PEPPERMINT INNOVATION LIMITED — Capital/Financing Update 2012

Aug 8, 2012

CHRYSALIS RESOURCES LIMITED

ACN 125 931 964

OFFER DOCUMENT

For a non-renounceable Entitlement issue of four (4) Shares for every five (5) Shares held by Shareholders registered at 5:00pm (WST) on 20 August 2012 at an issue price of 5 cents per New Share to raise up to approximately $3,013,748 ( Offer ).

IMPORTANT NOTICE

This document is not a prospectus. It does not contain all of the information that an investor would find in a prospectus or which may be required in order to make an informed investment decision regarding, or about the rights attaching to, the New Shares offered by this document.

This document is important and requires your immediate attention. It should be read in its entirety. If you do not understand its content or are in doubt as to the course you should follow, you should consult your stockbroker or professional adviser without delay.

This Offer opens on 24 August 2012 and closes at 5:00pm (WST) on 7 September 2012.

Valid acceptances must be received before that time.

Please read the instructions in this document and on the accompanying Entitlement and Acceptance Form regarding the acceptance of your Entitlement.

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IMPORTANT NOTES

No person is authorised to give any information or to make any representation in connection with the Offer which is not contained in this Offer Document. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with the Offer.

Eligibility

Applications for New Shares by Eligible Shareholders can only be made on an original Entitlement and Acceptance Form, as sent with this Offer Document. The Entitlement and Acceptance Form sets out an Eligible Shareholder's Entitlement to participate in the Offer.

Overseas shareholders

This Offer does not, and is not intended to, constitute an offer in any place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer or to issue this Offer Document.

It is not practicable for the Company to comply with the securities laws of overseas jurisdictions having regard to the number of overseas Shareholders, the number and value of New Shares these Shareholders would be offered and the cost of complying with regulatory requirements in each relevant jurisdiction. Accordingly, the Offer is not being extended and New Shares will not be issued to Shareholders with a registered address which is outside Australia or New Zealand.

Shareholders resident in New Zealand should consult their professional advisors as to whether any government or other consents are required, or other formalities need to be observed, to enable them to take up their Entitlements under the Offer.

Privacy Act

If you complete an application for New Shares, you will be providing personal information to the Company (directly or by the Company’s share registry). The Company collects, holds and uses that information to assess your application, service your needs as a Shareholder, facilitate distribution payments and corporate communications to you as a Shareholder and carry out administration.

The information may also be used from time to time and disclosed to persons inspecting the register, bidders for your securities in the context of takeovers, regulatory bodies, including the Australian Taxation Office, authorised securities brokers, print service providers, mail houses and the Company’s share registry.

You can access, correct and update the personal information that we hold about you. Please contact the Company or its share registry if you wish to do so at the relevant contact numbers set out in this Offer Document.

Collection, maintenance and disclosure of certain personal information is governed by legislation including the Privacy Act 1988 (Cth) (as amended), the Corporations Act and certain rules such as the ASX Settlement Operating Rules. You should note that if you do not provide the information required on the application for New Shares, the Company may not be able to accept or process your application.

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TABLE OF CONTENTS

1.	DETAILS OF THE OFFER .................................................................................................... 4
2.	ACTION REQUIRED BY SHAREHOLDERS ....................................................................... 10
3.	RISK FACTORS ............................................................................................................... 12
4.	CAPITAL STRUCTURE AND FINANCIAL INFORMATION ................................................ 16
5.	DEFINED TERMS ............................................................................................................. 19

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1. DETAILS OF THE OFFER

1.1 The Offer

The Company is making a non-renounceable pro rata offer of New Shares at an issue price of 5 cents each on the basis of four (4) New Shares for every five (5) Shares held on the Record Date ( Offer ) .

At the date of this Offer Document, the Company has 75,343,702 Shares and 35,036,327 listed Options on issue. The Company expects that up to approximately 60,274,962 New Shares will be issued under the Offer. Where the determination of the Entitlement of any Eligible Shareholder results in a fraction of a New Share, such fraction will be rounded up to the nearest whole New Share.

1.2 Use of Funds

Completion of the Offer will result in an increase in cash reserves of up to approximately $3,013,748 (before the payment of costs associated with the Offer).

The Company intends to apply the funds raised from the Offer towards:

Item of Expenditure	Amount ($)
Costs of the offer	20,000
Further exploration programme at the Pioneer and West Angelas Projects	300,000
Settlement of the Zambian Copper Project	300,000
Exploration work at the Zambian Copper Project including but not limited to: Airborne Geophysics Ground IP Drilling at Shilika and Kabwima North tenements Assays Overheads	1,400,000
Repayment of unsecured loan used to finance: Exploration work at the Zambian Copper Project listed above; and General Working Capital	300,000 200,000
General Working Capital	493,748
TOTAL	3,013,748

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1.3 Timetable

Timetable
Event	Date
Announcement of Rights Issue and lodgment of Appendix 3B	8 August 2012
The latest of release of Offer Document and Cleansing Statement to ASX Option holders to be notified	9 August 2012
Notice sent to Security Holders	10 August 2012
Ex Date (date from which securities commence trading without the entitlement to participate in the Rights Issue)	14 August 2012
Record Date (date for determining entitlements of eligible shareholders to participate in the Rights Issue)	20 August 2012
Offer Document Dispatched to Shareholders (expected date of dispatch of offer document, entitlement and acceptance forms)	24 August 2012
Company announces that the Offer Document has been dispatched	24 August 2012
Entitlement Issue opens	24 August 2012
Closing Date*	7 September 2012
Securities quoted on a deferred settlement basis **	10 September 2012
Company to notify ASX of under subscriptions (if any) **	12 September 2012
Despatch holding statements **	17 September 2012

• Subject to the Listing Rules, the Directors reserve the right to extend the Closing Date for the Offer at their discretion. Should this occur, the extension will have a consequential effect on the anticipated date of issue for the New Shares.

** These dates are indicative only.

1.4 Entitlements and acceptance

The Entitlement of Eligible Shareholders to participate in the Offer will be determined on the Record Date. Your Entitlement is shown on the Entitlement and Acceptance form accompanying this Offer Document.

Acceptances must not exceed your maximum Entitlement (as shown on the Entitlement and Acceptance Form), although you may accept for a lesser

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number of New Shares should you wish to take up only part of your Entitlement. If your acceptance exceeds your Entitlement, acceptance will be deemed to be for your maximum Entitlement and any surplus application monies will be returned to you.

1.5 No rights trading

The rights to New Shares under the Offer are non-renounceable. Accordingly, there will be no trading of rights on the ASX and you may not dispose of your rights to subscribe for New Shares under the Offer to any other party. If you do not take up your Entitlement to New Shares under the Offer by the Closing Date, the Offer to you will lapse.

1.6

Underwriting

The Offer is not underwritten.

1.7 Directors Interest and Participation

Each Director’s interest in the securities of the Company at the date of this Offer Document and their Entitlement is set out in the table below.

Director	Shares	Entitlement
Dr Neale Fong1	3,852,400 Shares 500,000 Options	3,081,920 Shares
Mr Grant Kidner2	3,581,724 Shares 2,190,000 Options	2,865,380 Shares
Mr Adrian Paul3	6,934,344 Shares 2,500,001Options	5,547,476 Shares

Notes

• 1 Including an indirect interest in 2,277,400 Shares and 450,000 Options 2 Including an indirect interest in 1,706,724 Shares and 1,940,000 Options 3 Including an indirect interest in 1,684,342 Shares

Each director has agreed to take up their full Entitlements.

1.8 Effect of the Rights Issue on Voting Power in the Company

The potential effect the Offer will have on the control of the Company is as follows:

• (a) if all Eligible Shareholders take up their Entitlement, each Eligible Shareholder's percentage interest in the total issued shares of the Company will remain the same and will not be diluted; and

• (b) if some but not all Eligible Shareholders take up their entitlement, and the Shortfall is taken up, the percentage interest in the total issued Shares of each Eligible Shareholder who does not take up their Entitlement will be diluted and the percentage interest of the total issued Shares of each Eligible Shareholder who does take up their Entitlement will remain the same. The precise level of change in the

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percentage interests will depend on the take up of Entitlements.

In addition, Shareholders should note that if they do not participate in the Offer, their holdings are likely to be diluted by approximately 55% (as compared to their holdings and number of Shares on issue as at the date of the Offer Document). Examples of how the dilution may impact Shareholders are set out in the table below:

Holder	Holding as at Record date	% at Record Date	Entitlements under the Offer	Holdings if Offer not taken Up	% post Offer
Shareholder 1	10,000,000	13.27%	8,000,000	10,000,000	7.37%
Shareholder 2	5,000,000	6.64%	4,000,000	5,000,000	3.69%
Shareholder 3	1,500,000	1.99%	1,200,000	1,500,000	1.11%
Shareholder 4	400,000	0.53%	320,000	400,000	0.29%
Shareholder 5	50,000	0.07%	40,000	50,000	0.04%

It is not expected that the Offer will have any material effect on control of the Company.

1.9

Market Price of Shares

The highest and lowest market sale prices of the Company’s Shares on ASX during the three months immediately preceding the date of printing of this Offer Document and the respective dates of those sales were:

Highest: 14 cents per share on 8, 9, 10, 11, 14 and 15 May 2012 Lowest: 6.5 cents per share on 23 and 24 July

The latest available closing sale price of the Company’s Shares on ASX prior to the printing of this Offer Document was 7 cents on 8 August 2012.

1.10

Opening and Closing Dates

The Offer opens on the Opening Date, being 24 August 2012. The Company will accept Entitlement and Acceptance Forms until 5:00 pm WST on the Closing Date, being 7 September 2012, or such other date as the Directors in their absolute discretion shall determine, subject to the Listing Rules.

1.11

Issue and dispatch

The expected dates for issue of New Shares offered by this Offer Document and dispatch of holding statements is expected to occur on the dates specified in the Timetable set out in Section 1.3.

It is the responsibility of applicants to determine the allocation prior to trading in the New Shares. Applicants who sell New Shares before they receive their holding statements will do so at their own risk.

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1.12 ASX listing

Application for official quotation by ASX of the New Shares offered pursuant to this Offer Document will be made within 7 days after the Closing Date of this Offer Document.

The fact that ASX may grant official quotation to the New Shares is not to be taken in any way as an indication of the merits of the Company or the New Shares now offered for subscription.

1.13 CHESS

The Company will apply to ASX to participate in CHESS, for those investors who have, or wish to have, a sponsoring stockbroker. Investors who do not wish to participate through CHESS will be issuer sponsored by the Company. Because the sub-registers are electronic, ownership of securities can be transferred without having to rely upon paper documentation.

Electronic registers mean that the Company will not be issuing certificates to investors. Instead, investors will be provided with a statement (similar to a bank account statement) that sets out the number of New Shares allotted to them under this Offer Document. The notice will also advise holders of their Holder Identification Number (HIN) and explain, for future reference, the sale and purchase procedures under CHESS and issuer sponsorship.

Further monthly statements will be provided to holders if there have been any changes in their security holding in the Company during the preceding month.

1.14 Overseas Eligible Shareholders

This Offer does not, and is not intended to, constitute an offer in any place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer or to issue this Offer Document.

It is not practicable for the Company to comply with the securities laws of overseas jurisdictions having regard to the number of overseas Shareholders, the number and value of New Shares these Shareholders would be offered and the cost of complying with regulatory requirements in each relevant jurisdiction. Accordingly, the Offer is not being extended and New Shares will not be issued to Shareholders with a registered address which is outside Australia or New Zealand.

The Offer is being made in New Zealand pursuant to the Securities Act (Overseas Companies) Exemption Notice 2002.

Shareholders resident in Australia or New Zealand holding Shares on behalf of persons who are resident overseas are responsible for ensuring that taking up an Entitlement under the Offer does not breach regulations in the relevant overseas jurisdiction. Return of a duly completed Entitlement and Acceptance Form will be taken by the Company to constitute a representation that there has been no breach of those regulations.

New Shares to which any Eligible Shareholders who are not resident in Australia or New Zealand would otherwise be entitled to will form part of the Shortfall.

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1.15 New Zealand Shareholders

The New Shares are not being offered or sold to the public within New Zealand other than to existing Shareholders of the Company with registered addresses in New Zealand to whom the offer of New Shares is being made in reliance on the Securities Act (Overseas Companies) Exemption Notice 2002 (New Zealand).

In accordance with the Securities Act (Overseas Companies) Exemption Notice 2002 (NZ), a person who, on the Record Date was registered as a holder of Shares with a New Zealand address but who, as at the time of this Offer no longer holds Shares is not eligible to participate in this Offer.

1.16 Taxation implications

The Directors do not consider it appropriate to give Shareholders advice regarding the taxation consequences of subscribing for New Shares under this Offer Document. The Company, its advisers and its officers do not accept any responsibility or liability for any such taxation consequences to Shareholders.

Shareholders should consult their professional tax adviser in connection with subscribing for New Shares under this Offer Document.

1.17 Risk factors

An investment in New Shares should be regarded as speculative. In addition to the general risks applicable to all investments in listed securities, there are specific risks associated with an investment in the Company which are described in Section 3.

1.18 Enquiries concerning Offer Document

Enquiries concerning the Entitlement and Acceptance Form can be obtained by contacting Computershare by telephone on 1300 787 272.

Enquiries relating to this Offer Document should be directed to the Company Secretary by telephone on (08) 9380 3802.

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2. ACTION REQUIRED BY SHAREHOLDERS

2.1 How to Accept the Offer

Your acceptance of the Offer must be made on the Entitlement and Acceptance Form accompanying this Offer Document. Your acceptance must not exceed your Entitlement as shown on that form. If it does, your acceptance will be deemed to be for the maximum Entitlement.

You may participate in the Offer as follows:

• (a) if you wish to accept your Entitlement in full:

• (i) complete the Entitlement and Acceptance Form, filling in the details in the spaces provided; and

• (ii) attach your cheque for the appropriate application monies (at 5 cents per New Share); or pay via BPAY by following the instructions set out in the Entitlement and Acceptance Form; or

• (b) if you only wish to accept part of your Entitlement:

• (i) fill in the number of New Shares you wish to accept in the space provided on the Entitlement and Acceptance Form; and

• (ii) attach your cheque for the appropriate application monies (at 5 cents per New Share); or pay via BPAY by following the instructions set out in the Entitlement and Acceptance Form; or

• (c) if you do not wish to accept all or part of your Entitlement, you are not obliged to do anything.

All cheques must be drawn on an Australian bank or bank draft made payable in Australian currency to “Chrysalis Resources Limited – Share Account” and crossed “Not Negotiable” .

Your completed Entitlement and Acceptance Form and cheque must reach the Company no later than 5:00pm (WST) on the Closing Date.

If paying via BPAY, Applicants should be aware that their own financial institution may implement earlier cut off times with regards to electronic payment and it is the responsibility of the Applicant to ensure that funds are submitted through BPAY by the date and time mentioned above. If you elect to pay via BPAY, you must follow the instructions for BPAY set out in the Entitlement and Acceptance Form and you will not need to return the Entitlement and Acceptance Form.

The Offer is non-renounceable. Accordingly, a holder of Shares may not sell or transfer all or part of their Entitlement.

2.2 Entitlements not taken up

If you do not wish to accept any of your Entitlement, you are not obliged to do anything.

The number of Shares you currently hold and the entitlement attaching to those Shares will not be affected should you choose not to accept any part of your Entitlement.

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2.3 Shortfall

If you do not wish to take up any part of your Entitlement you are not required to take any action. Any Entitlement not taken up pursuant to the Offer will form the Shortfall Offer.

The Shortfall Offer is a separate offer pursuant to this Offer Document. The issue price for each Share to be issued under the Shortfall Offer shall be 5 cents, being the price at which Shares have been issued under the Offer.

The Directors reserve the right to make the Shortfall Offer, and issue the Shortfall Shares, to parties at their absolute discretion, such parties which may include third parties who are not Shareholders.

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3. RISK FACTORS

3.1 General

The New Shares offered under this Offer Document should be considered speculative because of the nature of the Company’s business.

There are numerous risk factors involved with the Company’s business. Some of these risks can be mitigated by the use of safeguards and appropriate systems and controls, but some are outside the control of the Company and cannot be mitigated. Accordingly, an investment in the Company carries no guarantee with respect to the payment of dividends, return of capital or price at which securities will trade.

The following is a summary of the more material matters to be considered. However, this summary is not exhaustive and potential investors should examine the contents of this Offer Document in its entirety and consult their professional advisors before deciding whether to apply for the New Shares.

Based on the information available, a non-exhaustive list of risk factors which may affect the Company’s financial position, prospects and the price of its listed securities include the following.

3.2 Specific Risks relating to the Company

Additional Requirements for Capital

Should the funds raised be insufficient to fulfil the Company’s planned short term expenditure requirements, the Company may have an immediate requirement to raise further funds. As the Offer does not contain a minimum subscription amount, this will be a risk to investors who take up the Offer.

The Company’s capital requirements depend on numerous factors. Depending on the Company’s ability to generate income from its operations, the Company may require further financing in addition to amounts raised under the capital raising.

Any additional equity financing will dilute shareholdings, and debt financing, if available, may involve restrictions on financing and operating activities. If the Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations and scale back its exploration programmes as the case may be.

Risks associated with operations in Zambia

The Company has recently completed the purchase of a 100% interest in Zambian Copper Pty Ltd, which owns 99.9% of Sedgwick Resources Ltd (Sedgwick). Sedgwick in turn owns projects in Zambia ( Zambian Copper Project ). The Zambian Copper Project covers an area in excess of 3,000km[2] of which 2,180km[2] is in the Copperbelt region of northern Zambia.

The Zambian Copper Project is subject to the risks associated with operating in that country, including various levels of political, economic and other risks and uncertainties.

These risks and uncertainties include, but are not limited to terrorism, hostage taking, military repression, extreme fluctuations in currency exchange rates, high rates of inflation, labour unrest, the risks of war or civil unrest, expropriation and

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nationalization, renegotiation or nullification of existing concessions, licences, permits and contracts, illegal mining, changes in taxation policies, restrictions on foreign exchange and repatriation and changing political conditions, currency controls and governmental regulations that favour or require the awarding of contracts to local contractors or require foreign contractors to employ citizens of, or purchase supplies from, a particular jurisdiction.

The occurrence of these various factors and uncertainties cannot be accurately predicted and could have an adverse effect on the operations or profitability of the Company. The Company has made its investment and strategic decisions based on the information currently available to the Directors, however should there be any material change in the political, economic, legal and social environments in Zambia, the Directors may reassess investment decisions and commitments to assets in Zambia.

Exploration Success

The future profitability of the Company and the value of its securities are directly related to the results of exploration. The exploration tenements held by the Company are at various stages of exploration, and potential investors should understand that mineral exploration and development are high-risk undertakings.

There can be no assurance that exploration of the Company’s tenements, or any other tenements that may be acquired in the future, will result in the discovery of an economic resource. Even if an apparently viable resource is identified, there is no guarantee that it can be economically exploited. In addition, the resources may become depleted, resulting in a reduction of the value of those tenements.

The exploration costs of the Company are based on certain assumptions with respect to the method and timing of exploration. By their nature, these estimates and assumptions are subject to significant uncertainties and, accordingly, the actual costs may materially differ from these estimates and assumptions. Accordingly, no assurance can be given that the cost estimates and the underlying assumptions will be realised in practice, which may materially and adversely affect the Company’s viability.

Reliance on Key Management

The responsibility of overseeing the day-to-day operations and the strategic management of the Company depends substantially on its senior management and its key personnel. There can be no assurance given that there will be no detrimental impact on the Company if one or more of these employees cease their employment.

Further risks specific to the Company

The current and future operations of the Company, including exploration, appraisal and production activities, may be affected by a range of factors, including:

• (a) geological conditions;

• (b) alteration to exploration and production programmes and budgets;

• (c) unanticipated operational and technical difficulties;

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• (d) mechanical failure of operating plant and equipment, adverse weather conditions, industrial and environmental accidents, industrial disputes and other force majeure events;

• (e) unexpected shortages or increases in the costs of consumables, spare parts, plant and equipment;

• (f) prevention or restriction of access by reason of political unrest, outbreak of hostilities or inability to obtain consents or approvals (including access agreements entered into with Native Title claimants); and

• (g) uninsured losses or liabilities.

3.3 General Risks

Economic Risks

General economic conditions, movements in interest and inflation rates and currency exchange rates may have an adverse effect on the Company’s exploration, development and production activities, as well as on its ability to fund those activities.

Further, share market conditions may affect the value of the Company’s quoted securities regardless of the Company’s operating performance. Share market conditions are affected by many factors such as:

• (a) general economic outlook;

• (b) interest rates and inflation rates;

• (c) currency fluctuations;

• (d) changes in investor sentiment toward particular market sectors;

• (e) the demand for, and supply of, capital; and

• (f) terrorism or other hostilities.

Share Market Conditions

There are general risks associated with any investment in the share market. The market price of the Shares can fall as well as rise and may be subject to varied and unpredictable influences on the market for equities in general and resource exploration stocks in particular. Neither the Company nor the Directors warrant the future performance of the Company or any return on an investment in the Company.

Operating Risks

The operations of the Company may be affected by various factors, including failure to achieve predicted grades in exploration and mining; operational and technical difficulties encountered in extraction; difficulties in commissioning and operating plant and equipment; mechanical failure or plant breakdown; unanticipated metallurgical problems which may affect extraction costs; adverse weather conditions; industrial and environmental accidents; industrial disputes; and unexpected shortages or increases in the costs of consumables, spare parts, plant and equipment.

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Environmental Risks

The operations and proposed activities of the Company are subject to State and Federal laws and regulation concerning the environment. As with most exploration projects and extraction operations, the Company’s activities are expected to have an impact on the environment, particularly if advanced exploration or mine development proceeds. It is the Company’s intention to conduct its activities to the highest standard of environmental obligation, including compliance with all environmental laws.

Title Risks and Native Title

Interests in tenements in Australia are governed by the respective State legislation and are evidenced by the granting of licences or leases. Each licence or lease is for a specific term and carries with it annual expenditure and reporting commitments, as well as other conditions requiring compliance. Consequently, the Company could lose title to or its interest in tenements if licence conditions are not met or if insufficient funds are available to meet expenditure commitments.

It is also possible that, in relation to tenements which the Company has an interest in or will in the future acquire such an interest, there may be areas over which legitimate common law native title rights of Aboriginal Australians exist. If native title rights do exist, the ability of the Company to gain access to tenements (through obtaining consent of any relevant landowner), or to progress from the exploration phase to the development and mining phases of operations may be adversely affected. The Directors will closely monitor the potential effect of native title claims involving tenements in which the Company has or may have an interest.

3.4

Investment Speculative

The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by investors in the Company. The above factors, and others not specifically referred to above, may in the future materially affect the financial performance of the Company and the value of the securities offered under this Offer Document. Therefore, the New Shares to be issued pursuant to this Offer Document carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those securities.

Potential investors should consider that the investment in the Company is speculative and should consult their professional advisers before deciding whether to apply for New Shares pursuant to this Offer Document.

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4. CAPITAL STRUCTURE AND FINANCIAL INFORMATION

4.1 Capital structure on completion of the Offer

	Number of Shares	Number of Options
Balance at the date of this Offer Document	75,343,702	35,036,3272
To be issued under the Offer1	60,274,962	Nil
Balance after the Offer	135,618,664	35,036,3273

• 1 The number of New Shares to be issued under the Offer assumes that no Options are exercised before the Record Date.

• 2 Exercisable at $0.20 each on or before 20 June 2013.

• 3 Assuming that no Options are exercised in this time.

4.2 Consolidated balance sheet

Set out below is:

• (a) an unaudited consolidated statement of financial position of the Company as at 30 June 2012; and

• (b) an unaudited pro-forma consolidated statement of financial position of the Company as at 30 June 2012 incorporating the effect of the Offer.

These have been prepared on the basis of the accounting policies normally adopted by the Company and reflect the changes to its financial position. They have been prepared on the assumption that all New Shares pursuant to the Offer in this Offer Document are issued.

The unaudited consolidated statements of financial position have been prepared to provide Shareholders with information on the assets and liabilities of the Company and pro-forma assets and liabilities of the Company as noted below. The historical and pro-forma financial information is presented in an abbreviated form, insofar as it does not include all of the disclosures required by Australian Accounting Standards applicable to annual financial statements.

4.3 Statement of Financial Position and Pro-forma Consolidated Statement of Financial Position

The unaudited Statement of Financial Position as at 30 June 2012 and the unaudited Pro Forma Statement of Financial Position as at 30 June 2012 shown below have been prepared on the basis of the accounting policies normally adopted by the Company and reflect the changes to its financial position. They have been prepared on the assumption that all New Shares issued pursuant to the Offer Document as a result of the Offer are issued.

The unaudited Statement of Financial Position has been prepared to provide Shareholders with information on the assets and liabilities of the Company and

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pro-forma assets and liabilities of the Company as noted below. The historical pro-forma financial information is presented in an abbreviated form, insofar as it does not include all of the disclosures required by Australian Accounting Standards applicable to annual financial statements.

	Unaudited 30 June 2012 (AUD)	Effect of Offer (AUD)	Pro forma 30 June 2012 (AUD)
Assets
Current assets
Cash and cash equivalents	293,399	3,013,748	3,307,147
Receivables	2,832		2,832
Other financial assets	32,063		32,063
Prepayments	463,516		463,516
Total current assets	791,810		3,805,558
Non-current assets
Property, plant and equipment	27,200		27,200
Exploration and evaluation expenditure	3,600,024		3,600,024
Total non-current assets	3,627,224		3,627,224
Total assets	4,419,034		7,432,782
Liabilities
Current liabilities
Trade and other payables	607,909		607,909
Payment due for settlement of Zambian Project	300,000		300,000
Total current liabilities	907,909		907,909
Total liabilities	907,909		907,909
NET ASSETS	3,511,125		6,524,873
Equity
Issued capital	7,715,081	3,013,748	10,728,829
Accumulated losses	(5,122,925)		(5,122,925)
Reserves	918,969		918,969
TOTAL EQUITY	3,511,125		6,524,873

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The above pro forma unaudited Statement of Financial Position has been prepared on the basis that there have been no material movements in assets and liabilities of the Company between 30 June 2012 and the completion of the Offer, except completion of the Offer to raise $3,013,748 (before expenses of the Offer).

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5. DEFINED TERMS

Applicant refers to a person who submits an Entitlement and Acceptance Form.

Application refers to the submission of an Entitlement and Acceptance Form.

ASX means ASX Limited (ACN 008 624 691) or, where the context permits, the Australian Securities Exchange operated by ASX Limited.

Closing Date means 5:00pm WST 7 September 2012.

Company means Chrysalis Resources Ltd (ACN 125 931 964).

Directors means the directors of the Company.

Eligible Shareholder means a Shareholder whose details appear on the Company's register of Shareholders as at the Record Date.

Entitlement means the entitlement to subscribe for four (4) New Shares for every five (5) Shares held by an Eligible Shareholder on the Record Date and Entitlements has a corresponding meaning.

Entitlement and Acceptance Form means the Entitlement and Acceptance Form accompanying this Offer Document.

Listing Rules means the Listing Rules of the ASX.

New Share means a new Share proposed to be issued pursuant to this Offer.

Offer means the non-renounceable pro rata offer of New Shares at an issue price of 5 cents each on the basis of four (4) New Shares for every five (5) Shares held on the Record Date pursuant to this Offer Document.

Offer Document means this Offer Document dated 9 August 2012.

Opening Date means 24 August 2012.

Record Date means 20 August 2012.

Section means a section of this Offer Document.

Share means an ordinary fully paid share in the capital of the Company.

Shortfall means those New Shares under the Offer not applied for by Shareholders under their Entitlement.

Shortfall Offer means the offer for the Shortfall pursuant to this Offer Document as contained in clause 2.3 of this document.

Shareholder means a holder of Shares.

WST means Australian Western Standard Time.

Zambian Copper Project means as defined in paragraph 3.2 of this document.

Offer Document (CYS)_ 25 6 12 (781430_4)FINAL

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