REACH RESOURCES LIMITED — Capital/Financing Update 2018

Jan 30, 2018

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ASX ANNOUNCEMENT/ MEDIA RELEASE

31[ST] January 2018

Cervantes progresses development of gold projects

Cervantes Corporation Limited (ASX: CVS) (Cervantes) or (the Company) is pleased to report that it has completed a placement of 40,154,000 ordinary Shares together with 13,384,665 free-attaching Options to professional, sophisticated and other investors under the placement capacity available to the Company under ASX Listing Rule 7.1 to raise $281,078.

These funds were raised with the support of the local Chinese community and will allow the Company to take a further step to progress the development of the 3 gold projects in Western Australia, and to also consider other potentially value adding assets.

The Company will shortly be calling a share holders meeting to, amongst other things, refresh its issue capacity under Listing Rule 7.1, as the facility was effectively exhausted, in order to allow for additional securities to be issued to further expedite the development of its projects.

Discussions are ongoing in relation to a potential joint venture on the Garden Gully Meekatharra project. Cervantes board will either bring this to a successful conclusion in the near future or progress the project in its own right.

The funds raised will allow the Company to commence drilling and potential expansion of the exciting and underexplored Payne’s Find project, together with the Albury Heath project in Meekatharra. The formulation of drilling programs is currently underway and it is expected these will commence within the first quarter of 2018.

Further details regarding the placement and the terms of the Options are set out in the accompanying Appendix 3B.

For Further information please contact:

Collin Vost Executive Chairman (08) 6436 2300 cvost@cervantescorp.com.au END

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Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

Cervantes Corporation Limited (Company)

ABN

79 097 982 235

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of+securities issued or to be issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued 3 Principal terms of the +securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)	1. Ordinary Fully Paid Shares 2. Unquoted options
	1. 40,154,000 Shares 2. 13,384,665 Unquoted options
	1. Not applicable 2. Unquoted options exercisable at $0.015 each on or before 30 June 2020.

• See chapter 19 for defined terms.

Appendix 3B Page 1

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Appendix 3B New issue announcement

4 Do the+securities rank equally in all respects from the+issue date with an existing+class of quoted+securities? If the additional+securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 6a Is the entity an+eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h in relation to the+securities the subject of this Appendix 3B, and comply with section 6i 6b The date the security holder resolution under rule 7.1A was passed	1. Yes 2. No, the unquoted options exercisable at $0.015 each on or before 30 June 2020. Shares issued on the exercise of these options will rank equally with all other fully paid ordinary shares on issue.
	1. $281,078 2. NIL
	Funds will allow the Company to take further steps in the development of its 3 gold projects in Western Australia Discussion in relation to joint venture of the Garden Gully Meekatharra project or progress the project in its own right. Redrilling of the Albury Heath Meekatharra project and develop a drilling program for the Payne’s Find venture.
	No
	N/A

• See chapter 19 for defined terms.

Appendix 3B Page 2

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Appendix 3B New issue announcement

6c Number of+securities issued without security holder approval under rule 7.1 6d Number of+securities issued with security holder approval under rule 7.1A 6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of+securities issued under an exception in rule 7.2 6g If+securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation. 6h If+securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B.	53,538,665 shares and options
	Nil
	Nil
	Nil
	N/A
	N/A
	Capacity under LR7.1 will be 60,792 See Annexure 1.
	1. 31 January 2018 2. 31 January 2018

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Number +Class 8 Number and +class of all 397,483,716 Ordinary Fully Paid +securities quoted on ASX ( including the +securities in section 2 if applicable) Number +Class 9 Number and +class of all 13,384,665 Options exercisable +securities not quoted on ASX at $0.015 on or ( including the +securities in before 30 June 2020 section 2 if applicable) 7,000,000 Incentive Options exercisable at $0.01 on or before 31 December 2022

10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)

Part 2 - Pro rata issue

11 Is security holder approval required? 12 Is the issue renounceable or nonrenounceable? 13 Ratio in which the[+] securities will be offered 14 +Class of +securities to which the offer relates 15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements?

• See chapter 19 for defined terms.

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17	Policy for deciding entitlements
	in relation to fractions
18	Names of countries in which the
	entity has security holders who
	will not be sent new offer
	documents
	Note: Security holders must be told how their
	entitlements are to be dealt with.
	Cross reference: rule 7.7.
19	Closing date for receipt of
	acceptances or renunciations
20	Names of any underwriters
21	Amount of any underwriting fee
	or commission
22	Names of any brokers to the
	issue
23	Fee or commission payable to the
	broker to the issue
24	Amount of any handling fee
	payable to brokers who lodge
	acceptances or renunciations on
	behalf of security holders
25	If the issue is contingent on
	security holders’ approval, the
	date of the meeting
26	Date entitlement and acceptance
	form and offer documents will be
	sent to persons entitled
27	If the entity has issued options,
	and the terms entitle option
	holders to participate on
	exercise, the date on which
	notices will be sent to option
	holders
28	Date rights trading will begin (if
	applicable)

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

29	Date rights trading will end (if
	applicable)
30	How do security holders sell
	their entitlements_in full_through
	a broker?
31	How do security holders sell_part_
	of their entitlements through a
	broker and accept for the
	balance?
32	How do security holders dispose
	of their entitlements (except by
	sale through a broker)?
33	+Issue date

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

34 Type of[+] securities ( tick one )

• (a) +Securities described in Part 1

(b) All other[+] securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over 37 A copy of any trust deed for the additional[+] securities

Entities that have ticked box 34(b)

38 Number of[+] securities for which +quotation is sought

39	+Class of+securities for which
	quotation is sought
40	Do the+securities rank equally in
	all respects from the+issue date
	with an existing+class of quoted
	+securities?
	If the additional+securities do not
	rank equally, please state:
	• the date from which they do
	• the extent to which they
	participate for the next
	dividend, (in the case of a
	trust, distribution) or interest
	payment
	• the extent to which they do
	not rank equally, other than in
	relation to the next dividend,
	distribution or interest
	payment
41	Reason for request for quotation
	now
	Example: In the case of restricted securities, end
	of restriction period
	(if issued upon conversion of
	another+security, clearly identify
	that other+security)

• See chapter 19 for defined terms.

Appendix 3B Page 7

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Appendix 3B New issue announcement

Number +Class 42 Number and +class of all +securities quoted on ASX ( including the[+] securities in clause 38)

• See chapter 19 for defined terms.

Appendix 3B Page 8

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Appendix 3B New issue announcement

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted +quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: (Director)

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Date: 31 January 2018

Print name: Collin Vost

• See chapter 19 for defined terms.

Appendix 3B Page 9

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Appendix 3B New issue announcement

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1

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Rule 7.1 – Issues exceeding 15% of capital
Step 1: Calculate “A”, the base figure from which the placement capacity is calculated
Insert number of fully paid [+] ordinary securities 299,379,716
on issue 12 months before the [+] issue date or
date of agreement to issue
Add the following:
• Number of fully paid [+] ordinary securities
issued in that 12 month period under an
exception in rule 7.2
• Number of fully paid [+] ordinary securities
issued in that 12 month period with
17,950,000 (placement of shortfall 10/02/2017
shareholder approval
from prospectus issued 11/10/2017)
6,000,000 (issued 4/05/2017 approved by
shareholders 27/06/2017)
1,000,000 (issued 12/07/2017 approved by
shareholders 27/06/2017)
25,000,000 (issued 22/12/2017 approved by
shareholders 29/09/2017)
8,000,000 (issued 22/12/2017 approved by
shareholders 29/09/2017)
• Number of partly paid [+] ordinary securities
that became fully paid in that 12 month
period
Note:
• Include only ordinary securities here – other
classes of equity securities cannot be added
• Include here (if applicable) the securities the
subject of the Appendix 3B to which this
form is annexed
• It may be useful to set out issues of
securities on different dates as separate line
items
Subtract the number of fully paid [+] ordinary
securities cancelled during that 12 month
period
“A” 357,329,716
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• See chapter 19 for defined terms.

Appendix 3B Page 10

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Appendix 3B New issue announcement

Step 2: Calculate 15% of “A”
“B”	0.15 [Note: this value cannot be changed]
Multiply“A” by 0.15	53,599,457
Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used
Insertnumber of+equity securities issued or agreed to be issued in that 12 month period not counting_those issued: • Under an exception in rule 7.2 • Under rule 7.1A • With security holder approval under rule 7.1 or rule 7.4 _Note: • This applies to equity securities, unless specifically excluded – not just ordinary securities • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items	53,538,665 placement of share and option to be allotted
“C”	60,792
Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1
“A” x 0.15 Note: number must be same as shown in Step 2	53,599,457
Subtract“C” Note: number must be same as shown in Step 3	53,538,665
Total[“A” x 0.15] – “C”	60,792 [Note: this is the remaining placement capacity under rule 7.1]

Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1	Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1
“A” x 0.15	53,599,457
Note: number must be same as shown in Step 2
Subtract“C”	53,538,665
Note: number must be same as shown in Step 3
Total[“A” x 0.15] – “C”	60,792
	[Note: this is the remaining placement capacity
	under rule 7.1]

• See chapter 19 for defined terms.

Appendix 3B Page 11

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Appendix 3B New issue announcement

Part 2

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Rule 7.1A – Additional placement capacity for eligible entities
Step 1: Calculate “A”, the base figure from which the placement capacity is calculated
“A” N/A
Note: number must be same as shown in Step 1
of Part 1
Step 2: Calculate 10% of “A”
“D” 0.10
Note: this value cannot be changed
Multiply “A” by 0.10
Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been
used
Insert number of [+] equity securities issued or
agreed to be issued in that 12 month period
under rule 7.1A
Notes:
• This applies to equity securities – not just
ordinary securities
• Include here – if applicable – the securities
the subject of the Appendix 3B to which this
form is annexed
• Do not include equity securities issued
under rule 7.1 (they must be dealt with in
Part 1), or for which specific security holder
approval has been obtained
• It may be useful to set out issues of
securities on different dates as separate line
items
“E”
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• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A “A” x 0.10 Note: number must be same as shown in Step 2 Subtract “E” Note: number must be same as shown in Step 3 Total [“A” x 0.10] – “E” Note: this is the remaining placement capacity under rule 7.1A

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• See chapter 19 for defined terms.

Appendix 3B Page 13

01/08/2012