LOTUS RESOURCES LIMITED — Capital/Financing Update 2011

Feb 20, 2011

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SHORTFALL ON SHARE ENTITLEMENT ISSUE AND OPTION ENTITLEMENT ISSUE

ASX ANNOUNCEMENT 21 FEBRUARY 2011

In accordance with ASX Listing Rules Appendix 7A timetable, Dragon Energy Ltd (ASX: DLE) advises the following in relation to its conditionally underwritten 1-for-2 pro-rata nonrenounceable entitlement issue to shareholders ( Share Entitlement Issue ).

Share Entitlement Issue

Number	of Shares available under the Share Entitlement	71,189,859 Shares
Issue:
Number	of Shares taken up:	40,526,283 Shares
Shortfall	Shares (i.e. Shares not taken up):	30,663,576 Shares

In addition, Dragon Energy advises the following in relation to its 1-for-3 pro-rata nonrenounceable entitlement issue of options exercisable at $0.35 each with an expiry date of 18 November 2014 ( Options ) to shareholders ( Option Entitlement Issue ):

Option Entitlement Issue

Number	of	Options	available	under	the	Priority	47,460,245 Options
Placement:
Number	of Options taken up:						36,234,778 Options
Shortfall	Options (i.e. Options not			taken up):			11,225,467 Options

The Shortfall Shares have been notified to the underwriter to the Share Entitlement Issue. Pursuant to Section 3.6 of the Entitlement Issues Prospectus, the Directors have placed the Shortfall Options.

The Company will proceed to allot the securities in accordance with the Entitlement Issues timetable and will provide additional information regarding the Share Entitlement Issue and Option Entitlement Issue as required by ASX in due course.

Gang Xu Managing Director

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