MCS SERVICES LIMITED — Capital/Financing Update 2014

Mar 9, 2014

10 March 2014

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ASX Market Announcements Australian Securities Exchange Limited 20 Bridge Street Sydney NSW 2000

Renounceable Rights Issue

Red Gum Resources Limited ( Company, ASX : RGX ) is pleased to update its earlier announcement of its intention to undertake a fully underwritten renounceable rights issue ( Rights Issue ) of three new fully paid ordinary shares in the capital of the Company ( RRI Shares ) for every two shares held by eligible shareholders on the record date, at an issue price of $0.003 cents per RRI Share, to raise approximately $0.582 million, together with one free attaching quoted option for every four RRI Shares issued, exercisable at $0.01 per option on or before 15 November 2017.

Up to approximately 194 million RRI Shares will be issued pursuant to the Rights Issue which is fully underwritten, subject to certain terms and conditions, by DJ Carmichael Pty Ltd ( DJ Carmichael ). Shares issued under the Rights Issue will rank equally with the Shares which the Company currently has on issue. The offer is renounceable, accordingly there will be trading of rights on ASX and shareholders may sell or transfer all or part of their rights.

The funds raised will be used for the Company to identify new opportunities, working capital and costs of the issue. Shareholder approval is not required in relation to the issue of the Shares and Options pursuant to the Rights Issue.

Full details of the Rights Issue, including details of the use of funds, underwriting arrangement and key risks of the Rights Issue, will be set out in a prospectus which is expected to be lodged with ASIC, released to the ASX, and available on the Company’s website at www.redgumresources.com, on 10 March 2014

In addition to quotation of the RRI Shares, the Company also intends to apply to ASX for quotation of the attaching options, and the Appendix 3B in respect of the Rights Issue accompanies this announcement.

Outlined below is a timetable of relevant events and dates relating to the Rights Issue. These dates are indicative only and subject to ASX approval, and may be changed at the discretion of the Board (again subject to any ASX approval required).

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	Date 10 March 2014 10 March 2014 10 March 2014 10 March 2014 12 March 2014 13 March 2014 19 March 2014 24 March 2014 31 March 2014 1 April 2014 7 April 2014 9 April 2014 14 April 2014 15 April 2014
Event	Date
Renounceable Rights Issue announced and Appendix 3B lodged	10 March 2014
Lodgement of Prospectus with ASIC	10 March 2014
Lodgement of Prospectus with ASX	10 March 2014
Notice sent to Option holders who are unable toparticipate	10 March 2014
Notice sent to Shareholders containingAppendix 3B information	12 March 2014
Shares commence tradingon an ex rights basis and rights tradingstarts	13 March 2014
Record Date for the Offer	19 March 2014
Prospectus and Entitlement and Acceptance Form despatched to	24 March 2014
Rights tradingends	31 March 2014
Sharesquoted on a deferred basis	1 April 2014
ClosingDate of Offer*	7 April 2014
Advise ASX of anyunder subscriptions	9 April 2014
Issue Date and deferred settlement tradingends	14 April 2014
Commencement of tradingof Securities on ASX*	15 April 2014

• Subject to the Listing Rules, the Directors reserve the right to extend the Closing Date for the Offer by giving at least 6 Business Days' notice to ASX prior to the closing date. As such the date the securities are expected to commence trading on ASX may vary.

Unsecured Loan

In addition and also as previously announced to the market on 3 March 2014 the Company has negotiated an unsecured loan ( Loan ) through DJ Carmichael for $0.530 million convertible, subject to shareholder approval, into 176,654,220 million ordinary shares at $0.003 each, being the same issue price as the RRI Shares. Upon conversion (following shareholder approval) the loan subscribers will receive one quoted option for each four conversion shares on the same terms as the quoted options attaching to the RRI Shares, i.e. exercisable at $0.01 each expiring on 15 November 2017.

The Loan is subject to standard conditions for a facility of this type in the circumstances, including an interest rate of 12% pa plus an acknowledgement that sale proceeds from any asset sales will be first applied in repayment of the Loan.

Yours sincerely

M E Lucas-Smith Company Secretary Red Gum Resources Limited

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Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

RED GUM RESOURCES LIMITED

ABN

66 119 641 986

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of+securities issued or to be issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued 3 Principal terms of the+securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)	ORD Quoted options
	ORD 194,007,468 Attaching quoted options 48,501,867 Broker options 40,000,000
	Fully paid ordinary shares Attaching quoted options ex $0.01 exp 15/11/2017 Broker options subscription fee $0.00001 ex $0.01 exp 15/11/2017

• See chapter 19 for defined terms.

Appendix 3B Page 1

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Appendix 3B New issue announcement

4 Do the+securities rank equally in all respects from the+issue date with an existing+class of quoted +securities? If the additional+securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 6a Is the entity an+eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h_in_ relation to the+securities the subject of this Appendix 3B, and comply with section 6i 6b The date the security holder resolution under rule 7.1A was passed 6c Number of +securities issued without security holder approval under rule 7.1 6d Number of+securities issued with security holder approval under rule 7.1A	ORD Yes Quoted options No. Options do not receive dividends but will rank equally with ORD if and when exercised.
	ORD $0.003 each Attaching quoted options at no cost to recipient Brokerquoted options –$0.00001 each
	Renounceable Rights Issue
	Yes
	7 November 2013
	Nil
	Nil

• See chapter 19 for defined terms.

Appendix 3B Page 2

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Appendix 3B New issue announcement

6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of+securities issued under an exception in rule 7.2 6g If+securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation. 6h If+securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B. 8 Number and+class of all+securities quoted on ASX (_including_the +securities in section 2 if applicable)	NA	NA
	ORD 194,007,468 Quoted options 88,501,867
	NA
	NA
	Remaining capacity under LR 7.1 – 29,101,120 Remaining capacity under LR7.1A - 30,647,557
	14/04/2014
	Number	+Class
	323,345,780 61,234,053 88,501,867	ORD excl restricted Quoted options RGXO Ex $0.10 exp 1/03/16 Quoted options ex $0.01 exp 15/11/2017

• See chapter 19 for defined terms.

Appendix 3B Page 3

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Appendix 3B New issue announcement

Number +Class 9 Number and[+] class of all[+] securities 5,000,000 Unquoted options RGXAK not quoted on ASX ( including the ex $0.15 exp 30/04/16 +securities in section 2 if applicable) 1,000,000 Unquoted options RGXAY ex $0.25 exp 9/06/14 10 Dividend policy (in the case of a As for existing securities

• 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)

Part 2 - Pro rata issue

11 Is security holder approval required? 12 Is the issue renounceable or non- renounceable? 13 Ratio in which the+securities will be offered 14 +Class of+securities to which the offer relates 15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has security holders who will not be sent new offer documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of acceptances or renunciations 20 Names of any underwriters	No
	Renounceable
	3 new shares for each 2 held
	ORD
	19/03/2014
	NA
	To be rounded up
	UAE, Bahrain, Barbados, Canada, Germany, France, UK, Hong Kong, Singapore, USA, British Virgin Islands, Vanuatu & South Africa
	7/04/2014
	DJ Carmichael Pty Ltd

• See chapter 19 for defined terms.

Appendix 3B Page 4

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Appendix 3B New issue announcement

21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of security holders 25 If the issue is contingent on security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and offer documents will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do security holders sell their entitlements_in full_through a broker? 31 How do security holders sell_part_of their entitlements through a broker and accept for the balance? 32 How do security holders dispose of their entitlements (except by sale through a broker)? 33 +Issue date	6% of the total amount raised from all sources
	DJ Carmichael Pty Ltd
	Nil
	Nil
	NA
	24/03/2014
	10/03/2014
	13/03/2014
	31/03/2014
	By providing their E&A form to a broker
	By first completing & returning their E&A form with the number to be accepted and then providing a copy of their E&A form to a broker to sell the balance
	Must be through a broker
	14/04/2014

• See chapter 19 for defined terms.

Appendix 3B Page 5

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Appendix 3B New issue announcement

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

34 Type of[+] securities ( tick one )

(a) +Securities described in Part 1

• (b)[All other ][+][securities ]

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders

36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

37 A copy of any trust deed for the additional[+] securities

Entities that have ticked box 34(b)

38 Number of[+] securities for which +quotation is sought

39 +Class of +securities for which quotation is sought

• See chapter 19 for defined terms.

Appendix 3B Page 6

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Appendix 3B New issue announcement

• 40 Do the[+] securities rank equally in all respects from the[+] issue date with an existing[+] class of quoted[+] securities?

If the additional[+] securities do not

rank equally, please state:

• the date from which they do

• the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment

• the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

• 41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period

(if issued upon conversion of another

• +security, clearly identify that other +security)

42 Number and[+] class of all[+] securities quoted on ASX ( including the +securities in clause 38)

Number	+Class
323,345,780 149,735,920	ORD Quoted options

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted[+] quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the +securities be quoted.

• See chapter 19 for defined terms.

Appendix 3B Page 7

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Appendix 3B New issue announcement

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

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Sign here: M E Lucas-Smith ........................... Date: 10/03/2014.... (Director/Company secretary)

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• See chapter 19 for defined terms.

Appendix 3B Page 8

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Appendix 3B New issue announcement

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1

Rule 7.1 – Issues exceeding 15% of capital

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

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Insert number of fully paid [+] ordinary 74,978,727
securities on issue 12 months before the
+ issue date or date of agreement to issue
Add the following:
• Number of fully paid [+] ordinary 12/06/13 6,223,005
securities issued in that 12 month
18/06/13 31,266,365
period under an exception in rule 7.2
RRI issue 194,007,468
• Number of fully paid [+] ordinary
securities issued in that 12 month NIL
period with shareholder approval
• Number of partly paid [+] ordinary NIL
securities that became fully paid in that
12 month period
Note:
• Include only ordinary securities here –
other classes of equity securities
cannot be added
• Include here (if applicable) the
securities the subject of the Appendix
3B to which this form is annexed
• It may be useful to set out issues of
securities on different dates as
separate line items
Subtract the number of fully paid NIL
+ ordinary securities cancelled during that
12 month period
“A” 306,475,565
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• See chapter 19 for defined terms.

Appendix 3B Page 9

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Appendix 3B New issue announcement

Step 2: Calculate 15% of “A”

Step 2: Calculate 15% of “A”	Step 2: Calculate 15% of “A”
“B”	0.15 [Note: this value cannot be changed]
Multiply“A” by 0.15	45,971,335
Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used
Insertnumber of+equity securities issued or agreed to be issued in that 12 month period_not counting_those issued: • Under an exception in rule 7.2 • Under rule 7.1A • With security holder approval under rule 7.1 or rule 7.4 Note: • This applies to equity securities, unless specifically excluded – not just ordinary securities • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items	16,870,215
“C”	16,870,215
Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1
“A” x 0.15 Note: number must be same as shown in Step 2	45,971,335
Subtract“C” Note: number must be same as shown in Step 3	16,870,215
Total[“A” x 0.15] – “C”	29,101,120 [Note: this is the remaining placement capacity under rule 7.1]

placement capacity under rule 7.1
“A” x 0.15	45,971,335
Note: number must be same as shown in
Step 2
Subtract“C”	16,870,215
Note: number must be same as shown in
Step 3
Total[“A” x 0.15] – “C”	29,101,120
	[Note: this is the remaining placement
	capacity under rule 7.1]

• See chapter 19 for defined terms.

Appendix 3B Page 10

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Appendix 3B New issue announcement

Part 2

Rule 7.1A – Additional placement capacity for eligible entities

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

“A” 306,475,565 Note: number must be same as shown in Step 1 of Part 1 Step 2: Calculate 10% of “A” “D” 0.10 Note: this value cannot be changed Multiply “A” by 0.10 30,647,557

Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used

Insert number of[+] equity securities issued or agreed to be issued in that 12 month period under rule 7.1A

• NIL

• Notes: • This applies to equity securities – not just ordinary securities

• Include here – if applicable – the securities the subject of the Appendix 3B to which this form is annexed

• • Do not include equity securities issued under rule 7.1 (they must be dealt with in Part 1), or for which specific security holder approval has been obtained

• • It may be useful to set out issues of securities on different dates as separate line items

• “E” NIL

• See chapter 19 for defined terms.

Appendix 3B Page 11

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Appendix 3B New issue announcement

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A	Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A
“A” x 0.10 Note: number must be same as shown in Step 2	30,647,557
Subtract“E” Note: number must be same as shown in Step 3	NIL
Total[“A” x 0.10] – “E”	30,647,557 Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

Appendix 3B Page 12

04/03/2013