MCS SERVICES LIMITED — Capital/Financing Update 2014

Mar 30, 2014

ASX : RGX

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31 March, 2014

Company Update

Highlights

• ￭ Company undertaking review of strategy and seeking new opportunities to rebuild shareholder value.

• ￭ Board implements cost cutting measures commensurate with this transitional phase.

• ￭ Announced funding via Convertible Loan and fully underwritten Renounceable Rights Issue are expected to place the Company in a strong financial position during this process.

Details

As a starting point to rebuilding shareholder confidence and value, the Company in February 2014 mandated DJ Carmichael Pty Limited to assist in the identification of new business opportunities and the sourcing of additional funding. Given the current market difficulties the junior mining sector is experiencing, the Board believes that it needs to assess a range of new opportunities, which may well include opportunities beyond the Company's traditional resource sector.

In addition to reviewing new opportunities, the Company has instigated a number of cost cutting measures aimed at minimising cash outflows through this transitional phase. Non-essential exploration related activities in Chile and Peru have been curtailed, while operational and administrative overheads have been reviewed and reduced. The Executive Chairman has agreed to suspend key terms of his existing service contract during this period of reduced work load, and receive remuneration in line with the Board’s non-executive directors.

As outlined in the Renounceable Rights Issue Prospectus dated 10 March 2014 and in the Explanatory Notes for the EGM released with the Notice of Meeting on 28 March 2014, the Company, like many other junior exploration companies, has recently experienced difficulty in maintaining investor support and raising further funds to advance its operations, notwithstanding positive operational and technical results. Attempts to refine business strategy through a greater focus on copper-gold exploration in Chile, proposed strategic alliances and the disposal of our Peruvian assets, have to date not come to fruition.

Executive Chairman Dr Ray Shaw said that the recent actions of the Board should give shareholders reassurance that it is determined to preserve capital and rebuild shareholder value, and implement the necessary steps to do so.

For further information please contact:

Dr Raymond Shaw, Executive Chairman

08 8223 1680