statement�of�holding�will�be�issued�for�the�Partly�Paid�Shares�and�will�be�forwarded�to�the� holder�together�with�the�terms�and�conditions�of�the�Partly�Paid�Shares.�

• (e) Dividends�may�be�declared�in�respect�of�any�of�the�Partly�Paid�Shares�notwithstanding�that�the� issue�price�of�such�Partly�Paid�Shares�has�not�been�paid�in�full.��The�Partly�Paid�Shares�will� participate�in�any�dividends�so�declared�with�all�other�shares�pro�rata�to�the�proportion�which� the�portion�of�the�issue�price�paid�up�on�the�Partly�Paid�Shares�bears�to�the�issue�price.�

• (f) The�holder�will�be�entitled�to�exercise�any�vote�attaching�to�a�Partly�Paid�Share�at�general� meetings�of�members�in�accordance�with�the�Constitution�of�the�Company.��Under�the� Constitution,�on�a�poll,�partly�paid�shares�have�a�vote�pro�rata�to�the�proportion�of�the�total� issue�price�paid�up.��Amounts�paid�in�advance�of�a�call�will�be�ignored�when�calculating�the� proportion.�

• (g) Partly�Paid�Shares�allotted�to�the�holder�will�participate�in�all�issues�of�securities�(including� issues�of�shares,�options�and�convertible�notes)�made�to�shareholders�of�the�Company�pro� rata�to�the�proportion�of�the�total�issue�price�paid�up.��In�respect�of�an�issue�of�bonus� securities,�amounts�paid�in�advance�of�a�call�will�be�ignored�when�calculating�the�proportion.�

• (h) The�Company�will�ensure�that,�at�least�9�business�days�before�the�record�date�to�determine� entitlement�to�any�such�new�issue,�the�Company�will�notify�the�holder�of�the�proposed�new� issue.��This�will�afford�the�holder�an�opportunity�to�pay�up�all�or�some�of�the�partly�paid�shares� prior�to�the�record�date�of�any�such�new�issue.�

• (i) In�the�event�of�a�reconstruction�(including�consolidation,�sub�division,�reduction�or�return)�of� the�issued�capital�of�the�Company,�the�number�of�partly�paid�shares�shall�be�reconstructed�in� accordance�with�the�Listing�Rules.�

• (j) Subject�to�the�Partly�Paid�Shares�becoming�fully�paid,�the�Company�will�apply�for�listing�of�the� fully�paid�shares�on�the�ASX.�

• (k) ln�the�event�of�death�of�the�holder,�the�right�of�the�holder�to�pay�up�the�Partly�Paid�Shares� which�are�not�at�the�time�of�the�death�of�the�holder�fully�paid�up,�will�vest�in�the�holder's� executor�and/or�administrator�as�the�case�may�be�and�such�executor�and/or�administrator� shall�have�the�same�rights�to�pay�up�the�Partly�Paid�Shares�as�such�deceased�holder�would� have�had�but�for�the�holder's�death.�

• (l) Upon�becoming�fully�paid,�each�Partly�Paid�Share�will�rank�equally�in�all�respects�with�the�other� issued�fully�paid�ordinary�shares�in�the�Company.�

• (m) Subject�to�the�ASX�Listing�Rules,�the�Partly�Paid�Shares,�whilst�partly�paid,�shall�not�be�capable� of�transfer�or�assignment�either�in�whole�or�in�part�without�the�approval�of�the�Directors.�

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10.6 Rights�Attaching�to�Options�

The�Company�intends�to�issue�the�following�options�subject�to�shareholder�approval�at�a�general� meeting�to�be�held�on�15�July�2011:�

• 7,750,000�options�to�directors,�management�and�corporate�advisor,�including�4,500,000� options�to�directors�("Management�Options");�

• 3,690,403�options�to�the�Company's�broker�("Broker�Options");�and�

• 1,476,162�options�to�the�Company's�nominated�advisor�("Nomad�Options").�

Full�details�of�the�terms�and�conditions�of�the�Options�are�set�out�below.�

• (a) Management�Options�

• (i) The�Management�Options�will�expire�at�5:00pm�(WST)�on�30�June�2012�("Expiry�Date").�� Any�Management�Option�not�exercised�before�the�Expiry�Date�will�automatically�lapse� on�the�Expiry�Date.�

• (ii) The�amount�payable�upon�exercise�of�each�Management�Option�will�be�$0.30�("Exercise� Price").�

• (b) Broker�Options��

• (i) The�Broker�Options�will�expire�at�5:00pm�(WST)�on�the�date�being�30�months�from�the� date�of�issue�("Expiry�Date").��Any�Broker�Option�not�exercised�before�the�Expiry�Date� will�automatically�lapse�on�the�Expiry�Date.�

• (ii) Subject�to�the�Listing�Rules,�the�amount�payable�upon�exercise�of�each�Broker�Option� will�be�the�same�price�of�the�Shares�issued�pursuant�to�the�first�UK�share�placement� (which�will�be�not�less�than�80%�of�the�average�market�price�for�Shares�calculated�over� the�5�days�on�which�sales�in�Shares�are�recorded�before�the�day�on�which�the�details�of� the�first�UK�share�placement�are�announced�to�ASX�("Exercise�Price").�

• (c) Nomad�Options��

• (i) The�Nomad�Options�will�expire�at�5:00pm�(WST)�on�the�date�being�2�years�from�the�date� of�issue�("Expiry�Date").��Any�Nomad�Option�not�exercised�before�the�Expiry�Date�will� automatically�lapse�on�the�Expiry�Date.�

• (ii) Subject�to�the�Listing�Rules,�the�amount�payable�upon�exercise�of�each�Nomad�Option� will�be�the�mid�market�price�of�Share�at�the�close�of�business�on�the�date�of�AIM�Listing� Date.�

• (d) Global�Option�Terms��

Each�Option�(which�includes�the�Options,�Broker�Options�and�Nomad�Options)�entitle�the� holder�to�subscribe�for�Shares�on�the�following�terms�and�conditions:�

• (i) Each�Option�gives�the�Optionholder�the�right�to�subscribe�for�one�Share.�

• (ii) The�Options�held�by�each�Optionholder�may�be�exercised�in�whole�or�in�part,�and�if� exercised�in�part,�multiples�of�1,000�must�be�exercised�on�each�occasion.�

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• (iii) An�Optionholder�may�exercise�their�Options�by�lodging�with�the�Company,�before�the� Expiry�Date:�

• (A) a�written�notice�of�exercise�of�Options�specifying�the�number�of�Options�being� exercised;�and�

• (B) a�cheque�or�electronic�funds�transfer�for�the�Exercise�Price�for�the�number�of� Options�being�exercised,��

("Exercise�Notice " ).�

• (iv) An�Exercise�Notice�is�only�effective�when�the�Company�has�received�the�full�amount�of� the�Exercise�Price�in�cleared�funds.�

• (v) Within�10�Business�Days�of�receipt�of�the�Exercise�Notice�accompanied�by�the�Exercise� Price,�the�Company�will�allot�the�number�of�Shares�required�under�these�terms�and� conditions�in�respect�of�the�number�of�Options�specified�in�the�Exercise�Notice.�

• (vi) All�Shares�allotted�upon�the�exercise�of�Options�will�upon�allotment�rank�pari�passu�in�all� respects�with�other�Shares.�

• (vii) The�Company�will�not�apply�for�quotation�of�the�Options�on�ASX.��The�Company�will� apply�for�quotation�of�all�Shares�allotted�pursuant�to�the�exercise�of�Options�on�ASX� within�10�Business�Days�after�the�date�of�allotment�of�those�Shares.�

• (viii) If�at�any�time�the�issued�capital�of�the�Company�is�reconstructed,�all�rights�of�an� Optionholder�are�to�be�changed�in�a�manner�consistent�with�the�Corporations�Act�and� the�ASX�Listing�Rules�at�the�time�of�the�reconstruction.�

• (ix) There�are�no�participating�rights�or�entitlements�inherent�in�the�Options�and� Optionholders�will�not�be�entitled�to�participate�in�new�issues�of�capital�offered�to� Shareholders�during�the�currency�of�the�Options.��However,�the�Company�will�ensure� that�for�the�purposes�of�determining�entitlements�to�any�such�issue,�the�record�date�will� be�at�least�7�Business�Days�after�the�issue�is�announced.��This�will�give�Optionholders�the� opportunity�to�exercise�their�Options�prior�to�the�date�for�determining�entitlements�to� participate�in�any�such�issue.�

• (x) In�the�event�the�Company�proceeds�with�a�pro�rata�issue�(except�a�bonus�issue)�of� securities�to�Shareholders�after�the�date�of�issue�of�the�Options,�the�exercise�price�of�the� Options�may�be�reduced�in�accordance�with�the�formula�set�out�in�ASX�Listing� Rule�6.22.2.�

• (xi) In�the�event�the�Company�proceeds�with�a�bonus�issue�of�securities�to�Shareholders� after�the�date�of�issues�of�the�Options,�the�number�of�securities�over�which�an�Option�is� exercisable�may�be�increased�by�the�number�of�securities�which�the�Optionholder�would� have�received�if�the�Option�had�been�exercised�before�the�record�date�for�the�bonus� issue.�

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11. ADDITIONAL�MATTERS��

11.1 Fees�and�Benefits�

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

• (a) Director�of�the�Company;�

• (b) 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;�

• (c) promoter�of�the�Company;�or�

• (d) 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�Offer,�

has,�or�had�within�2�years�before�lodgement�of�this�Prospectus�with�the�ASIC,�any�interest�in:�

• (i) the�formation�or�promotion�of�the�Company;�

• (ii) any�property�acquired�or�proposed�to�be�acquired�by�the�Company�in�connection�with� its�formation�or�promotion�or�in�connection�with�the�offer�of�Shares�under�this� Prospectus;�or�

• (iii) the�offer�of�Shares�under�this�Prospectus,�

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�those�persons�as�an�inducement�to�become,�or�to�qualify�as,�a�Director�of�the� Company�or�for�services�rendered�in�connection�with�the�formation�or�promotion�of�the�Company�or� the�offer�of�Shares�under�this�Prospectus.�

Anjarwalla�Collins�&�Haidermota�( AC&H )�has�acted�as�the�international�solicitors�to�the�Company�in� respect�of�the�Puntland�Projects�and�has�prepared�a�title�opinion�which�has�been�included�in� Section�7�of�this�Prospectus.��The�Company�estimates�that�it�will�pay�a�total�of�$7,500�for�these� services.��During�the�24�months�preceding�lodgement�of�this�Prospectus�with�the�ASIC,�AC&H�has� received�approximately�US$25,200�for�legal�services�provided�to�the�Company.��

BGI�Advisory�Services�Georgia�Limited�( BGI )�has�acted�as�the�international�solicitors�to�the�Company� in�respect�of�the�Georgian�Project�and�has�prepared�a�title�opinion�which�has�been�included�in� Section�7�of�this�Prospectus.��The�Company�estimates�that�it�will�pay�a�total�of�$7,500�for�these� services.��During�the�24�months�preceding�lodgement�of�this�Prospectus�with�the�ASIC,�BGI�will� receive�approximately�US$20,000�for�legal�services�provided�to�the�Company�during�that�period.�

Gaffney,�Cline�&�Associates�( Gaffney�Cline )�has�acted�as�the�independent�expert�to�the�Company�in� relation�to�the�Puntland�Projects�and�has�prepared�a�technical�report�which�has�been�included�in� Section�5�of�this�Prospectus.��The�Company�estimates�that�it�will�pay�a�total�of�$7,500�for�these� services.��During�the�24�months�preceding�lodgement�of�this�Prospectus�with�the�ASIC,�Gaffney�Cline� has�received�approximately�US$15,000�for�services�provided�to�the�Company.�

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RPS�Energy�has�acted�as�the�independent�expert�to�the�Company�in�relation�to�the�Georgian�Project� and�has�prepared�a�technical�report�which�has�been�included�in�Section�5�of�this�Prospectus.��The� Company�estimates�that�it�will�pay�a�total�of�$7,500�for�these�services.��During�the�24�months� preceding�lodgement�of�this�Prospectus�with�the�ASIC,�RPS�Energy�has�received�approximately� GBP£13,000�for�services�provided�to�the�Company.�

BDO�Corporate�Finance�(WA)�Pty�Ltd�( BDO )�has�acted�as�Investigating�Accountant�and�has�prepared� an�Investigating�Accountant’s�Report�which�has�been�included�in�Section�6�of�this�Prospectus.��The� Company�estimates�it�will�pay�BDO�a�total�of�$15,000�for�these�services.��Subsequently,�fees�will�be� charged�in�accordance�with�normal�charge�out�rates.��During�the�24�months�preceding�lodgement�of� this�Prospectus�with�the�ASIC,�BDO�has�not�provided�any�services�to�the�Company.�

Steinepreis�Paganin�has�acted�as�the�Australian�solicitors�to�the�Company�in�relation�to�the�Offer,�and� has�been�involved�in�due�diligence�enquiries�on�legal�matters.��The�Company�estimates�it�will�pay� Steinepreis�Paganin�$25,000�for�these�services.��Subsequently,�fees�will�be�charged�in�accordance� with�normal�charge�out�rates.��During�the�24�months�preceding�lodgement�of�this�Prospectus�with� the�ASIC,�Steinepreis�Paganin�has�received�approximately�$67,500�for�legal�services�provided�to�the� Company.�

Max�Capital�Pty�Ltd�( Max�Capital )�has�acted�as�the�lead�manager�to�the�Company�in�relation�to�the� Offer.��The�Company�estimates�it�will�pay�Max�Capital�$60,000�(being�a�fee�of�6%�of�the�amount� raised�pursuant�to�the�Offer)�for�these�services.��During�the�24�months�preceding�lodgement�of�this� Prospectus�with�the�ASIC,�Max�Capital�has�received�approximately�$1,113,000�for�corporate�advisory� and�capital�raising�services�provided�to�the�Company.��This�amount�includes�fees�paid�to�other� financial�service�licensees�and/or�any�sub�underwriters�in�respect�of�capital�raisings�undertaken�by� the�Company.�

Grange�Consulting�Pty�Ltd�( Grange�Consulting )�has�acted�as�the�Australian�solicitors�to�the�Company� in�relation�to�the�Offer.��The�Company�estimates�it�will�pay�Grange�Consulting�$60,000�for�these� services.��During�the�24�months�preceding�lodgement�of�this�Prospectus�with�the�ASIC,�Grange� Consulting�has�received�approximately�$180,600�for�corporate�advisory�and�compliance�services� provided�to�the�Company.��

11.2 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.�

AC&H�has�given�its�written�consent�to�being�named�as�international�solicitors�to�the�Company�in� respect�of�the�Puntland�Projects�in�this�Prospectus�and�to�the�inclusion�of�the�title�report�in�Section�7� in�the�form�and�context�in�which�the�report�is�included.��AC&H�has�not�withdrawn�its�consent�prior�to� the�lodgement�of�this�Prospectus�with�the�ASIC.�

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BGI�has�given�its�written�consent�to�being�named�as�international�solicitors�to�the�Company�in� respect�of�the�Georgian�Project�in�this�Prospectus�and�to�the�inclusion�of�the�title�report�in�Section�7� in�the�form�and�context�in�which�the�report�is�included.��BGI�has�not�withdrawn�its�consent�prior�to� the�lodgement�of�this�Prospectus�with�the�ASIC.�

Gaffney�Cline�has�given�its�written�consent�to�being�named�as�independent�expert�to�the�Company�in� relation�to�the�Puntland�Projects�in�this�Prospectus�and�to�the�inclusion�of�the�technical�report�in� Section�5�in�the�form�and�context�in�which�the�report�is�included.��Gaffney�Cline�has�not�withdrawn� its�consent�prior�to�the�lodgement�of�this�Prospectus�with�the�ASIC.�

RPS�Energy�has�given�its�written�consent�to�being�named�as�independent�expert�to�the�Company�in� relation�to�the�Georgian�Projects�in�this�Prospectus�and�to�the�inclusion�of�the�technical�report�in� Section�5�in�the�form�and�context�in�which�the�report�is�included.��RPS�Energy�has�not�withdrawn�its� consent�prior�to�the�lodgement�of�this�Prospectus�with�the�ASIC.�

BDO�has�given�its�written�consent�to�being�named�as�Investigating�Accountant�in�this�Prospectus�and� to�the�inclusion�of�the�Investigating�Accountant’s�Report�in�Section�6�in�the�form�and�context�in� which�the�report�is�included.��BDO�has�not�withdrawn�its�consent�prior�to�lodgement�of�this� Prospectus�with�the�ASIC.���

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

Max�Capital�has�given,�and�not�withdrawn,�its�written�consent�to�being�named�as�lead�manager�to� the�Company�in�this�Prospectus.��Grange�Consulting�has�not�authorised�or�caused�the�issue�of�this� Prospectus�or�the�making�of�the�Offer�and�takes�no�responsibility�for�any�part�of�the�Prospectus.�� Grange�Consulting�makes�no�representation�regarding,�and�to�the�extent�permitted�by�law,�excludes� responsibility�for,�any�statements�in�or�omissions�from�any�part�of�this�Prospectus.��

Grange�Consulting�has�given,�and�not�withdrawn,�its�written�consent�to�being�named�as�corporate� advisor�to�the�Company�in�this�Prospectus.��Grange�Consulting�has�not�authorised�or�caused�the�issue� of�this�Prospectus�or�the�making�of�the�Offer�and�takes�no�responsibility�for�any�part�of�the� Prospectus.��Grange�Consulting�makes�no�representation�regarding,�and�to�the�extent�permitted�by� law,�excludes�responsibility�for,�any�statements�in�or�omissions�from�any�part�of�this�Prospectus.�

11.3 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.�

11.4 Electronic�Prospectus�

Pursuant�to�Class�Order�00/044,�the�ASIC�has�exempted�compliance�with�certain�provisions�of�the� Corporations�Act�to�allow�distribution�of�an�electronic�prospectus�and�electronic�application�form�on� the�basis�of�a�paper�prospectus�lodged�with�the�ASIC,�and�the�publication�of�notices�referring�to�an� electronic�prospectus�or�electronic�application�form,�subject�to�compliance�with�certain�conditions.�

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If�you�have�received�this�Prospectus�as�an�electronic�Prospectus,�please�ensure�that�you�have� received�the�entire�Prospectus�accompanied�by�the�relevant�application�forms.��If�you�have�not,� please�email�the�Company�at� info@redemperorresources.com 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� the� Prospectus� from� the� Company’s� website� at� www.redemperorresources.com.�

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.�

11.5 Taxation�

The�acquisition�and�disposal�of�Shares�in�the�Company�will�have�tax�consequences,�which�will�differ� depending�on�the�individual�financial�affairs�of�each�investor.��All�potential�investors�in�the�Company� are�urged�to�obtain�independent�financial�advice�about�the�consequences�of�acquiring�Shares�from�a� taxation�viewpoint�and�generally.�

To�the�maximum�extent�permitted�by�law,�the�Company,�its�officers�and�each�of�their�respective� advisors�accept�no�liability�and�responsibility�with�respect�to�the�taxation�consequences�of� subscribing�for�Shares�under�this�Prospectus.�

11.6 Continuous�Disclosure�Obligations���

Following�the�re�quotation�of�the�Company�to�the�Official�List,�the�Company�will�be�a�“disclosing� entity”�(as�defined�in�Section�111AC�of�the�Corporations�Act)�and,�as�such,�will�be�subject�to�regular� reporting�and�disclosure�obligations.��Specifically,�like�all�listed�companies,�the�Company�will�be� 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.�

Price�sensitive�information�will�be�publicly�released�through�ASX�before�it�is�disclosed�to�shareholders� and�market�participants.��Distribution�of�other�information�to�shareholders�and�market�participants� will�also�be�managed�through�disclosure�to�the�ASX.�In�addition,�the�Company�will�post�this� information�on�its�website�after�the�ASX�confirms�an�announcement�has�been�made,�with�the�aim�of� making�the�information�readily�accessible�to�the�widest�audience.�

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12. �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.�

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----- Start of picture text -----

_______�
Greg�Bandy�
Executive�Director�
----- End of picture text -----

For�and�on�behalf�of� RED�EMPEROR�RESOURCES�NL�

Red�Emperor�Resources�NL�Prospectus�

Page�150�

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13. GLOSSARY�

Where�the�following�terms�are�used�in�this�Prospectus�they�have�the�following�meanings:�

A$ �or� $ �means�an�Australian�dollar.�

AIM� means�the�Alternative�Investment�Market�of�the�London�Stock�Exchange.��

AIM�Listing� means�the�Company’s�admission�to�the�official�list�of�AIM�on�23�June�2011.�

AIM�Listing�Date� means�23�June�2011.��

Applicant �means�a�person�who�submits�an�Application�Form.�

Application�Form �means�the�application�form�accompanying�this�Prospectus�relating�to�the�Offer.�

Associated�Body�Corporate �means:�

• (a) a�related�body�corporate�(as�defined�in�the�Corporations�Act)�of�the�Company;�

• (b) a�body�corporate�which�has�an�entitlement�to�not�less�than�20%�of�the�voting�Shares�in�the�Company;� or�

• (c) a�body�corporate�in�which�the�Company�has�an�entitlement�to�not�less�than�20%�of�the�voting�shares.��

ASIC �means�Australian�Securities�&�Investments�Commission.�

ASX �means�ASX�Limited�(ABN�98�008�624�691)�or�the�Australian�Securities�Exchange�(as�the�context� requires).�

Board �means�the�board�of�Directors�as�constituted�from�time�to�time.�

Business�Day �means�a�week�day�when�trading�banks�are�ordinarily�open�for�business�in�Perth,�Western� Australia.�

Company �means�Red�Emperor�Resources�NL�(ACN�124�734�961).��

Closing�Date �means�the�closing�date�of�the�Offer�as�set�out�in�the�Investment�Overview�Section.�

Constitution �means�the�constitution�of�the�Company.�

Corporations�Act �means�the�Corporations�Act�2001�(Cth).�

Directors �mean�the�directors�of�the�Company�at�the�date�of�this�Prospectus.�

Drilling�Program� the�proposed�two�well�drilling�program�for�two�exploration�Wells�to�be�undertaken�on�the� Georgian�Project.���

Georgian�Acquisition�Agreement� means�the�subscription�agreement�and�the�Strait�shareholders� agreement,�details�of�which�are�set�out�in�Section�9.2.��

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Georgian�Project� means�the�two�oil�and�gas�licences�located�in�Georgia,�which�are�known�as�Block�VIA�and� Block�VIB.�

Independent�Expert’s�Report �means�the�Independent�Expert’s�Reports�included�in�Section�5�of�this� Prospectus.�

Listing�Rules �means�the�official�listing�rules�of�ASX.�

MMbbls �means�millions�of�barrels.�

Offer �means�the�offer�of�Shares�pursuant�to�this�Prospectus�as�outlined�in�Investment�Overview�Section.�

Official�List �means�the�Official�List�of�ASX.��

Official�Quotation �means�official�quotation�by�ASX�in�accordance�with�the�Listing�Rules.�

Option �means�an�option�to�subscribe�for�a�Share.�

Phase�III� means�the�third�phase�requirements�under�the�production�sharing�contract�for�the�Georgian� Project,�which�includes,�but�is�not�limited�to�the�Drilling�Program.��

Project �or� Projects �means�the�Georgian�and�Puntland�Projects,�as�appropriate.��

Prospectus �means�this�prospectus.�

Securities �mean�Shares�and�Options.�

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

Share�Registry �means�Computershare�Investor�Services�Pty�Limited.�

Shareholder �means�a�holder�of�Shares.�

Solicitor’s�Report �means�the�Solicitor’s�Reports�included�in�Section�8�of�this�Prospectus.�

US$ �or� USD �means�the�currency�of�the�United�States�of�America.�

WST �means�Western�Standard�Time,�Perth,�Western�Australia.�

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