GENESIS RESOURCES LIMITED — Capital/Financing Update 2014

Aug 27, 2014

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GENESIS RESOURCES LIMITED

(ASX: GES)

ASX and Media Release

28 August 2014

Company Update on Plavica Project in Macedonia

Genesis Resources Limited ( Genesis or the Company ) is pleased to advise shareholders of a number of significant developments which have occurred in respect of its Plavica Project in Macedonia.

Background

As shareholders are aware, the Company is party to a joint venture agreement with its Macedonia-based partner RIK Sileks AD Kratovo ( Sileks ), in respect of seven exploration tenements in Macedonia including the relatively advanced Plavica tenement ( JV Agreement ) which Sileks held concession licences over; the seven tenements collectively comprise the ‘Plavica Project’. Under the JV Agreement, the Company has the right to acquire a 62% legal and beneficial ownership of the interests held by Sileks in respect of each tenement (whether tangible or intangible, including exploration/ mining rights, licences and exploration results), subject to the completion of drilling and exploration programs and the submission of a feasibility study as prescribed by the Agreement.

Incorporation of joint venture entity

Genesis and Sileks have now jointly incorporated a company in Macedonia, Silgen Resources International Ltd, Kratovo ( JV Company ), which is 62% owned by Genesis and 38% owned by Sileks’ nominee. The JV Company is governed in general by a 4 member supervisory board which consists of two members nominated by each joint venture party. The board is responsible for supervising the management of the JV Company, which in turn is administered by the manager of the JV Company, who Genesis has the sole right to appoint. Under Macedonian law, certain decisions of the JV Company, including the appointment of board members, require member approval at a general meeting (otherwise known as an assembly of partners). The voting power of members of the JV Company at a general meeting will be in proportion to their share ownership percentage.

Completion and submission of government mandated final feasibility study

As announced to the market, Genesis previously engaged consultants in Macedonia to complete, in respect of the main Plavica tenement, a final feasibility study in accordance with the requirements of the Macedonian Government. The submission of the Government-mandated final feasibility study reports is a pre-requisite to the application for an exploitation (mining) licence for the Plavica tenement. This study has been completed by Genesis and submitted to Sileks.

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

Following the parties’ incorporation of the JV Company, Sileks transferred the ownership of all assets it held in respect of the Plavica tenement (including the concession licence, all exploration results, associated data and the Government-mandated final feasibility study reports) to the JV Company. The Directors confirm that the Government-mandated final feasibility study reports for the Plavica tenement have been submitted to the Macedonian Ministry of Economy by the JV Company.

Application of exploitation (mining) licence for Plavica tenement

The Directors are pleased to advise that the JV Company has now submitted an application for a 30 years exploitation (mining) licence for the Plavica tenement to the Ministry of Economy ( Licence ); for reference, the area covered by the application totals 16.85 km[2 ] (see Figure 1 below). Genesis and Sileks have no reason to believe that the JV Company’s application for the 30 years exploitation Licence will not be granted.

As a result of the developments described above, Genesis now has a direct 62% ownership of the JV Company (subject to the encumbrance described below) which in turn owns all assets in respect of the Plavica tenement, including the Licence when granted.

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Figure 1: Area covered by the 30 year exploitation (mining) licence submitted by the JV Company. Co-ordinates shown are in the Gauss-Kruger system

After the Licence is granted, Genesis remains responsible under the terms of the JV Agreement for undertaking infill and extensional drilling and completing a feasibility study in respect of the Licence area (as required to obtain funding for mine development), and the costs of those activities. The infill drilling will aim to deliver a resource in the ‘indicated’ category, and the extensional drilling will aim to increase the total resource of Plavica, which is still open along strike as well as test Maricanski Rid (46m @ 1.59 g/t Au) located 800m south of Plavica, and a number of other targets. Genesis expects to complete the proposed infill and extensional drilling and the feasibility study within 2.5 years of the JV Company being granted the Licence, and has agreed to commit up to US$7.5m for such activities. In order to secure the performance of Genesis’ obligations to complete and pay for the proposed infill and extensional drilling and the

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feasibility study within 2.5 years, Genesis has granted a security interest over its shares in the JV Company in favour of Sileks. This security interest will be discharged when Genesis completes the proposed infill and extensional drilling and feasibility study.

Remaining six tenements

The remaining six tenements are green field projects. These six exploration tenements have recently expired. Instead of seeking to extend the terms of these concession licences as the parties initially intended, which extensions would only be granted for a maximum of two years, it was determined that it would be more appropriate to re-apply for new concession licences over the relevant areas. This will enable the parties to benefit from recent changes to Macedonian law which entitle holders of newly granted concession licences to conduct exploration over a period of up to six years. Genesis is currently reviewing recent mapping over the relevant areas to determine the best areas over which to submit applications for exploration concession licences.

Further updates

The Company looks forward to providing further updates to the market as and when developments occur, particularly when it receives notification of grant of the 30 year exploitation Licence.

-Ends-

For further information, please contact:

Sophie Karzis

Company Secretary T: +61 3 9286 7501 M: 0409 540 827 E: sk@ccounsel.com.au

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