GENESIS RESOURCES LIMITED — Capital/Financing Update 2012

Sep 9, 2012

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GENESIS RESOURCES LIMITED

(ASX: GES)

ASX Release

9 September 2012

The Manager Company Announcements Office ASX Limited Level 45 – South Tower, Rialto 525 Collins Street MELBOURNE VIC 3000

Pro-Rata Non-Renounceable Rights Issue Notice under section 708AA(2)(f) of the Corporations Act 2001 (Cth)

Genesis Resources Limited ( Genesis or the Company ) has announced a fully underwritten prorata non-renounceable rights issue ( Offer ) on a 1-for-3 basis at an issue price of 9 cents per share. The Offer is made to holders of ordinary shares in the Company who had a registered address in Australia or New Zealand as at 7:00pm (Melbourne time) on Wednesday 5 September 2012.

The Company gives notice under section 708AA(2)(f) of the Corporations Act 2001 (Cth) (the Act ) as follows:

• (a) the new shares will be offered for issue without disclosure to investors under Part 6D.2 of the Act;

• (b) this notice is being given under section 708AA(2)(f) of the Act;

• (c) as at the date of this notice, Genesis has complied with:

• (i) the provisions of Chapter 2M of the Act as they apply to Genesis; and

• (ii) section 674 of the Act;

• (d) as at the date of this notice, there is no excluded information of the type referred to in sections 708AA(8) and 708AA(9) of the Act; and

• (e) the potential effect that the issue of the new shares will have on the control of Genesis, and the consequences of that effect, will depend on a number of factors including:

GENESIS RESOURCES LIMITED ACN 114 787 469 Level 3, 1 Collins Street, Melbourne, Victoria 3000, Australia Tel: + 61 3 9286 7500 | F + 61 3 9662 1472 | www.genesisresourcesltd.com.au

• the level of shareholder participation (including both the taking up of entitlements and applications for additional new shares);

• which shareholders participate;

• the extent to which the underwriting is called upon; and

• the level of dispersion of shortfall shares (if any) to the Underwriter and subunderwriters to the Offer.

If every shareholder takes up their full entitlement, there will be no effect on the control of Genesis, as the Offer is made pro-rata and in that case there would not be any scope for any shareholder to apply for additional new shares under the Offer and there would be no shortfall for the underwriter, Tigermoth Investments Limited ( Tigermoth or the Underwriter ), which is a major shareholder of the Company.

If no shareholder other than the Underwriter takes up any of their entitlement and no rights are exercised ( Lack of Shareholder Subscription ), the following would result (before the effect of the underwriting):

				Percentage of Genesis’ Issued Capital After Taking Up Full Entitlement (%)
		Current Percentage Of Genesis’ Issued Capital (%)	Total Holdings After Taking Up Full Entitlement
	Current Holding
Party
Tigermoth Investments Limited	3,775,000	4.13	5,033,334	4.13

The Underwriter will be bound to subscribe for all new shares which are not taken up under the Offer or under the shortfall facility. If no shareholder, other than the Underwriter, takes up any of their entitlement and no rights are exercised, the Underwriter will therefore be bound to subscribe for 29,236,558 shares at a total price of $2,631,290. The final shareholding interests of the Underwriter upon completion of the Offer in the event of Lack of Shareholder Subscription will be as follows:

	Current Percentage Of Genesis’ Issued Capital (%)					Maximum Percentage Of Genesis’ Issued Capital (%)
		Full Entitlement Under The Offer	Maximum Under Written Shares	Maximum Number Shares Acquired Under The Offer
					Total Maximum Holding
Current Holding
3,775,000	4.13	1,258,334	29,236,558	30,494,892 (inclusive of full entitlement and maximum underwritten shares)	34,269,892 (being the total of current holding and maximum shares acquired under Offer)	28.09

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The Underwriter has advised the Company that a major shareholder of Genesis, S Active Holding Sdn Bhd ( S Active ), intends to participate in the Offer as a sub-underwriter, in addition to taking up its full entitlement under the Offer.

S Active currently holds 12.97% of the Company’s issued share capital. In accordance with the underwriting agreement, S Active (or any other sub-underwriter) may not acquire shares which will result in it having a relevant interest in 20% or more of the Company’s total issued share capital (post-Offer).

Therefore, the maximum relevant interest in Genesis shares that S Active (or any other sub-underwriter) will hold as a result of the Offer will not exceed 20%.

Mr Patrick Volpe, a director, has advised the Board that Trayburn Pty Ltd ACN 006 048 639 ( Trayburn ), a company controlled by him, intends to participate in the Offer as a subunderwriter by subscribing for shortfall shares (if any) worth approximately $200,000. Trayburn is not currently a shareholder of the Company. In the event that Trayburn subscribes for $200,000 worth of New Shares as a sub-underwriter, Trayburn will hold approximately 2,222,222 shares (1.82% of the Company’s issued capital post-Offer) in Genesis. Accordingly, Mr Volpe will, upon completion of the Offer, hold a relevant interest in 1.82% of the Company’s issued share capital.

The following can be said about the effect of the Offer on the control of Genesis:

• currently, the Underwriter does not control Genesis;

• as noted above, if every shareholder was to take up their full entitlement, there would be no effect on the control of Genesis following the Offer;

• the Offer, as a result of Lack of Shareholder Participation could result in the Underwriter increasing its holding in Genesis from 4.13% to 28.09%, giving it significantly increased voting power (in the event that the Underwriter elects to directly subscribe for these shares instead of allocating shares to sub-underwriters);

• The Underwriter has advised Genesis that it does not currently intend to change its existing relationship with Genesis (other than the number of shares it holds directly); and

• in addition to the shares that may be issued to the Underwriter as a result of the underwriting, the Underwriter will also receive the underwriting fee of 5% of the amount to be raised under the Offer; together with an administration fee of 1% of the amount to be raised under the Offer.

Yours faithfully

• Sophie Karzis Company Secretary T. 03 9286 7501

• F. 03 9662 1472

• M. 0409 540 827 E. sk@ccounsel.com.au

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