REACH RESOURCES LIMITED — Capital/Financing Update 2004

Oct 26, 2004

27 October 2004

Company Announcements Office Australian Stock Exchange PO Box H224 Australia Square Sydney NSW 2000

LODGEMENT OF PROSPECTUS

In accordance with Listing Rule 3.10.4, attached is a copy of the Prospectus dated 27 October 2004 that was lodged with ASIC earlier today.

Yours sincerely

thoy Ho

Anthony Ho Company Secretary

att.

CERVANTES SEAFOOD LIMITED ABN 79 097 982 235

PROSPECTUS

OFFER OF SHARES

A Prospectus for the issue of up to 25,000,000 Shares at an issue price of 5 cents each to raise up to $1,250,000 before costs (oversubscriptions of up to 10,000,000 Shares at 5 cents each to raise up to an additional $500,000 may be accepted).

The Offer closes at 5.00pm WST on 16 November 2004. The Offer is not underwritten.

CORPORATE DIRECTORY

Directors

Barry MacKinnon Chairman
Robert Grover	Managing Director
Chen Hao	Non-Exec. Director
	William McSharer Non-Exec. Director

Company Secretary

Anthony Ho

Principal Business Office

467 Scarborough Beach Road Osborne Park WA 6017

Telephone: $(61-8)$ 9446 6499 Facsimile: $(61-8)$ 9445 2257

Registered Office

219-221 York Street Subjaco WA 6008

Share Registry*

Stock Exchange Listing

Australian Stock Exchange Limited (Home Branch - Perth)

ASX Code: CVS

Solicitors*

Steinepreis Paganin Level 14, Citibank House 37 St George's Terrace Perth WA 6000

Auditors

Hall Chadwick Level 40, BankWest Tower 108 St George's Terrace Perth WA 6000

* These parties have not been involved in the preparation of this Prospectus and have not consented to being named in this Prospectus. Their names are disclosed for information purposes only.

Computershare Investor Services Pty Ltd Level 2, Reserve Bank Building 45 St George's Terrace Perth WA 6000

Telephone: $(61-8)$ 9323 2000 Facsimile: $(61-8)$ 9323 2033

TABLE OF CONTENTS

Page No.

	Corporate Directory	Inside cover
	Chairman's Letter	$\overline{2}$
1.0	Details of the Offer	3
2.0	Information on Cervantes Seafood Ltd	7
3.0	Purpose and Effect of the Issue	8
4.0	Risks of Investing	10
5.0	Additional Information	12
6.0	Continuous Disclosure and Documents Available for Inspection	16
7.0	Directors' Consent	17
8.0	Glossary	18
	Application Form
	Instructions to Applicants

IMPORTANT INFORMATION

This document is important and should be read in its entirety. The Directors consider an investment in the Shares as speculative and recommend that you consult your professional adviser before making an application for the Shares being offered pursuant to this Prospectus.

This Prospectus is dated 27 October 2004 and has been lodged with the ASIC on 27 October 2004.

The ASIC and the ASX take no responsibility as to the contents of the Prospectus.

No Shares will be allotted or issued on the basis of this Prospectus later than the expiry date, being the date which is 13 months after the date of this Prospectus.

For ease of reading various words and phrases have a defined meaning as set out in Section 8 of this Prospectus.

In making representations in this Prospectus regard has been had to the fact that the Company is a disclosing entity for the purposes of the Corporations Act and certain matters may reasonably be expected to be known to investors and professional advisers whom potential investors may consult.

CHAIRMAN'S LETTER

27 October 2004

Dear Investor

The purpose of this Prospectus is to raise funds through a share placement in order to ensure a working capital position that allows the Company to efficiently manage its existing operations, as well as invest in the vertically integrated strategies outlined in this Prospectus.

The Company has identified that, in order to increase profitability and enhance shareholder wealth, it must expand its operations to more fully utilise its existing asset base and to take advantage of opportunities for future growth. To that end, the Company intends to use its market and industry profile to position itself as a key player in any future movements in the industry.

The key objectives of the Company include:

• the use of existing infrastructure and expertise to investigate the potential for development of aquaculture programmes;
• increased return on sales through the development of direct marketing of seafood products to end users: and
• the evaluation of opportunities to provide financial support, through the Company's strategic alliances, to the fishing sector generally.

The Western Rock Lobster industry in Western Australia is a well-managed and sustainable industry. Its fishery management practices are recognised internationally as world's best practice.

I encourage you to consider this opportunity to invest in Cervantes Seafood Limited and the Western Australian Rock Lobster industry.

Yours sincerely

an King

Barry MacKinnon Chairman

$1.0$ DETAILS OF THE OFFER

$1.1$ The Offer

This Prospectus offers investors the opportunity to subscribe for up to 25,000,000 Shares at an issue price of 5 cents per Share to raise up to $1,250,000. The Offer is not underwritten. Oversubscriptions of up to 10,000,000 Shares at 5 cents each to raise up to an additional $500,000 may be accepted.

The rights attaching to the Shares are summarised in Section 5.1 of this Prospectus.

$1.2$ Opening and Closing Dates

The Offer will open at 9.00am WST on Thursday, 28 October 2004 and will close at 5.00pm WST on Tuesday, 16 November 2004, or such later date not exceeding 13 months from the date of this Prospectus as the Directors, in their absolute discretion, may defermine

These dates are indicative only and may vary. The Company reserves the right to vary the Opening Date and the Closing Date of the Offer without prior notice. Applicants are encouraged to apply as soon as possible after the Opening Date as the Offer may close earlier than the date specified above. The Company also reserves the right not to proceed with the Offer at any time before the allotment of Shares to successful applicants.

1.3 Applications for Shares

All applications for Shares pursuant to this Prospectus must be made on the Application Form attached to or accompanying this Prospectus. The Application Form must be completed in accordance with the instructions set out on the reverse of the Application Form.

Completed Application Forms should be forwarded to the Company's share registry at:

Computershare Investor Services Pty Ltd Level 2 Reserve Bank Building 45 St Georges Terrace PERTH WA 6000

$\alpha$ r

Computershare Investor Services Pty Ltd GPO Box D182 PERTH WA 6840

not later than 5.00pm WST on 16 November 2004 or such later date as the Directors advise.

$1.0$ DETAILS OF THE OFFER (cont'd)

1.3 Applications for Shares (cont'd)

Applications must be accompanied by payment in full in Australian currency of $0.05 for each Share applied for. Cheques should be made payable to "Cervantes Seafood" Limited - Share Offer" and crossed "Not Negotiable". Cash should not be forwarded. The amount payable on application will not vary during the period of the Offer and no further amount is payable on allotment.

Applicants must apply for a minimum of 40,000 Shares, representing a minimum investment of $2,000. Applicants requiring additional Shares must apply for Shares in multiples of 10,000 Shares thereafter.

1.4 Minimum Subscription

The minimum amount to be raised pursuant to the Offer is $1,250,000. If the minimum amount has not been raised within 4 months after the date of this Prospectus, the Offer will not proceed and all applications will be dealt with in accordance with the Corporations Act.

1.5 Underwriting

This Issue is not underwritten.

$1.6$ Oversubscriptions

The Company reserves the right to accept oversubscriptions of up to 10,000,000 Shares at 5 cents each to raise up to an additional $500,000. Accordingly, the maximum amount that may be raised pursuant to this Prospectus is $1,750,000.

$1.7$ Allotment of Shares

The Shares will be allotted as soon as practicable after the Closing Date.

Statements of holding for the Shares will be mailed as soon as possible after the Closing Date.

The Directors reserve the right, in their absolute discretion, to accept any application in whole or in part, or to reject any application. If the Directors decide to accept an application and issue the Shares, whether in whole or in part, they will issue the Shares and dispatch holding statements as soon as practicable after the Closing Date, together with any application monies received in excess of the number of Shares that have been issued.

All application monies will, before the allotment of Shares pursuant to this Prospectus, be held by the Company in trust in a bank account until allotment or, where applicable, until repaid to the Applicants.

$1.0$ DETAILS OF THE OFFER (cont'd)

1.8 ASX Quotation

The Company's securities are currently traded on ASX. Application will be made within 7 days after the date of this Prospectus for Official Quotation of the Shares offered under this Prospectus.

In the event that ASX does not grant permission for Official Quotation of the Shares within 3 months after the date of this Prospectus (or such period as is varied by the ASIC), none of the Shares offered by this Prospectus will be allotted or issued. In that circumstance, all applications will be dealt with in accordance with the Corporations Act.

1.9 Expenses of the Issue

The estimated expenses of the Issue, including brokerage, ASX and ASIC fees, printing and distribution costs and other miscellaneous expenses, are $90,000 which have been paid or are payable by the Company.

1.10 Investors Resident Outside Australia

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

Applicants resident in countries other than Australia should consult their professional advisors as to whether any governmental or other consents are required, or whether formalities need to be observed to enable them to subscribe for Shares pursuant to this Prospectus.

1.11 Interest on Application Monies

The Company will be entitled to all interest paid or accrued on application monies held in trust by the Company from the date of receipt of the application monies to the date of allotment of the Shares to which the application monies relate, or the refund of any application monies.

1.12 Risks of Investing

This Prospectus relates to the offer of Shares in a Company involved in the lobster export industry, with its prospects dependent on many factors. Material risks are set out in Section 4 of this Prospectus.

$1.0$ DETAILS OF THE OFFER (cont'd)

1.13 Market Price of Shares on ASX

The highest and lowest market sale prices of Shares on ASX during the three months immediately preceding the date of this Prospectus and the respective dates of those sales were 3.6 cents on 3, 16, 17, 18, 19, 20, 23, 24 and 25 August 2004 and 2.1 cents on 16, 17, 20, 21, 22, 23 and 24 September 2004. The latest available market price of the Shares on ASX immediately before the date of this Prospectus was 3.5 cents on 26 October 2004.

1.14 Privacy Disclosure Statement

By completing and submitting an application for Shares, personal information will be provided to the Company (directly or by the Company's share registry). The Company collects, holds and will use that information to assess applications, service successful applicants' needs as a shareholder, facilitate the distribution of payments and corporate communications to shareholders, and carry out administration.

The information may also be used from time to time and disclosed to persons inspecting the register, bidders for the Company's 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.

Personal information held about shareholders can be accessed, corrected and updated, if required. In order to do so, shareholders should contact the Company or its registry at the relevant contact numbers set out in this Prospectus.

Collection, maintenance and disclosure of certain personal information is governed by legislation including the Privacy Act 1988 (as amended), the Corporations Act and certain rules such as the ASTC Settlement Rules. It should be noted that if the information required on an application for Shares is not provided, the Company may not be able to accept or process the application.

INFORMATION ON CERVANTES SEAFOOD LTD $2.0$

Cervantes Seafood exports premium lobster to expanding international markets. The WA Rock Lobster is acknowledged as the world's premium cold water rock lobster and is the most valuable single species fishery in Australia, accounting for in excess of 70% of Australia's lobster exports.

The Western Australian industry is a well-managed, sustainable and stable fishery. Strict management of the industry has allowed Fisheries WA to accurately predict future catch patterns which are expected to increase substantially in the next few years.

Cervantes Seafood was admitted to the Official List of ASX in November 2002 following a prospectus capital raising.

Since that time, the Company has experienced two lobster seasons (which run from mid-November to 30 June each year). The 2002/03 lobster season in Western Australia was a difficult one for the Company, with adverse factors such as high beach prices, generally depressed Asian markets due to occurrences such as the SARS epidemic and global uncertainty emanating from unrest in the Middle East, and the strengthening of the Australian dollar during the year, as well as a fire which interrupted the Company's business during the busiest period of the season.

During the 2003 off-season, the Company acquired the assets and business of INF Pty Ltd, a Western Australian lobster trading business that had been in operation for more than 28 years. The merger of the INF business increased the Company's catch-base for the 2003/04 lobster season, and brought about significant changes to the operational structure of the Company. In addition, during the 2003/04 season the Company introduced contract fleet processing to its operations, which had not been undertaken previously and which resulted in a significant increase in the Company's gross trading revenue. However, it is unlikely that contract fleet processing will continue.

The Company has identified that, in order to increase profitability and enhance shareholder wealth, it must expand its operations to more fully utilise its existing asset base and to take advantage of opportunities for future growth. To that end, the Company intends to use its market and industry profile to position itself as a key player in any future movements in the industry.

The key objectives of the Company include:

• the use of existing infrastructure and expertise to investigate the potential for development of aquaculture programmes;
• increased return on sales through the development of direct marketing of seafood products to end users; and
• the evaluation of opportunities to provide financial support, through the Company's strategic alliances, to the fishing sector generally.

PURPOSE AND EFFECT OF THE ISSUE $3.0$

$3.1$ Use of Proceeds

It is intended to apply funds raised from the Offer as follows:

	Amount
Description	WithoutOversubscriptions	WithOversubscriptions
Development and expansion of business	$200,000	$200,000
Fund existing business operations andworking capital	$960,000	$1,460,000
Expenses of the Offer	$90,000	$90,000
Total	$1,250,000	$1,750,000

The development and expansion of the business includes cash required to:

• fund the set-up of a new seafood supply operation approximately $50,000;
• $\bullet$ participate in an aqua research project - approximately $100,000; and
• investigate other lobster processing opportunities approximately $50,000. $\bullet$

Oversubscriptions will be applied towards the funding of existing business operations and general working capital.

$3.2$ Principal Effect

The principal effect of the Offer on the Company, assuming that the Offer is fully subscribed, will be to increase the number of Shares on issue to 147,011,112 and to increase the Company's cash reserves by approximately $1,160,000 (after deducting expenses of the Offer).

$3.3$ Capital Structure

The Issue will have an effect on the capital structure of the Company. Set out below is the capital structure of the Company incorporating the securities currently on issue and after the Offer (assuming the Offer is fully subscribed).

	Shares
WithoutOversub's	WithOversub's	Options	Details
122,011,112	122,011,112	40,486,111	At the date of this ProspectusThe number of Shares that may be issued
25,000,000	35,000,000		pursuant to this Prospectus
147,011,112	157,011,112	40,486,111	Total securities on issue on completionof the Offer

The 122,011,112 Shares and 40,486,111 Options on issue at the date of this Prospectus are categorised as follows:

Ouoted on ASX:

• $\blacksquare$ 91,280,696 Shares; and
• 16,426,458 Options exercisable at $0.20 each on or before 31 August 2005.

Unquoted (in escrow until 6 November 2004):

• 30,730,416 Shares; and
• 24,059,653 Options exercisable at $0.20 each on or before 31 August 2005.

PURPOSE AND EFFECT OF THE ISSUE (CONT'D) $3.0$

$3.4$ Pro forma Statement of Financial Position

An unaudited proforma statement of financial position of the Company as at 30 June 2004 is set out below. It has been prepared on the basis of the Company's audited statement of financial position as at 30 June 2004, adjusted for the following:

• $(a)$ the issue of 25,000,000 Shares at 5 cents each, to raise a total of $1,250,000; and
• $(b)$ the estimated costs of the Issue of $90,000, which have been debited against Contributed Equity.

	Audited	Unaudited
	30 June 2004	Proforma
	A$	A$
CURRENT ASSETS
Cash assets	410,108	1,570,108
Receivables	451,927	451,927
Inventories	1,096,511	1,096,511
Other	78,384	78,384
Total Current Assets	2,036,930	3,196,930
NON CURRENT ASSETS
Property, plant and equipment	3,094,213	3,094,213
Other financial assets	3,396	3,396
Intangible assets	1,101,447	1,101,447
Total Non-current Assets	4,199,056	4,199,056
TOTAL ASSETS	6,235,986	7,395,986
CURRENT LIABILITIES
Payables	1,329,661	1,329,661
Interest bearing liabilities	499,784	499,784
Provisions	68,306	68,306
Total Current Liabilities	1,897,751	1,897,751
NON CURRENT LIABILITIES
Interest bearing liabilities	700,324	700,324
Total Non-current Liabilities	700,324	700,324
TOTAL LIABILITIES	2,598,075	2,598,075
NET ASSETS	3,637,911	4,797,911
EQUITY
Contributed equity	10,633,869	11,793,869
Accumulated losses	(6,995,958)	(6,995,958)
TOTAL EQUITY	3,637,911	4,797,911

The effect of acceptance of oversubscriptions would be to increase the Company's Cash Assets and Contributed Equity by the amount of the oversubscriptions accepted, up to a maximum of $500,000, representing 10,000,000 Shares at 5 cents each.

$4.0$ RISKS OF INVESTING

The business activities of the Company are subject to risks that may impact on its future performance. Prospective investors should consider the risk factors in this section, together with the information contained in this Prospectus, before deciding whether to apply for Shares.

A summary of the main risk factors relevant to the Company is set out below. The list is not exhaustive and potential investors should read the Prospectus in full and, if they require further information on material risk, seek professional advice.

• In the Company's 2004 Annual Report, the Company's auditors raised an emphasis of matter regarding the significant uncertainty as to whether the Company was a going concern.
• The future capital requirements of the Company will depend on many factors. The Company believes the net proceeds of this Offer, together with additional financing facilities, should be adequate to fund the working capital requirements of the Company during the forthcoming season, and assist in achieving other objectives as stated in this Prospectus. There can be no guarantee or assurance that additional financing will be available on acceptable terms, or at all. Any additional equity raising may dilute the interests of shareholders and any debt financing, if available, may involve financial covenants which limit the Company's operations. Any inability to obtain additional finance would have a material adverse effect on the Company's business and its financial condition and performance and its ability to continue as a going concern.
• The Company is subject to the general commercial and economic risks faced by all businesses including, but not limited to, the risk of industrial disruption, litigation, regulatory and tax audits, disruption to the supply of product or its pricing and terms, the unpredictable impact of any competitor activity, the success or otherwise of any advertising or marketing campaigns, increases in interest rates and other unforeseeable events which could adversely affect normal commercial activity.
• There are significant restrictions on commercial fisheries activities designed to protect the environment and preserve sustainability of the natural resource. The Company operates in a highly regulated environment. In order for an entity to process and market lobster for export it is necessary to have a processing licence issued by the Fisheries Department of Western Australia. The currency of this licence is dependant on the holder observing the terms of the licence and the policies and guidelines of the Fisheries Department of Western Australia. Noncompliance with these terms, policies and guidelines by the holder could affect its processing licence and in turn, adversely affect its operations and profitability.
• Competing lobster companies may endeavour to increase their market share by reducing prices or taking other competitive measures which may impact on the Company's operations and profitability. There is also the risk that new facilities will be established to compete with the existing operators.
• The supply of lobster to Cervantes Seafood is subject to a number of factors, such as seasonal catch volatility, pricing and other commercial determinations with fishermen which may adversely affect its supply to Cervantes Seafood. There is an annual variation in the Western Australian lobster catch, with the total catch ranging from 8 million kilograms to 14.5 million kilograms in the last ten seasons. Input controls (pot entitlements) are used to sustainably manage the Western Australian lobster catch. There remains, however, a seasonal risk associated with all marine and agriculture businesses.

RISKS OF INVESTING (CONT'D) $4.0$

• No undertaking can be given that the Shares will not decrease in value. Neither the $\blacksquare$ Company nor the directors warrant the future performance of the Company.
• For reporting periods beginning on or after 1 January 2005, the Company must ă. comply with International Financial Reporting Standards. These changes will affect the way certain items are reported in the Company's financial statements.

ADDITIONAL INFORMATION $5.0$

$5.1$ Rights Attaching to Shares

The following is a broad summary (not an exhaustive or definitive statement) of the rights which attach to the existing Shares and which will attach to Shares being issued pursuant to this Prospectus. Full details of the rights attaching to Shares are set out in the Constitution, a copy of which can be inspected at the Company's registered office during normal business hours.

$(a)$ Voting Rights

Subject to any rights or restrictions for the time being attached to any class of Shares (at present there are none), at a general meeting every person present who is either a member or a proxy or representative of a member shall have one vote on a show of hands, or on a poll every member present in person, by proxy, attorney or representative shall have one vote per fully paid Share and a fraction of a vote for every partly paid Share.

$(b)$ Dividend Rights

Subject to the rights of holders of Shares issued with any special or preferential rights (at present there are none), the profits of the Company which the Directors may from time to time determine to distribute by way of dividend are divisible among shareholders in proportion to the Shares held by them respectively and are paid irrespective of the amount paid up or credited as paid up on those Shares.

$(c)$ Rights on Winding Up

Subject to the rights of holders of Shares issued on special terms and conditions (at present there are none) if the Company is wound up and a surplus remains, it must be distributed among the parties entitled to it in proportion to the number of Shares held by them, irrespective of the amounts paid up on the Shares.

$(d)$ Transfer of Shares

Subject to the Constitution of the Company, the Corporations Act and Listing Rules, Shares are freely transferable.

$(e)$ Creation and Issue of Further Shares

Shareholders in general meeting may from time to time increase the Company's capital. The allotment and issue of any Shares is under the control of the Directors. Subject to restrictions on the allotment of Shares to Directors and their associates, the Listing Rules, the Constitution of the Company and the Corporations Act, the Directors may allot, issue, grant options over or otherwise dispose of Shares on such terms and conditions and with such rights and privileges as they see fit.

$(f)$ Variation of Rights

At present the Company has only ordinary Shares on issue. If Shares of another class were issued, the rights and privileges attaching to the Shares could be altered with the sanction of a special resolution passed at a separate meeting of holders of the Shares of that class.

$5.0$ ADDITIONAL INFORMATION (cont'd)

5.1 Rights Attaching to Shares (cont'd)

General Meeting $(g)$

Each member is entitled to receive notice of, and to attend and vote at, general meetings of the Company and to receive all notices, accounts and other documents required to be furnished to shareholders under the Company's Constitution or the Corporations Act.

Interests of Directors 5.2

Other than as set out below or elsewhere in this Prospectus, no Director has or had within 2 years before the lodgement of this Prospectus with the ASIC, any interest in:

• the promotion or formation of the Company; $(a)$
• $(b)$ property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the offer of Shares pursuant to this Prospectus; or
• $(c)$ the offer of Shares pursuant to this Prospectus,

and no amounts have been paid or agreed to be paid to any Director, either to induce him to become, or to qualify him as, a Director, or otherwise for services rendered by him in connection with the promotion or formation of the Company.

The particulars of Shares and Options in which the Directors have a relevant interest at the date of this Prospectus are shown in the table below:

Director	Shares	Options
, , , , , , , , , , , , , , , , , , , B MacKinnon	.250,000	125.000
R Grover
C Hao	4,480,189	2,240,095
W McSharer.	296.ZSU

Non-executive Directors' remuneration is payable to a maximum aggregate amount of $150,000 per annum. The sum as fixed by shareholders may be divided amongst the non-executive Directors in such proportion and manner as the non-executive Directors may agree or, in default of agreement, equally.

The following table provides the details of all Directors of the Company and the nature and amount of the elements of their remuneration for the years ended 30 June 2004 and 30 June 2003.

$5.0$ ADDITIONAL INFORMATION (cont'd)

$5.2$ Interests of Directors (cont'd)

			Remuneration(salary and/or fees)$-2004$	2003
	Director	Note	S
Non-executive
	Mr B MacKinnon (Chairman - appointed 28/08/01)	(a)	30.083	15.OO
Mr W McSharer	(appointed $17/03/04$ )	(b)	$-10,500$
Mr P Rengel	(appointed $16/10/03$ ; resigned $19/05/04$ )	(c)	18.500
Mr L West	(appointed 19/08/02; resigned 05/02/04)
Mr C Hao	(appointed $19/08/02$ )	(d)
Executive
Mr R Grover (1)	(appointed $19/05/04$ )	(e)	20,000
		Totals	100,219	15,000

• $(a)$ Fees for Mr MacKinnon's services are paid to a director-related entity, Yrrab Nominees Pty Ltd.
• $(b)$ Fees for Mr McSharer's services are paid to a director-related entity, Daylien Pty Ltd.
• Fees for Mr Rengel's services were paid to a director-related entity, Moore $(c)$ Stephens BG.
• $(d)$ Fees for Mr Hao's services are paid to a director-related entity, Engineers 2002 $(PTE).$
• Fees for Mr Grover's services are paid to a director-related entity, Pacific Finance $(e)$ & Securities Pty Ltd ("PFS"). Mr Grover was appointed Managing Director of the Company on 19 May 2004. Prior to that date, his role was as an executive officer, for which PFS was paid a total of $110,000 in the 2004 financial year.

The Directors are also entitled to be paid reasonable traveling, hotel and other expenses incurred by them respectively in or about the performance of their duties as Directors. Subject to the Corporations Act and the Listing Rules, if a Director is called upon to perform extra duties or make special exertions on behalf of the Company, the Directors may remunerate that Director which may either be in addition to or in substitution for his or her usual Directors' fees.

$5.0$ ADDITIONAL INFORMATION (cont'd)

5.3 Consents

The following persons have consented to the inclusion of the following statements and statements identified in this Prospectus as being based on statements made by those persons, in the form and context in which they are included, and have not withdrawn that consent before lodgment of this Prospectus with the ASIC:

(a) Hall Chadwick in relation to the audited statement of financial position of the Company as at 30 June 2004 and the reference to that audited statement of financial position in this Prospectus. Hall Chadwick have also consented to be named in this Prospectus as Auditors to the Company. Hall Chadwick have not authorised or caused the issue of any other part of this Prospectus.

5.4 Dividend Policy

At the date of this Prospectus, the Company has not adopted a dividend policy.

CONTINUOUS DISCLOSURE & DOCUMENTS $6.0$ AVAILABLE FOR INSPECTION

The Company is a "disclosing entity" (as defined in Section 111AC of the Corporations Act) for the purposes of Section 713 of the Corporations Act and, as such, is subject to regular reporting and disclosure obligations. Specifically, as with all listed companies, the Company is required to continuously disclose any information it has to the market which a reasonable person would expect to have a material effect on the price or the value of the Company's securities. The Shares that will be issued pursuant to this Prospectus will be in the same class of Shares that have been quoted on the official list of ASX during the 12 months prior to the issue of this Prospectus.

In general terms "transaction specific prospectuses" are only required to contain information in relation to the effect of the issue of securities on the Company and the rights attaching to the securities. It is not necessary to include general information in relation to all of the assets and liabilities, financial position, profits and losses or prospects of the issuing company.

Having taken such precautions and having made such enquires as are reasonable, the Company believes that it has complied with the general and specific requirements of ASX as applicable from time to time throughout the 12 months before the issue of this Prospectus which required the Company to notify ASX of information about specified events or matters as they arise for the purpose of ASX making that information available to the stock market conducted by ASX.

Information that is already in the public domain has not been reported in this Prospectus other than that which is considered necessary to make this Prospectus complete.

The Company, as a disclosing entity under the Corporations Act, states that:

• $(a)$ it is subject to regular reporting and disclosure obligations;
• $(b)$ copies of documents lodged with the ASIC in relation to the Company (not being documents referred to in section $1274(2)(a)$ of the Corporations Act) may be obtained from, or inspected at, the offices of the ASIC; and
• $(c)$ it will provide a copy of each of the following documents, free of charge, to any person on request between the date of issue of this Prospectus and the Closing Date:
  • the annual financial report most recently lodged by the Company with the $(i)$ ASIC;
  • $(ii)$ any half year financial report lodged with the ASIC by the Company after the lodgement of the annual financial report referred to in paragraph (i) above and before the lodgement of this Prospectus with the ASIC; and
  • any documents used to notify ASX of information relating to the Company $(iii)$ during that period in accordance with ASX Listing Rules as referred to in Section 674(1) of the Corporations Act.

Copies of all documents lodged with the ASIC in relation to the Company can be inspected at the registered office of the Company during normal office hours.

Since the lodgement of the Company's 2004 financial report with ASX on 30 September 2004, the only documents lodged with ASX were (i) an announcement titled "Release from Escrow" dated 22 October 2004, and (ii) the Company's Notice of Annual General Meeting dated 27 October 2004.

7.0 DIRECTORS' CONSENT

This Prospectus has been issued by Cervantes Seafood Limited and each Director has consented to the lodgement of this Prospectus with the ASIC and has not withdrawn that consent.

$\sim$

Barry MacKinnon Chairman

27 October 2004

$8$ . GLOSSARY

The following definitions apply throughout this document unless the content otherwise requires to the contrary:-

"Application Form"	The application form attached to or accompanying thisProspectus.
"ASIC"	Australian Securities and Investments Commission.
$"$ ASX"	Australian Stock Exchange Limited ACN 006 624 691
"Closing Date"	16 November 2004.
"Company" or "Cervantes Seafood"	Cervantes Seafood Limited (ACN 097 982 235).
"Corporations Act"	Corporations Act 2001 (Cth) as amended from time totime.
"Directors"	The directors of the Company.
"Issue" or "Offer"	The offer by way of placement of up to 25,000,000Shares at an issue price of $0.05 per Share pursuant tothis Prospectus.
"Listing Rules"	The Listing Rules of ASX.
"Offer"	The offer of Shares pursuant to this Prospectus.
"Official Quotation"	Official quotation by ASX in accordance with theListing Rules.
"Opening Date"	28 October 2004.
"Option"	An option to acquire one Share in the Companyexercisable at $0.20 on or before 31 August 2005.
"Prospectus"	This prospectus dated 27 October 2004.
"Share"	An ordinary fully paid share in the capital of theCompany.
"WST"	Western Standard Time. All times detailed in thisProspectus are WST.

APPLICATION FORMShares at 5 cents per Share$for the above Shares.StreetState Post codeTelephone number - Business hoursTelephone number - After hoursE-mail AddressAgreement present?Applicant #2Applicant #3BSBBankAmount of cheque	Before completing this Application Form, you should read the Prospectus dated 27 October 2004 and the instructionsoverleaf. No Shares will be issued pursuant to the Prospectus later than 13 months after the date of the Prospectus.PLEASE READ CAREFULLY ALL INSTRUCTIONS ON THE REVERSE OF THIS FORM.in CERVANTES SEAFOOD LIMITED or such lesser number of Shares which may be allocated to me/us by the Directors.t/We todge full application monies of:$Full nome (PLEASE PRINT)Joint Applicant #2 or Joint Applicant #3 or < designated account>Postal Address (PLEASE PRINT)Street NumberSuburb/TownContact NameCHESS HIN (where applicable)Tax File Number or Exemption	I/We acknowledge that the Company will send me/us a paper copy of the Prospectus and any Supplementary Prospectus (if applicable)I/We have received personally a copy of the Prospectus accompanied by or attached to this Application Form or a copy of theThey also requireI/We acknowledge that returning the Application Form with the application monies will constitute my/our offer to subscribe for Shares inTO MEET THE REQUIREMENTS OF THE CORPORATIONS ACT, THIS FORM MUST NOT BE HANDED TO ANY PERSON UNLESS IT IS ATTACHED TO ORACCOMPANIED BY THE PROSPECTUS DATED 27 OCTOBER 2004,	Broker/Dealer Stamp		Share Registrar Use Only
			l/We apply for
			CHEQUE DETAILSDrawer
Declaration and Statements:By lodging this Application Form;
	I/We declare that all details and statements made by me/us are complete and accurate;
	I/We agree to be bound by the terms and conditions set out in the Prospectus and by the Constitution of the Company;
	free of charge if t/we request so during the currency of the Prospectus;
	I/We authorise the Company to complete and execute any documentation necessary to effect the issue of Shares to me/us; and $\sim$ $\sim$
	Application form or a direct derivative of the Application form before applying for Shares.
	Cervantes Seatood and that no notice of acceptance of the application will be provided	{See application instructions overleaf}

This Application Form relates to the Offer of 25,000,000 Shares in Cervantes Seafood Limited at $0.05 each pursuant to the Prospectus dated 27 October 2004.

APPIICATION FORMS

Applications must be made on the application form attached to this Prospectus. Please complete all parts of the application form using BLOCK LETTERS

Use correct forms of registrable name (see below). Applications using the wrong form of name may be rejected. Current CHESS participants should complete their name and address in the same format as they are presently registered in the CHESS system.

Insert the number of Shares you wish to apply for. The application must be for a minimum of 40,000 Shares and thereafter in multiples of 10,000 Shares. The applicants agree(s) upon and subject to the terms of the Prospectus to take any number of Shares equal to or less than the number of Shares indicated on the Application Form that may be allotted to the applicants pursuant to the Prospectus and declare(s) that all details of statements made are complete and accurate.

No notice of acceptance of the application will be provided by the Company prior to the allotment of Shares. Applicants agree to be bound upon acceptance by the Company of the application.

Please provide us with a telephone contact number (including the person responsible in the case of an application by a company) so that we can contact you promptly if there is an irregularity in your Application Form. It your Application Form is not completed correctly, it may still be treated as valid. There is no requirement to sian the Application Form. The Company's decision as to whether to treat your application as valid. and how to construe, amend or complete it, shall be final.

PAYMENT

...................................... payable to "Cervantes Seasood Limited - Share Offer" and crossed "Not Negotiable".

OR

LODGING OF APPLICATIONS

Completed Application Forms and cheques must be:

Posted to: Cervantes Seafood Limited C/- Computershare Registry Services Pty Ltd Delivered to: Cervantes Seafood Limited C/- Computershare Reaistry Services Pty Ltd. Level 2, Reserve Bank Building 45 St George's Terrace PERTH WA 6000

Applications must be received by no later than 5.00pm WST on 16 November 2004.

BROKER SPONSORED APPLICANTS

GPO Box 0182 PERTH WA 6840

The Company is an Issuer Sponsored participant in the Australian Stock Exchange CHESS System. This enables a holder to receive a statement of holding rather than a certificate. If you are aready a Broker Sponsored participant in this system, you may complete this section or forward a signed Application Form to your sponsoring broker for completion prior to lodgement. Otherwise, leave this box blank and your Shares will automatically be Issuer Sponsored on afforment.

TAX FILE NUMBERS

The collection of tax file number ("TFN") information is authorised and the tax laws and the Privacy Act strictly requlate its use and disclosure. Please note that it is not against the law not to provide your TFN or claim an exemption, however, if you do not provide your TFN or claim an exemption, you should be ownre that tax will be taken out of any unfranked dividend distribution at the maximum tax rate.

If you are completing the application with one or more joint applicants, and you do not wish to disclose your TFN or claim an exemption, a separate form may be obtained from the Australian Taxation Office to be used by you to provide this information to the Company. Certain persons are exempt from providing a TFN. For further information, please contact your taxation adviser or any Taxation office.

CORRECT FORM OF REGISTRABLE TITLE

Note that only legal entities are allowed to hold securities. Applications must be in the name(s) of a natural person(s), companies or other legal entities acceptable to Cervantes Seafood Limited. At least one full given name and the sumame are required for each natural person. The name of the beneficiary or any other non-registrable name may be included by way of an account designation if completed exactly as described in the example of the correct forms of registrable names below:

IYEL OF INVESTOR	CORRECT FORM OF REGISTRABLEnen ke	INGORRECT RORM OFREGISTRABLETTEL
individualUse given names, not initials .	John Alfred Smith	JA Smith
CompanyUse Company title, not abbreviations	XYZ PIv Ltd	XYZ PAXYZ Co
TrustsUse trustee(s) personal name(s). Do not use the nameof the trust	Sue Smith.	Sue Smith Family Trust
Deceased Estatestise executor(s) personal name(s)	Jane Smith	Estate of late John Smith.
PartnershipsUse partners' personal names, do not use the name of $\sim$the partnership	John Smith and Michael Smith	John Smith and Son-
Clubs/incorporated Badies/Business Namestise office bearer(s) personal name(s), Do not use thenames of the clubs etc.	Michael Smith	XYZ Cricket Association
Superannuation FundsUse of name of trustee of fund, do not use the name	Jane Smith Pty Ltd	'Jane Smith Pfy LtdSuperannuation Fund

of the fund.