GENESIS RESOURCES LIMITED — Capital/Financing Update 2012

Aug 26, 2012

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GENESIS RESOURCES LIMITED

(ASX: GES)

ASX Release

27 August 2012

Pro-Rata Non-Renounceable Rights Issue

• 1-for-3 pro-rata non-renounceable Rights Issue at an issue price of 9 cents per share

• To be fully underwritten by Tigermoth Investments Limited, a major shareholder of the Company

• Rights Issue to raise approximately $2.74 million

• Proceeds of the Rights Issue will be applied, over the next 12 months, to:

• fund the Company’s minimum expenditure commitments for its mining and exploration licences and permits;

• fund further exploration costs associated with its projects, particularly the Company’s Plavica Project in Macedonia; and

• to meet the Company’s general working capital requirements

Overview

Genesis Resources Limited ( Genesis or the Company ) announces a pro-rata non-renounceable rights issue on a 1 for 3 basis ( Offer ) to holders of ordinary shares ( Shares ) in the Company ( Shareholders ) with a registered address in Australia or New Zealand ( Eligible Shareholders ) as at 7:00pm (Melbourne time) on Wednesday 5 September 2012 ( Record Date ).

Pursuant to the Offer, the Company will issue approximately 30,494,892 fully paid ordinary shares (this number may vary due to the rounding up of fractional entitlements) in the capital of the Company ( New Shares ) at an issue price of 9 cents each, to raise approximately $2,744,540 (before costs). The issue price represents a discount of approximately 5.3% to the closing price of 9.5 cents for Shares last traded on the Australian Securities Exchange ( ASX ) on 24 August 2012.

The Rights Issue offers Eligible Shareholders the right to take up one New Share for every three Shares held as at the Record Date of 7.00pm (Melbourne time) on Wednesday 5 September 2012 at an issue price of 9 cents per New Share ( Entitlement ). The right to subscribe for New Shares in accordance with an Entitlement under the Offer will be non-renounceable.

GENESIS RESOURCES LIMITED ACN 114 787 469 Level 3, 1 Collins Street, Melbourne, Victoria 3000, Australia

Tel: +61 3 9665 0411 | Fax: +61 3 9650 5571 | www.genesisresourcesltd.com.au

The Rights Issue Offer is to be fully underwritten by Tigermoth Investments Limited ( Tigermoth or Underwriter ). To the extent that a Shareholder does not take up their Entitlement, their interest in the Company will be diluted.

The New Shares issued under the Offer will be fully paid and will rank equally with the Company’s existing Shares. The Company will make an application to the ASX for official quotation of the New Shares.

There will be an Offer Information Document in relation to the Offer which will be lodged with ASX on Tuesday 28 August 2012 and despatched to Eligible Shareholders on Monday 10 September in accordance with the timetable below.

The number of Shares on issue in the Company at the date of this letter and the total number of Shares that will be on issue in the Company following the Offer are as follows:

EVENT	NUMBER OF SHARES
Shares on issue at date of Offer Information Document	91,484,676
New Shares issuedpursuant to the Rights Issue Offer*	30,494,892
TOTAL SHARES ON ISSUE AFTER COMPLETION OF THE OFFER	121,979,568

*this number may vary due to the rounding up of fractional entitlements under the offer

The number of options on issue in the Company at the date of this letter is as follows:

CLASS OF OPTIONS	NUMBER OF OPTIONS
Unlisted options exercisable at $0.20 on or before 27 October 2012	500,000
Unlisted optionsexercisable at $0.10on or before4 May2014	19,429,424
Unlisted optionsexercisable at $0.10on or before11 May2014	7,110,952
TOTAL OPTIONS CURRENTLY ON ISSUE:	27,040,376

After payment of the costs and expenses of the Offer, the proceeds of the Rights Issue will be applied, over the next 12 months, to:

• (a) fund the Company’s minimum expenditure commitments for its mining and exploration licences and permits;

• (b) fund further exploration costs associated with its Plavica Project, which will be necessarily incurred as a result of the Company’s stated intentions of rapidly and significantly progressing this project;

• (c) fund further exploration costs associated with its Australian projects; and

• (d) to meet the Company’s general working capital requirements.

Whilst the Company has successfully undertaken two capital raisings this year by way of a rights issue and a placement, the Board has determined a need for further capital in order for it to significantly progress the Plavica Project in Macedonia in line with its previously stated objectives. To this end, the Company has recently appointed a consultant to undertake a scoping study for the Plavica Project, which will focus on moving it towards a prefeasibility study stage, and eventually a final feasibility study. Further, the Company has engaged a drilling contractor to complete a

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minimum of 7,000 meters of reverse circulation drilling and 2,500 meters of diamond core drilling at the Plavica Project.

The Board appreciates the support demonstrated by shareholders in the Company’s rights issue conducted in March this year, and remains committed to striking an appropriate balance between preventing unnecessary dilution of existing shareholders and raising an appropriate amount of funds as the need arises, in the best interests of all shareholders. To this end, the Board has strategically endeavoured to conduct rights issues of smaller proportions to raise funds which are strictly necessary, albeit more frequently. The Board believes that this allows the Company to better align the offer price per share of each rights issue with the market price of Genesis shares (which has increased since the Company’s rights issue conducted in March 2012) thus minimising any dilutionary effect the rights issues may have on non-participating shareholders. The last closing price of Genesis shares traded on the ASX on 24 August 2012 was 9.5 cents, in comparison to the last closing price of 7 cents on 22 March 2012, prior to the announcement of the Company’s rights issue on 27 March 2012.

Offer timetable

EVENT	DESCRIPTION	PROPOSED DATE (2012)
Announcement date of Rights Issue	The Offer will be announced to ASX and the market	Monday 27 August
Lodging of Offer information documents and Appendix 3B with ASX	The Offer information documents and Appendix 3B will be lodged with ASX. .	Tuesday 28 August
Sending of letter to option holders	A letter to option holders will be sent	Tuesday 28 August
Sending of notice of the Offer to shareholders	Letters to ineligible and eligible shareholders will be sent notifying them of the Offer.	Wednesday 29 August
“Ex” date	Existing shares commence trading without the entitlement to participate in the Offer	Thursday 30 August
Record date	The date for determining entitlements to new shares under the Offer	Wednesday 5 September
Offer information documents despatch date	Offer information documents lodged with ASX and despatched to eligible shareholders	Monday 10 September
Opening date	The Offer opens	Monday 10 September
Closing date	The Offer closes	Monday 24 September
Securities quoted on a deferred settlement basis	Deferred settlement trading commences	Tuesday 25 September
Shortfall notification date	ASX is notified of any shortfall	Thursday 27 September
Despatch date	New securities applied for under the Offer are issued and entered onto shareholders’ uncertifcated security holdings	Tuesday 2 October
End of deferred settlement trading	Deferred settlement trading ends	Tuesday 2 October
Normal trading commences	Normal trading commences	Wednesday 3 October
Holding statement mail-out date	Holding statements for shares are despatched to participating shareholders.	Thursday 4 October

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This timetable is indicative only and subject to change. Subject to the Corporations Act 2001 (Cth) ( Corporations Act ) and the ASX Listing Rules, the Company, in conjunction with the Underwriter, reserves the right to vary these dates, including the closing date of the Offer, without prior notice.

The Company also reserves the right not to proceed with the whole or part of the Offer at any time prior to the issue date. In that event, application monies will be refunded in full without interest.

Full details of the terms and conditions of the Offer will be contained in the Offer Information Document to be lodged with ASX and despatched to Eligible Shareholders in accordance with the timetable set out above.

-End

For further information, please contact:

Sophie Karzis Company Secretary

• T. 03 9665 0460

• F. 03 9650 5571

• M. 0409 540 827

E. sk@ccounsel.com.au

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