MACH7 TECHNOLOGIES LIMITED — Capital/Financing Update 2012

Dec 11, 2012

12 December 2012

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The Company Announcements Office ASX Limited Via E Lodgement

SAFETY MEDICAL – ACQUISITION OF KISARA GOLD KISARA AWARDED ITACIPURU NORTE GOLD PROJECT

HIGHLIGHTS

• On 7 December 2012 Companhia Baiana de Pesquisa Mineral (“ CBPM ”) gazetted the award of Itapicuru Norte Gold Project (“ Norte ”) to Mineração Caiçara Ltda (“ Caiçara ”), a 99% owned subsidiary of Kisara Gold Pty Limited (“ Kisara ”).

• Safety Medical announced on 15 June 2012 that it had entered into a Heads of Agreement to acquire 100% of Kisara, which acquisition would include the existing Silvina Farm asset and any Future Assets awarded to Kisara.

• Norte comprises 15,421 Ha of ground (Dexai Block and Taraugo Block) covering parts of the Rio Itapicuru Greenstone Belt (“ RIGB ”) a known gold producing province in Bahia state, Brazil.

• Norte is considered an exciting opportunity on an underexplored gold property within the RIGB. Points of interest based on historical data presented to Safety Medical include:

• Ongoing small scale gold production by garimpeiros on the Deixai trend.

• Substantial series of historical soil geochemical anomalies ranging up to 856ppb Au* , 484 ppm Cu and 448ppm As over 11km of tested strike, consistently supported by:

  • Rock chip samples – up to 29.56g/t Au*

  • Trenching - up to 7.81g/t Au* (never drilled); and

  • Anomalous historical RC Drilling results – including reported intervals of 2m @*

  • 10.39g/t Au from 128m (DRC10), 12m @ 2.39g/t Au from 88m (DRC16) and 4m@ 5.76g/t Au from 84m (DRC17).

• Two operating gold mines exist within 30 - 80 km of the Norte blocks (C1 Santa Luz and Fazenda Brasileiro – both Yamana Gold operations).

• All historical soil, rock and drilling results quoted herein were taken directly from exploration reports made available by CBPM

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Safety Medical Products Limited Level 24, 44 St Georges Terrace, Perth Australia, 6000 ACN 007 817 192 Phone: (08) 6211 5099 Fax: (08) 9218 8875 Website: www.safetymed.com.au ASX Code: SFP SafetyMed® is a registered trademark of Safety Medical Products Ltd

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Figure 1: Norte Location

Itapicuru Norte Gold Project

The property is composed of two mostly contiguous groups of claims overlying prospective stratigraphy in the northern portion of the Rio Itapicuru Greenstone Belt (“RIGB”). The RIGB is an economically significant sequence within a paleoproterozoic aged granite-greenstone terrane and comprises part of the Serrhina Block, one of four Achaean-aged crustal segments which collectively make up the basement of the Sao Francisco Craton, north-eastern Brazil.

The belt itself represents a low-grade metamorphic sequence of mafic to intermediate volcanic and sedimentary rocks. The entire belt measures roughly 180km long, 30km wide and has been divided into three general lithostratigraphic units by previous workers, a basal mafic volcanic unit, an intermediate to felsic volcanic unit and a metasedimentary unit.

The Deixaí group of claims includes roughly 16km of strike along greenstones on the western side of the RIGB. Deixai has been subject to a greater amount of historical work than the Tarugao block underlain primarily by metamorphosed mafic volcanics and lesser proportions of metasedimentary rocks.

Gold mineralisation at Deixai is associated with shear hosted quartz veins ranging up to 1.5m wide within carbonate altered wall rocks. Host rocks in the western portion of the Deixai block are often sheared, altered meta-gabbros. Mineralisation is found on the eastern side of Deixai within sheared metasediments including meta-pelites and meta-cherts. Gold grades in old workings are reportedly highest within smoky quartz veins and in silicified wallrock. Reported mineralised widths indicated by RC drilling in the 1990s range up to 32m ( DRC16, approx 24m true width ) of shear hosted quartz veins and veinlets.

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Figure 2 – CBPM Claims and Underlying Geology Deixaí block (West) and Tarugão (East)

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The setting of Itapicuru Norte may be compared to that of Yamana Gold’s Fazenda Brasileiro mine and the C1 Santa Luz mine-in-development, both located within the RIGB. Fazenda Brasileiro is located on the Weber belt, trending east-west at the RIGB’s southern end. First mined in the early 1980s, Fazenda Brasileiro Gold Mine is some 80km south-east of the garimpo workings on Deixai block. The mine has been operating for over 20 years and has produced well over 1 milion ounces of gold to date and has consistently replaced its mineral reserves as they have been mined. As at December 31[st] , 2011, the mine held 359,000 oz Au proven & probable reserves at 2.42 g/t Au and 153,000 oz Au measured & indicated resources at 1.91 g/t Au. In 2011 the mine produced 55,163 oz Au at an average cash cost of $937 per oz as an underground operation. (Source – www.yamana.com)

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The C1 Santa Luz project is being developed on a series of gold deposits and is scheduled to begin production in early 2013. C1 Santa Luz is composed of a series of structurally controlled deposits within carbonaceous metasediments of the RIGB, associated with small porphyritic dacite intrusions. These deposits are located some 30km south of Deixai. Yamana is planning to produce +100,000oz Au each year over an initial planned mine life of 10 years and currently boasts 1,460,000 oz Au proven & probable reserves at 1.49 g/t Au and 476,000 oz Au measured & indicated resources at 2.53 g/t Au. (source www.yamana.com)

Construction of a second mine within the RIGB reinforces the belt’s mineral potential. Yamana continues to drill aggressively in-mine and near-mine; in 2011 the company completed over 38,000m in diamond drilling at Fazenda Brasileiro, resulting in an increase of the mine’s mineral reserves by 104%.

Safety Medical and Minerãçao Caiçara are currently finalising plans for the 2013 exploration programme which will include airborne magnetic and EM survey and surface reconnaissance trenching and soil sampling. A first pass diamond drill programme totalling 2,500m in 16 holes has been programmed for completion during the first phase of work in order to test four of the most promising prospects while reconnaissance fieldwork and target generation activities are underway.

There are numerous active and historically worked garimpos at Norte. It has been lightly explored since 1986 by Companhia Baiana de Pesquisa Mineral (CBPM), then Barrick Mining in Brazil Ltda and subsequently Marubeni Brazil S.A. The combined work of these companies consists of soil sampling, trenching and limited drilling, with the vast majority of the work to date focussed on the Deixai Block.

A list of the Project Claims is in Appendix One to this Announcement.

Figure 3: Norte tenements on the Rio Itapicuru Greenstone Belt

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Notes to Figure 3:

1. The Norte award to Caiçara is limited to the Deixai and Taurago blocks as identified in blue circles and arrowed. There is a series of tenements identified in yellow to the west of Deixai and Taurago that are owned and controlled by CBPM but are not part of the Norte award.

2. Caiçara have also pegged ground to the north of Deixai and Taurago on the RIGB. These tenements will ultimately form part of the tenement package controlled by Safety Medical once they have been granted.

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Norte – Dexai Block Exploration Highlights*

The historical Deixai soil sampling covered 11km x 4.5km on 200 - 400m spaced lines at intervals of 25 or 50m for 2,680 samples, returning highest values* of 856ppb Au, 484 ppm Cu and 448ppm As.

93 rock chip samples were reportedly taken by CBPM from 35 garimpos with the highest quartz vein sample* recording 29.56g/t Au at the Garimpo Agua Branca.

Twenty trenches were excavated by CBPM for 2,126m and 700 channel samples taken, with a maximum value* of 7.81g/t Au at Trench #16, which is located over 2km north of historic RC drilling. This emphasises the potential scale and the relatively underexplored nature of the Deixai Block alone.

Historical EM and magnetic surveys identified anomalies up to 2,800m in length showing spatial correlation to gold and arsenic soil geochemical anomalies.

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Figure 4: Exploration highlights

Norte – Dexai Block Drilling Highlights*

20 RC holes totaling 3,000m were drilled by a previous operator with encouraging results*. The majority of holes were drilled at 60o

These first drilling results* confirmed both high grade and wide intervals of mineralisation:

• 2m @ 10.39 g/t Au from 128m (DRC10)

• 36m @ 0.29 g/t Au from 20m, including 2m @ 1.07g/t Au from 28m and 2m @ 1.34g/t Au from 46m (DRC15)

• 32m @ 1.07 g/t Au from 68m, including 12m @ 2.39g/t Au from 88m (including 6m @ 3.22g/t Au from 94m) (DRC16)

• 44m @ 0.89 g/t Au from 64m including 2m @ 2.39 g/t Au from 66m and 4m @ 5.76g/t Au from 84m (DRC17)

Figure 5: Drilling Highlights*

*Exploration results quoted above are historical and are included to highlight the property’s exploration potential; while there is no reason to doubt the validity of these results, neither Safety Medical nor its Competent Person can verify the collection procedures, sample preparation or analysis methods.

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Norte – Tarugao Block Highlights*

The Tarugao Block covers a strike length of almost 38km of RIGB yet remains relatively unexplored compared to the Deixai Block. CBPM has conducted an initial geochemical survey including stream sediments, soils and rock sampling including chip sampling from a limited trenching campaign. Results to date indicate strong potential for gold mineralisation. Historical results* include:

• Stream sediments around 0.008 g/t Au, with higher anomalies between 0.10 and 0.22 g/t Au

• Excavations with intervals of 2 and 3 metres with gold grades of 1.45 g/t, 5.50 g/t, 1.1 g/t, 4.45 g/t and 2.35 g/t Au.

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Figure 6: Deixai & Tarugao Blocks on the RIGB

*Exploration results quoted above are historical and are included to highlight the property’s exploration potential; while there is no reason to doubt the validity of these results, neither Safety Medical nor its’ Competent Person can verify the collection procedures, sample preparation or analysis methods.

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Norte Acquisition Terms

Norte is being acquired by Caiçara on the following terms (converted to AUD at Real$1 = AUD$0.5):

• $250,000 (“ Initial Payment ”) paid upon the signing of the winning tender agreement, with a further $250,000 payable on the 1 year anniversary of signing the winning tender agreement. The initial payment is anticipated before the end of 2012, and will be repayable to the Company if shareholders do not approve the Company’s acquisition of Kisara.

• Minimum exploration expenditure of A$750,000 in each of the first 2 years from acquisition.

• A Gross Revenue Royalty of 2.55%.

There is no additional payment to the Kisara vendors by the Company as a result of the acquisition of Norte. However it should be noted that any JORC compliant Mineral Resource defined at Norte will contribute to the potential performance share based consideration payable to Kisara upon certain milestones being reached in relation to resource definition. This potential share based consideration was first announced in the agreement to acquire Kisara on 15 June 2012 and is set out below.

Milestone	Performance Shares
Milestone 1- A JORC compliant Inferred Mineral Resource of 500koz at 1.8g/t Au Eq	120,000,000
Milestone 2- A JORC compliant Inferred Mineral Resource of 750koz at 1.8g/t Au Eq	90,000,000
Milestone 3- A JORC compliant Inferred Mineral Resource of 1,000koz at 1.7g/t Au Eq	70,000,000
Milestone 4- A JORC compliant Inferred Mineral Resource of 1,250koz at 1.7g/t Au Eq	20,000,000
Milestone 5- A JORC compliant Inferred Mineral Resource of 1,500koz at 1.6g/t Au Eq	20,000,000
Milestone 6- A JORC compliant Inferred Mineral Resource of 2,000koz at 1.6g/t Au Eq	40,000,000
Total	360,000,000

NB – The Performance Shares noted above entitle the holder to acquire one share for every performance right held and will be subject to approval by the ASX.

Silvina Farm

As reported previously, in late 2011/early 2012 Caiçara successfully won the tender and signed an option agreement with CBPM on the Silvina property. At the time of signing, the Silvina mineral claim had been extant for 5 years. By Brazilian mining law, once a mineral exploration claim has been active for 6 years it must be converted to a mining tenement. In Caiçara’s opinion, the property has merit and is worthy of ongoing exploration, however there is insufficient data to support the resource calculation required for conversion to a mining tenement.

Following discussions with CBPM it was decided that the claim should be surrendered and then be immediately re-staked, allowing the 6 year activity period to recommence and providing a more reasonable timeline for evaluation of the Silvina claim. During the discussions it was also agreed that the minimum expenditure commitment going forward shall revised to be the drilling of 4 strategic holes.

Acquisition of Kisara Gold – Update

The Directors of Safety Medical Products have concluded to their satisfaction the initial geological, commercial and legal due diligence on Kisara and associated entities. The Board anticipates final execution of the Share Sale and Purchase Agreement before the end of 2012.

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The transaction is subject to shareholder approval being obtained. The preparation of documents for shareholder approval is underway, and are currently being updated to accommodate the Norte acquisition. Immediately following the shareholder approval the Company will be required to recomply with Chapters 1 and 2 of the ASX Listing Rules and will be placed in trading suspension whilst it re-complies.

The key acquisition terms have not changed since the ASX announcement on June 15 and are contained in Appendix Two to this announcement.

If shareholder approval is given at the general meeting, the Company will most likely undergo a capital consolidation to assist re-compliance with Chapters 1 & 2 of the ASX Listing Rules at a ratio to be determined prior to the release of the Notice of Meeting. The Consideration Shares and shares to be issued under the capital raising will also be adjusted by the same ratio.

Proposed Timetable for Recompliance

	Date*
Execution of Share Sale Agreement	31 Dec 2012
Dispatch of Notice of Meeting	31 Jan 2013
Lodgement of Prospectus with ASIC	4 Feb 2013
Meetingof Shareholders to Approve Acquisition	4 Feb 2013
Suspension of Company’s Shares from tradingon ASX	4 Feb 2013
Closure of Prospectus	18 Feb 2013
Satisfaction of all Requirements of Chapters 1 & 2	21 Feb 2013
Reinstatement to Trading	21 Feb 2013

• The above dates are indicative only and are subject to change. The Company will keep shareholders updated on the timing of the implementation of the transaction as it progresses

To re-comply with Chapters 1 and 2 of ASX Listing Rules Safety Medical will prepare and issue a prospectus. Funds raised will be used to conduct exploration on the properties to be acquired, and to cover the ongoing administration costs of the Company.

Indicative Capital Structure.

	Number of Shares
Current Issued Capital	396,455,466
Shares to be issued in capital raising, completed as part of the recompliance with Chapters 1 & 2 of the ASX Listing Rules (Assumes capital raising at $0.01 – though shares to be issued at$0.20)	300,000,000
Total Shares on Issue following Completion and recompliance
	696,455,466
Potential shares to be issued under the Share Sale Agreement(subject to satisfaction of Milestones)	360,000,000
Total Issued Shares assuming Milestones satisfied	1,056,455,466

NB The above table shows the Company’s pre and post reconstruction capital structure. The Company is most likely to reconstruct its capital to comply with Chapters 1 and 2 of the ASX Listing Rules which require a capital raising at $0.20 per share. The above Table is based on a share price of $0.01 immediately prior to the issuance of the requisite Notice of Meeting and consequently a reconstruction ratio of one share for every 20 held. However if

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the share price is at a higher price prior to the issuance of the Notice of Meeting then the reconstruction ratio will be reduced accordingly.

The capital raising considered in the above Table is $3M. The capital raising number may be adjusted through the prospectus dependent upon the final position of the Company’s tangible assets before the capital raising commence and its expenditure obligations within Brazil.

Competent Persons Statement

The information in this report that relates to mineral resources and exploration results is based on information compiled and reviewed by Dale Brittliffe P.Geo., a Consulting Geologist to Safety Medical Products Limited. Mr Brittliffe is a member in good standing with the Association of Professional Engineers and Geoscientists of British Columbia, Canada (APEGBC) Non-Resident Licence # 149983. APEGBC is a “Recognised Overseas Professional Organisation” (ROPO) as recognised by JORC.

All historical soil, rock and drilling results quoted in this release have been compiled from historical exploration reports, maps and sections provided to Safety Medical by CBPM. Neither Mr Brittliffe nor Safety Medical were responsible for the collection, preparation or reporting of the quoted results and while there is no reason to doubt the validity of the quoted results, they are as yet unverified and in their current state would not pass modern QA/QC . Mr Brittliffe visited the project in July 2011. Grab samples collected during this trip confirmed the presence of gold mineralisation from old workings and mineralized outcrops.

Mr. Brittliffe has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the Australasian Code for Reporting of Exploration results, Mineral Resources and Ore Reserves.” Mr. Brittliffe has given his consent to the inclusion in this report of the matters based on the information in the form and context in which it appears.

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APPENDIX ONE

DEIXAI PROJECT CLAIMS

	DEIXAI PROJECT CLAIMS
	Claim ID Date of Issue Area (Ha) Status Owner
	873315/2006 2006 1,000.00 Granted CBPM 870296/2007 2007 383.57 Granted CBPM 873849/2007 2007 855.64 Granted CBPM 870284/2007 2007 895.45 Granted CBPM 872575/2006 2006 570.53 Granted CBPM 875155/2008 2008 819.36 Granted CBPM 870461/2009 2009 487.96 Granted CBPM 870626/2009 2009 203.69 Granted CBPM 871912/2010 2010 22.00 Granted CBPM 871913/2010 2010 6.53 Granted CBPM 871911/2010 2010 6.90 Granted CBPM 871303/2010 2010 1,000.05 Granted CBPM 874409/2011 2011 979.44 Application - Pending CBPM TOTAL AREA 7,231.12

TARUGAO PROJECT CLAIMS	TARUGAO PROJECT CLAIMS
Claim ID Date of Issue Area (Ha)	Status Owner
870297/2007 2007 839.99 870272/2007 2007 376.71 870279/2007 2007 1,000.00 870294/2007 2007 999.36 870295/2007 2007 1,000.00 872595/2008 2008 988.41 874471/2008 2008 497.96 874414/2008 2008 478.14 874470/2008 2008 478.36 871902/2010 2010 194.96 871910/2010 2010 176.53 871909/2010 2010 10.20 871901/2010 2010 149.77 874407/2008 2008 1,000.13 871587/2011 2011 488.75	Granted CBPM Granted CBPM Granted CBPM Granted CBPM Granted CBPM Granted CBPM Granted CBPM Granted CBPM Granted CBPM Granted CBPM Granted CBPM Granted CBPM Granted CBPM Granted CBPM Granted CBPM
TOTAL AREA 8,190.52

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APPENDIX TWO

Acquisition Terms

The Agreement to acquire 100% of the issued capital of Kisara is made up of consideration as follows:

• Safety Medical has advanced an initial sum of $100,000 on signing of the Agreement which has been used for geological investigation and reports, preparation of Tender documents and general in country costs associated with the acquisition.

• A further $39,900 is payable on settlement of the purchase, and the Agreement includes provision for the Company, at its discretion, to advance funds to assist Kisara in maintaining its tenement obligations, though it is not an obligation of the Company.

• Further share based consideration is payable to the Kisara Shareholders on certain milestones being reached in relation to definition of resources. Milestone payments are as follows:

Milestone	Consideration Shares
Milestone 1 A JORC compliant Mineral Resource of 500koz at 1.8g/t Au Eq	120,000,000
Milestone 2 A JORC compliant Mineral Resource of 750koz at 1.8g/t Au Eq	90,000,000
Milestone 3 A JORC compliant Mineral Resource of 1,000koz at 1.7g/t Au Eq	70,000,000
Milestone 4 A JORC compliant Mineral Resource of 1,250koz at 1.7g/t Au Eq	20,000,000
Milestone 5 A JORC compliant Mineral Resource of 1,500koz at 1.6g/t Au Eq	20,000,000
Milestone 6 A JORC compliant Mineral Resource of 2,000koz at 1.6g/t Au Eq	40,000,000
Total	360,000,000

The terms of the Agreement to acquire Kisara are subject to due diligence, regulatory approvals and final documentation. Settlement of the purchase of Kisara will require the Company to recomply with Chapters 1 and 2 of the ASX Listing Rules, which cannot occur until the Company has received shareholder approval. The Company will make further announcements to the market in relation to recompliance as required.

During the period until settlement of the acquisition Safety Medical has no obligation to spend money maintaining the tenements, though it may chose to assist Kisara in preparatory work for drilling. The Company will continue to spend money on due diligence procedures in Brazil which may include some confirmatory work.

Following settlement of the acquisition, Kisara will be entitled to nominate a person for appointment to the Board of Safety Medical. At the date of this announcement, the Kisara shareholders have not decided who they will nominate.