LION SELECTION GROUP LIMITED. — Capital/Financing Update 2019

Nov 3, 2019

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ASX RELEASE: LSX

Net Tangible Asset Backing

Net Tangible Asset Backing

Lion Selection Group Limited (Lion) advises that the unaudited net tangible asset backing of Lion as at 31 October 2019 is $0.47 per share (after tax).

		Commodity	September 2019	October	2019
			A$M	A$M	¢ps
Pani	Joint Venture (33.3% Interest)	Gold	39.2	39.2	26.1
	Fair value for Pani based on Merdeka’s acquisition of		66.7% interest
	in the Pani JV from Lion’s previous	JV partner in November 2018.
Portfolio
Nusantara Resources		Gold	11.5	11.5	7.7
Egan	Street Resources	Gold	6.3	6.7	4.4
Erdene Resources		Gold	2.0	2.0	1.4
Other			3.4	3.3	2.2
	Portfolio holdings measured at fair	value
	Includes investments held directly by Lion and the value to Lion of
	investments held by African Lion.

Net Cash	8.6	8.2	5.4
Net Tangible Assets	A$71.0m	A$70.9m	47¢ps

Capital Structure

Shares on Issue:	150,134,879
Share Price:	39.5¢ps	31 October 2019
Options on Issue:	15,720,958	$0.50 expiry 12 April 2020

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Lion Selection Group Limited ABN 26 077 729 572 Level 2, 175 Flinders Lane, Melbourne Vic 3000 T: +61 3 9614 8008 www.lsg.com.au ASX RELEASE – 4 NOVEMBER 2019

Further enquiries: Craig Smyth E: csmyth@lsg.com.au

EGAN STREET TAKEOVER – IMPROVED CONSIDERATION

On 30 July 2019 it was announced that Lion had entered a Pre‐Bid Acceptance Deed with Silver Lake Resources Limited (‘Silver Lake’) for a Recommended Takeover Offer for EganStreet Resources Limited (‘EganStreet’), with Lion’s 21.1m shares of EganStreet subsequently being accepted into the offer under the terms of the Pre‐Bid Acceptance Deed.

On 1 November 2019 Silver Lake and EganStreet announced that Silver Lake will increase the Offer consideration with EganStreet Shareholders to be offered 0.400 Silver Lake shares for each EganStreet share held (“New Offer Consideration”). Further, Silver Lake will increase the consideration to 0.431 for each EganStreet share held (“Conditional Offer Consideration”), if Silver Lake obtains a relevant interest in at least 38% of EganStreet shares on or before 7.00 pm Sydney time on 8 November 2019, being 7 days from lodgment of the variation notice. As at 31 October 2019, Silver Lake has a relevant interest in 31.6% of EganStreet shares, including acceptances from the Board of Directors and Lion. Once Silver Lake receives a relevant interest of at least 38%, Silver Lake has advised it intends to declare the Offer immediately unconditional. Lion is eligible to benefit from the improved consideration assuming that the bid is declared unconditional.

Based on the Silver Lake closing price on 1 November of $1.185 per share, the New Offer Consideration imputes a value of 47.4¢ per EganStreet share and the Conditional Offer Consideration 51.1¢. The October 2019 NTA backing is based on the closing EganStreet price on 31 October 2019 of 31.5¢ps. The Pro Forma NTA based on the increased offer is set out below.

	EganStreet	Lion's	Contribution to Lion	Lion Pro
	Value	Interest	Pro Forma NTA	Forma NTA
Valuation 31 October 2019	31.5¢ps	$6.7m	4.4¢ps	47¢ps
New Offer Consideration	47.4¢ps	$10.0m	6.7¢ps	49¢ps
Conditional Offer Consideration	51.1¢ps	$10.8m	7.2¢ps	50¢ps

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ASX RELEASE – 4 NOVEMBER 2019