PEPPERMINT INNOVATION LIMITED — Capital/Financing Update 2012

Aug 8, 2012

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Churchill Court Unit 2, Level 1, 331 Hay Street Subiaco WA 6008 Ph: (08) 9380 4430 Fx: (08) 9481 5044

ABN 56 125 931 964

Dear Sir/Madam

NOTICE UNDER SECTION 708AA(2)(f) OF THE CORPORATIONS ACT 2001

This notice is given by Chrysalis Resources Ltd ( Company ) under section 708AA(2)(f) of the Corporations Act 2001 (Cth) ( Corporations Act ) as notionally modified by Australian Securities and Investment Commission Class Order 08/35 ( C08/35 ). References in this notice of the Corporations Act are references to the Corporations Act as modified or amended by CO 08/35.

The Company has announced its intention to undertake an equity raising of up to approximately $3,013,748 via a non-renounceable entitlement offer. The raising comprises a non-renounceable pro-rata entitlement offer of fully paid ordinary shares ( Shares ), on the basis of 4 new Shares for every 5 Shares held as at 5.00pm WST on 20 August 2012 to eligible shareholders with a registered address in Australia, New Zealand and certain institutional holders in other jurisdictions in which the Company chooses to make offers ( Entitlement Offer ).

Based on the current capital structure (and assuming no options to acquire Shares ( Options ) are exercised prior to the Record Date)] a total of an additional 60,274,962 Shares will be issued if the Entitlement Offer is fully subscribed and the amount raised will be approximately $3,013,748.

As at the date of this announcement the Company currently has 35,036,327 Options on issue. In order to participate in the Entitlement Offer these Options must be exercised prior to the Record Date.

Any shortfall under the Entitlement Offer will be dealt with by the Company at its discretion.

The Company hereby confirms that in respect of the Entitlement Offer (as per the requirements of paragraph 708AA(2)(f) of the Corporations Act):

• (a) the Company will offer the Shares for issue without disclosure to investors under Part 6D.2 of the Corporations Act;

• (b) the Company is providing this notice under paragraph 2(f) of section 708AA of the Corporations Act;

• (c) as at the date of this notice the Company has complied with:

  • (i) the provisions of Chapter 2M of the Corporations Act as they apply to the Company;

  • (ii) section 674 of the Corporations Act as it applies to the Company;

NOTICE UNDER SECTION 708AA(2)(f) OF THE CORPORATIONS ACT 2001

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• (d) as at the date of this notice, there is no excluded information of the type referred to in sections 708AA(8) and 708AA(9) of the Corporations Act;

• (e) the potential effect that the issue of the new Shares pursuant to the Entitlement Offer will have on the control of the Company, and the consequences of that effect, will depend on a number of factors, including investor demand. If all shareholders subscribe for their entitlements, then all shareholders will retain their percentage ownership in the Company, and the issue of Shares under the Entitlement Offer is not expected to have any material effect on the control of the Company.

However, if shareholders do not participate in the Offer (or the Placement), 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). Examples of how the dilution may impact Shareholders are set out in the table below:

Holder	Holding asat Recorddate	% atRecordDate	Entitlementsunder theOffer	Holdings ifOffer nottaken Up	% postOffer
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.

Yours sincerely

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Melanie Cotterell

Company Secretary