PREDICTIVE DISCOVERY LIMITED — Capital/Financing Update 2012

Jun 6, 2012

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6 June 2012

ABN 11 127 171 877 Level 2, 9 Colin Street WEST PERTH WA 6005 PO Box 1710 West Perth WA 6872 p (08) 9216 1000 f (08) 9481 7939 w www.predictivediscovery.com

‐ Non renounceable pro rata entitlement offer

As announced on 28 May 2012, Predictive Discovery Limited ( Company ) is undertaking a pro rata non‐renounceable entitlements issue to raise up to $2,008,886 before the costs of the issue ( Entitlement Offer ). The Company has today lodged a prospectus with ASIC and ASX setting out further details of the Entitlement Offer.

Funds raised from the Entitlement Offer will be used primarily to fund the Company’s exploration of its gold project portfolio in Burkina Faso, capital raising costs, and for general working capital purposes.

Overview of Entitlement Offer

• The Entitlement Offer is non‐renounceable and is being undertaken on the basis of:

• one (1) new fully paid ordinary share ( New Share ) for every five (5) ordinary shares held by eligible shareholders on the record date at $0.08 cents per New Share; and

• one free attaching unlisted option for every 2 New Shares issued in the Entitlement Offer, with an exercise price of 10 cents to 30 June 2013, 15 cents from 1 July 2013 to 30 June 2014 and 20 cents from 1 July 2014 to the expiry date on 30 June 2015 ( New Option ).

• The Record Date to determine entitlements for Eligible Shareholders is 7.00pm AEST on Monday 18 June 2012.

• Eligible Shareholders are those persons who:

• are registered as a holder of Shares as at 7.00pm (AEST) on the Record Date;

• have a registered address in Australia or New Zealand or are, in the opinion of the Company and the Lead Manager, otherwise eligible under all applicable securities laws to receive an offer of New Shares under the Entitlement Offer; and

• are not in the United States and are subscribing for the New Shares in an ‘offshore transaction’ (as defined in Rule 902(h) under the US Securities Act).

• Shareholders not satisfying the above criteria will not be eligible to participate in the Entitlement Offer.

• Eligible Shareholders may apply for more than their entitlements, in accordance with the terms and conditions set out in the Prospectus.

• As the Entitlement Offer is non renounceable, entitlements to take up New Shares and New Options are non‐transferable and will not be tradeable on ASX. Shareholders who do not take up their entitlements in full will not receive any value in respect of those entitlements that they do not take up, and their equity interest in the Company will be diluted. Shareholders who are not eligible to receive entitlements will not receive any value in respect of entitlements they would have received, had they been eligible.

• A maximum of 25,111,081 ordinary shares will be issued under the Entitlement Offer. This number excludes any allowance for shares issued in the event that any option holders exercise

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their right to convert their securities to ordinary shares prior to the Record Date. This number is subject to reconciliation of entitlements and rounding. All Entitlements will be rounded up to the nearest whole number of New Shares and New Options.

• After the Entitlement Offer, the Company will have up to 150,666,486 ordinary shares on issue, of which up to 130,469,611 ordinary shares will be quoted on ASX. The following securities will not be quoted on ASX:

• 20,196,875 escrowed ordinary shares;

• 6,000,000 options exercisable at 25 cents, expiring on 20 August 2015;

• 500,000 options exercisable at 31 cents, expiring 11 July 2015;

• up to 12,555,541 New Options; and

• 2,000,000 unlisted options ( Lead Manager Options ) which will have identical terms to the New Options, except the exercise price for the Lead Manager Options will be $0.15 and they will expire 3 years from the date of allotment of the New Shares the subject of the Entitlement Offer.

• The Entitlement Offer is not currently underwritten. The Directors reserve the right to obtain an underwriter at any stage in accordance with the Corporations Act and ASX Listing Rules.

• The Directors reserve the right in accordance with the Corporations Act and ASX Listing Rule 7.2 (exemption 3) to place any Shortfall at their discretion with:

• Eligible Shareholders whose acceptances exceeds their entitlement; or

• any other parties selected by them.

• Any New Shares and New Options the subject of the Shortfall will be placed no later than 3 months after the Closing Date and will be issued on the same terms as are offered to Eligible Shareholders under the Entitlements Issue.

• Canaccord BGF is the lead manager of the Entitlement Offer ( Lead Manager ). The Company has agreed to pay the Lead Manager:

• a cash fee of 2% (plus GST) on all funds raised under the Entitlement Offer;

• an additional cash fee of 4% (plus GST) on all funds raised from any New Shares and New Options placed by the Lead Manager under the Shortfall; and

• 2,000,000 Lead Manager Options.

• The Company has agreed to pay a stamping fee to ASX participants whose Entitlement and Acceptance Forms are stamped by a broker and received by the Registry by the Entitlement Offer closing date at 5.00pm (AEST) on 13 July 2012. The stamping fee will be 2% of the total of an application, with a maximum of $400 per application.

• The Company does not currently have a dividend policy, and no dividends have been paid by the Company since it was listed on ASX.

• No shareholder approval is required for the Entitlement Offer.

• Each New Share will be issued on the same terms as those ordinary shares already issued by the Company and shares issued on exercise of the New Options will rank equally with fully paid ordinary shares from the date of allotment.

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Timetable

Important dates for Eligible Shareholders are:

Event	Date
Notice sent to existing option holders	6 June 2012
Shares quoted on an "ex" basis	12 June 2012
Record Date	7.00pm (AEST), 18 June 2012
Prospectus and Entitlement and Acceptance Forms	21 June 2012
despatched to Eligible Shareholders
Opening date for Entitlement Offer	21 June 2012
Entitlement Offer closing date for acceptance and	5.00pm (AEST), 13 July 2012
payment in full
Issue of new shares and despatch of holding statements	19 July 2012
New shares commence trading on ASX	20 July 2012

Further information

• Details of the Entitlement Offer are contained in the Prospectus lodged with ASIC and ASX on 6 June 2012, and available at www.asx.com.au. Eligible Shareholders are expected to be mailed a copy of the Prospectus together with a personalised Entitlement and Acceptance Form by no later than 21 June 2012.

• It is important that Eligible Shareholders read the Prospectus carefully, and consult their stockbroker, solicitor, accountant or other professional adviser before deciding whether to invest. If Eligible Shareholders wish to participate, they should follow the directions in the Entitlement and Acceptance Form and section 3 of the Prospectus.

• For further information on the Entitlement Offer:

• visit the Company’s website at www.predictivediscovery.com;

• see the Company’s Prospectus lodged with ASIC and ASX on 6 June 2012, and available at www.asx.com.au; or

• contact the Company on (08) 9216 1000 between 8.30am and 5.00pm (AWST) Monday to Friday.

Yours sincerely,

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Phillip Harman Chairman

The information provided in this announcement is not investment advice. You should read the entire Prospectus when you receive it, as well as all other materials lodged with ASX which you consider relevant and consider all of the risk factors that could affect the performance of the Company and the new shares in light of your particular investment objectives, financial circumstances and investment needs (including financial and taxation issues) and seek professional advice from your accountant, financial adviser, stock broker, lawyer or other professional adviser before deciding whether to invest in new shares. Specifically, shareholders should seek advice on the taxation implications of participating in the Entitlement Offer and have regard to the risks of investing in the Company highlighted in the Company’s prospectus dated 6 June 2012.

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