Lachlan Star Limited — Major Shareholding Notification 2012

May 14, 2012

FACSIMILE TRANSMITTAL SHEET

TO.	FROM:
Company Announcements Office	Maggie Tang
COMPANY	DATE:
Australian Securities Exchange	May 14, 2012
FAX NUMBER	TOTAL NO. OF PAGES INCLUDING COVER
011-61-2-9778-0999/ 61-2-9347-0005	3
PHONE NUMBER	SENDER'S PHONE NUMBER. 416-943-4072
RE.	SENDER'S FAX NUMBER
FORM 603	416-943-6497
E PLEASE COMMENT E FOR REVIEW $\square$ urgent	$\Box$ PLEASE REPLY $\Box$ PLEASE RECYCLE

NOTES/COMMENTS:

Dear Sir/Madam,

Please find attached a Form 603 notice of initial substantial holder for Lachlan Star Limited. Please do not hesitate to contact me at mtang@sprott.com if you have any questions.

Sincerely, Maggie Tang Corporations Act 2001 Section 671B

Notice of initial substantial holder

To Company Name/Scheme	Lachlan Star Limited
ACN/ARSN	000 759 535
1. Details of substantial holder (1)
Name	Sprott Asset Management LP
ACN/ARSN (if applicable)

The holder became a substantial holder on 04/05/2012

2. Dotalls of voting power

The total number of votes attached to all the voting shares in the company or voting interests in the scheme that the substantial holder or an me total number or votes auached to an the voting shares in the company or voting interests in the scribine that the subs
associate (2) had a relevant interest (3) in on the date the substantial holder became a substantial

Class of securities (4)	Number of securities	Person's votes (5)	Voting power (6)
1 Ordinary Shares	4 4 2 2 9 2 3	4,422,923	5.1%

3. Details of relovant Interests

The nature of the relevant interest the substantial holder or an associate had in the following voting securities on the date the substantial holder became a substantial holder are as follows:

Holder of relevant interest	Nature of relevant interest (7)	Class and number of securities
Sprott Asset Management LP	t Portfolio manager acting on behalf of the various funds managed by it	Ordinary Shares 4,422,923

4. Dotalls of present registered holders

The persons registered as holders of the securities referred to in paragraph 3 above are as follows:

Holder of relevant	Registered holder of	Person entitled to be	Class and number of securities
interest	securities	registered as holder (8)
	RBC Dexia Investor
Sprott Asset Management	Sarvices Trust	Various Sprott funds	Í Ordì⊓ary Shares 4,422,923.
LP	(Sub-custodian: HSBC)
	Bank Australia Limited)

5. Consideration

The consideration paid for each relevant interest referred to in paragraph 3 above, and acquired in the four months prior to the day that the substantial holder became a substantial holder is as follows:

Holder of relevant interest	Date of acquisition	Consideration (9)		Class and number of securities
		Cash	Non-cash
Sprott Asset Management LP	01/02/2012	C\$1.20		300,000 ordinary shares
Sprott Asset Management LP	22/03/2012	C\$1.60		50,000 ordinary shares
Sprott Asset Management LP	03/04/2012	C\$1.60		600,000 special warrants

6 Associates

The reasons the persons named in paragraph 3 above are associates of the substantial holder are as follows:

Name and ACN/ARSN (if applicable)	Nature of association
l Not applicable

7. Addresses

The addresses of persons named in this form are as follows:

Name	Address
Sprott Asset Management LP	200 Bay Street, Suite 2700, P.O. Box 27 Toronto, Ontario, Canada M5J 2J1

Signature

print name	Kirstin McTaggart	capacity	Chief Compliance Officer
sign here	----	date	May 10, 2012

DIRECTIONS

• (1) If there are a number of substantial holders with similar or related relevant Interests (eg. a corporation and its related corporations, or the manager and trustee of an equity trust), the names could be included in an annexure to the form. If the relevant interests of a group of persons are essentially similar, they may be referred to throughout the form as a specifically named group if the membership of each group, with the names and addresses of members is clearly set out in paragraph 7 of the form.
• (2) See the definition of "associate" in section 9 of the Corporations Act 2001.
• (3) See the definition of "relevant interest" in sections 608 and 671B(7) of the Corporations Act 2001.
• $(4)$ The voting shares of a company constitute one class unless divided into separate classes.
• $(5)$ The total number of votes attached to all the voting shares in the company or voting interests in the scheme (if any) that the person or an associate has a relevant interest in.
• (6) The person's votes divided by the total votes in the body corporate or scheme multiplied by 100.
• (7) Include details of:
• $(a)$ any relevant agreement or other circumstances by which the relevant interest was acquired. If subsection 671B(4) applies, a copy of any document setting out the terms of any relevant agreement. and a statement by the person giving full and accurate details of any contract, scheme or arrangement, must accompany this form, together with a written statement certifying this contract, scheme or arrangement; and
• any qualification of the power of a person to exercise, control the exercise of, or influence the exercise of, the voting powers or disposal $(b)$ of the securities to which the relevant interest relates (indicating clearly the particular securities to which the qualification applies).

See the definition of "relevant agreement" In section 9 of the Corporations Act 2001.

• If the substantial holder is unable to determine the identity of the person (eg. if the relevant interest arises because of an option) write $(8)$ "unknown".
• Details of the consideration must include any and all benefits, money and other, that any person from whom a relevant interest was acquired (9) has, or may, become entitled to receive in relation to that acquisition. Details must be included even if the benefit is conditional on the happening or not of a contingency. Details must be included of any benefit paid on behalf of the substantial holder or its associate in relation to the acquisitions, even if they are not paid directly to the person from whom the relevant interest was acquired.