ENTITLEMENT ISSUE OFFER DOCUMENT DISPATCHED

ASX Announcement 18th July 2014

In accordance with our estimated timetable the Company has received confirmation from its mailing house that Offer Documents for the 1 for 2 Non-renounceable Entitlement Issue were dispatched to shareholders today 18 July 2014. The offer document is attached for immediate release.

Key Dates

Key dates for the issue are set out in the following table. The dates are indicative only and Chrysalis reserves the right to vary them, subject to the Corporations Act 2001 (Act) and the ASX Listing Rules.

Announcement of Entitlement Issue and Cleansing Statement given to ASX	8 July 2014
Securities quoted on 'ex' basis	11 July 2014
Record Date for determining entitlements to New Shares	15 July 2014
Dispatch of Offer Document and Entitlement and Acceptance forms to shareholders	18 July 2014
Closing date for receipt of Entitlement and Acceptance Forms and payment in full forshares	8 August 2014
Issue of New Shares	15 August 2014
Dispatch of Shareholder Statements	18 August 2014

Yours sincerely,

KEVIN HART Company Secretary

Chrysalis Resources Limited	Company Snapshot		Company Structure		Board & Management
A.B.N 58 125 931 964Suite 207 The EsplanadeMT PLEASANT WA 6153Phone: 618 9180 9290Fax:618 9316 1314E: [email protected]www.chrysalisresources.com.au	Listed on ASXASX Share CodeSector	27 May 2008CYSExploration	No of Shares on IssueCash (as at 31st March 2013)	229,489,419$1.4M	Dr Neale Fong – Non-Executive ChairmanMr Jian Hua Sang – Non-Executive DirectorMr Michael Griffiths – Non-Executive DirectorMs Michelle Wang – Executive DirectorMr Leigh Ryan – CEOMr Kevin Hart – Company Secretary

ENTITLEMENT ISSUE OFFER DOCUMENT

For a pro rata non-renounceable entitlement issue of one (1) Share for every two (2) Shares held by Shareholders at the Record Date at an issue price of $0.01 per Share to raise approximately $1,144,947 (Entitlement Issue).

The Entitlement Issue is fully underwritten. Refer to section 4.6 for details regarding the terms of the underwriting agreement.

This offer closes at 5.00pm WST on 8th August 2014 unless extended. Valid acceptances must be received before that date.

IMPORTANT NOTICE

This document is not a Prospectus and does not contain all of the information that an investor may require in order to make an informed investment decision regarding the Shares offered by this document.

This document is important and should be read in its entirety. If after reading this Offer Document you have any questions about the Shares being offered under this Offer Document or any other matter, then you should consult your stockbroker, accountant or other professional adviser.

The Shares offered by this Offer Document should be considered as speculative.

T AB L E O F C O N T E N T S

1.	SUMMARY OF IMPORTANTDATES AND IMPORTANT NOTES	2
2.	CORPORATE DIRECTORY	6
3.	CHAIRMAN'S LETTER	7
4.	DETAILS OF THE OFFER	10
5.	RISK FACTORS	15
6.	HOW TO ACCEPT THE OFFER	19
7.	DEFINITIONS	21

Competent Person's Statement

The information in this report that relates to exploration results is based on information compiled by Mr Leigh Ryan, CEO employed by Chrysalis, who is a Member of the Australian Institute of Geoscientists (MAIG). Mr Ryan has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr Ryan consents to the inclusion in the report of the matters based on information in the form and context in which it appears. Mr Ryan participates in the Company's Employee Share Plan

1. SUMMARY OF IMPORTANT DATES AND IMPORTANT NOTES

Timetable and important dates*

Issue Announcement and Appendix 3B	8 July 2014
Notice sent to Shareholders	9 July 2014
Ex Date	10 July 2014
Record Date for determining Entitlements	5.00pm (WST) 15 July 2014
Offer Document dispatched to Shareholders	18 July 2014
Closing Date*	5.00pm (WST) 8 August 2014
Shares quoted on a deferred settlement basis	11 August 2014
Notify ASX of under-subscriptions	13 August 2014
Shares entered into Shareholders' securityholdings	15 August 2014
Date of despatch of holding statements	18 August 2014

* The Directors may extend the Closing Date by giving at least 3 Business Days' notice to ASX prior to the Closing Date. As such the date the Shares are expected to commence trading on ASX may vary.

THIS DOCUMENT IS NOT A PROSPECTUS

Chrysalis Resources Limited is making a Non-renounceable Pro Rata offer of shares to shareholders at the record date to raise up to $1,144,947 before costs. This Offer Document is not a prospectus under the Corporations Act and has not been lodged with the ASIC. 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 Shares offered by this document.

This Offer Document including each of the documents attached to it and which form part of this Offer Document are important and should be read in their entirety prior to making an investment decision. In particular, Shareholders should refer to the risk factors set out in Section 5 of this document. If you do not fully understand this Offer Document or are in any doubt as to how to deal with it, you should consult your professional adviser.

SECTION 708AA OF THE CORPORATIONS ACT

This Offer Document has been prepared in accordance with section 708AA of the Corporations Act and applicable ASIC Class Order CO 08/35. In general terms, section 708AA permits certain companies to undertake entitlement issues without being required to use or provide to shareholders a prospectus or other disclosure document. Accordingly the level of disclosure in this Offer Document is significantly less than the level of disclosure required in, and what you would expect in, a prospectus. Eligible Shareholders should rely on their own knowledge of the Company, refer to disclosures made by the Company to ASX and consult their professional advisers before deciding to accept the Offer.

IMPORTANT NOTES

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

The distribution of this Offer Document in jurisdictions outside Australia, New Zealand, the United Kingdom, Hong Kong, United Arab Emirates and Singapore may be restricted by law and persons who come into possession of this Offer Document should seek advice and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. No action has been taken to register or qualify these Shares the subject of this Offer Document or otherwise permit a public offering of the Shares the subject of this Offer Document in any jurisdiction outside Australia, New Zealand, the United Kingdom, Hong Kong, United Arab Emirates or Singapore.

INFORMATION FOR SHAREHOLDERS OUTSIDE AUSTRALIA AND NEW ZEALAND

The distribution of this Offer Document in jurisdictions outside Australia, New Zealand, the United Kingdom, Hong Kong, the United Arab Emirates and Singapore may be restricted by law and persons who come into possession of this Offer Document should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. No action has been taken to register or qualify these Shares the subject of this Offer Document or otherwise permit a public offering of the Shares the subject of this Offer Document in any jurisdiction outside Australia, New Zealand, the United Kingdom, Hong Kong, the United Arab Emirates or Singapore.

It is the responsibility of applicants outside Australia to obtain all necessary approvals for the allotment and issue of the Shares pursuant to this Offer Document. The return of a completed Entitlement and Acceptance Form will be taken by the Company to constitute a representation and warranty by the Applicant that all relevant approvals have been obtained.

This Offer does not constitute an offer in a place in which, or to any person to whom, it would not be lawful to make such an offer.

This Offer does not constitute an offer in the United States of America or Canada, nor does it constitute an offer to a person who is a US or Canadian Person or someone who is acting on behalf of a US or Canadian Person.

Shareholders resident in Australia, New Zealand, the United Kingdom, the United Arab Emirates, Singapore or Hong Kong holding shares on behalf of persons who are resident overseas are responsible for ensuring that taking up an Entitlement under the Offer (or the Shortfall) 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.

Disclosures for New Zealand

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 2013 (New Zealand).

This Offer Document has not been registered, filed with or approved by any New Zealand regulatory authority under the Securities Act 1978 (New Zealand). This Offer Document is not an investment statement or Offer Document under New Zealand law and is not required to, and may not, contain all the information that an investment statement or Offer Document under New Zealand law is required to contain.

The Company in its absolute discretion, reserves the right to determine whether a Shareholder outside of Australia, New Zealand or Singapore has complied to be eligible and able to participate in the Offer.

In accordance with the Securities Act (Overseas Companies) Exemption Notice 2013 (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.

Disclosures for Hong Kong

WARNING: The contents of this document have not been reviewed by any Hong Kong regulatory authority. You are advised to exercise caution in relation to the offer. If you are in doubt about any contents of this document, you should obtain independent professional advice.

Disclosures for the United Kingdom

Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Services Authority in the United Kingdom and no Offer Document (within the meaning of section 85 of the Financial Services and Markets Act 2000, as amended ("FSMA")) has been published or is intended to be published in respect of the New Shares. This document is issued on a confidential basis to fewer than 150 persons (other than "qualified investors" (within the meaning of section 86(7) of FSMA)) in the United Kingdom, and the Shares may not be offered or sold in the United Kingdom by means of this document, any accompanying letter or any other document, except in circumstances which do not require the publication of an Offer Document pursuant to section 86(1) FSMA. This document should not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by recipients to any other person in the United Kingdom.

Any invitation or inducement to engage in investment activity (within the meaning of section 21 FSMA) received in connection with the issue or sale of the New Shares has only been communicated or caused to be communicated and will only be communicated or caused to be communicated in the United Kingdom in circumstances in which section 21(1) FSMA does not apply to the Company.

Disclosures for the United Arab Emirates

Neither this document nor the New Shares have been approved, disapproved or passed on in any way by the Central Bank of the United Arab Emirates, the Emirates Securities and Commodities Authority or any other governmental authority in the United Arab Emirates, nor has the Company received authorization or licensing from the Central Bank of the United Arab Emirates, the Emirates Securities and Commodities Authority or any other governmental authority in the United Arab Emirates to market or sell the New Shares within the United Arab Emirates. No marketing of any financial products or services may be made from within the United Arab Emirates and no subscription to any financial products or services may be consummated within the United Arab Emirates. This document does not constitute and may not be used for the purpose of an offer or invitation. No services relating to the New Shares, including the receipt of applications and/or the allotment or redemption of New Shares, may be rendered within the United Arab Emirates by the Company.

No offer or invitation to subscribe for New Shares is valid in, or permitted from any person in, the Dubai International Financial Centre.

Disclosures for Singapore

This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as an Offer Document in Singapore with the Monetary Authority of Singapore. Accordingly, this document and any other document or materials in connection with the offer or sale, or invitation for subscription or purchase, of New Shares may not be issued, circulated or distributed, nor may these securities be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore except pursuant to and in accordance with exemptions in Subdivision (4) Division 1, Part XIII of the Securities and Futures Act, Chapter 289 of Singapore (the "SFA"), or as otherwise pursuant to, and in accordance with the conditions of any other applicable provisions of the SFA.

This document has been given to you on the basis that you are an existing holder of the Company's shares. In the event that you are not such a shareholder, please return this document immediately. You may not forward or circulate this document to any other person in Singapore.

Any offer is not made to you with a view to the Shares being subsequently offered for sale to any other party. There are on-sale restrictions in Singapore that may be applicable to investors who acquire New Shares. As such, investors are advised to acquaint themselves with the SFA provisions relating to resale restrictions in Singapore and comply accordingly.

RISK FACTORS

Potential investors should be aware that subscribing for Shares in the Company involves a number of risks. The key risk factors of which investors should be aware are set out in Section 5 of this Offer Document. These risks together with other general risks applicable to all investments in listed securities not specifically referred to, may affect the value of the Shares in the future. Accordingly, an investment in the Company should be considered highly speculative. Investors should consider consulting their professional advisers before deciding whether to apply for Shares pursuant to this Offer Document.

Privacy Act

If you complete an Entitlement and Acceptance Form, 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 Entitlement and Acceptance Form, the Company may not be able to accept or process your application.

2. CORPORATE DIRECTORY

Directors Solicitors

Dr Neale Fong

Non-Executive Chairman

Ms Jing Wang

Executive Director

Mr Jian Hua Sang

Non-Executive Director

Mr Michael Griffiths

Non-Executive Director

Mr Kevin Hart

Company Secretary Auditors*

Steinepreis Paganin Lawyers and Consultants Level 4, Next Building 16 Milligan Street PERTH WA 6000

HLB Mann Judd Level 4, 130 Stirling Street PERTH WA 6000

Telephone: +61 8 9227 7500 Facsimile: + 61 8 9227 7533

Registered Office ASX Code

Suite 20, 7 The Esplanade MT PLEASANT WA 6153

Telephone: +61 8 6180 9290 Facsimile: +61 8 9316 1314

Share Registry*

Computershare Investor Services Pty Limited Level 2, Reserve Bank Building PERTH WA 6000

www.chrysalisresources.com.au Telephone: +61 8 6180 9290

CYS

Website General Enquiries

*These parties have been included for information purposes only. They have not been involved in the preparation of this Offer Document.

3. CHAIRMAN'S LETTER

Dear Shareholder

The Board is pleased to offer Shareholders the opportunity to participate in a one for two nonrenounceable entitlement issue of Shares.

All Shareholders registered as at 5.00 pm (WST) on 15 July 2014 will be entitled to participate in the pro-rata non-renounceable entitlement issue of Shares on the basis of one (1) Share for every two (2) Shares then held (Offer) at an issue price of 1.0 cent per Share. The pricing has been set at 1.0 cent to provide an opportunity for all Shareholders to participate in the Entitlement Issue. The issue price represents a 33.3% discount to the last traded share price prior to the announcement and a 54.5% discount to the 15 trading day vwap.

The company has recently defined a highly prospective 5.5km x 1.6km >100ppm Cu-in-soil anomaly at the Kimabwe Prospect within the Kabwima Project in Zambia (Fig. 1). The soil geochemistry includes Cu values up to 485ppm Cu and in-pit results up to 626ppm Cu. Geological and geophysical interpretations have identified a ENE-trending fault zone that corresponds with the anomalous soil geochemistry. A first pass drill program consisting of 70 aircore holes has been designed to test this structure (Fig 2). Drill lines have been prepared and the program will commence as soon as funding from the current Entitlement Issue is received.

Figure 1: Kimabwe Prospect soil sampling XRF results and maximum down-pit copper results labelled and coloured by Cu (ppm) over RTP TMI aeromagnetic image.

Figure 2: Kimabwe Prospect >100ppm Cu-in-soil contour (red), pit geology and proposed drilling over interpreted geology

Infill soil sampling at the Mwako Prospect (Bulala Hills Project) has defined a semi-continuous 4.5km long x 1km wide >100ppm Cu-in-soil anomaly that remains open to the east. The anomaly contains recent Cu-in-soil values up to 0.11% Cu associated with a 50m to 200m wide shear zone containing a quartz porphyry intrusive displaying strong argillic alteration and a hematite breccia unit on its northern contact. A program of 10 Reverse Circulation (RC) drill holes has been planned beneath the best parts of the Cu-in-soil anomaly in order to test for copper and/or gold mineralisation at depth within the shear zone. Drill pad preparation is underway with the program due to commence immediately after the completion of the Kimabwe aircore drilling.

Figure 3: Bulala Hills historic soil samples (coloured circles), rock chips (>0.1% Cu labelled in red), interpreted structures, and Mwako Prospect >100ppm Cu-in-soil contour from recent infill soil sampling over grey scale RTP TMI aeromagnetic image.

Figure 4: Mwako Prospect soil samples coloured and labelled by XRF Cu results (ppm), proposed drill hole locations over interpreted geology.

The closing date for acceptances is 5.00 pm (WST) on 8 August 2014.

The Company intends to use the funds raised under this Offer Document to undertake exploration drilling within the company's copper projects in Zambia and to provide working capital to the Company.

The Board encourage your participation in this Entitlement Issue.

The Board takes this opportunity to thank all Shareholders for their support and looks forward to your continued support in the future.

Yours faithfully

DR NEALE FONG CHAIRMAN

4. DETAILS OF THE OFFER

4.1 Offer

The Company offers for subscription approximately 114,494,709 New Shares pursuant to a pro-rata non-renounceable entitlement issue to Shareholders whose registered address is in Australia, New Zealand, the United Kingdom, Hong Kong, United Arab Emirates or Singapore (Eligible Shareholders) of one (1) New Share for every two (2) Shares held on the Record Date at an issue price of $0.01 per Share. Fractional entitlements will be rounded up to the nearest whole number.

All of the New Shares offered under this Offer Document will rank equally with the Shares on issue at the date of this Offer Document.

The Company currently has 228,989,419 Shares on issue. The Company does not currently have any Options on issue. Based on the capital structure of the Company, the maximum number of New Shares to be issued pursuant to the Offer is approximately 114,494,709 Shares (subject to rounding), which would increase the total number of Shares on issue in the Company to approximately 343,484,129 Shares after the close of the Offer and issue of all Shortfall (if any).

The Offer will raise up to approximately $1,144,947 before the costs of the Offer. The proceeds of the Offer are planned to be used in accordance with the table set out below (which assumes that the Offer is fully subscribed):

Proceeds of the Offer $

Kabwima Project Exploration Programmes	213,000
Bulala Hills Project Exploration Programmes	174,000
Working Capital	681,500
Expenses of the Offer	76,447
Total	1,144,947

The expenditures shown above may be subject to change, and will be contingent upon results, circumstances and other opportunities. The Board reserves the right to alter the way that funds are applied on this basis. The Directors are of the opinion that, on completion of the Offer, there will be sufficient working capital for the Company to meet its stated objectives.

4.2 Entitlements and acceptance

Details of how to apply under the Offer are set out in Section 6 below.

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. You may accept for a lesser number of Shares should you wish to take up only part of your Entitlement.

The Directors reserve the right to issue Shortfall Shares in conjunction with the Underwriter, The issue of any Shortfall Shares is subject to the terms of the Underwriting Agreement.

4.3 Minimum subscription

There is no minimum subscription for the Offer, however the Offer is fully underwritten on the terms set out in section 4.5 below.

4.4 Shortfall Offer

Any Shares not taken up by Eligible Shareholders may become available as Shortfall Shares which may be placed by the Company. It is possible that there will be few or no Shortfall Shares available, depending on the level of acceptance of Entitlements by Eligible Shareholders.

The offer of any Shortfall is a separate offer made pursuant to this Offer Document (Shortfall Offer). Shortfall Shares will be issued at the same issue price as the Shares offered to Eligible Shareholders under the Offer, being $0.01.

It is the intention of the Company to issue the Shortfall in accordance with the Underwriting Agreement. The terms of the Underwriting Agreement are set out in Section 4.5 below.

4.5 Underwriting Agreement

By an agreement between Mr Adrian Paul (Underwriter) and the Company (Underwriting Agreement), the Underwriter has agreed to fully underwrite the Offer of 114,494,709 Shares (Underwritten Shares).

The Underwriter is not a related party of the Company.

Pursuant to the Underwriting Agreement, the Company has agreed to pay the Underwriter an underwriting fee of 5% of the value of the Underwritten Shares being $1,144,947.

The Underwriting Agreement contains limited termination provisions, all considered standard for an underwriting agreement. However, the Underwriting Agreement is specifically able to be terminated where the Company fails to implement overhead cost reduction measures agreed between the Underwriter and the Company or where the Zambian Government makes a declaration that the Company's Zambian licences will not be renewed, each on the date before the Underwriter is required to apply for all Shortfall.

Prior to entering into the Underwriting Agreement with the Underwriter, the Directors considered a number of alternatives arrangements, including seeking expressions of interest from other third party professional investors. However, following those considerations, it was the decision of the Directors that the arrangement entered into with the Underwriter was in the best interests of the Company given the terms of the arrangement, the circumstances of the Company and the market in general.

4.6 Details of Substantial Holders

Based on publically available information as at 30 June 2014 those persons having a relevant interest in 5% or more of the Shares on issue are as follows

Shareholder	No. of shares	%
Eagle Brilliant Holdings Limited	57,247,355	25.0
Tiger Resources Limited	45,568,894	19.9
Adrian Stephen Paul	13,351,595	5.83

For further information on these substantial holders and the effect that the Offer will have on them, please refer to section 4.7 of the Offer Document.

4.7 Effect on control of the Company

If all Shareholders take up all of their Entitlement under the Offer, the percentage interests in the Company held by the major Shareholders (as set out in the above table) would not change and there would be no effect on the control of the Company.

However, if some or all Shareholders do not take up some or all of their Entitlements under the Offer, then the control of the major shareholders may increase, while the interests of Shareholders that do not participate will correspondingly decrease.

Specifically, the interest of Mr Adrian Stephen Paul being the Underwriter may increase by virtue of his agreement to underwrite the Offer under the terms of the Underwriting Agreement summarised in Section 4.5 above.

If no Shareholders took up their Entitlement, the maximum theoretical voting power of the Underwriter, if the Underwriter was required to subscribe for all of the New Shares would be approximately 37.22%.

However, the Underwriter has confirmed to the Company in writing that the Underwriter will be engaging sub-underwriters, such that neither the Underwriter nor any of his subunderwriters will acquire a voting power in the Company greater than 19.9%,

As such, the Company does not consider that the Entitlement Issue will have an effect on the control of the Company, notwithstanding that the Underwriter may be able to increase his voting power in the Company to up to 19.9% where there is a large Shortfall.

The Company also notes that two current Shareholders, Eagle Brilliant Holdings Limited and Tiger Resources Limited each have a relevant interest in approximately 25% and 19.9% in the Company respectively. The Company does not have any written indication from either of these two Shareholders as to whether they intend to apply for their Entitlement or not. If each of the two major Shareholders applied for their Entitlement, then the maximum voting power that the Underwriter could acquire in the Company (assuming no other Shareholders took up their Entitlement) would be 18.75%.

4.8 Issue

Shares issued pursuant to the Offer will be issued in accordance with the ASX Listing Rules and the timetable set out in this Offer Document.

Pending the issue of the Shares or payment of refunds pursuant to this Offer Document, all Application monies will be held by the Company in trust for the Applicants in a separate bank account as required by the Corporations Act. The Company, however, will be entitled to retain all interest that accrues on the bank account and each Applicant waives the right to claim interest.

Holding statements for Shares issued under the Offer will be mailed in accordance with the ASX Listing Rules and the timetable set out in this Offer Document.

4.9 Rights and Liabilities Attaching to Shares

The Shares offered under this Offer Document will rank equally in respect of dividends and have the same rights in all other respects (eg voting, bonus issues) as existing Shares.

Full details of the rights and liabilities attaching to Shares are set out in the Company's Constitution, a copy of which is available for inspection at the Company's registered office during normal business hours.

4.10 Continuous disclosure obligations

The Company is a "disclosing entity" (as defined in Section 111AC of the Corporations Act) for the purposes of the Corporations Act and its Shares are enhanced disclosure securities quoted on ASX and, as such, the Company is subject to regular reporting and disclosure obligations under the Corporations Act and the Listing Rules.

Specifically, the Company is required to notify ASX of information about specific events and matters as they arise for the purposes of the ASX making that information available to the securities markets conducted by the ASX. In particular, the Company has an obligation under the ASX Listing Rules (subject to certain exceptions) to notify the ASX immediately of any information of which it is or becomes aware which a reasonable person would expect to have a material effect on the price of value of its securities.

This Offer Document is intended to be read in conjunction with the publicly available information in relation to the Company which has been notified to ASX and does not include information that would be included in a disclosure document or which investors ought to have regard to in deciding whether to subscribe for Shares under the Offer. Investors should therefore have regard to the other publicly available information in relation to the Company before making a decision whether or not to invest.

All announcements made by the Company are available from its website www.chrysalisresources.com.au or the ASX www.asx.com.au.

Additionally, the Company is also required to prepare and lodge with ASIC yearly and halfyearly financial statements accompanied by a directors' statement and report, and an audit report or review. These reports are released to ASX and published on the Company's and the ASX websites.

This Offer Document (including the Entitlement & Acceptance Form) and the contracts that arise from acceptance of the Applications are governed by the laws applicable in Western Australia and each Applicant submits to the non-exclusive jurisdiction of the courts of Western Australia.

4.11 Rights Issue Notice

The Company has lodged with ASX a notice in accordance with section 708AA of the Corporations Act which sets out, amongst other information, the effect of the Offer on the control of the Company. This notice may be reviewed on the websites of the Company and ASX.

4.12 No rights trading

The rights to 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 Shares under the Offer to any other party. If you do not take up your Entitlement to Shares under the Offer by the Closing Date, the Offer to you will lapse.

4.13 ASX Listing

Application for official quotation by ASX of the Shares offered pursuant to this Offer Document will be made within 7 days after the date of this Offer Document. If approval is not obtained from ASX before the expiration of 3 months after the date of issue of the Offer Document, (or such period as modified by the ASIC), the Company will not issue any Shares and will repay all application monies for the Shares within the time prescribed under the Corporations Act, without interest.

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

4.14 Allotment of Shares

Shares issued pursuant to the Offer will be allotted as soon as practicable after the Closing Date and in accordance with the ASX Listing Rules and timetable set out in Section 1 of this Offer Document. The Company will allot the Shares on the basis of a Shareholder's Entitlement. Where the number of Shares issued is less than the number applied for, or where no allotment is made, surplus application monies will be refunded without any interest to the applicant as soon as practicable after the Closing Date.

Pending the allotment and issue of the Shares or payment of refunds pursuant to this Offer Document, all application monies will be held by the Company in trust for the Applicants in a separate bank account as required by the Corporations Act. The Company, however, will be entitled to retain all interest that accrues on the bank account and each Applicant waives the right to claim interest.

4.15 Taxation Implications

The Directors do not consider that it is appropriate to give Applicants advice regarding the taxation consequences of applying for Shares under this Offer Document, as it is not possible to provide a comprehensive summary of the possible taxation consequences. The Company, its advisers and officers, do not accept any responsibility or liability for any taxation consequences to Applicants. Potential Applicants should, therefore, consult their own professional tax adviser in connection with the taxation implications of the Shares offered pursuant to this Offer Document.

4.16 Clearing House Electronic Sub-Register System (CHESS) and Issuer Sponsorship

The Company will not be issuing share certificates. The Company is a participant 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 Shares allotted to them under this Offer Document. The notice will also advise holders of their Holder Identification Number or Security Holder Reference Number 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.

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 Shares, the Company may not be able to accept or process your application.

4.17 Enquiries

Any questions concerning the Offer should be directed to Kevin Hart, Company Secretary on +61 8 9316 9100.

5. RISK FACTORS

5.1 Introduction

The New Shares offered under this Offer Document are considered highly speculative. An investment in the Company is not risk free and the Directors strongly recommend potential investors to consider the risk factors described below, together with information contained elsewhere in this Offer Document and to consult their professional advisers before deciding whether to apply for Shares pursuant to this Offer Document.

There are specific risks which relate directly to the Company's business. In addition, there are other general risks, many of which are largely beyond the control of the Company and the Directors. The risks identified in this section, or other risk factors, may have a material impact on the financial performance of the Company and the market price of the Shares.

The following is not intended to be an exhaustive list of the risk factors to which the Company is exposed.

5.2 Risks Specific to the Company

Potential for significant dilution

Upon implementation of the Offer, assuming all Entitlements are accepted, the number of Shares in the Company will increase from 228,989,419 to 343,484,129. This means that each Share will represent a significantly lower proportion of the ownership of the Company.

It is not possible to predict what the value of the Company or a Share will be following the completion of the Offer and the Directors do not make any representation as to such matters.

The last trading price of Shares on ASX prior to this Offer being announced of $0.015 is not a reliable indicator as to the potential trading price of shares after implementation of this Offer.

Additional Requirements for Capital

The Company's activities will require substantial expenditures. There can be no guarantees that the funds raised through the Offer will be sufficient to successfully achieve all the objectives of the Company's overall business strategy. If the Company is unable to use debt or equity to fund expansion after the substantial exhaustion of the net proceeds of the Offer there can be no assurances that the Company will have sufficient capital resources for that purpose, or other purposes, or that it will be able to obtain additional resources on terms acceptable to the Company, or at all. Any additional equity financing may be dilutive to shareholders and any debt financing if available may involve restrictive covenants, which limit the Company's operations and business strategy. If the Company is unable to obtain additional financing as required, it may have to reduce the scope of its operations and scale back its exploration programmes as the case may be.

Shareholders should note that the Financial Report of the Company for the half year ended 31 December 2013 has been prepared on a going concern basis. However, the ability of the Company to continue as a going concern and to meet planned and committed expenditure requirements is subject to the Company successfully exploiting the investments and mining projects owned by the Company and/or the raising of further equity and/or loan capital. In the event that the Company is not successful in raising further funds, the realisable value of the entity's non-current assets may be significantly less than their current carrying values and the Company may not be able to continue in its present form.

The Company's failure to raise capital, if and when needed, could delay or suspend the Company's business strategy and could have a material adverse effect on the Company's activities.

Risks associated with operations in Zambia

The Company has 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 3,000km2 of which 2,180km2 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 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;
(a) alteration to exploration and production programmes and budgets;
(b) unanticipated operational and technical difficulties;
(c) mechanical failure of operating plant and equipment, adverse weather conditions, industrial and environmental accidents, industrial disputes and other force majeure events;
(d) unexpected shortages or increases in the costs of consumables, spare parts, plant and equipment;
(e) 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
(f) uninsured losses or liabilities.

Currency Risk

The Offer may involve a currency exchange risk. The currency in which the Shares are denominated in is Australian dollars. The value of the Shares will go up and down according to changes in the exchange rate between that currency and currencies in foreign jurisdictions. These changes may be significant.

5.3 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:

general economic outlook;
interest rates and inflation rates;
currency fluctuations;
changes in investor sentiment toward particular market sectors;
the demand for, and supply of, capital; and
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.

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.

Interests in licences granted in Zambia are governed by Zambian law. Each licence is valid 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 licences if conditions are not met or if insufficient funds are available to meet expenditure commitments.

5.4 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.

6. HOW TO ACCEPT THE OFFER

6.1 How to accept the Offer

Your acceptance of the Offer must be made on the Entitlement and Acceptance Form accompanying this Offer Document.

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 amount indicated on that relevant Entitlement and Acceptance Form or pay via Bpay by following the instructions set out on the Entitlement and Acceptance Form (Applicants should ensure they include their reference number if paying by BPay); or
(b) if you only wish to accept part of your Entitlement:
- (i) fill in the number of 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 $0.01 per Share) or pay via Bpay by following the instructions set out on the Entitlement and Acceptance Form (Applicants should ensure they include their reference number if paying by BPay); or
(c) if you do not wish to accept all or part of your Entitlement, you are not obliged to do anything.

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

6.2 Implications of an acceptance

Returning a completed Entitlement and Acceptance Form or paying any Application monies by BPAY® will be taken to constitute a representation by you that:

(a) you have received a copy of this Offer Document and the accompanying Entitlement and Acceptance Form, and read them both in their entirety;
(b) you acknowledge that once the Entitlement and Acceptance Form is returned, or a BPAY® payment instruction is given in relation to any Application monies, the Application may not be varied or withdrawn except as required by law.

6.3 Payment by cheque/bank draft

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

Your completed Entitlement and Acceptance Form and cheque must reach the Company's share registry at the address set out on the Entitlement and Acceptance Form by no later than 5:00pm WST on the Closing Date.

6.4 Payment by BPAY®

For payment by BPAY®, please follow the instructions on the Entitlement and Acceptance Form. You can only make a payment via BPAY® if you are the holder of an account with an Australian financial institution that supports BPAY® transactions. Please note that should you choose to pay by BPAY®:

(a) you do not need to submit the Entitlement and Acceptance Form but are taken to have made the declarations on that Entitlement and Acceptance Form; and

(b) if you do not pay for your Entitlement in full, you are deemed to have taken up your Entitlement in respect of such whole number of Shares which is covered in full by your application monies.

It is your responsibility to ensure that your BPAY® payment is received by the share registry by no later than 3.00pm (WST) on the Closing Date. You should be aware that your financial institution may implement earlier cut-off times with regards to electronic payment and you should therefore take this into consideration when making payment.

6.4 If you do not wish to accept any of your Entitlement

If you do not wish to accept any of your Entitlement, you are not obliged to do anything. In that case, shares not accepted by the Closing Date will become shortfall shares and you will receive no benefit.

7. DEFINITIONS

Applicant means a Shareholder who applies for Shares pursuant to the Offer or other party who applies for Shortfall Shares pursuant to the Shortfall Offer.

ASIC means the Australian Securities and Investments Commission.

ASX means the ASX Limited (ACN 008 624 691).

ASX Settlement Operating Rules means the settlement rules of the securities clearing house which operates CHESS.

Board means the board of Directors unless the context indicates otherwise.

Business Day means a day on which trading takes place on the stock market of ASX.

Closing Date means the closing date of the Offer, being 5:00pm (WST) on 8 August 2014 (unless extended).

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

Constitution means the Company's Constitution as at the date of this Offer Document.

Corporations Act means the Corporations Act 2001(Cth).

Directors means the directors of the Company at the date of this Offer Document.

Dollar or "$" means Australian dollars.

Entitlement means the entitlement of a Shareholder who is eligible to participate in the Offer.

Entitlement and Acceptance Form means the entitlement and acceptance form either attached to or accompanying this Offer Document.

Issue means the issue of Shares offered by this Offer Document.

Listing Rules or ASX Listing Rules means the Listing Rules of the ASX.

New Share means a Share offered under the Offer or the Shortfall Offer.

Offer means the offer pursuant to this Offer Document of one (1) new Share for every two (2) Shares held by a Shareholder on the Record Date to raise approximately $1,144,947.

Official List means the official list of ASX.

Offer Document means this Offer Document.

Quotation and Official Quotation means official quotation on ASX.

Record Date means 5:00pm (WST) on 15 July 2014.

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

Shareholder means a shareholder of the Company.

Shortfall Offer means the offer of the Shortfall under this Offer Document on the terms set out in Section 4.4.

Shortfall Application Form means the shortfall application form for the Shortfall Shares.

Shortfall Shares means those Shares to be issued pursuant to the Shortfall Offer**.**

Underwriter means Mr Adrian Paul.

Underwriting Agreement has the meaning given to that term in section 4.5 of this Offer Document.

Underwritten Amount means the dollar amount for which the Offer is underwritten by the Underwriter, being $1,144,947.

Underwritten Shares means the number of Shares the Underwriter will subscribe for if there is a Shortfall, being 114,494,709 Shares.

WST means Western Standard Time.

For all enquiries:

Phone:

Chrysalis Resources Limited +61 8 9316 9100

Web: www.investorcentre.com/contact

S000001Q01

T 000001 000 CYS MR SAM SAMPLE 123 SAMPLE STREET SAMPLETOWN VIC 3000

Make your payment:

See over for details of the Offer and how to make your payment

Non-Renounceable Rights Issue — Entitlement and Acceptance Form

Your payment must be received by 5:00pm (AWST) Friday 8 August 2014

This is an important document that requires your immediate attention. It can only be used in relation to the shareholding represented by the details printed overleaf. If you are in doubt about how to deal with this form, please contact your financial or other professional adviser.

Step 1: Registration Name

Please check the details provided and update your address via www.investorcentre.com if any of the details are incorrect.

If you have a CHESS sponsored holding, please contact your Controlling Participant to notify a change of address.

Step 2: Make Your Payment

You can apply to accept either all or part of your Entitlement. Enter the number of new shares you wish to apply for and the amount of payment for those shares.

By making your payment you confirm that you agree to all of the terms and conditions as detailed in the Offer Document dated 8 July 2014.

Choose one of the payment methods shown below. BPAY® : See overleaf. Do not return the slip with BPAY payment. By Mail: Complete the reverse side of this payment slip and detach and return with your payment. Make your cheque or bank draft payable in Australian dollars to "Chrysalis Resources Limited" and crossed "Not Negotiable". The cheque must be drawn from an Australian bank. Cash is not accepted.

Payment will be processed on the day of receipt and as such, sufficient cleared funds must be held in your account as cheques received may not be re-presented and may result in your Application being rejected. Paperclip (do not staple) your cheque(s) to the slip below as indicated. Receipts will not be forwarded. Funds cannot be debited directly from your account.

Entering your contact details is not compulsory, but will assist us if we need to contact you.

Turn over for details of the Offer è

Chrysalis Resources Limited Non-Renounceable Rights Issue Payment must be received by 5:00pm (AWST) Friday 8 August 2014

Registration Name & Offer DetailsMR SAM SAMPLE123 SAMPLE STREETSAMPLETOWN VIC 3000	For your security keep your SRN/HIN confidential.

	Entitlement No: 12345678

	4,000
	1
	$0.01

	Existing shares entitled to participate as at5.00PM (AWST) 15 July 2014:Entitlement to new shareson a 1 for 2 basis:Amount payable on acceptanceat $0.01 per share:Make Your Payment

Biller Code: 99999
Ref No: 1234 5678 9123 4567 89

Contact your financial institution to make your payment from your cheque or savings account.

Computershare Investor Services Pty Limited GPO BOX 505 Melbourne Victoria 3001 Australia

Return your cheque with the below slip to:

Make your cheque, money order or bank draft payable to "Chrysalis

Resources Limited" and crossed "Not Negotiable".

Lodgement of Acceptance

If you are applying for shares and your payment is being made by BPAY® , you do not need to return the slip below. Your payment must be received by no later than 5:00pm (AWST) Friday 8 August 2014. Applicants should be aware that their own financial institution may implement earlier cut off times with regards to electronic payment, and should therefore take this into consideration when making payment. Neither Computershare Investor Services Pty Limited (CIS) nor Chrysalis Resources Limited accepts any responsibility for loss incurred through incorrectly completed BPAY® payments. It is the responsibility of the applicant to ensure that funds submitted through BPAY® are received by this time.

Pay by Mail:

If you are paying by cheque, bank draft or money order the slip below must be received by CIS by no later than 5:00pm (AWST) Friday 8 August 2014. You should allow sufficient time for this to occur. A reply paid envelope is enclosed for shareholders in Australia. Other Eligible Shareholders will need to affix the appropriate postage. Return the slip below with cheque attached. Neither CIS nor the Company accepts any responsibility if you lodge the slip below at any other address or by any other means.

Privacy Notice

The personal information you provide on this form is collected by Computershare Investor Services Pty Limited (CIS), as registrar for the securities issuers (the issuer), for the purpose of maintaining registers of securityholders, facilitating distribution payments and other corporate actions and communications. In addition, the issuer may authorise us on their behalf to send you marketing material or include such material in a corporate communication. You may elect not to receive marketing material by contacting CIS using the details provided above or emailing [email protected]. We may be required to collect your personal information under the Corporations Act 2001 (Cth) and ASX Settlement Operating Rules. We may disclose your personal information to our related bodies corporate and to other individuals or companies who assist us in supplying our services or who perform functions on our behalf, to the issuer for whom we maintain securities registers or to third parties upon direction by the issuer where related to the issuer's administration of your securityholding, or as otherwise required or authorised by law. Some of these recipients may be located outside Australia, including in the following countries: Hong Kong, United Arab Emirates, New Zealand, United Kingdom and Singapore. For further details, including how to access and correct your personal information, and information on our privacy complaints handling procedure, please contact our Privacy Officer at [email protected] or see our Privacy Policy at http://www.computershare.com.au.

Detach here

Acceptance Payment DetailsEntitlement taken up:
Amount enclosed at $0.01 perA$new share:			12345678Entitlement No: 12345678
Payment must be received by 5:00pm (AWST) Friday 8 August 2014			MR SAM SAMPLE123 SAMPLE STREETSAMPLETOWN VIC 3000
Contact Details
ContactName	DaytimeTelephone
Cheque DetailsDrawer	BSB NumberCheque Number	Account Number	Amount of Cheque