KINGSROSE MINING LIMITED — Capital/Financing Update 2013

Apr 17, 2013

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18 April 2013

Company Announcements Office Australian Securities Exchange Limited Level 6, 20 Bridge Street Sydney NSW 2000

**CHANGE

TO FINANCING ARRANGEMENTS**

As a result of delays experienced in resuming full mining activities at the Way Linggo Project, the Company, in consultation with lender Credit Suisse, has decided to defer the activation of the prepaid gold forward financing transaction ( refer ASX announcement 12 February 2013 ). No funds have been advanced under this arrangement.

As an interim measure, A$5 million financing has been agreed with Beaurama Pty Ltd, an entity associated with one of the Company’s non-­‐executive directors and substantial shareholder, James William [Bill] Phillips, on arms length basis, the terms of which are similar to or more advantageous to the Company than those that could reasonably be expected to be reached with an independent third party lender. The loan drawdown, subject to completion and execution of loan documentation, is expected before the end of April and will be used to fund development activities at Talang Santo and for general working capital purposes. The key terms of the loan are as follows:

Ø **Loan

from Beaurama Pty Ltd (as trustee for the Phillips Investment Trust).**

• Principal: up to A$5 million; drawable in A$1m lots at the Company’s election.

• Interest rate: 8.5% pa, payable quarterly.

• Repayment: from end-­‐January 2014 to end-­‐April 2014

• The Company can elect to repay any outstanding funds early.

• The lender will be repaid should the Company or a subsidiary raise more than US$15m from another lender or from a share issue.

• Security*: Equal first ranking security over all the issued shares in the Company’s Australian subsidiaries that hold the (85%) ownership of the Way Linggo Project.

In addition, the terms of a US$5 million loan received in October 2012 from an entity associated with Mr Phillips, Advance Concept Holdings Inc., will be amended to be consistent with the terms of the new loan. These key terms of the loan are as follows:

Ø **Loan

from Advance Concept Holdings Limited.**

• Principal: US$5 million; this amount was drawn down in October 2012.

• Interest rate: 8.5% pa, payable quarterly.

• Repayment: from end-­‐January 2014 to end-­‐April 2014

• The Company can elect to repay any outstanding funds early.

Suite 9, Level 2 | 12 – 14 Thelma Street West Perth WA 6005 ABN: 49 112 389 910

T + 61 8 9486 1149 | F + 61 8 9486 1151 www.kingsrosemining.com.au info@kingsroseminig.com.au

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• The lender will be repaid should the Company or a subsidiary raise more than US$15m from another lender or from a share issue.

• Security*: Equal first ranking security over all the issued shares in the Company’s Australian subsidiaries that hold the (85%) ownership of the Way Linggo Project.

***

ASX WAIVER**

As part of the financing rearrangement, it was necessary for the Company to seek a waiver from ASX Listing Rule 10.1 concerning the granting of security over Company assets without first seeking shareholder approval.

The waiver has now been granted by the ASX on the following terms:

1. Based solely on the information provided, ASX Limited (“ASX”) grants Kingsrose Mining Limited (the “Company”) a waiver from listing rule 10.1, to the extent necessary to permit the Company and its subsidiaries (“Subsidiaries”), to:

• 1.1. Grant security over its assets in favour of Beaurama Pty Ltd (“Beaurama”) (the “Beaurama Security”) pursuant to a loan facility agreement under which Beaurama may provide the Company up to A$5 million to assist with its working capital requirements (the “Beaurama Facility”), without obtaining shareholder approval on the following conditions.

  • 1.1.1. The Beaurama Facility includes a term that if an event of default occurs and Beaurama exercises its rights under the Beaurama Security, neither Beaurama nor any of its associates can acquire any legal or beneficial interest in an asset of the Company in full or part satisfaction of the Company's obligations under the Beaurama Facility, or otherwise deal with the assets of the Company, without the Company first having complied with any applicable listing rules, including listing rule 10.1, other than as required by law or through a receiver, or receiver and manager (or any other person acting on behalf of Beaurama) appointed by Beaurama exercising its power of sale under the Beaurama Security and selling the assets to an unrelated third party on arm's length commercial terms and conditions and distributing the cash proceeds to Beaurama in accordance with its legal entitlements.

  • 1.1.2. A summary of the material terms of the Beaurama Facility is made in each annual report of the Company during the term of the Beaurama Facility.

  • 1.1.3. Any variations to the terms of the Beaurama Facility or the Beaurama Security which is:

    • 1.1.3.1. not a minor change; or

    • 1.1.3.2. inconsistent with the terms of the waiver,

must be subject to shareholder approval.

• 1.1.4. The Company must seek to discharge the Beaurama Security when the funds Advance under the Beaurama Facility are repaid, or if it is not discharged, seek shareholder approval for the continuation of the Beaurama Security for any further loan facility amount.

www.kingsrosemining.com.au

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• 1.1.5. The Company immediately releases to the market an announcement which sets out the terms of the waiver, and the Company’s plans with respect to the repayment of the funds Advance under the Beaurama Facility and the discharge of the Beaurama Security, including the timeframe within which it expects the repayment and discharge to occur.

• 1.2. Grant security over its assets in favour of Advance Concept Holding Pty Ltd (“Advance”) (the “Advance Security”) pursuant to the extension to an existing loan facility agreement under which Advance may provide the Company up to US$5 million to assist with its working capital requirements (the “Advance Facility”), without obtaining shareholder approval on the following conditions.

  • 1.2.1. The Advance Facility includes a term that if an event of default occurs and Advance exercises its rights under the Advance Security, neither Advance nor any of its associates can acquire any legal or beneficial interest in an asset of the Company in full or part satisfaction of the Company's obligations under the Advance Facility, or otherwise deal with the assets of the Company, without the Company first having complied with any applicable listing rules, including listing rule 10.1, other than as required by law or through a receiver, or receiver and manager (or any other person acting on behalf of Advance) appointed by Advance exercising its power of sale under the Advance Security and selling the assets to an unrelated third party on arm's length commercial terms and conditions and distributing the cash proceeds to Advance in accordance with its legal entitlements.

  • 1.2.2. A summary of the material terms of the Advance Facility is made in each annual report of the Company during the term of the Advance Facility.

  • 1.2.3. Any variations to the terms of the Advance Facility or the Advance Security which is:

    • 1.2.3.1. not a minor change; or

    • 1.2.3.2. inconsistent with the terms of the waiver,

must be subject to shareholder approval.

• 1.2.4. The Company must seek to discharge the Advance Security when the funds Advance under the Advance Facility are repaid, or if it is not discharged, seek shareholder approval for the continuation of the Advance Security for any further loan facility amount.

• 1.2.5. The Company immediately releases to the market an announcement which sets out the terms of the waiver, and the Company’s plans with respect to the repayment of the funds Advance under the Advance Facility and the discharge of the Advance Security, including the timeframe within which it expects the repayment and discharge to occur.

2. ASX has considered listing rule 10.1 only and makes no statement as to the Company’s compliance with other listing rules.

www.kingsrosemining.com.au

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Kingsrose intends to either repay the loans before their respective repayment dates from surplus cashflows or refinancing.

Yours faithfully KINGSROSE MINING LIMITED

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**CHRIS

START MANAGING DIRECTOR KINGSROSE MINING LIMITED**

For more information please contact:

Investors: Chris Start Managing Director +61 8 9486 1149 www.kingsrsosemining.com.au info@kingsrosemining.com.au

Media: Paul Armstrong Read Corporate +61 8 9388 1474

**About

Kingsrose Mining Limited:**

Kingsrose Mining Limited is a gold producer that owns 85% of the Way Linggo Project in South Sumatra, Indonesia. The Project has emerged as small but highly profitable due to its high gold and silver grades and low operating costs. The Way Linggo Project hosts a JORC compliant resource of 2,188,500 tonnes with a grade of 6.9/t gold containing 485,900 ounces and 135g/t silver containing 3,183,200 ounces. Management are targeting production of +40,000 ounces of gold and +250,000 ounces of silver per annum at cash costs of circa US$300oz after silver credits.

The Way Linggo Project, held under a highly prized 4[th] Generation Contract of Work agreement with the Indonesian government (mining title of 10,000 hectares), sits on the prolifically mineralised Trans-­‐Sumatra Fault which is part of the Pacific Rim of Fire. The area is considered highly prospective for low-­‐sulphidation epithermal gold-­‐silver deposits. Kingsrose made a second high grade epithermal gold discovery in mid-­‐2011, named Talang Santo, 7km NNE of the Way Linggo mine and has commenced development of that ore system to supplement and sustain its gold production.

www.kingsrosemining.com.au