GENESIS RESOURCES LIMITED — Capital/Financing Update 2016

Aug 14, 2016

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Monday 15 August 2016

Dear Shareholder

Genesis Resources Limited Pro-Rata Non-Renounceable Rights Issue

On Friday 12 August 2016, Genesis Resources Limited ACN 114 787 469 ( Genesis or the Company ) announced that it would undertake 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, New Zealand, Hong Kong, Malaysia or Singapore ( Eligible Shareholders ) as at 7:00pm (Melbourne time) on Wednesday 17 August 2016 ( Record Date ).

The Company has prepared an Offer Document in relation to the Offer. The Offer Document was lodged with the Australian Securities Exchange ( ASX ) on Friday 12 August 2016, and a copy is available on the ASX website at www.asx.com.au (ASX: GES).

The Offer Document will be despatched to Eligible Shareholders in Australia, New Zealand, Hong Kong, Malaysia and Singapore on Monday 22 August 2016.

Treatment of ineligible shareholders

The Company has determined that it would be unreasonable to extend the Offer to shareholders with a registered address outside Australia, New Zealand, Hong Kong, Malaysia or Singapore ( Ineligible Shareholders ) having regard to:

• the small number of shareholders with addresses in such other countries;

• the number and value of the shares they hold; and

• the cost to the Company of complying with applicable legal and regulatory requirements in such other countries.

Accordingly, Eligible Shareholders are those shareholders who:

• will be on the Company’s register of shareholders as at the Record Date; and

• have a registered address in Australia, New Zealand, Hong Kong, Malaysia or Singapore.

Details of the Offer

Pursuant to the Offer, which is made on a 1-for-3 basis, the Company will issue up to 128,295,129 Shares ( New Shares ) in the capital of the Company at an issue price of $0.03 each, to raise up to $3,848,853.86 (before costs of the Offer).

The rights issue offers Eligible Shareholders the right to take up 1 New Share for every 3 Shares held as at the Record Date at an issue price of $0.03 per New Share ( Entitlement ). The right to subscribe for New Shares in accordance with an Entitlement under the Offer will be non-renounceable. Shareholders who subscribe for their full Entitlement will also be entitled to apply for additional New Shares in excess of their full Entitlement under a shortfall facility. The Company will only issue up to the aggregate number of New Shares that are offered under the Offer, being 128,295,129 Shares, therefore it may be necessary to scale-back applications for additional Shares under the shortfall facility if all applications exceed this number.

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

The Offer is partially underwritten by S Active Holding Sdn Bhd ( Underwriter ) up to an amount of $2,000,000.00, on the terms and conditions of an underwriting agreement summarised in the Offer Document.

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. In the event that, following the close of the Offer and taking up of Shares by the Underwriter (and any sub-underwriters) a shortfall remains, the Directors reserve the right to place such shortfall shares at their discretion with persons interested in subscribing for Shares in the Company within 3 months of the close of the Offer.

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, assuming the Offer is fully subscribed, are as follows:

EVENT	NO. OF SHARES
Shares on issue at date of Offer Document	384,885,386
Maximum New Shares issuedpursuant to the Offer	128,295,129
Maximum total Shares on issue after completion of the Offer	513,180,515

Purpose of Offer and use of funds

As announced to the market on 12 May 2015, Silgen Resources International Ltd, Kratovo ( Silgen ), the joint venture company owned by the Company and its joint venture partner RIK Sileks AD Kratovo ( Sileks ) in 62% and 38% proportions respectively, has been granted a 30 years exploitation (mining) licence for the Plavica tenement ( Licence ).

As the joint venture party responsible for managing the Plavica Project, the Company is seeking to raise capital under the Offer to meet its obligations under its joint venture agreement with Sileks to undertake infill and extensional drilling and complete a feasibility study in respect of the exploitation licence area (as required to obtain funding for mine development). 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 exploitation licence, and has agreed to commit up to US$7.5M for such activities.

Offer timetable

EVENT	DATE (2016)
Announcement of the Offer	Pre-marketFriday 12 August
Lodgement of the following documents with ASX:
•an Appendix 3B;•this Offer Document; and•a cleansing notice under section 708AA(2)(f) of the	Pre-marketFriday 12 August
Corporations Act
Notice sent to Shareholders containing ASX Appendix 3B detailsand indicative timetable	Monday 15 August
“Ex” date where the Company’s existing shares will commencetrading without the entitlement to participate in the Offer	Tuesday 16 August
Record date to determine Entitlements under the Offer	7.00pm (Melbourne time)Wednesday 17 August
Opening Date for the Rights Issue
Mailing of Offer Document and Entitlement and Acceptance Form	Monday 22 August
to Eligible Shareholders

Last day to extend Rights Issue Closing Date	Tuesday 13 September
Closing Date for the Rights Issue	5.00pm (Melbourne time)Friday 16 September
Shares quoted on a deferred settlement basis	Monday 19 September
ASX notified of under subscriptions	Wednesday 21 September
New Shares for which valid applications have been received andaccepted by the Company will be issued	Friday 23 September
Deferred settlement trading ends	Friday 23 September
Normal trading of New Shares on ASX expected to commence	Monday 26 September
Deadline for placement of remaining shortfall	Friday 16 December

This timetable is indicative only and subject to change. Subject to the Corporations Act and the ASX Listing Rules, the Company 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.

Dealing with Entitlements

Eligible Shareholders have the following alternatives available in relation to the Rights Issue:

1. accept their Entitlement in full;

2. accept their Entitlement in full and apply for additional shares under the shortfall facility;

3. partially accept their Entitlement; or

4. allow their Entitlement to lapse.

To the extent that Shareholders do not take up their Entitlement, their interest in the Company will be diluted.

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

Yours faithfully Sophie Karzis Company Secretary