RENT.COM.AU LIMITED - Capital/Financing Update 2012

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SELECT EXPLORATION LIMITED

(ABN 25 062 063 692)

PROSPECTUS

For an offer of 11,666,667 Shares at an issue price of $0.30 per Share together with one free Attaching Option for every two Shares issued ( Attaching Options ) to raise $3,500,000. Oversubscriptions of up to 1,666,666 Shares at an issue price of $0.30 per Share together with Attaching Options to raise an additional $500,000 may be accepted.

The Offer includes a priority offer of up to 8,166,667 Shares together with Attaching Options to existing Shareholders.

IMPORTANT INFORMATION

This Offer is conditional upon the Conditions of the Offer outlined in Section 1.6 being satisfied. In the event that the Conditions of the Offer are not satisfied the Company will not proceed with the Offer and the Company will repay all application monies received.

This Prospectus is a re‐compliance prospectus for the purposes of satisfying Chapters 1 and 2 of the Listing Rules and to satisfy ASX requirements for re‐admission to the Official List following a change to the nature and scale of the Company’s activities.

This is an important document that should be read in its entirety. If you do not understand it you should consult your professional advisers without delay. The Shares offered by this Prospectus should be considered speculative. Refer to Section 4 for details relating to investment risk.

LEAD MANAGER TO THE OFFER:

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AFSL No: 239 052

IMPORTANT NOTICE

This Prospectus is dated 11 September 2012 and was lodged with the ASIC on that date. The ASX, ASIC and its officers take no responsibility for the contents of this Prospectus or the merits of the investment to which this Prospectus relates.

The expiry date of this Prospectus is at 5.00pm (WST) on that date which is 13 months after the date the Prospectus was lodged with the ASIC ( Expiry Date ). No Shares may be issued on the basis of this Prospectus after the Expiry Date.

Application for Official Quotation by ASX of the Shares offered pursuant to this Prospectus will be made within 7 days after the date of this Prospectus.

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

It is important that investors read this Prospectus in its entirety and seek professional advice where necessary. The Shares the subject of this Prospectus should be considered highly speculative.

DISCLAIMER

No person is authorised to give any information or to make any representation in connection with the Offer described in this Prospectus which is not contained in this Prospectus. Any information not so contained may not be relied upon as having been authorised by the Company or any other person in connection with the Offer. You should rely only on information in this Prospectus.

WEB SITE – ELECTRONIC PROSPECTUS

A copy of this Prospectus can be downloaded from the website of the Company at www.selectex.com.au. Any person accessing the electronic version of this Prospectus for the purpose of making an investment in

the Company must be an Australian resident and must only access this Prospectus from within Australia.

The Corporations Act prohibits any person passing onto another person an Application Form unless it is attached to a hard copy of this Prospectus or it accompanies the complete and unaltered version of this Prospectus. Any person may obtain a hard copy of this Prospectus free of charge by contacting the Company on +61 8 9322 7600.

The Company reserves the right not to accept an Application Form from a person if it has reason to believe that when that person was given access to the electronic Application Form, it was not provided together with the electronic Prospectus and any relevant supplementary or replacement prospectus or any of those documents were incomplete or altered.

COMPETENT PERSON’S STATEMENTS

The information in this Prospectus that relates to exploration results is based on information compiled by Ms Cherie Leeden. Ms Leeden is a Non‐executive Director of the Company. Ms Leeden is a member of The Australian Institute of Geoscientists and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which she is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Ms Leeden consents to the inclusion in this Prospectus of the matters based on her information in the form and context in which it appears.

DEFINED TERMS AND OTHER MATTERS

Certain terms and abbreviations used in this Prospectus have defined meanings which are explained in Section 12.

Unless otherwise stated, all other references to “$”, dollars and cents are to Australian currency. Any discrepancies between totals and sums and components in tables contained in this Prospectus are due to rounding.

CORPORATE DIRECTORY .................................................................................................................. 4	CORPORATE DIRECTORY .................................................................................................................. 4
CHAIRMAN’S LETTER ....................................................................................................................... 5
1.	INVESTMENT OVERVIEW .................................................................................................. 6
2.	DETAILS OF THE OFFER .................................................................................................... 18
3.	COMPANY OVERVIEW ..................................................................................................... 23
4.	RISK FACTORS ................................................................................................................. 33
5.	CORPORATE GOVERNANCE ............................................................................................. 40
6.	INDEPENDENT GEOLOGIST’S REPORT .............................................................................. 43
7.	INVESTIGATING ACCOUNTANT’S REPORT...................................................................... 133
8.	SOLICITOR’S REPORT ..................................................................................................... 157
9.	RIGHTS ATTACHING TO SECURITIES ............................................................................... 176
10.	ADDITIONAL INFORMATION ......................................................................................... 187
11.	DIRECTORS’ AUTHORISATION ....................................................................................... 195
12.	GLOSSARY ..................................................................................................................... 196

CORPORATE DIRECTORY

Directors

Current

Mr Ian Macliver Non‐executive Chairman

Ms Cherie Leeden Non‐executive Director

Mr Gary Seabrooke Non‐executive Director

Mr Mark Titchener Non‐executive Director

Proposed Director

Mr Shane Cranswick Managing Director Elect

Company Secretary

Mr Phil Warren

Registered Office

945 Wellington Street West Perth WESTERN AUSTRALIA 6005

Telephone: +61 8 9322 7600 Facsimile: +61 8 9322 7602

Website

www.selectex.com.au

ASX Code:

SLT

Lead Manager

Patersons Securities Limited Level 23, Exchange Plaza 2 The Esplanade Perth WESTERN AUSTRALIA 6000

Independent Geologist

SRK Consulting (Australasia) Pty Ltd 10 Richardson Street West Perth WESTERN AUSTRALIA 6005

Australian Solicitors

GTP Legal Level 1, 28 Ord Street West Perth WESTERN AUSTRALIA 6005

Tanzanian Solicitors

Rex Attorneys Rex House 145 Magore Street Upanga Dar es Salaam TANZANIA

Auditors

BDO Audit (WA) Pty Ltd 38 Station Street Subiaco WESTERN AUSTRALIA 6008

Investigating Accountant

BDO Corporate Finance (WA) Pty Ltd 38 Station Street Subiaco WESTERN AUSTRALIA 6008

Share Registry*

Security Transfer Registrars Pty Ltd 770 Canning Highway Applecross WESTERN AUSTRALIA 6153

Telephone: +61 8 9315 2333

Corporate Advisor

This entity is included for information purposes only. It has not been involved in the preparation of this Prospectus.

Grange Consulting Group Pty Ltd 945 Wellington Street West Perth WESTERN AUSTRALIA 6005

CHAIRMAN’S LETTER

Dear Investor,

I have pleasure in presenting what the Board of Directors believe is an exciting opportunity for our Company.

Select is an emerging exploration company focused on the exploration of coal and uranium in Tanzania, East Africa. The Company has entered into an agreement to acquire exploration tenements covering four prospective and potentially large scale coal and uranium projects in Tanzania. The tenements being acquired by the Company cover approximately 3,700km[2] across four sedimentary basins, all with a history of coal and/or uranium occurrences.

The Company has developed focussed, aggressive exploration plans with a view to defining significant coal and/or uranium mineralisation. Drilling is currently proposed to commence on the first exploration target, the Ruhuhu Project shortly following the Company’s re‐listing on ASX.

The Board and management of the Company have demonstrable technical, operational and corporate experience in mineral exploration and in‐country operations in Africa. Two of the Company’s directors were actively involved with the acquisition and early development of the Riversdale Mining Ltd coal discoveries in Mozambique.

The Company is seeking to raise $3,500,000 through an issue of 11,666,667 shares at an issue price of $0.30 per Share together with one free Attaching Option for every two Shares issued. The Offer includes a priority offer to existing Shareholders of up to 8,166,667 Shares together with free Attaching Options.

This Offer presents investors an opportunity to invest in the future of the Company. However all investors should be aware of the speculative nature of mineral exploration and the associated risks. These and additional risks are highlighted in Sections 1.2 and 4. Please study this document carefully and seek professional advice, if necessary, to make an informed decision.

On behalf of the Board, I look forward to welcoming you as a shareholder of Select Exploration Limited.

Yours sincerely

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Ian Macliver Chairman

1. INVESTMENT OVERVIEW

This Section is not intended to provide full information for investors intending to apply for Shares offered pursuant to this Prospectus. This Prospectus should be read and considered in its entirety. The Shares offered under this Prospectus carry no guarantee in respect of return of capital, return on investment, payment of dividends or the future value of the Shares.

1.1 BUSINESS MODEL – EXPLORATION COMPANY

The Company intends to commence energy focussed exploration activities on the Project Tenements following satisfaction of the Conditions of the Offer and the completion of the Offer under this Prospectus.

The Company has entered into the Share Sale Agreement with Mauritian based explorer Indigo Metals Limited ( Indigo ) to acquire 100% of the issued capital of the companies which ultimately own the exploration Tenements (granted and under application) covering four prospective and potentially large scale coal and uranium projects in the United Republic of Tanzania, East Africa. As outlined further in Sections 1.9 and 1.12 the Directors currently collectively own 76% of Indigo. The Project Tenements have been grouped into the following four project areas:

The Rukwa Project comprises seven tenements in the Rukwa Basin and adjacent areas in western Tanzania covering a total of approximately 526km[2] .
The Ruhuhu Project comprises seven tenements in the Ruhuhu Basin and adjacent areas and covers a total area of approximately 494km[2] .
The Mhukuru Project comprises five tenements in the southern Selous Basin and adjacent areas in south‐west Tanzania, near the border with Mozambique and covers a total area of approximately 223km[2] .
The Selous Project comprises eleven tenements in the Selous‐Kilosa and Rufiji Basins of central and eastern Tanzania and covers a total area of approximately 2,480km[2] .

This exploration portfolio covers approximately 3,700 km[2] of ground which has never been drilled before and is spread across four sedimentary basins with a history of coal and/or uranium occurrences. The Company’s exploration program will focus on defining the geology, geometry and structure of the Karoo age sedimentary basins within the Project Tenements and to prioritise areas to undertake targeted drilling to define and analyse coal seams and uranium mineralisation.

The Project Tenements are all considered to be early stage exploration areas and are therefore highly speculative in nature involving some degree of exploration risk with conceptual targets identified that have been subject to limited exploration but have the potential for large scale coal and uranium discoveries. Further exploration will be required to determine the extent of the Project Tenements’ prospectivity.

The Company will also consider and evaluate potential new resource exploration projects in Africa with a view to increasing and diversifying the number of projects held by the Company.

1.2 RISK FACTORS

Potential investors should consider that an investment in the Company is highly speculative and should consult their professional advisers before deciding whether to apply for Shares pursuant to this Prospectus.

The following risk factors are not exhaustive and are presented in this section in summary form. Further details in respect to these and other general risks associated with an investment in the Company are outlined in Section 4.

Risk	Summary Details
Conditions of the Offer	 The Offer is subject to the satisfaction of the Conditions of the Offer outlined in Section 1.6.  There is a risk that the Conditions of the Offer will not be satisfied and the Company will not proceed with the Offer in which case the Company will repay all application monies received.  Further details of this risk are set out in Section 4.2(a).
Exploration Risk – Early Stage and Weather Delays	 The Tenements are at the early stages of exploration, and potential investors should understand that mineral exploration is a high‐risk undertaking, only occasionally providing high rewards.  The conceptual exploration targets identified are based on ground surveys and the interpretation of geological structures and have been subject to limited exploration.  The Company’s proposed exploration activities including its maiden drilling programme may be impacted by weather conditions and the availability of drill rigs when required.  Further details on this risk are set out in Section 4.2(b).
Budget Risk	 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.  Further details of this risk are set out in Section 4.2(c).
Country risk	 The Company will be subject to the risks associated with operating in Tanzania. Changes to Tanzania’s mining or investment policies and legislation or a shift in political attitude may adversely affect the Company’s operations and profitability.  Further details of this risk are set out in Section 4.2(d)
Uranium as a source of Energy	 Nuclear energy is in direct competition with other more conventional sources of energy including gas, coal and hydro‐ electricity.  The nuclear industry is subject to some negative public opinion owing to political, technological and environmental factors. This may have an adverse impact on the demand for uranium and increase the regulation of uranium mining.  Further details in respect of this risk are set out in Section 4.2(e)
Exploration and Mining within Game and Forest Reserves	 Some of the Selous Project Tenements are located within the Selous Game Reserve. The Company will comply with the protocol outlined in the Mining Act 2010 and seek to be granted permission from the Ministry of Natural Resources and Tourism to undertake coal and uranium exploration on the portion of the Selous Project Tenements that fall within the game reserve during certain periods every year.  Further details of this risk are set out in Section 4.2(f).
Tenement Title	 Interests in tenements in Tanzania are governed by legislation and are evidenced by the granting of licences. Each licence is for a specific term and carries with it annual expenditure and reporting commitments,as well as other conditions requiringcompliance.

	Consequently, the Company could lose title to or its interest in the Tenements if licence conditions are not met or if insufficient funds are available to meet expenditure commitments as and when they arise.  Further details of this risk are set out in Section 4.2(g).
Legal System‐ Tanzania	 The legal system operating in Tanzania may be less developed than more established countries, which may result in political difficulties in obtaining effective legal redress in the courts whether in respect of a breach of law or regulation, or in an ownership dispute.  Further details of this risk are set out in Section 4.2(h).
Reliance on key management	 The responsibility of overseeing the day‐to‐day operations and the strategic management of the Company will depend substantially on the Managing Director. There can be no assurance that there will not be a detrimental impact on the Company if the Managing Director ceases his employment.  Further details in respect of this risk are set out in Section 4.2(i)
Further funding	 The future capital requirements of the Company will depend on many factors including the results of future exploration and business development activities.  Should the Company’s exploration programme be successful in identifying coal and/or uranium bearing stratigraphy additional funds will be required to advance the project to a resource stage.  Any additional equity financing will dilute Shareholdings, and debt financing, if available, may involve restrictions on financing and operating activities.  Further details in respect of this risk are set out in Section 4.2(j).

1.3 OBJECTIVES OF THE OFFER

The Company’s main objectives in undertaking the Offer are to:

(a) assist the Company to meet the requirements of ASX and re‐comply with Chapters 1 and 2 of the Listing Rules;
(b) raise funds required for the Cash Consideration component of the Acquisition;
(c) raise funds to be applied towards the exploration of the Tanzanian Projects with the purpose of defining the geology, geometry and structure of the Karoo age sedimentary basins within the Project Tenements and to prioritise areas to undertake targeted drilling to define and analyse coal seams and uranium mineralisation; and
(d) provide funds for general working capital and expenses of the Offer.

On completion of the Offer, the Board believes the Company will have sufficient working capital to achieve these objectives.

1.4 SUMMARY OF THE OFFER

By this Prospectus, the Company invites investors to apply for 11,666,667 Shares at an issue price of $0.30 each with one free Attaching Option for every two Shares issued to raise $3,500,000. The Offer consists of:

(a) a General Offer; and

(b) a Priority Offer.

The Shares offered under the Offer will be issued at the discretion of the Directors of the Company, in accordance with the following allocation policy:

(a) 8,166,667 Shares together with Attaching Options will be reserved in the first instance for existing Shareholders under the Priority Offer (refer to Section 2.1 for further details); and
(b) 3,500,000 Shares together with Attaching Options plus any Shares from the Priority Offer remaining after allocation of the Priority Offer shall be allocated under the General Offer as determined by the Directors.

Oversubscriptions of up to 1,666,666 Shares at an issue price of $0.30 per Share with one free Attaching Option for every two Shares issued to raise an additional $500,000 may be accepted.

Key offer statistics

	Minimum Subscription	Maximum Subscription
Offer price per Share	$0.30	$0.30
Shares offered	11,666,667	13,333,333
Attaching Options	5,833,333	6,666,667
Total proceeds from the Offer	$3,500,000	$4,000,000
Consideration Shares to be issued to Indigo Metals1	14,750,000	14,750,000
Total number of Shares (undiluted) on issue ‐ Post Offer1	37,738,338	39,405,004

Note:

Assumes Indigo elects to receive the Cash Consideration fully in cash. If the whole of the Cash Consideration is received as Shares, Indigo will be issued an additional 1,500,000 Shares.

1.5 INDICATIVE TIMEABLE

Event	Date
July General Meeting	31 July 2012
Suspension of the Company’s Shares from trading on ASX	1 August 2012
Priority Offer Entitlement Date	2 August 2012
Lodgement of Prospectus at ASIC	11 September 2012
Opening Date	11 September 2012
October General Meeting	9 October 2012
Closing Date of Priority Offer	10 October 2012
Closing Date of General Offer	12 October 2012
Settlement of the Acquisition and allotment of Shares under the Offer	17 October 2012
Despatch of holding statements	18 October 2012
Expected date for re‐quotation on ASX1	23 October 2012

Notes :

Trading in Shares will only be reinstated by ASX after the Company has satisfied the Conditions of the Offer. The Company will endeavour to minimise the period of suspension as much as possible.
The above timetable is indicative only and may be varied at the Directors absolute discretion. In particular the Company reserves the right to extend or shorten the Closing Date, to accept late applications and to withdraw the Offer without prior notice.

1.6 CONDITIONS OF THE OFFER

The Offer is conditional upon:

a) Completion of the Acquisition pursuant to the Share Sale Agreement;
b) Shareholder approval of the grant of the Attaching Options at the October General Meeting; and
c) The Company re‐complying with Chapters 1 and 2 of the Listing Rules and receiving conditional approval for re‐quotation on ASX.

(together the Conditions of the Offer )

The Company was suspended from Official Quotation from the time of the July General Meeting and will not be re‐instated until the Conditions of the Offer are achieved. There is a risk that the Conditions of the Offer will not be achieved.

In the event the Conditions of the Offer are not achieved then the Company will not proceed with the Offer and will repay all application monies received.

1.7 USE OF FUNDS

The Company intends to apply funds raised pursuant to the Capital Raising together with current cash reserves (over the first two years following completion of the Capital Raising) as follows:

Source and Use of Funds	Minimum Subscription	Maximum Subscription
Source of Funds
Current cash	$255,210	$255,210
Capital Raising	$3,500,000	$4,000,000
Total	$3,755,210	$4,255,210
Use of Funds
Exploration – Tanzanian Projects	$2,000,000	$2,200,000
Cash Consideration payable to Indigo1	$600,000	$600,000
General administration	$375,000	$375,000
Costs of the Offer	$529,000	$559,000
General working capital	$251,210	$521,210
Total	$3,755,210	$4,255,210

Note:

Assumes Indigo elects to receive the Cash Consideration fully in cash. In the event that some or all of the Cash Consideration is paid in Shares these funds will be re‐allocated to general working capital.

The above table is a statement of current intentions as of the date of this Prospectus. As with any budget, intervening events (including exploration success or failure) and new circumstances have the potential to affect the manner in which the funds are ultimately applied. The Directors reserve the right to alter the way funds are applied on this basis.

Further details in respect to the Company’s work plan and proposed use of funds is outlined in Section 3.2 and the Independent Geologist’s Report in Section 6.

1.8 CAPITAL STRUCTURE

The capital structure of the Company following completion of the Offer is summarised below:

Shares	Minimum Subscription	Maximum Subscription
Shares on issue at the date of the Prospectus	11,321,671	11,321,671
Shares to be issued pursuant to Capital Raising	11,666,667	13,333,333
Consideration Shares to be issued to Indigo1	14,750,000	14,750,000
Total Shares – Post Offer (undiluted)	37,738,338	39,405,004

Notes

Assumes Indigo elects to receive the Cash Consideration fully in cash. If the whole of the Cash Consideration is received in Shares, Indigo will be issued an additional 1,500,000 Shares.

Options Exercise Price Expiry Date	Options Exercise Price Expiry Date	Number
		Minimum Subscription Maximum Subscription
Options on issue at the date of the Prospectus (Existing Options)1	$0.20 31 July 2013	4,175,091 4,175,091
Incentive Options2	$0.36 30 June 2016	2,000,000 2,000,000
Loyalty Options3	$0.35 30 Sept 2015	18,869,169 19,702,502
Attaching Options to be issued pursuant to the Offer	$0.35 30 Sept 2015	5,833,333 6,666,667
Total Options		30,877,593 32,544,260

Notes:

Further details on the terms and condition of the Existing Options are outlined in Section 9.3.
The Incentive Options are to be granted to key employees, consultants and advisors of the Company on the terms and conditions set out in Section 9.4.
The Company intends to make an offer of Loyalty Options (on the basis of one Loyalty Option for every two Shares held) to all Shareholders on the register of members as at a record date to be determined which is likely to be 2 months after the Company is re‐admitted to Official Quotation on ASX. The number of Loyalty Options outlined assumes no Options are exercised or any other Shares issued in the Company prior to the offer of the Loyalty Options. Refer to Sections 2.4 and 9.5 for further details on the proposed Loyalty Option offer and the terms and conditions of the Loyalty Options.
Refer to Sections 9.5 for further details on the terms and conditions of the Attaching Options.

Performance Shares	Performance Shares		Number
Performance Shares to be issued to Indigo			50,000,000
Total Performance Shares			50,000,000

Notes:

Further details on the terms and condition of the Performance Shares to be issued to Indigo are outlined in Section 9.2

1.9 SUBSTANTIAL SHAREHOLDERS

The substantial Shareholders in the Company as at the date of this Prospectus and their respective relevant interest on completion of the Offer are summarised below.

	Current	% (pre‐	% (post‐Offer)	% (post‐Offer)
	Shares	Offer)
Substantial Holder			Minimum Subscription	Maximum Subscription
Mark Titchener (no Shares subscribed for under the Offer)1	967,505	8.55%	2.56%	2.46%
Mark Titchener (333,334 Shares subscribed for under the Offer)2	967,505	8.55%	3.45%	3.30%

Notes:

Post‐Offer holding is undiluted and assumes the Cash Consideration is received fully in cash and no Shares are subscribed for by the substantial Shareholder under the Offer.
As outlined further in Section 1.12 Mr Titchener may (subject to Shareholder approval) subscribe for up to 333,334 Shares together with 166,667 Attaching Options under the Offer. Post‐Offer holding is undiluted and assumes the Cash Consideration is received fully in cash and Mr Titchener subscribes for his full commitment of 333,334 Shares together with 166,667 Attaching Options under the Offer. If Mr Titchener exercises his Existing Options (and no other Options are exercised) his relevant interest would increase to 4.63% assuming the Minimum Subscription is raised under the Offer.

Following completion of the Acquisition and Offer, Indigo and Sean Tangney will be substantial shareholders of the Company as outlined below.

			% (post‐Offer)1	% (post‐Offer)1
Substantial Holder	Pre‐Offer Shares	Post‐Offer Shares1	Minimum Subscription	Maximum Subscription
Cash Consideration received fully in cash
Indigo	‐	14,750,0003	39.09%	37.43%
Sean Tangney2	30,000	14,780,0003	39.17%	37.51%
Cash Consideration received fully in Shares
Indigo	‐	16,250,0003	41.41%	39.73%
Sean Tangney2	30,000	16,280,0003	41.49%	39.80%

Notes:

Post‐Offer holdings are undiluted and assume no Shares are subscribed for by Indigo or Sean Tangney and their associated entities under the Offer.
Sean Tangney has a relevant interest in the Vendor Shares to be allotted to Indigo because he holds 20% of Indigo.
Indigo and Sean Tangney will also have a relevant interest in 50,000,000 Performance Shares following completion of the Offer. If all the Performance Shares are converted into Shares (and assuming the Company does not issue any further Shares other than the Minimum Subscription pursuant to the Offer), Indigo and Sean Tangney will have a relevant interest in 66,250,000 (74.24%) and 66,280,000 (74.27%) Shares respectively (assumes Indigo elects to receive the Cash Consideration fully in Shares).

The Current Directors of the Company collectively own 76% of Indigo. As outlined further in Section 1.12 no Director has a relevant interest in the Vendor Securities to be allotted to Indigo because neither they, nor any of their associates, have the power to control the vote or disposal of the Vendor Securities and none of them hold more than 20% of Indigo.

The Company will announce to the ASX details of its top 20 Shareholders and will lodge substantial holder notices received following completion of the Offer.

1.10 FINANCIAL INFORMATION

Further financial information for the Company is included in the Investigating Accountant’s Report in Section 7 of the Prospectus.

1.11 DIRECTORS

Current Directors

Mr Ian Macliver

Non‐executive Chairman

Ian Macliver is Managing Director of Grange Consulting. Prior to establishing Grange Consulting, Mr Macliver held positions over nine years in a general manager or executive director position for various listed and corporate advisory companies. His experience covers all areas of corporate activity including capital raisings, acquisitions, divestments, takeovers, business and strategic planning, debt and equity reconstructions, operating projects and financial reviews and valuations.

Ms Cherie Leeden

Non‐executive Director

Cherie Leeden is a member of the Australian Institute of Geoscientists. Ms Leeden has been involved in mining and exploration for the past ten years with the bulk of her experience relating to energy (coal and uranium) projects.

Ms Leeden has previously worked for Rio Tinto and two midtier ASX listed companies. Ms Leeden has most recently worked as Exploration Manager for Advaita Power Resources Pte Ltd ( Advaita ), and as Exploration Manager for Alara Uranium Limited (now Alara Resources Limited, ASX:AUQ). Whilst Exploration Manager for Strike Resources Limited (ASX:SRK), she discovered and advanced SRK's Berau Thermal Coal Resource, located in Indonesia. This included the technical and logistical planning and supervision of all exploration and resource development activities for the coal division. For Advaita she made coal resource acquisitions and/or energy licence applications in Botswana, Namibia and Australia.

Ms Leeden has a Bachelor of Science in Applied Geology degree with Honours from the Western Australian School of Mines. Ms Leeden is a non‐executive director of Advaita, a Singaporean based company which sources thermal coal for several Indian power plants.

Mr Gary Seabrooke

Non‐Executive Director

Gary Seabrooke has been involved in the ownership and management of contract drilling companies in Australia and Africa during the last 25 years.

Mr Seabrooke was involved with the discovery of the Mt Olympus Gold Mine in WA’s Ashburton Basin (a new gold discovery in a region where no historical gold mining had taken place) and has also been involved in the exploration industry in various African countries for the last 15 years in gold, base metals and coal exploration.

Over the last five years Mr Seabrooke has been involved in over 400,000m of contract exploration and mineralisation definition drilling for coal in Mozambique. Mr Seabrooke was involved with the acquisition and early development of the Riversdale Mining Ltd ( Riversdale ) coal discoveries in Tete, Mozambique.

Mark Titchener

Non‐executive Director

Mark Titchener is a sophisticated investor specialising in investment strategies for early stage resource projects. Over the past 10 years he has participated in, and advised on, a significant number of listed and unlisted corporate transactions including capital raisings, reverse takeovers, restructures, seed investments and initial public offerings. Mark sits on a number of unlisted resource project boards as both a director and significant shareholder.

Mr Titchener was involved with the acquisition and early development of the Riversdale Mining Ltd coal discoveries in Tete, Mozambique.

Proposed Director

Shane Cranswick has been appointed as Managing Director Elect of the Company. Mr Cranswick’s appointment is subject to satisfaction of the Conditions of the Offer.

Shane Cranswick

Managing Director Elect

Shane Cranswick is an accomplished mining executive with over 10 years’ experience in senior management roles in resources companies both in Australia and overseas with a focus on coal, uranium and iron ore.

Mr Cranswick was previously Chief Financial Officer of Berkley Resources Ltd (ASX: BKY) where he played an integral role in the development of the company’s flagship uranium projects in Spain. Mr Cranswick has also worked as Chief Financial Officer of ASX listed Indo Mines Ltd (ASX: IDO) focusing on the company’s coal production and iron assets in Indonesia.

Mr Cranswick was a founding director of Mantra Resources Ltd which had significant success in the exploration and development of uranium projects in Tanzania. Most recently, Mr Cranswick held a senior commercial role with Rio Tinto focusing on the development of the large scale Simandou Iron Ore Project in Guinea, Africa.

Mr Cranswick gained a Bachelor of Commerce degree from the University of Western Australia and commenced his career with an international Chartered Accounting firm before spending approximately 8 years with Apollo Group Pty Ltd, a corporate services provider to listed entities, focusing on the acquisition of resources projects and implementation of management teams to oversee the development of the projects. Mr Cranswick is a member of the Institute of Chartered Accountants in Australia, the Financial Services Institute of Australasia and the Institute of Chartered Secretaries.

1.12 RELATED PARTY DISCLOSURE

Remuneration and Current Security Holdings

Directors are not required under the Constitution to hold any Shares. As at the date of this Prospectus, the annual remuneration (exclusive of superannuation) and the relevant interests of each of the Directors in Shares and Options are set out in the table below:

Director	Remuneration YTD June 20121	Remuneration FY Dec 20112	Shares	Existing Options3
Ian Macliver5	$20,000	$40,000	555,005	260,836
Cherie Leeden5	$20,130	$36,663	‐	‐
Gary Seabrooke	$20,000	$36,667	417,505	192,086
Mark Titchener5	$20,000	$40,000	967,505	467,086
Shane Cranswick4	‐	‐	85,000	‐

Notes:

Actual remuneration paid for the 6 months ended 30 June 2012. The Directors currently each receive annual remuneration of $40,000 pa (excluding non‐monetary and Share / Option based remuneration).

Actual remuneration received for the financial year ended 31 December 2011. Ms Leeden and Mr Seabrook were appointed to the Board on 10 January 2011.

Listed Options exercisable at $0.20 on or before 31 July 2013. Ian Macliver, Gary Seabrooke and Mark Titchener may exercise their Existing Options in the near future and prior to the General Offer Closing Date.

As outlined further below Select has entered into an agreement to engage Mr Shane Cranswick as Managing

Director of the Company, subject to the Company’s re‐compliance and re‐admission on ASX. Pursuant to the Managing Director Elect Agreement, Mr Cranswick is also entitled to be issued 600,000 performance rights under the Company’s performance rights plan. Further details in respect to the terms and conditions of the Managing Director Elect Agreement are outlined in Section 10.3.

Director Participation in the Offer

The Directors (and/or their nominees) may (subject to Shareholder approval) subscribe for a total of up to 1,233,336 Shares ( Director Placement Shares ) together with up to 616,669 free Attaching Options ( Director Placement Options ) under the Offer.

The table below provides a breakdown of the total proposed Director Placement Shares and the Director Placement Options that each Director would receive assuming that each Director subscribes for the full amount proposed under the Offer.

Director	Current Shares	Director Placement Shares	Existing Options	Director Placement Options	% Post Offer
Ian Macliver	555,005	333,334	260,836	166,667	2.35%
Cherie Leeden	Nil	66,667	Nil	33,334	0.18%
Gary Seabrooke	417,505	333,334	192,086	166,667	1.99%
Mark Titchener	967,505	333,334	467,086	166,667	3.45%
Shane Cranswick	85,000	166,667	‐	83,334	0.67%
Total		1,233,336		616,669

Note:

The Post Offer % assumes the Minimum Subscription is raised under the Offer, Indigo elects to receive the Cash Consideration fully in cash and each Current Director subscribe for their full commitment of Director Placement Shares under the Offer and no Options are exercised.

The terms and conditions upon which the Directors will subscribe for the Director Placement Shares and Director Placement Options will be the same terms and conditions under which others will subscribe for Securities under the Offer.

Share Sale Agreement

The Company has entered into the Share Sale Agreement with Indigo to acquire 100% of the issued capital of the companies which ultimately own the Tenements. Further details in respect to the Share Sale Agreement are summarised in Section 10.1.

The Current Directors of the Company collectively own 76% of Indigo. No Director has a relevant interest in the Vendor Securities to be allotted to Indigo because neither they, nor any of their associates, have the power to control the vote or disposal of the Vendor Securities and none of them hold more than 20% of Indigo. However, for the purposes of good corporate governance, the following disclosure is made in respect of the Directors’ shareholdings in Indigo:

Indigo Shareholders	Shares in Indigo	Percentage interest in Indigo
Rochas Resources (related to Cherie Leeden)	95,000	19%
Rovuma Investments (related to Gary Seabrooke)	95,000	19%
Element Nominees Pty Ltd (related to Mark Titchener)	95,000	19%
Wildwood Developments Pty Ltd (related to Ian Macliver)	95,000	19%

Grange Consulting Engagements

The Company has engaged Grange Consulting to act as its corporate advisor in respect to the Acquisition, re‐compliance with chapters 1 and 2 of the Listing Rules and the Offer under this Prospectus. Grange Consulting will receive a cash fee of $100,000 (plus GST) for the corporate advisory services provided.

Grange Consulting is also currently engaged to provide company secretarial and financial management services to the Company. Grange Consulting currently receives $7,500 (plus GST) per month for these services. Following the Company’s re‐compliance with the Listing Rules the scope of work to be undertaken by Grange Consulting will include company secretarial, financial management and general corporate advisory services which will be subject to a monthly retainer of $12,500 (plus GST) per month. These services and fee will be effective from the Company’s successful re‐compliance with the Listing Rules and will continue until terminated by mutual agreement or by either party giving 60 days notice.

Following the Company’s re‐compliance with the Listing Rules, Grange Consulting will also provide the Company with a fully serviced office, including full secretarial support, office administration services and support and a car bay. The Company will pay Grange Consulting $3,000 (plus GST) for the use of the serviced office and car bay.

Mr Ian Macliver, a Director of the Company is the managing director and a shareholder of Grange Consulting. Mr Phil Warren, the Company Secretary of the Company is also a director and shareholder of Grange Consulting.

Managing Director Elect Agreement and Consulting Services

Select has entered into an agreement to engage Mr Shane Cranswick as Managing Director of the Company, subject to the Company’s re‐compliance and re‐admission on ASX. Mr Cranswick will receive annual remuneration of $225,000 (inclusive of statutory superannuation) and will be entitled to 600,000 Performance Rights pursuant to the Company’s performance rights plan.

Further details in respect to the terms and conditions of the Managing Director Elect Agreement are outlined in Section 10.3.

The Company has also agreed to pay Mr Cranswick $1,000 per day for consultancy services provided to the Company prior to his appointment as Managing Director pursuant to the Managing Director Elect Agreement. As at the date of the Prospectus approximately $18,000 is payable to Mr Cranswick for consultancy services provided.

Cypress Management Consulting Services Agreements

The Company has entered into the following consulting services agreements with Cypress Management. Mr Ian Macliver, Ms Cherie Leeden and Mr Mark Titchener each have a 33.33% beneficial shareholding interest in Cypress Management.

The Company has paid Cypress Management a total of $64,835 for consultancy services provided in the two year period ended 30 June 2012.

Exploration Manager Consulting Agreement

The Company has engaged John Monaghan ( Monaghan ) an employee of Cypress Management, to provide geological consulting services and to assume the role of exploration manager for the Projects ( Services ).

Monaghan will spend a minimum of 100 business days over the term of the agreement providing the Services. The agreement commenced on 1 July 2012 and ends on 30 June 2013. Either party may cancel the agreement by giving 30 days’ written notice to the other party.

Cypress Management will receive a monthly retainer of $10,000 per month for the provision of the Services. Should Monaghan spend less than the minimum 100 business days performing the Services under the agreement, Cypress Management will reimburse the Company $1,000 for every business day under the 100 days that Monaghan has not provided the Services.

General Consulting Services Agreement – Cherie Leeden

The Company has engaged Cherie Leeden ( Leeden ), an adviser to Cypress Management, to provide consulting services to the Company in relation to the Projects.

The agreement commenced on 1 July 2012 and ends on 30 June 2013. Either party may cancel the agreement by giving 30 days’ written notice to the other party.

The Company will pay Cypress Management $1,500 per day for the consultancy services provided by Leeden under this agreement.

General Consulting Services Agreement – Bangun Maruli

The Company has engaged Bangun Maruli ( Maruli ), an adviser to Cypress Management, to provide geological consulting services to the Company in relation to the Projects.

The agreement commenced on 1 July 2012 and ends on 30 June 2013. Either party may cancel the agreement by giving 30 days’ written notice to the other party.

The Company will pay Cypress Management $750 per day for the consultancy services provided by Maruli under this agreement.

1.13 CORPORATE GOVERNANCE

To the extent applicable, in light of the Company’s size and nature, the Company has adopted the Corporate Governance Principles and Recommendations with 2012 amendments (2[nd] Edition) as published by the ASX Corporation Governance Council ( Recommendations ).

The Company’s main corporate governance policies and practices as at the date of this Prospectus are outlined in Section 5 and the Company’s 2011 Annual Report. The Company’s compliance and departures from the Recommendations are also set out in its 2011 Annual Report. The 2011 Annual Report is available from ASX and the Company’s website.

In addition, the Company’s full Corporation Governance Plan is available from the Company’s website at www.selectex.com.au.

2. DETAILS OF THE OFFER

2.1 The Offer

Pursuant to this Prospectus, the Company invites applications for 11,666,667 Shares at an issue price of $0.30 per Share to raise $3,500,000. The Company will grant one free Attaching Option for every two Shares issued ( Offer ).

The Offer consists of:

(a) a General Offer; and
(b) a Priority Offer

The Shares offered under the Offer will be issued at the discretion of the Directors of the Company, in accordance with the following allocation policy:

(c) 8,166,667 Shares together with Attaching Options will be reserved in the first instance for existing Shareholders under the Priority Offer (refer below); and
(d) 3,500,000 Shares together with Attaching Options plus any Shares from the Priority Offer remaining after allocation of the Priority Offer shall be allocated under the General Offer as determined by the Directors.

The Shares offered under this Prospectus will rank equally with the existing Shares on issue. Please refer to Section 9.1 for further information regarding the rights and liabilities attaching to the Shares.

The Attaching Options have an exercise price of $0.35 and expire on 30 September 2015. On the exercise of each Attaching Option, the holder will be issued one Share and one Secondary Option which has an exercise price of $0.45 and an expiry date of 31 March 2017. The terms and conditions of the Attaching Options are outlined in Section 9.5.

Priority Offer

Of the 11,666,667 Shares together with Attaching Options being offered under the Offer, up to 8,166,667 together with Attaching Options will be offered in priority to Shareholders of the Company registered at the Priority Offer Entitlement Date ( Priority Offer ). The Directors intend to allocate the Priority Offer Shares firstly to allow existing Shareholders to increase their existing holdings to a marketable parcel by applying for a minimum parcel of 7,000 Shares each. The balance of the Priority Offer Shares will then be offered to Shareholders and in the event of oversubscription, the Priority Offer will be allocated having regard to the Shareholders existing Shareholding and the number of Priority Shares applied for under the Offer. No Director will participate in the Priority Offer.

The Company will limit the number of Shares that it issues to any Shareholder to the greater of 5% of the Shares being offered under the Offer and the number of Shares the Shareholder would be entitled to under a pro‐rata issue of Shares.

General Offer

The pool for the General Offer will be 3,500,000 Shares together with Attaching Options, plus any Shares not applied for by Shareholders under the Priority Offer ( General Offer ).

Following completion of the Offer and re‐quotation of the Company’s Securities on ASX, Select may implement a sale of any remaining Unmarketable Parcels of Shares pursuant to Listing Rule 15.3 and the Company’s Constitution.

2.2 Minimum subscription

The minimum subscription to be raised pursuant to the Offer is $3,500,000 ( Minimum Subscription ). If the Minimum Subscription has not been raised within four (4) months after the date of this Prospectus, all applications will be dealt with in accordance with the Corporations Act.

2.3 Oversubscriptions

The Company may accept oversubscriptions of up to 1,666,666 Shares (together with Attaching Options) at the Issue Price to raise up to a further $500,000 and an aggregate maximum of $4,000,000 before expenses of the Offer ( Maximum Subscription ).

2.4 Loyalty Offer

It is the intention of the Company to make an offer of new Loyalty Options to all Shareholders on the register of members as at a record date to be determined which is likely to be approximately 2 months after the date that the Company’s Shares are re‐admitted to Official Quotation on ASX. It is intended that the issue will be on the basis of one Loyalty Option for every two Shares held at that time. The Loyalty Options will be issued for nominal consideration with an exercise price of $0.35 each and expiry date of 30 September 2015. The Loyalty Options on exercise will entitle the holder to one Share and one Secondary Option. On the exercise of each Loyalty Option, the holder will be issued one Share and one Secondary Option which has an exercise price of $0.45 and an expiry date of 31 March 2017. Further details in respect to the terms and conditions of the Loyalty Options and Secondary Options are outlined in Sections 9.5 and 9.6.

A disclosure document will be made available when the Loyalty Options are offered by the Company. Anyone who wishes to “take up” the Loyalty Options under the proposed entitlement issue will need to complete an application form that will be in or will accompany the disclosure document. The Directors reserve the right to vary the terms in which the Loyalty Options are offered (including ratio, issue price, expiry date and the record date for determining entitlements).

2.5 Applications

Applications for Shares under the:

(a) Priority Offer must be made using the personalised Priority Application Form accompanying this Prospectus; and
(b) General Offer must be made using the General Application Form enclosed at the back of this Prospectus.

Applications for Shares must be for a minimum of 7,000 Shares ($2,100) and thereafter in multiples of 500 Shares ($150) and payment for the Shares must be made in full at the issue price of $0.30 per Share.

The Company reserves the right to close the Offer early.

General Offer

Completed General Application Forms and accompanying cheques, made payable to “Select Exploration Ltd – Share Issue Account” and crossed “Not Negotiable”, must be mailed or delivered to the address set out on the General Application Form by no later than the General Offer Closing Date.

Priority Offer

Eligible Shareholder applying for Shares under the Priority Offer may pay by either cheque or Bpay.

If you are paying by cheque, your completed Priority Application Form(s) and accompanying cheque(s), made payable to “Select Exploration Limited – Share Offer Account” and crossed “Not Negotiable”, must be mailed or delivered to the address set out on the Priority Application Form by no later than the Priority Offer Closing Date.

If you are paying by Bpay refer to your personalised instructions on your Priority Application Form. You DO NOT need to complete or return the Priority Application Form.

2.6 ASX listing

The Company was suspended from Official Quotation from the date of the July General Meeting and will not be reinstated until satisfaction of the Conditions to the Offer.

In the event that the Conditions of the Offer are not achieved, including if the Company does not receive conditional approval for re‐quotation on ASX, then the Company will not proceed with the Offer and will repay all application monies received.

Application for Official Quotation by ASX of the Shares offered pursuant to this Prospectus will be made within 7 days after the date of this Prospectus. If approval is not obtained from ASX before the expiration of 3 months after the date of issue of the Prospectus (or such longer period as is permitted by the Corporations Act), 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 Loyalty Options will be unlisted Options at the time of grant. However the Company reserves the right to apply for quotation of the Attaching Options at such time as the Company in its absolute discretion determines. Should the Company make an application for official quotation of the Attaching Options and the ASX accepts the application for quotation of the Attaching Options then the Attaching Options will be listed options from the time that the ASX accepts such application.

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.

2.7 Allotment

The Lead Manager (in consultation with and subject to the prior written approval of the Company), will determine the allottees of the Shares in accordance with the terms of the Lead Manager Mandate summarised in Section 10.2 and the Priority Offer summarised in Section 2.1. The Directors and the Lead Manager reserve the right to reject any application or to allocate any Applicant fewer Shares than the number applied for.

Subject to satisfaction of the Conditions to the Offer and ASX approving the Company’s re‐ compliance with Chapters 1 and 2 of the Listing Rules, Shares issued pursuant to the Offer will be allotted as soon as practicable after the Closing Date. 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 Prospectus, 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.

2.8 Restricted Securities

Subject to the Company re‐complying with Chapters 1 and 2 of the Listing Rules, certain Shares on issue prior to the Offer, and to be issued pursuant to the Share Sale Agreement and Options to be issued to Directors, brokers, management, staff and consultants who assist the Company in relation to the Offer, may be classified by ASX as restricted securities and may be required to be held in escrow.

2.9 Restrictions on the Distribution of the Prospectus

No action has been taken to register or qualify the Shares or otherwise permit a public offering of the Shares in any jurisdiction outside Australia.

This Prospectus does not, and is not intended to, constitute an offer in any jurisdiction, or to any person to whom, it would not be lawful to make such an offer. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should 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 the Shares or otherwise permit a public offering of the Shares in any jurisdiction outside Australia.

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

2.10 Lead Manager

Patersons has been appointed to act as lead manager to the Offer on the terms and conditions of the mandate summarised in Section 10.2.

Patersons will be paid a lead manager fee of $60,000 and will be entitled to receive an issue management fee equal to 1% of the gross funds raised pursuant to the Offer. Patersons will be paid a selling fee of 5% of all applications accepted by the Company. All selling fees will be paid by Patersons from this fee, including fees paid or rebated to third parties.

2.11 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 separate statements (similar to a bank account statement) that set out the number of Shares allotted to them under this Prospectus. 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.

2.12 Financial Forecasts

The Tanzanian Projects are exploration assets. The Directors have considered the matters set out in ASIC Regulatory Guide 170 and believe that they do not have a reasonable basis to forecast future earnings on the basis that the operations of the Company are inherently uncertain. Accordingly, any forecast or projection information would contain such a broad range of potential outcomes and possibilities that it is not possible to prepare a reliable best estimate forecast or projection.

2.13 Privacy statement

If you complete an Application Form, you will be providing personal information to the Company. The Company collects, holds and will use that information to assess your application,

service your needs as a Shareholder and to facilitate distribution payments and corporate communications to you as a Shareholder.

The information may also be used from time to time and disclosed to persons inspecting the register, including 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 share registry.

You can access, correct and update the personal information that we hold about you. If you wish to do so, please contact the share registry at the relevant contact number 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. You should note that if you do not provide the information required on the Application Form, the Company may not be able to accept or process your application.

2.14 Queries

Any questions concerning the Offer should be directed to the Company, on +61 8 9322 7600 or by email on [email protected] .

3. COMPANY OVERVIEW

3.1 Company Overview

In December 2011 the Company announced it had entered into a heads of agreement with Indigo to acquire 100% of the issued capital of the companies, which ultimately own exploration Tenements covering four prospective and potentially large scale coal and uranium projects located in the United Republic of Tanzania, East Africa. The formal Share Sale Agreement was subsequently executed in March 2012.

The Acquisition was approved by Shareholders at the Company’s July General Meeting.

Select is undertaking the Offer to fund both the Acquisition and the exploration of the Tanzanian Projects. Following completion of the Offer, the Company intends to focus its activities on coal and uranium exploration in Tanzania with the objective of identifying substantial coal and/or uranium mineralisation within the Tanzanian Projects.

3.2 Use of Funds and Work Plan

The Company intends to apply the funds raised pursuant to the Offer over the first two years as follows:

Source of Funds ‐Minimum Subscription			Total
Current Cash1			$255,210
Capital Raising – Minimum Subscription			$3,500,000
Total			$3,755,210
Use of Funds	Year 1	Year 2
Exploration expenditure2	$980,000	$1,020,000	$2,000,000
Cash Consideration payable to Indigo3	$600,000	‐	$600,000
General administration expenses	$175,000	$200,000	$375,000
Costs of the Offer4	$529,000	‐	$529,000
General working capital	$125,605	$125,605	$251,210
Total	$2,409,605	$1,345,605	$3,755,210

Notes:

Refer to the Investigating Accountants Report in Section 7 for further details.
Further details in respect to exploration expenditure is outlined in the Independent Geologist’s Report in Section 6.
Assumes Indigo elects to receive the Cash Consideration fully in cash. In the event that some or all of the Cash Consideration is paid in Shares these funds will be re‐allocated to general working capital.
Refer to Section 10.8 of this Prospectus for further details.

In the event that the Maximum Subscription under the Offer is raised the Company intends to apply the additional funds primarily to its exploration budget to undertake geophysics on the Project Tenements as outlined below.

Source of Funds ‐Maximum Subscription			Total
Current Cash1			$255,210
Capital Raising – Maximum Subscription			$4,000,000
Total			$4,255,210

Use of Funds	Year 1	Year 2
Exploration expenditure2	$1,080,000	$1,120,000	$2,200,000
Cash Consideration payable to Indigo3	$600,000	‐	$600,000
General Administration	$175,000	$200,000	$375,000
Costs of the Offer4	$559,000		$559,000
General working capital	$260,605	$260,605	$521,210
Total	$2,674,605	$1,580,605	$4,255,210

Notes:

Refer to the Investigating Accountants Report in Section 7 for further details.

Further details in respect to exploration expenditure is outlined in the Independent Geologist’s Report in Section 6

Assumes Indigo elects to receive the Cash Consideration fully in cash. In the event that some or all of the Cash Consideration is paid in Shares these funds will be re‐allocated to general working capital.

Refer to Section 10.8 of this Prospectus for further details.

Select proposes to undertake a maiden drilling program on the Ruhuhu Project to understand the geology of the granted Ruhuhu Project Tenements with a focus on locating areas likely to contain coal and uranium mineralisation within the Karoo sequence. Year 1 drilling will be reverse circulation ( RC ) with downhole geophysics conducted in all RC holes to assist in stratigraphic correlation between boreholes. Year 2 drilling will target core coal seams and uranium mineralisation identified in Year 1 open hole drilling. The Company’s exploration program also includes airborne magnetic, resistivity and radiometric surveys and satellite data acquisition and interpretation over the granted Project Tenements.

A summary of the proposed exploration budget by project is outlined below. Further details in respect to the exploration budget are outlined in the Independent Geologist Report in Section 6.

Use of Funds – Minimum Subscription	Year 1	Year 2	Total
Ruhuhu Project	$650,000	$400,000	$1,050,000
Selous Project	$150,000	$300,000	$450,000
Mhukuru Project	$150,000	$300,000	$450,000
Rukwa Project	$30,000	$20,000	$50,000
Total	$980,000	$1,020,000	$2,000,000

Exploration expenditure has been allocated only to currently granted Project Tenements and excludes the areas of the Selous Project Tenements that are located within the Selous Game Park. For further details in respect to the exploration programme and budget refer to the Independent Geologist’s Report in Section 6.

3.3 Tanzanian Projects

The overview of the Projects contained in this Section focuses solely on the Project Tenements. Pursuant to the Share Sale Agreement, the Company will acquire the Additional Tenements which comprise eight prospecting licences (two granted, three under application, two which have been offered to grant and one which is being transferred). The Additional Tenements have not been included in the summary of the Projects in this Section because they have only recently been applied for and further technical due diligence in respect of them is required. The Additional Tenements are not considered material to the Company and no exploration expenditure has been allocated to the Additional Tenements. The Additional Tenements were added to the portfolio of tenements for no additional consideration.

The Tanzanian Projects are located in the southern half of Tanzania and cover approximately 3,700 km[2] across several geographical areas. The Project Tenements have been grouped into the following four project areas:

The Rukwa Project comprises seven Project Tenements in the Rukwa Basin and adjacent areas in western Tanzania covering a total of approximately 526km[2] .
The Ruhuhu Project comprises seven Project Tenements in the Ruhuhu Basin and adjacent areas and covers a total area of approximately 494km[2] .
The Mhukuru Project comprises five Project Tenements in the southern Selous Basin and adjacent areas in south‐west Tanzania, near the border with Mozambique and cover a total area of approximately 223km[2]
The Selous Project comprises eleven Project Tenements in the Selous‐Kilosa and Rufiji Basins on central and eastern Tanzania and covers a total area of 2,480km[2]

Tanzanian Project locations

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1 ‐ Namwele‐Mkomolo, Muze coalfields 5 – Ketewaka‐Mchuchuma coalfield 2 ‐ Galula coalfield 6 – Njuga coalfield 3 ‐ Songwe‐Kiwira Basin 7 – Mhukuru coalfield 4 ‐ Ruhuhu Basin 8 – Mbamba Bay coalfield IML concessions

A summary of the four Tanzanian Projects is outlined below.

Prospective investors should also refer to the Independent Geologist’s Report in Section 6 for further details about the geology, location and mineral potential of the Company’s Tanzanian Projects and the Solicitor’s Report in Section 8 for further details in respect to the Company’s interests in the Tanzanian Projects.

3.3.1 Rukwa Project

The Rukwa Project is located in the Sumbawanga Region, Rukwa District of southwest Tanzania, approximately 800 km south‐southwest of the capital Dar‐es‐Salaam. The Rukwa Project is located 220 km southeast of the railhead at Tuduma, 150 km northwest of the railhead at Mpanda and 120 km southeast of the Kasanga Port and jetty on Lake Tanganyika. The majority of the Rukwa Project Tenements are located in the Rukwa Basin in the central west area of Lake Rukwa, located partially in the lake itself and on the central‐western shore of the lake and hinterland.

The Rukwa Basin contains several small coalfields, including the Namwele‐Mkomolo, Muze and Galula Coalfields that contain seams of economic significance which are currently mined or have been mined in the past. The Rukwa Project occurs in the far northwest of the Rukwa Basin in the Namwele Coalfield. The Rukwa Basin contains Karoo‐Songea Group sedimentary sequences up to 8 km thick, which are entirely fault‐bounded against older Precambrian terranes. The basin lies between the larger rift valleys occupied by Lakes Tanganyika and Malawi (Nyasa).

The Rukwa Project is contiguous along strike and contained in the same basin with the property to the west explored by Edenville Energy PLC ( EE ) in the Namwele coalfield block.

Rukwa Project Location and Geology

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Whilst there is limited existing infrastructure in the Lake Rukwa region, the Rukwa Project is within the proposed Mtwarra Development Corridor ( MDC ) where it is proposed that a railway line be built from Mtwarra Port on the coast through the area to enable the movement of any product coal to users within Tanzania and potentially for export.

A priority for exploration in the Rukwa Project is to establish whether the Karoo‐Songea Group sediments which have been reported by EE as coal‐bearing extend onto the Rukwa Project Tenements as a small basin within Precambrian metamorphic rocks. Several small areas of Karoo‐Songea Group coal sequences exist 6 km northwest (Mkomolo Coalfield), 4 km north (Muze Coalfield) and 140 km south of the project area (Galula Coalfield).

3.3.2 Ruhuhu Project

The Ruhuhu Project comprises the Ruhuhu Project Tenements which are three separate groups of tenements and application areas. The Ruhuhu Basin is located in the far southwest of Tanzania, 90 km north of the town of Songea and 900 km southwest of the capital of Dar es Salaam. The Ruhuhu Project Tenements are approximately 35 km east of Lake Nyasa and 46 km east of the Tanzania‐Malawi border. The basin is rift‐derived and contains Karoo‐Songea Group sedimentary sequences of Carboniferous to Triassic age that include the full K1‐K8 Karoo succession.

The northern and central groups of Ruhuhu Project Tenements are situated wholly within or partly within or adjacent to the Ruhuhu Basin whereas the south‐eastern group of Ruhuhu Project Tenements are situated approximately 10 km south‐east of the south‐eastern boundary of the Ruhuhu Basin.

The Ruhuhu Basin is located in the far south‐west of Tanzania and contains Karoo‐Songea Group sedimentary sequences of Carboniferous to Triassic age that include the full K1‐K8 Karoo succession and a number of known coalfields. The Ruhuhu Project is partly located and in the far north of the Ngaka Coalfield which contains several dispersed blocks called the Mbalawala, Mbuyura and Mkapa blocks. Intra Energy’s Mbalawala Coal Project, which is at bankable feasibility study stage is located in the adjacent to tenements to the Ruhuhu Project Tenements.

Ruhuhu Project Location and Geology

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Granted tenements in the northwest block of tenements that make up the Ruhuhu Project Tenements will be an early focus of exploration for Select in order to identify and understand the distribution of the coal‐bearing K2 Mchuchuma Formation within an exposed belt of Karoo‐ Songea Group sedimentary sequences. As for much of the Tanzanian coalfields, there is minimal existing infrastructure, but the Ruhuhu Project is also located within the proposed MDC.

3.3.3 Mhukuru Project

The Mhukuru Project is located in the far western portion of the Selous Basin in the Songea district and Ruvuma region of the far south‐west of Tanzania, approximately 100 km south‐west of the town of Songea, 20 km from the Mozambique border town of Mitomoni and 60 km east of the Mbamba Bay Coalfield.

Mhukuru Project location

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Geologically, the Mhukuru Project Tenements are located within the central and western parts of the Karoo age South Selous Basin or wholly within or partly within, adjacent areas of non coal‐ bearing crystalline Precambrian basement. Geological data for the area containing the Mhukuru Project is limited and no exploration has been undertaken by Indigo.

Undifferentiated Karoo sedimentary sequences of the South Selous Basin outcrop in the east and south‐east of tenement HQ‐P24982. The regional airborne magnetic data suggests that the area of recent Quaternary‐Recent sediments may cover an extension of Karoo rocks of the South Selous Basin and that all of some application areas and parts of others likely exist outside Karoo sedimentary sequences. There may be potential for coal‐bearing sequences to be present in the inferred underlying Karoo rocks, including the K2 and K4. Refer to Section 3.4 for further details on the Karoo stratigraphy which consists of eight subdivisions numbered K1 to K8.

The Mhukuru Coalfield is located 25 km to the north of the Mhukuru Project. The only workable coal seams in the Mhukuru Coalfield occur in the K4 (Mhukuru Formation) which is more than 350 m thick throughout the coalfield, but contains few coal‐bearing zones.

The Company has identified the primary exploration target at the Mhukuru Project is the potential occurrence of the prospective K2 coal‐bearing interval in Karoo sequence which is inferred to be present underneath a cover of recent Cainozoic sediments and within undifferentiated Karoo sedimentary sequence of the South Selous Basin. The K4, if present may be a secondary exploration target.

3.3.4 Selous Project

The Selous Project forms the largest fully granted licence area in the portfolio and is located in within a vast Savannah belt that extends from central Tanzania south to the Mozambique border. The Selous Project is accessible from the east through the town of Kilwa and from the west through Morogoro and Mikumi to Ifakara on a surfaced road. A road from Songea provides access to the Selous Project from the southwest.

The Selous Project Tenements are located in the Selous‐Kilosa and Rufiji Basins. The geology of these basins is currently poorly understood. Apart from mapping by the Geological Survey of Tanzania, exploration undertaken between the 1960s and 1970s and an oil exploration program by BHP‐Billiton in 2009, very little information is available to characterise the geology of the two basins.

The Selous‐Kilosa and Rufiji Basins are underexplored and there is potential for prospective Karoo sequences to occur beneath areas of younger, recent Cainozoic cover. Limited more detailed mapping has identified potentially coal‐bearing units of the Karoo‐Songea Group in close proximity to some Selous Project Tenements. Field based exploration including detailed field mapping, drilling and seismic surveys are required to determine the prospectivity of these units.

Initial reconnaissance by Select geologists has indicated that the extent of Karoo sedimentary sequences within areas mapped as alluvial cover on regional geological maps is much more widely distributed. The presence of such outcrops also implies the cover could be shallow in certain areas.

Selous Project Location and Geology

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3.4 Tanzania ‐ Country Overview

Demographics and Physiology

The United Republic of Tanzania is located in Eastern Africa. It shares its borders with Burundi, Kenya, Malawi, Mozambique, Rwanda, Uganda, Zambia and the Indian Ocean with a coastline length of 1,424 km. Tanzania is the largest nation in East Africa, both in land area and population.

The Government of the United Republic of Tanzania is a unitary republic consisting of the Union Government and the Zanzibar Revolutionary Government. The country welcomes foreign investment to develop the country and has signed multi‐lateral and bilateral agreements against nationalising or expropriating company assets. Tanzania has an unbroken record of political stability without the divisive and destructive civil wars that occurred in many neighbouring African countries in the post‐colonial era.

Tanzania was estimated to have a population of around 40 million people (in 2009), with an average population growth of two percent. Tanzania is divided into 26 regions (21 on the mainland and five in Zanzibar). The 26 regions are further divided into 99 districts, each with at least one council, to further increase local authority.

The north‐eastern part of the country is mountainous and includes Mount Kilimanjaro, Africa's highest peak. To the north and west are the Great Lakes of Lake Victoria and Lake Tanganyika. Central Tanzania comprises a large plateau, with plains and arable land.

The climate varies from tropical along the coast to semi‐temperate inland. In mountainous regions, the climate is cool. Tanzania has two major rainfall regions. In southern, south‐western, central and western parts of the country the wet season occurs between December and April. In the north and northern coastal regions there are two wet seasons, between October and December and between March and May, with April typically yielding the highest rainfall.

Geology – Karoo Supergroup

Coal in Tanzania, like in other parts of central and southern Africa, occurs mainly in the lower part of the Karoo Supergroup. Sediments in this sequence are Permian in age. The setting of coal is comparable to other Gondwana‐related coal deposits found in South America, India, Australia and Antarctica. The term “Karoo” was extrapolated from the main Karoo Basin of South Africa to describe the sedimentary fill of all the other basins of similar age across the Gondwana super‐ continent.

The Karoo sequence in Tanzania is mainly terrestrial, although thin marine intercalations occur in the east‐central part of the country. The Ruhuhu Basin in the southwest of the country is the northernmost of the Karoo basins that still contains a fairly complete succession of typical Karoo litho‐facies units.

In Tanzania, the Karoo Supergroup succession is known as the Songea Group and is preserved in narrow, elongated, partly fault‐controlled and disconnected graben and half‐graben areas that rest unconformably on crystalline basement of Precambrian age. The Karoo sequence displays overlapping and overstepping relationships on the basement, particularly in the southwest and west, reflecting the relief of the pre‐Karoo surface. The pre‐Karoo tectonic framework appears to have exerted an important control on the geometry and development of the Karoo basins and on the thickness of the sedimentary fill that accumulated.

The known coalfields in Tanzania occur in the southwest of the country in a series of unconnected Karoo (Permian age) basins that extend southeast from Lake Rukwa down, on the east side of Lake Nyasa (Malawi), towards the international border with Mozambique. In addition to the Permian coal deposits, lignite occurs in Jurassic and Tertiary age sediments in the coastal plains.

The Karoo stratigraphy consists of eight subdivisions numbered K1 through K8, with K1 being the oldest subdivision and K8 the youngest. Coal is contained in two formations (K2 and K4). These are the lower and upper coal measures which have been named the Mchuchuma Formation (K2) and Mhukuru Formation (K4). In all but one of the coalfields, the better developed coal is found in the Lower Permian age Mchuchuma Formation (K2).

Coal Industry

To date, exploitation of Tanzania’s coal mineralisation has been limited. Kiwira Colliery, located in the Songwe‐Kiwira coalfield, is the sole mine from which coal has been (formally) exploited in Tanzania. On average some 35,000 tonnes of coal were mined annually, most of which was used for local electricity generation. Production ceased at Kiwira Colliery in 2009 due to reported high operational costs.

Tanzania is currently a net importer of coal and is subject to long, and at times uncertain, supply lines from neighbouring African countries. Scope exists in Tanzania for the development of local coal markets. However, until an assured local supply is available at competitive cost, the increased and preferential use of coal as a prime energy source by local industry, agricultural and domestic sectors is considered unlikely.

Further exploration and investigation is warranted to estimate the Tanzanian coal resources and mineable reserves in accordance with internationally accepted standards in order to assess the development potential. Self‐sufficiency would probably be the primary aim, although in the long term, Tanzania, with its coastal situation, may prove to possess export potential.

4. RISK FACTORS

4.1 Introduction

THE RISKS CONTAINED IN THIS SECTION 4 SHOULD BE CONSIDERED CAREFULLY BY POTENTIAL INVESTORS.

The Shares offered under this Prospectus are considered highly speculative. An investment in the Company is subject to a number of risks and the Directors strongly recommend potential investors consider the risk factors described below, together with information contained elsewhere in this Prospectus, and consult their professional advisers before deciding whether to apply for Shares pursuant to this Prospectus.

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.

4.2 Risks specific to the Company

(a) Conditions of the Offer

The Offer is conditional upon:

(i) Completion of the Acquisition pursuant to the Share Sale Agreement;
(ii) Shareholder approval of the grant of the Attaching Options at the October General Meeting; and
(iii) The Company re‐complying with Chapters 1 and 2 of the Listing Rules and receiving conditional approval for re‐quotation on ASX.

(together the Conditions of the Offer )

In the event the Conditions of the Offer are not achieved then the Company will not proceed with the Acquisition or the Offer and will repay all application monies received.

(b) Exploration Risk – Early Stage and Weather Delays

The Tenements are at the early stages of exploration, and potential investors should understand that mineral exploration is a high‐risk undertaking, only occasionally providing high rewards.

The Tenements are speculative in nature. The conceptual exploration targets identified are based on ground surveys and the interpretation of geological structures and have been subject to limited exploration. No drilling has been undertaken on the Projects. The Projects represent a regional exploration play.

The Company’s proposed exploration activities including its maiden drilling programme may be impacted by weather conditions and the availability of drill rigs when required. The wet season in southern Tanzania generally occurs from December to April during which time access to the Project areas may be limited and drilling may not be able to be undertaken. The Company currently intends to undertake its proposed drilling programme on the Ruhuhu Project prior to

the wet season commencing. Should weather conditions however restrict access to the Ruhuhu Project, drilling of the Ruhuhu Project may be delayed until after the wet season. In the event that drilling is delayed access to drill rigs will need to be rescheduled.

(c) Budget Risk

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.

(d) Country Risk

The Projects are based in Tanzania. Tanzania is a developing country with a multi‐party democracy which has successfully evolved over the past decade into having established an expanding mining industries.

The Company will be subject to the risks associated with operating in Tanzania. Such risks include economic, social or political change, changes in law affecting foreign investment, taxation, working conditions, rates of exchange, exploration licencing, export duties, repatriation of income or return of capital, environmental protection, mine safety, labour relations as well as government control over mineral properties or government regulations. Changes to Tanzania’s mining or investment policies and legislation or a shift in political attitude may adversely affect the Company’s operations and profitability.

Any future material adverse changes in government policies or legislation in Tanzania that affect foreign ownership, mineral exploration, development or mining activities, may affect the viability and profitability of the Projects.

(e) Uranium as a source of energy

Nuclear energy is in direct competition with other more conventional sources of energy including gas, coal and hydro‐electricity.

Furthermore, any potential growth of the nuclear power industry (and increase in demand for uranium) beyond its current level will depend on the continued and increased acceptance of nuclear technology as a means of generating electricity. The nuclear industry is subject to some negative public opinion owing to political, technological and environmental factors. This may have an adverse impact on the demand for uranium and increase the regulation of uranium mining.

One of the arguments in favour of nuclear energy is its lower emissions of carbon dioxide per unit of power generated compared to coal and gas. Alternative energy systems such as wind or solar also have no or very low carbon emissions. However, to date these have not been cost effective enough to be used for large scale base load power. Technology changes may occur that make alternative energy systems more efficient, reliable or cost‐effective.

(f) Exploration and Mining within Game and Forest Reserves

Pursuant to the Mining Act 2010 of Tanzania, the holder of a mineral right shall not exercise any of his rights under the licence or under the Mining Act 2010 in respect of land in any game reserve declared under the Wildlife Conservation Act, except with the written consent of the authority having control over the reserve. A portion of some of the Selous Project Tenements are located within the Selous Game Reserve, which is a World Heritage Site under UNESCO. The Company will comply with the protocol outlined in the Mining Act 2010 and seek to be granted

permission from the Ministry of Natural Resources and Tourism to undertake coal and uranium exploration on the portion of the Selous Project Tenements that fall within the game reserve during certain periods every year. The Company may also require additional approvals from the Ministry of Natural Resources and Tourism and UNESCO to progress from the exploration phase to the development and mining phases of operations. If mining occurs the Ministry of Natural Resources and Tourism would prefer underground mining. Failure to obtain approvals for mining or the imposition of restrictive conditions on mining activities making the project uneconomic may have a material adverse effect on the business operations of the Company.

Also pursuant to the Mining Act 2010 of Tanzania, the written consent of the Ministry of Natural Resources and Tourism will be required prior to exploration commencing on any portion of the Tenements that falls within a forest reserve. The Company is not aware of any forest reserves that would affect the Tenements. As part of exploration activities, the Company will continue to assess whether any portion of the Tenements falls within a forest reserve. Prior written permission must be obtained from the relevant authority in order to undertake exploration and mining activities within forest reserves. However, where approval is refused by the concerned authority then this would likely have an adverse effect on the Company’s activities in that area.

(g) Tenement Title

Interests in tenements in Tanzania are governed by legislation and are evidenced by the granting of licences. Each licence 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 the Tenements if licence conditions are not met or if insufficient funds are available to meet expenditure commitments as and when they arise.

All of the Tenements in which the Company has or may earn an interest in will be subject to applications for renewal or grant (as the case may be). Tenements are granted on a first come first served basis, providing there are not any overlaps or competing applications. The renewal of the term of each Tenement is mandatory unless the licenceholder is in default and fails to remedy any default upon being served such notice. If a Tenement is not renewed or granted, the Company may suffer significant damage through loss of investment and the opportunity to develop and discover any mineral resources on that Tenement.

Section 8(6) of the Mining Act 2010 of Tanzania imposes a limit of 20 tenements to be held by an entity and its directors and shareholders. Provided that neither of the Company’s two proposed Tanzanian subsidiaries have a common director or common direct shareholders, and neither of the entities individually hold more than 20 granted tenements then there will not be a breach of Section 8(6). Due to the fact that Section 8(6) has not been judicially interpreted there is a risk however that the relevant Tanzanian Authority may interpret Section 8(6) such that entities which control the shareholders of the Tanzanian subsidiaries holding the tenements (ie. holding companies up the corporate chain) should be included in the 20 licence limit. The Company has been advised by its legal advisers in Tanzania that there are no examples of this occurring to date and that the Company could challenge such an interpretation through a judicial review by the Tanzanian courts on the grounds of illegality should the Tanzanian Authority take such an interpretation.

(h) Legal System ‐ Tanzania

The legal system operating in Tanzania is based on a number of sources including English common law, statues, and customary law and may be less developed than more established countries. This may result in risk such as:

political difficulties in obtaining effective legal redress in the courts whether in respect of a breach of law or regulation, or in an ownership dispute;
a higher degree of discretion on the part of governmental agencies supervising the minerals and energy sector;

the lack of political or administrative guidance on implementing applicable rules and regulations;
inconsistencies or conflicts between and within various laws, regulations, decrees, orders and resolutions; or
relative inexperience of the judiciary and court in such matter.

The commitment to local business people, government officials and agencies and the judicial system to abide by legal requirements and negotiated agreements may be more uncertain, creating particular concerns with respect to tenements and agreements for business. These may be susceptible to revision or cancellation and legal redress may be uncertain or delayed. There can be no assurance joint ventures, tenements, license applications or other legal arrangements will not be adversely effected by the actions of the government authorities or others and the effectiveness of, and enforcement of, such arrangements cannot be assured.

(i) Reliance on key management

The responsibility of overseeing the day‐to‐day operations and the strategic management of the Company following its re‐listing on ASX will depend substantially on its Managing Director. There can be no assurance that there will be no detrimental impact on the Company if the Managing Director ceases his employment.

The Board is aware of the need to have sufficient management to properly supervise the exploration and (if successful) for the development of the projects in which the Company has, or will in the future have, an interest and the Board will continually monitor the management roles in the Company.

As the Company’s operations require an increased level of involvement the Board will look to appoint additional management and/or consultants when and where appropriate to ensure proper management of the Company’s projects. However, there is a risk that the Company may not be able to secure personnel with the relevant experience at the appropriate time which may impact on the Company’s ability to complete all of its preferred exploration programmes in its preferred timetable.

(j) Additional requirements for capital

The future capital requirements of the Company will depend on many factors including the results of future exploration and business development activities. The Company believes its available cash and resources following the Acquisition should be adequate to funds its proposed exploration work programme and meet the Company’s objectives. Should the Company’s exploration programme be successful in identifying coal and/or uranium bearing stratigraphy additional funds will be required to advance the project to a resource stage.

Additional funding may be raised by the Company via the issues of equity, debt or a combination of debt and equity. Any additional equity financing will dilute Shareholdings, and debt financing, if available, may involve restrictions on financing and operating activities. If the Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations and scale back its programs or enter into joint venture arrangements to reduce expenditure and this could have a material adverse effect on the Company’s activities.

4.3 Mining Industry Risks

(a) Exploration Risk

Mineral exploration by its nature is a high risk activity and there can be no guarantee of exploration success on the Projects. There can be no assurance that exploration of the Tenements to be acquired pursuant to the Acquisition, or any other tenements that may be acquired in the future, will result in the discovery of an economic deposit. Even if an apparently viable deposit is identified, there is no guarantee that it can be economically exploited.

Further, exploration involves certain operating hazards, such as failure and or breakdown of equipment, adverse geological, seismic and geotechnical conditions, industrial accidents, labour disputes, adverse weather conditions, pollution and other environmental hazards and risks.

Whilst the Directors’ will make every effort to reduce this risk, the fact remains that the discovery and development of a commercially viable resource is the exception rather than the rule.

(b) Payment Obligations

Pursuant to the licences comprising the Tanzanian Projects the Company will become subject to payment and other obligations. In particular, licence holders are required to expend the funds necessary to meet the minimum work commitments attaching to the tenements. Failure to meet these work commitments will render the licence liable to be cancelled. Further, if any contractual obligations are not complied with when due, in addition to any other remedies that may be available to other parties, this could result in dilution or forfeiture of the Company’s interest in the Projects.

(c) Commodity price Volatility and Exchange Rate Risks

If the Company achieves success leading to mineral production, the revenue it will derive through the sale of commodities exposes the potential income of the Company to price and exchange rate risks. Commodity prices (including coal and uranium) fluctuate and are affected by many factors beyond the control of the Company including the international supply and demand for commodities, the quality of the minerals produced, actions taken by governments, forward selling activities and other macro‐economic factors.

Furthermore, the Company will have an interest in four coal and uranium projects located in Tanzania. As a consequence the Company will be subject to foreign exchange risk generally and in particular to exchange fluctuations affecting the relative and absolute value of the Australian dollar and Tanzanian shilling. Should the Company develop a producing operation, any sale of coal and/or uranium will likely be in United States dollars which leaves the Company exposed to exchange rate fluctuations between the Australian dollar, Tanzanian shilling and United States dollar.

(d) Environmental risk

Coal and uranium mining are industries that have become subject to increasing environmental responsibility and liability. The potential for liability is an ever present risk. Future legislation and regulations governing coal and/or uranium production may impose significant environmental obligations on the Company in relation to coal and/or uranium mining. The Company intends to conduct its activities in a responsible manner which minimises its impact on the environment, and in accordance with applicable laws.

The operations and proposed activities of the Company are subject to regulations concerning the environment. The Government and other authorities that administer and enforce environmental laws determine these requirements. As with all exploration projects and mining operations, the Company’s activities are expected to have an impact on the environment, particularly if mine development proceeds. The Company intends to conduct its activities in an environmentally responsible manner and in accordance with applicable laws.

The cost and complexity of complying with the applicable environmental laws and regulations may prevent the Company from being able to develop potentially economically viable mineral deposits.

Although the Company believes that it is in compliance in all material respects with all applicable environmental laws and regulations, there are certain risks inherent to its activities,

such as accidental spills, leakages or other unforeseen circumstances, which could subject the Company to extensive liability.

Further, the Company may require approval from the relevant authorities before it can undertake activities that are likely to impact the environment. Failure to obtain such approvals will prevent the Company from undertaking its desired activities. The Company is unable to predict the effect of additional environmental laws and regulations, which may be adopted in the future, including whether any such laws or regulations would materially increase the Company's cost of doing business or affect its operations in any area.

There can be no assurances that new environmental laws, regulations or stricter enforcement policies, once implemented, will not oblige the Company to incur significant expenses and undertake significant investments in such respect which could have a material adverse effect on the Company's business, financial condition and results of operations.

4.4 General Risks

(a) Economic risks

General economic conditions, movements in interest and inflation rates, commodity prices and currency exchange rates may have an adverse effect on the Company’s exploration and any future development and production activities, as well as on its ability to fund those activities.

The market price of securities 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. Further, share market conditions may affect the value of the Company’s Shares regardless of the Company’s operating performance.

Neither the Company nor the Directors warrant the future performance of the Company or any return on an investment in the Company.

(b) Changes in Government Policies and Legislation

Any material adverse changes in government policies or legislation of Australia, Tanzania or any other country that the Company may acquire economic interests in may affect the viability and profitability of the Company.

(c) Unforeseen expenditure risk

Expenditure may need to be incurred that has not been taken into account in the preparation of this Prospectus. Although the Company is not aware of any such additional expenditure requirements, if such expenditure is subsequently incurred, this may adversely affect the expenditure proposals of the Company.

(d) Competition

There is a risk that the Company will not be able to continue to compete profitably in the competitive industry in which it intends to operate. The potential exists for the nature and extent of the competition to change rapidly, which may cause loss to the Company.

(e) Insurance

The Company will, where possible and economically practicable, endeavour to mitigate some project and business risks by procuring relevant insurance cover. However, such insurance cover may not always be available or economically justifiable and the policy provisions and exclusions may render a particular claim by the Company outside the scope of the insurance cover.

While the Company will undertake all reasonable due diligence in assessing the creditworthiness of its insurance providers, there will remain the risk that an insurer defaults in payment of a legitimate claim by the Company under an insurance policy.

(f) 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 Shares offered under this Prospectus

Therefore, the Shares to be issued pursuant to this Prospectus carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those Shares.

Potential investors should consider that the investment in the Company is highly speculative and should consult their professional advisers before deciding whether to apply for Shares pursuant to this Prospectus.

5. CORPORATE GOVERNANCE

5.1 ASX Corporate Governance Council Principles and Recommendations

The Directors monitor the business affairs of the Company on behalf of Shareholders and have formally adopted a corporate governance policy which is designed to encourage Directors to focus their attention on accountability, risk management and ethical conduct.

The Board has adopted corporate governance policies and practices consistent with the ASX Corporate Governance Council's Principles of Good Corporate Governance and Best Practice Recommendations with 2010 amendments (2nd Edition) where considered appropriate for a company of Select’s size and nature. Further details in respect to the Company’s corporate governance practices are summarised below.

A detailed corporate governance statement setting out the Company’s corporate governance policies and its compliance and departure from the Recommendations is outlined in its annual report to Shareholders for the 2011 financial year available from www.asx.com.au or the Company’s website. In addition, the Company’s full Corporation Governance Plan is also available from the Company’s website at www.selectex.com.au.

Roles of the Board and Management

The Board considers that the essential responsibilities of the Directors are to oversee Select’s activities for the benefit of its shareholders, employees and other stakeholders and to protect and enhance shareholder value.

The Board has a charter, which clearly establishes the relationship between the Board and management and describes their functions and responsibilities.

The key responsibilities of the Board include:

contributing to the development of and approving corporate strategy;
appoint and review the performance of the Executive Director/ chief executive officer;
reviewing and approving business plans, the annual budget and financial plans including available resources and major capital expenditure initiatives;
arrange for effective budgeting and financial supervision;
ensure that effective and appropriate reporting systems in place will, in particular, assure the Board that financial, operational, compliance and risk management controls function adequately;
ensure that appropriate audit arrangements are in place; and
reporting to Shareholders.

Board Structure

The composition of the Board shall be determined in accordance with the following principles and guidelines:

the Board shall comprise at least 3 Directors, increasing where additional expertise is considered desirable in certain areas;
the Chairman should be non‐executive;
the Board should not comprise a majority of non‐executive Directors; and
Directors should bring characteristics which allow a mix of qualifications, skills and experience.

Review of Performance

The Board reviews its performance and composition on an annual basis to ensure that it has the appropriate mix of expertise and experience. Given the size and nature of the Company’s activities the Board reviews the performance of Directors and the composition of the Board, at regular intervals during the year, or as deemed necessary.

Directors’ Remuneration

The remuneration of non‐executive Directors is different to that of executives. Executive Directors receive a salary and may receive other benefits.

Non‐executive Directors receive a set fee per annum, in addition to their statutory superannuation entitlements, and are fully reimbursed for any out of pocket expenses necessarily incurred in carrying out their duties. When reviewing Non‐executive Director’s fees the Board takes into account any changes in the size and scope of Select’s activities.

The Board will review the remuneration and policies applicable to all Directors on an annual basis. Remuneration levels will be competitively set to attract the most qualified and experienced Directors and senior Executives. Where necessary the Board will obtain independent advice on the appropriateness of remuneration packages.

Board Access to Information

All Directors have unrestricted access to all employees of the Company and, subject to the law, access to all Company records and information held by employees and/or external advisers. The Board receives regular detailed financial and operational reports to enable it to carry out its duties.

Each Director may, with the prior written approval of the Chairman, obtain independent professional advice to assist the Director in the proper exercise of powers and discharge of duties as a Director or as a member of a Board Committee. The Company will reimburse the Director for the reasonable expense of obtaining that advice.

Board Committees

The Board, where appropriate, may establish a number of committees to assist in carrying out its responsibilities in an effective and efficient manner. The full Board currently carries out the role of the nomination committee, audit committee and remuneration committee as the Company considers that its present size and scope of activities do not justify the establishment of any special or separate Board committees.

Share Trading

Under the Company’s Share Trading Policy, all employees and Directors of the Company are prohibited from trading in the Company’s shares or other securities if they are in possession of “inside information”. Subject to this condition and in light of the ASX’s continuous disclosure requirements, trading can occur at any time but subject to conditions surrounding periods prior to the publication of financial results and disclosure documents.

Ethical Standards

All Directors, executives and employees are charged with the responsibility to act with the utmost integrity and objectivity, striving at all times to enhance the reputation and performance of the Company.

It is the Board’s responsibility to ensure that all staff are aware of the Company’s Code of Conduct and to ensure that any individual who does not adhere to these ideals is dealt with

appropriately by executive management. Appropriate action may be counselling, disciplinary action or termination of employment. The Board is responsible for setting the tone of legal, ethical and moral conduct to ensure that the Company is considered reputable by the industry and other outside entities. This involves considering the impact of the Company’s decisions on the industry, colleagues and the general community.

Communications with Shareholders

The Board aims to ensure that shareholders are kept informed of all major developments affecting Select. Information is communicated to shareholders through the distribution of annual reports and by presentation to shareholders at the Annual General Meeting, which they are encouraged to attend. In addition, all reports and releases made by the Company throughout the year with respect to its activities are distributed widely via the ASX.

Diversity Policy

The Board confirms that any board, senior management and consulting positions will be filled by the best candidates without discrimination to their gender, ethnicity, age, religion, disability, origin or sexual orientation, and upon any significant increase in the level of operations a Diversity Policy will be implemented by Select, with measurable objectives set by the Board, and this Diversity Policy will be made available for public viewing on the Company’s website.

6. INDEPENDENT GEOLOGIST’S REPORT

Independent Technical Assessment Report on Coal Licences in Tanzania

Report Prepared for

Select Vaccines Limited

==> picture [399 x 191] intentionally omitted <==

Report Prepared by

SRK Consulting (Australasia) Pty Ltd SVL001 September 2012

SRK Consulting

Page i

Independent Technical Assessment Report on Coal Licences in Tanzania

Select Vaccines Limited

945 Wellington Street West Perth WA 6005

SRK Consulting (Australasia) Pty Ltd

10 Richardson Street West Perth WA 6005

e-mail: [email protected] website: srk.com.au

Tel: +61 8 9288 2000 Fax: +61 8 9288 2001

SRK Project Number SVL001

September 2012

Compiled by

Peer Reviewed by

Deborah Lord Principal Consultant (Geology)

Chris Woodfull Principal Consultant (Geology)

Email: [email protected]

Authors:

Graham Noon; Deborah Lord

LORD/NOON/WOOD/wulr

SVL001_ITA_Report_Coal_Tanzania_Rev10

7 September 2012

SRK Consulting

Page ii

The Directors Select Vaccines Limited 945 Wellington Street WEST PERTH WA 6005

Dear Directors,

Select Vaccines Limited (Select) commissioned SRK Consulting (Australasia) Pty Ltd (SRK) to provide an Independent Technical Assessment Report (Report) on a portfolio of coal exploration projects located in Tanzania, Africa. This Report is to be included in a prospectus to be issued in support of a listing on the Australian Securities Exchange (ASX). The prospectus will offer 11,666,667 shares at an issue price of $0.30 per share to raise a total of $3,500,000 before the costs of offer. Select may accept oversubscriptions of a further 1,666,666 shares at the issue price of $0.30 per share to raise a further $500,000 and an aggregate maximum of $4,000,000 before expenses of the offer. Select proposes to lodge the Prospectus with the Australian Securities and Investment Commission (ASIC) on or about 10 September 2012.

Select has advised SRK that it intends spending approximately $2,000,000 of the amount raised on exploration of the projects during the first two years post-listing, based on a minimum subscription, which SRK considers is justified given the exploration potential of the projects. SRK understands that, should the maximum subscription be achieved, $2,200,000 of funds would be allocated to the projects, with the additional funds predominantly allocated to undertaking additional geophysics.

Select has entered into a Share Sale Agreement with Indigo Metals Limited (“Indigo”) to acquire 100% of the issued capital of two wholly owned Mauritian entities and their subsidiaries which hold the prospecting licences (granted and under application) covering the cover four projects outlined in this report.

Standard of the Report

This Report has been prepared to the standard of, and is considered by SRK to be, a Technical Assessment Report under the guidelines of the JORC and VALMIN Codes. The VALMIN Code is the code adopted by The Australasian Institute of Mining and Metallurgy and the standard is binding upon all members of The Australasian Institute of Mining and Metallurgy (AusIMM) and Australian Institute of Geoscientists (AIG). The VALMIN Code incorporates the JORC Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves.

This Report is not a Valuation Report and does not express an opinion regarding the value of the mineral assets or tenements involved, nor to the ‘fairness and reasonableness’ of any transaction between Select and any other parties.

Statement of SRK Independence

Neither SRK nor any of the authors of this Report have any material present or contingent interest in the outcome of this Report, nor do they have any pecuniary or other interest that could be reasonably regarded as being capable of affecting their independence or that of SRK. SRK has previously completed a valuation of the licences that are the subject of this Report. SRK has no beneficial interest in the outcome of the technical assessment being capable of affecting its independence. SRK’s fee for completing this Report is based on its normal professional daily rates plus reimbursement of incidental expenses. The payment of that professional fee is not contingent upon the outcome of the Report.

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Information basis of this Report

SRK has derived the technical information, which forms that basis of its Report on information provided by Select. SRK has supplemented this information where necessary with information from its own extensive regional geological database. However, where discrepancies arise and no alternative comments are provided, data and interpretations provided by Select prevail in this Report. The past exploration history for these tenements has been derived from previous explorers reports, as provided by Select and verified by SRK, as well as government records of exploration activities within the project area.

The principal sources of information are included in a reference list at the end of the Report. The Report has been prepared to include information available up to the data of this Report. Select has stated that all information provided by Select may be presented in the Report and that none of the information is regarded as confidential.

The work was based on a desk-top study review and no site visit was undertaken to the project area as SRK understands this aspect was completed by another independent geological consultancy. Background research was conducted at SRK’s offices, and included searches of public domain data sources. The work included a review of Select’s proposed exploration program and budget.

Note on the Tenement Status and Material Contents

SRK has not independently verified ownership and the current standing of the tenements and is not qualified to make legal representations in this regard. Instead, SRK has relied on information provided by Select. SRK has prepared this Report on the understanding that all the tenements of Select are currently in good standing, and that there is no cause to doubt the eventual granting of any tenement applications. SRK has not attempted to establish the legal status of tenements with respect to Native Title or potential environmental and access restrictions.

Within this Prospectus, the current ownership status and legal standing of the tenements within the project areas are dealt with in the Solicitor’s Report on Mining Tenements.

SRK and Authors

The SRK Group comprises more than 1450 staff, offering expertise in a wide range of resource engineering disciplines. The SRK Group’s independence is ensured by the fact that it holds no equity in any project. This permits the SRK Group to provide its clients with conflict-free and objective recommendations on crucial judgement issues. The SRK Group has a demonstrated track record in undertaking independent assessments of exploration assets, resources and reserves, project evaluations and audits, competent person’s reports, independent audits and independent feasibility evaluations to bankable standards on behalf of exploration and mining companies and financial institutions worldwide.

This Report was prepared by SRK Consultants Deborah Lord, Principal Consultant (Geology) and Graham Noon, Senior Consultant (Geology). Graham Noon and Chris Woodfull, Principal Consultant (Geology), reviewed the exploration programs and budget and Chris Woodfull undertook internal peer review. All are permanent employees of SRK.

The information in this Report that refers to Exploration Results is based on information compiled by Graham Noon. Graham Noon is a Member of the Australian Institute of Mining and Metallurgy (AusIMM) and has sufficient experience which is relevant to the style of mineralisation and the type of deposit under consideration, and to the activity he is undertaking, to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code).

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Graham Noon is a permanent full time employee of SRK and consents to the inclusion of such information in the Report in the form and context in which it appears.

Graham Noon (BSc Hons, MAusIMM) – Senior Consultant . Graham Noon began his mining career with 10 years’ practical experience as a coal miner in a modern longwall mine while studying for his undergraduate and Honours geology degrees. Since then, Graham has over 11 years’ experience in the fields of coal exploration and underground coal mine geology with 6 years’ experience at a senior level. Graham is a Member of the AusIMM and he reviewed the tenements in Tanzania and completed the review of the exploration programs.

Deborah Lord (BSc Hons, MAIG, MGSA, MSEG) – Principal Consultant . Deborah has over 20 years’ experience in the mineral exploration industry and has consulted with SRK for more than a decade based in Australia and South America. Her expertise is in the development of valuation techniques for assessment of exploration assets and the application of these principles in valuation reports to VALMIN standard for release to the ASX and independent technical assessments or due diligence. Deborah is a Member of the Australasian Institute of Geoscientists (AIG) and completed project management, report compilation and was involved in the previous valuation report.

Chris Woodfull (MSc, BSc Hons, MAIG, MAusIMM) – Principal Consultant . Chris is a geologist with over 24 years’ experience in exploration, mining geology and environmental management, in industry or as a consultant. He is an experienced project director and manager in a range of areas including: geological risk, exploration and independent technical reviews for the resource sector. Chris has worked on numerous exploration targeting / assessment and structural geological risk studies for minerals and coal exploration and mining companies. In recent years, he has managed a number of major geological and multi-disciplinary projects including two multi-client, basin-scale structural framework and risk studies to assist coal, coal seam gas and minerals companies operating and exploring in the Sydney-Gunnedah Basin in New South Wales and the Bowen, Surat and Drummond Basins in Queensland. Chris is a Member of the AIG and AusIMM and completed the review of the exploration programs and budgets and internal peer review.

Warranties and Indemnities

Select has warranted in writing to SRK that full disclosure has been made of all material information and that, to the best of its knowledge and understanding, such information is complete, accurate and true.

As recommended by the VALMIN Code, Select has provided SRK with an indemnity under which SRK is to be compensated for any liability and/or any additional work or expenditure resulting from any additional work required:

which results from SRK's reliance on information provided by Select or to Select not providing material information; or
which relates to any consequential extension workload through queries, questions or public hearings arising from this Report.

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Consents

SRK consents to this Report being included, in full, in the Select prospectus, in the form and context in which the technical assessment is provided, and not for any other purpose.

SRK provides this consent on the basis that the technical assessments expressed in the Summary and in the individual sections of this Report are considered with, and not independently of, the information set out in the complete Report and the Cover Letter.

Yours faithfully

SRK Consulting

Deborah Lord, BSc (Hons), MAIG, MGSA, MSEG

Principal Consultant (Geology)

Perth, 7 September 2012

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	Disclaimer ..................................................................................................................................................... x	Disclaimer ..................................................................................................................................................... x
	List	of Abbreviations .................................................................................................................................... xi
	Executive Summary ................................................................................................................................... xiii
1	Background and Brief .................................................................................................. 1
	1.1	Background of the Project ................................................................................................................... 1
2	General Information on Tanzania ................................................................................ 5
	2.1	Demographics and physiography ....................................................................................................... 5
	2.2	Politics and industry ............................................................................................................................ 6
	2.3	Tanzania coal industry ........................................................................................................................ 7
	2.4	Coal Formation .................................................................................................................................... 8
	2.5	Infrastructure ....................................................................................................................................... 9
3	Geology of Tanzania .................................................................................................. 11
	3.1	Overview ........................................................................................................................................... 11
	3.2	Karoo Supergroup ............................................................................................................................. 12
		3.2.1 K1 .......................................................................................................................................... 15
		3.2.2 K2 .......................................................................................................................................... 15
		3.2.3 K3 .......................................................................................................................................... 16
		3.2.4 K4 .......................................................................................................................................... 16
		3.2.5 K5 .......................................................................................................................................... 16
		3.2.6 K6 .......................................................................................................................................... 17
		3.2.7 K7 .......................................................................................................................................... 17
		3.2.8 K8 .......................................................................................................................................... 17
4	Rukwa Project ............................................................................................................. 18
	4.1	Location and Physiography ............................................................................................................... 18
	4.2	Geology ............................................................................................................................................. 18
	4.3	Coalfields of the Rukwa Basin .......................................................................................................... 21
		4.3.1 Namwele-Mkomolo Coalfield................................................................................................. 21
		4.3.2 Muze Coalfield ....................................................................................................................... 25
	4.4	Previous exploration.......................................................................................................................... 26
		4.4.1 Neighbouring tenements ....................................................................................................... 27
		4.4.2 Coal potential in the Namwele and Mkomolo blocks ............................................................ 28
		4.4.3 Namwele-Mkomolo Coalfield historic tonnage estimates ..................................................... 28
	4.5	Project potential and SRK comment ................................................................................................. 29
5	Ruhuhu Project ........................................................................................................... 30
	5.1	Location ............................................................................................................................................. 30
	5.2	Geology ............................................................................................................................................. 30
	5.3	Coalfields of the Ruhuhu Basin ......................................................................................................... 38
	5.4	Previous exploration.......................................................................................................................... 38

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	5.4.1 Recent exploration in the Ruhuhu Basin ............................................................................... 40
5.5	Project potential and SRK Comment ................................................................................................ 40
6 Mhukuru Project ......................................................................................................... 42
6.1	Location ............................................................................................................................................. 42
6.2	Geology ............................................................................................................................................. 42
6.3	Coalfields of the South Selous Basin ................................................................................................ 43
6.4	Previous exploration.......................................................................................................................... 44
	6.4.1 Neighbouring tenements ....................................................................................................... 44
6.5	Project potential and SRK comment ................................................................................................. 48
7 Selous Project ............................................................................................................ 49
7.1	Location ............................................................................................................................................. 49
7.2	Geology ............................................................................................................................................. 49
7.3	Coalfields of the Selous Basin .......................................................................................................... 52
7.4	Previous exploration.......................................................................................................................... 53
7.5	Project potential and SRK comment ................................................................................................. 53
8 Uranium Exploration in Tanzania .............................................................................. 57
8.1	Tanzanian uranium deposits and occurrences ................................................................................. 57
	8.1.1 Models for uranium deposits in Tanzania ............................................................................. 57
	8.1.2 Sandstone-hosted uranium deposits ..................................................................................... 60
9 Uranium Occurrences and Deposits in Basins with Indigo-controlled
tenements ................................................................................................................... 63
9.1	Sandstone-hosted type uranium deposit stratigraphy in SW Tanzania ............................................ 63
9.2	Potential source rocks of the Tanzanian sandstone-hosted uranium deposits ................................ 63
9.3	Rukwa Project uranium targets ......................................................................................................... 65
	9.3.1 Geosurvey International plans .............................................................................................. 65
	9.3.2 Rukwa Project tenements airborne gamma ray radiometric images .................................... 65
9.4	Ruhuhu Project uranium targets ....................................................................................................... 66
	9.4.1 Geosurvey International plans .............................................................................................. 66
	9.4.2 Ruhuhu Project tenements airborne radiometric images ...................................................... 66
9.5	Mhukuru Project uranium targets ...................................................................................................... 67
9.6	Selous Project uranium targets ......................................................................................................... 68
	9.6.1 Selous Project tenements airborne radiometric images ....................................................... 68
10 Proposed Exploration Strategy and Budget ............................................................ 69
11 Conclusions ................................................................................................................ 71
References ....................................................................................................................... 73

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List of Tables

Table	1-1:	Indigo tenements and application details ..................................................................................... 2
Table	2-1:	Tanzania mineral production statistics ......................................................................................... 6
Table	2-2:	Tanzania mineral exports ............................................................................................................. 7
Table	4-1:	Coal quality parameters of seams in the Namwele-Mkomolo Coalfield .................................... 25
Table	4-2:	Average coal quality parameters of 24 seams of the Namwele-Mkomolo Coalfield.................. 25
Table	10-1:	Select proposed exploration program by activity ....................................................................... 69

List of Figures

Figure	1-1:	Location of Indigo tenements in Tanzania with roads, towns and topography ............................ 4
Figure	2-1:	Coal formation from peat deposits over increasing time, pressure and heat .............................. 8
Figure	2-2:	Map of Tanzania showing existing infrastructure, proposed Mtwarra Development Corridor and
		the Port of Mtwarra ..................................................................................................................... 10
Figure	3-1:	Simplified geology of Tanzania with Indigo tenements .............................................................. 11
Figure	3-2:	Distribution of Karoo basins and coalfields in Tanzania with Indigo tenements ........................ 13
Figure	3-3:	Indigo-controlled tenements in Tanzania with coalfields and historic tonnages ........................ 14
Figure	3-4:	Stratigraphy of the Karoo basins in southwest Tanzania ........................................................... 15
Figure	4-1:	Geology of the Rukwa Basin in SW Tanzania with Indigo and competitor tenements .............. 19
Figure	4-2:	Location of Indigo and Edenville tenements in the Rukwa Basin .............................................. 20
Figure	4-3:	Geology of the Lake Rukwa area with Indigo tenement applications ........................................ 22
Figure	4-4:	View looking NW of Rukwa Project tenements draped over topography, the prominent
		escarpment formed by the Ufipa Fault and northern Lake Rukwa ............................................ 23
Figure	4-5:	Indigo Rukwa Project TMI image ............................................................................................... 24
Figure	5-1:	Location of Indigo tenements in the Ruhuhu Project in SW Tanzania with access and
		topography ................................................................................................................................. 31
Figure	5-2:	Geology of the Ruhuhu Project with Indigo, Tancoal and Uranex tenements ........................... 32
Figure	5-3:	1:125 000 geology (Manda sheet) of the Ruhuhu Project with four of seven Indigo
		tenements .................................................................................................................................. 33
Figure	5-4:	Total magnetic intensity image of Ruhuhu Project with the five northern and central area
		Indigo tenements ........................................................................................................................ 34
Figure	5-5:	Total magnetic intensity image of Ruhuhu Project with the two contiguous south-eastern
		area Indigo tenements ............................................................................................................... 35
Figure	5-6:	Ruhuhu Project tenements controlled by Indigo, Tancoal and Uranex and regional
		lineaments .................................................................................................................................. 36
Figure	5-7:	Landsat image of Indigo tenements in and adjacent to the Ruhuhu Basin ............................... 37
Figure	6-1:	Mhukuru Project with Indigo and Mantra tenements, access and topography .......................... 43
Figure	6-2:	Geology of the Mhukuru Project and competitor tenement, SW Tanzania ................................ 45
Figure	6-3:	1:125 000 mapped geology of the Mhukuru Project tenements in the South Selous Basin
		and adjacent areas ..................................................................................................................... 46
Figure	6-4:	Geology of the Mhukuru Project in the South Selous Basin draped over magnetic data
		with Indigo tenements and application areas ............................................................................. 47
Figure	7-1:	Location of Indigo tenements in the Selous-Kilosa and Rufiji Basins with access and
		topography ................................................................................................................................. 50

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Figure	7-2:	Geology of the Selous-Kilosa and Rufiji Basins with Indigo tenements .................................... 51
Figure	7-3:	Location of Indigo-controlled Selous Project tenements with total magnetic intensity .............. 52
Figure	7-4:	Indigo tenements PL 7400/2011 and PL 7380/2011 in the central-west Selous Basin with
		1:125 000 geology sheet ............................................................................................................ 55
Figure	7-5:	Indigo tenements PL 7385/2011 and PL 7397/2011 in the eastern Selous-Kilosa Basin
		with 1:125 000 geology sheet .................................................................................................... 56
Figure	8-1:	Plan of some Indigo-controlled tenements and applications in Tanzania with uranium
		occurrences and competitor tenements ..................................................................................... 58
Figure	8-2:	Plan of some Indigo-controlled tenements and applications in Tanzania with radiometric
		anomalies and competitor tenements ........................................................................................ 59
Figure	9-1:	Conceptual models for sandstone-hosted uranium deposits with a (a) Single-fluid model,
		and (b) a two fluid model ............................................................................................................ 64

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Disclaimer

The opinions expressed in this Report have been based on the information supplied to SRK Consulting (SRK) by Select Vaccines Limited (Select). The opinions in this Report are provided in response to a specific request from Select to do so. SRK has exercised all due care in reviewing the supplied information. Whilst SRK has compared key supplied data with expected values, the accuracy of the results and conclusions from the review are entirely reliant on the accuracy and completeness of the supplied data. SRK does not accept responsibility for any errors or omissions in the supplied information and does not accept any consequential liability arising from commercial decisions or actions resulting from them. Opinions presented in this Report apply to the site conditions and features as they existed at the time of SRK’s investigations, and those reasonably foreseeable. These opinions do not necessarily apply to conditions and features that may arise after the date of this Report, about which SRK had no prior knowledge nor had the opportunity to evaluate.

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List of Abbreviations

Abbreviation	Meaning
AIG	Australian Institute of Geoscientists
ASIC	Australian Securities and Investment Commission
AusIMM; AIG	Australasian Institute of Mining and Metallurgy (AusIMM) and Australian Institute of Geoscientists (AIG)
ASX	Australian Securities Exchange
Bt	Billion tonnes
CSM	Coal Seam Methane
CTL	Coal-to-Liquids
DFS	Definitive Feasibility Study
dmt	Dry metric tonne
DRI	Direct Iron Reduction
DTM	digital terrain model
E	East
EE	Edenville Energy PLC
E–W	east-west
GDP	Gross Domestic Product
IBIS	IBIS Resources Limited
IMF	International Monetary Fund
Indigo	Indigo Metals Limited
Intierra	Intierra Resource Intelligence (Intierra)
JORC Code	Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia (JORC), December 2004.
JV	Joint Venture
k	thousand
K	Potassium
m	metre
MDC	Mtwarra Development Corridor
ml	millilitre
m RL	metres reduced level
Mt	million tonnes
Mtpa	million tonnes per annum
N	north
NE	northeast
NW	northwest
PEA	Preliminary Economic Assessments
PCD	Poly Crystalline Diamond
PER	Public Environmental Review
PFS	Pre-Feasibility Study
PL-EM	Energy Mineral Prospecting Licenses
RC	Reverse Circulation
S	south
SE	southeast

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Abbreviation	Meaning
SRK	SRK Consulting (Australasia) Pty Ltd
Select	Select Vaccines Limited
SW	southwest
t	tonne
Th	Thorium
tpa	tonnes per annum
U	Uranium
UCG	underground coal gasification
W	west
WTF	WTF Resources Limited

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Executive Summary

Select has assembled a portfolio of licences in Tanzania that offer the investor an opportunity for exposure to early-stage coal and uranium exploration projects in East Africa.

The assets are held by Indigo Metals Limited ( Indigo ) through two subsidiary companies, IBIS Resources Ltd ( IBIS ) and WTF Resources Ltd ( WTF ). The assets, covering approximately 3,700 km[2] are all located in the southern half of Tanzania and can be grouped into several geographical areas within the following areas:

Rukwa Project comprising seven licences in the Rukwa Basin and adjacent areas in western Tanzania, covering a total area of approximately 526 km[2] (102 km[2] granted);
Ruhuhu Project comprising seven licences in the Ruhuhu Basin and adjacent areas and covering a total area of approximately 494 km[2] (262 km[2] granted);
Mhukuru Project comprising five licences in the southern Selous Basin and adjacent areas in south-west Tanzania, near the border with Mozambique and covering a total area of approximately 223 km[2] (11 km[2] granted); and
Selous Project comprising eleven licences in the Selous-Kilosa and Rufiji Basins of central and eastern Tanzania, and covering a total area of approximately 2,480 km[2] (all granted).

The four project areas secured by Indigo are all considered to be early-stage exploration areas and are therefore, highly speculative in nature, involving some degree of exploration risk. Further exploration will be required to determine if the projects have prospectivity. The focus of exploration in all tenements of project areas is for Energy Minerals (both coal and uranium).

No exploration has been undertaken by Indigo (or its subsidiary companies IBIS and WTF) and historical exploration within the project areas is very limited or non-existent. Nevertheless, Indigo has acquired the tenements on the basis of sound geological concepts and technical merit. While the project areas have varying degrees of prospectivity for coal and uranium mineralisation, in the opinion of SRK, further exploration is justified at the budgetary levels proposed by Indigo.

The Rukwa Basin contains several small coalfields, including the Namwele-Mkomolo, Muze and Galula Coalfields that contain seams of economic significance, which are currently mined or have been mined in the past. The Rukwa Project is contiguous along strike and contained in the same basin with the property to the west explored by Edenville Energy PLC (EE) in the Namwele coalfield block. A priority for exploration in this project is to establish whether the Karoo-Songea Group sediments, which have been reported by EE as coal-bearing extend onto the application HQ-P24426 as a small basin within Precambrian metamorphic rocks. Several small areas of Karoo-Songea Group coal sequences exist 6 km NW (Mkomolo Coalfield), 4 km north (Muze Coalfield) and 140 km south of the project area (Galula Coalfield).

Elsewhere on the licences, there is no direct evidence that Karoo-Songea Group coal sequences exist below the alluvium and younger lake sediments that largely form the surface outcrop. However, magnetic responses to the north and south of the licences could represent Karoo-Songea Group rocks that may be coal-bearing and the extension of these features into Selects ground will be the focus for ongoing exploration, once these licences are fully granted.

While minimal infrastructure is currently established in the Lake Rukwa area, limited to some weather-dependent roads, the area is within the proposed Mtwarra Development Corridor (MDC) where it is proposed that a railway line be built from Mtwarra Port on the coast through the area to enable the movement of any product coal to users within Tanzania and potentially for export.

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The Ruhuhu Basin is located in the far south-west of Tanzania and contains Karoo-Songea Group sedimentary sequences of Carboniferous to Triassic age that include the full K1-K8 Karoo succession and a number of known coalfields. The Ruhuhu Project is partly located and in the far north of the Ngaka Coalfield, which contains several dispersed blocks called the Mbalawala, Mbuyura and Mkapa blocks. Intra Energy’s Mbalawala Project, at Bankable Feasibility Study Stage is located in the adjoining licences to Select’s tenements and demonstrates the potential of this region to host significant thermal coal resources.

Granted licences in the NW block of tenements that make up the Ruhuhu Project should form an early focus of exploration for Select in order to identify and understand the distribution of the coalbearing K2 Mchuchuma Formation within an exposed belt of Karoo-Songea Group sedimentary sequences. As for much of the Tanzanian coalfields, there is minimal existing infrastructure, but the Ruhuhu Project is also located within the proposed MDC.

The Mhukuru Project tenements occur mostly within in the Songea district and Ruvuma region in the far south-west of Tanzania. Within this region, workable coal seams in the Mhukuru Coalfield occur in the K4 (Mhukuru Formation) which is more than 350 m thick throughout the coalfield, but contains few coal-bearing zones. The primary exploration target at the Mhukuru Project is the potential occurrence of the prospective K2 coal-bearing interval in Karoo sequence, which is inferred to be present underneath a cover of recent Cainozoic sediments and within undifferentiated Karoo sedimentary sequence of the South Selous Basin. At this time, one small licence areas has been fully granted.

The Selous Project forms the largest fully granted licence area in the portfolio and occurs within a vast Savannah belt that extends from central Tanzania south to the Mozambique border. The project does not cover any currently recognised coalfield areas in the Selous-Kilosa and Rufiji Basins. However, these basins are underexplored and there is potential to identify prospective Karoo sequences beneath areas of younger, recent Cainozoic cover. Limited more detailed mapping has identified potentially coal-bearing K2 and K4 units of the Karoo-Songea Group in close proximity to some licences and field based exploration including detailed field mapping, drilling and seismic surveys are required to determine the prospectivity of these units. Initial reconnaissance by Select geologists has indicated that the extent of the lower Karoo sequences within areas mapped as alluvial cover on regional maps is much more widely distributed.

Whilst there is little infrastructure developed within parts of the Selous Project, a railway line from Dar-es-Salaam to SW Tanzania passes through the Selous Project area from NW to SE. If coal resources were to be identified, product coal could be transported to local markets via the railway to coastal ports for export.

Select has presented an exploration budget of $2,000,000 over two years to advance exploration of the projects, including $980,000 in Year 1 and $1,020,000 in Year 2 based on a capital raising of $3,500,000. SRK understands that if oversubscriptions are received, an additional $200,000 will be allocated to the exploration budget which will be directed to geophysics.

In SRK’s opinion, the proposed exploration strategy is considered appropriate and should improve Select’s understanding of the geology, geometry and structure of the project areas to assist in identifying potential high priority drilling targets to be the focus of HQ core drilling in the second year.

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1 Background and Brief

1.1 Background of the Project

Select Vaccines Limited (Select) has requested SRK Consulting (Australasia) Pty Ltd (SRK) to undertake an independent technical assessment of 30 Energy Mineral Prospecting Licenses (PL-EM) and Prospecting Licence Applications (PL-EMA) (the assets) being vended by Indigo. The tenements cover a total area of approximately 3,725 km[2] , of which approximately 2,856 km[2] are granted tenure, and are considered to be prospective for coal and uranium.

The assets are held by Indigo through two subsidiary companies, IBIS Resources Ltd (IBIS) and WTF Resources Ltd (WTF), which are 100% owned by Indigo. A summary of the type, status, and ownership details for the 30 tenements is presented in Table 1-1. For further details of the licences the reader is referred to the Solicitor’s Report within this Prospectus.

The assets are all located in the southern half of Tanzania (Figure 1-1) and are grouped into four geographical / project areas as follows:

Ruhuhu Project comprising seven licences (four granted, two offer to grant and one being transferred) in the Ruhuhu Basin;
Rukwa Project comprising seven licences (two granted, four offer to grant and one application) in the western part of Tanzania;
Selous Project comprising eleven licences (all granted) in the Selous-Kilosa and the Rufiji basins in the central and eastern parts of Tanzania, and
Mhukuru Project comprising five licences (one granted, three offer to grant and one application) in the Southern Selous Basin in south-west Tanzania, near the border with Mozambique.

An additional eight licences will also be acquired by Select from Indigo pursuant to the Share Sale Agreement. Select has advised SRK that these additional licences were included in the asset portfolio for no additional consideration. Of these eight licences, two have been granted, two have been offered for grant, one is being transferred and three remain at application stage. Select has no spending commitments on these tenements. These additional licences are not included within the technical review and do not appear in any figures and tables within this report.

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Table 1-1: Indigo tenements and application details

Table 1-1:	Indigo tenements	and application details
Project	Tenement code	Basin	Type	Status	Holder/Applicant	Area (km2)
Ruhuhu Project	PL 4945/2008	Ruhuhu	PL-EM	Granted	IBIS Resources Ltd (100%)	25.97
	PL 7048/2011	Ruhuhu	PL-EM	Granted	IBIS Resources Ltd (100%)	81.49
	PL 7051/2011	Ruhuhu	PL-EM	Granted	IBIS Resources Ltd (100%)	148.14
	HQ-P22701	Ruhuhu	PL-EM	Being transferred	KIOMBILE/IBIS Resources Ltd	191.57
	HQ-P23985	Ruhuhu	PL-EM	Offer to Grant (but not yet notified)	IBIS Resources Ltd (100%)	23.86
	PL 7791/2012	Mbamba Bay Basin	PL-EM	Granted	IBIS Resources Ltd (100%)	6.93
	HQ-P25014	Mbamba Bay Basin	PL-EM	Offer to Grant (but not yet notified)	IBIS Resources Ltd (100%)	16.58
Rukwa Project	HQ-P23805	Rukwa	PL-EM	Offer to Grant (but not yet notified)	WTF Resources Ltd (100%)	51.83
	HQ-P23806	Rukwa	PL-EM	Offer to Grant (but not yet notified)	WTF Resources Ltd (100%)	10.05
	HQ-P23808	Rukwa	PL-EM	Offer to Grant (but not yet notified)	WTF Resources Ltd (100%)	28.69
	PL 7795/2012	Rukwa	PL-EM	Granted	WTF Resources Ltd (100%)	95.34
	HQ-P24426	Rukwa	PL-EM	Application	WTF Resources Ltd (100%)	326.59
	PL 7794/2012	Rukwa	PL-EM	Granted	WTF Resources Ltd (100%)	6.97
	HQ-P24980	South of Rukwa Basin	PL-EM	Application	WTF Resources Ltd (100%)	6.59
Selous Project	PL 7381/2011	Luwegu/Selous	PL-EM	Granted	IBIS Resources Ltd (100%)	116.59
	PL 7383/2011	Luwegu/Selous	PL-EM	Granted	IBIS Resources Ltd (100%)	48.08
	PL 7380/2011	Luwegu/Selous	PL-EM	Granted	IBIS Resources Ltd (100%)	295.48
	PL 7366/2011	Rufiji	PL-EM	Granted	IBIS Resources Ltd (100%)	294.00
	PL 7400/2011	Luwegu/Selous	PL-EM	Granted	IBIS Resources Ltd (100%)	296.08
	PL 7402/2011	Rufiji, Luwegu & Selous	PL-EM	Granted	IBIS Resources Ltd (100%)	292.80
	PL 7365/2011	Luwegu/Selous	PL-EM	Granted	IBIS Resources Ltd (100%)	197.15
	PL 7401/2011	Rufiji	PL-EM	Granted	IBIS Resources Ltd (100%)	296.77
	PL 7397/2011	Kilosa	PL-EM	Granted	IBIS Resources Ltd (100%)	298.31
	PL 7385/2011	Kilosa	PL-EM	Granted	IBIS Resources Ltd (100%)	295.56
	PL7790/2012	North Selous	PL-EM	Granted	IBIS Resources Ltd (100%)	49.92

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Project	Tenement code	Basin	Type	Status	Holder/Applicant	Area (km2)
Mhukuru Project	PL 7386/2011	Selous	PL-EM	Granted	IBIS Resources Ltd (100%)	11.41
	HQ-P24981	South Selous	PL-EM	Application	WTF Resources Ltd (100%)	33.16
	HQ-P24982	South Selous	PL-EM	Application	WTF Resources Ltd (100%)	9.84
	HQ-P25015	South Selous	PL-EM	Offer to Grant (but not yet notified)	IBIS Resources Ltd (100%)	71.26
	HQ-P23809	South Selous	PL-EM	Application	WTF Resources Ltd (100%)	98.12
					Total	3725.13

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Figure 1-1: Location of Indigo tenements in Tanzania with roads, towns and topography

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2 General Information on Tanzania

2.1 Demographics and physiography

The United Republic of Tanzania is located in Eastern Africa between longitude 29° and 41° East, Latitude 1° and 12° South. It shares its borders with Burundi, Kenya, Malawi, Mozambique, Rwanda, Uganda, Zambia and the Indian Ocean with a coastline length of 1,424 km. Tanzania is the largest nation in East Africa, both in land area and population.

The United Republic of Tanzania was formed out of the union of two sovereign states namely Tanganyika and Zanzibar. Tanganyika became a sovereign state in 1961 and became a Republic the following year. In 1963, Zanzibar became independent and the People's Republic of Zanzibar was established in 1964. That same year, the two sovereign republics formed the United Republic of Tanzania. However, the Government of the United Republic of Tanzania is a unitary republic consisting of the Union Government and the Zanzibar Revolutionary Government. The country welcomes foreign investment to develop the country and has signed multi-lateral and bilateral agreements against nationalising or expropriating company assets. Tanzania has an unbroken record of political stability without the divisive and destructive civil wars that occurred in many neighbouring African countries in the post-colonial era.

Tanzania was estimated to have a population of around 40 million people (in 2009), with an average population growth of two percent. The largest city and commercial capital, Dar es Salaam, is located on the coast of Tanzania. Dodoma, located in the centre of Tanzania is the legislative capital and houses the Union's Parliament. Tanzania is divided into 26 regions (21 on the mainland and five in Zanzibar). The 26 regions are further divided into 99 districts, each with at least one council, to further increase local authority.

The north-eastern part of the country is mountainous and includes Mount Kilimanjaro, Africa's highest peak. To the north and west are the Great Lakes of Lake Victoria and Lake Tanganyika. Central Tanzania comprises a large plateau, with plains and arable land. The coast of the Indian Ocean is hot and humid, with the island of Zanzibar lying just offshore.

The climate varies from tropical along the coast to semi-temperate inland. In mountainous regions, the climate is cool. Tanzania has two major rainfall regions. In southern, south-western, central and western parts of the country the wet season occurs between December and April. In the north and northern coastal regions there are two wet seasons, between October and December and between March and May, with April typically yielding the highest rainfall.

Swahili and English are the official languages, although there are some 120 other tribal languages recognised in Tanzania. The population of mainland Tanzania by religion are 30% Christian, 35% Muslim and 35% indigenous beliefs. The population of Zanzibar is almost entirely Muslim (>99%).

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2.2 Politics and industry

All state authority in the United Republic is exercised and controlled by the Union Government of the United Republic of Tanzania and the Revolutionary Government of Zanzibar. Each Central Government has three organs: The Executive; Judiciary; and The Legislature that have powers over the conduct of public affairs. In addition, Local Government authorities assist each central government in each administrative region.

The Government of the United Republic of Tanzania has authority over all union matters in the United Republic and over all other matters concerning Mainland Tanzania. The current President of the Government is Jakaya Mrisho Kikwete, who is enjoying his sixth year in power, having been reelected to a second five-year term in office in November 2010.

There are 16 permanently registered political parties in Tanzania. Multiparty elections are usually conducted after every five years with the president’s mandate limited to a maximum of two five-year terms.

Tanzania is one of the poorest countries in the world. The economy depends heavily on agriculture, which accounts for more than 40% of the gross domestic product (GDP). Agriculture provides 85% of exports, and employs 80% of the work force. However, topography and climatic conditions limit cultivated crops to only 4% of the land area.

The World Bank, the International Monetary Fund (IMF), and bilateral donors have provided funds to rehabilitate Tanzania's out-of-date economic infrastructure and to alleviate poverty. Long-term growth through 2005 featured a pickup in industrial production and a substantial increase in output of minerals led by gold. Recent banking reforms have helped increase private-sector growth and investment.

The mining sector contributes approximately 2.3% to the Tanzanian GDP; this number is projected by the Government to rise to 10% by 2025. Mining is one of the leading components in generating foreign exchange earnings within the non-traditional exports (http://www.tanzania.go.tz/mining.html).

Table 2-1: Tanzania mineral production statistics

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Source: The United Republic of Tanzania Ministry of Finance and Foreign Affairs, 2010

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Tanzania’s mineral exports include gold, base metals, diamonds, ferrous minerals and a wide variety of gemstones, some, such as tanzanite, are unique to Tanzania. Tanzania is also host to coal, uranium, and various industrial minerals such as soda, kaolin, tin, gypsum and phosphate in varying economic quantities (Table 2-1 and Table 2-2).

Petroleum, hydropower and coal are the major sources of commercial energy in the country (http://www.tanzania.go.tz/energy.html). Petroleum is imported, with the transport sector being the main consumer of petroleum products. Presently, only 70% of the demand for petroleum is met. Biomass, which comprises fuel-wood and charcoal from both natural forest and plantations, accounts for 93% of total energy resource consumption.

The electricity subsector contributes about 0.6% to the total energy output. Electricity is mainly generated from hydropower, which is prone to drought effects. Only three quarters of the country (mainly urban areas) are connected to the national grid. There are plans to connect the national grid with the grids of neighbouring countries of Zambia and Uganda to boost the supply of electricity.

Table 2-2: Tanzania mineral exports

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Source: United Republic of Tanzania Ministry of Finance and Foreign Affairs, 2010

2.3 Tanzania coal industry

To date, exploitation of Tanzania’s coal resources has been limited. Kiwira Colliery, located in the Songwe-Kiwira coalfield, is the sole mine from which coal has been (formally) exploited in Tanzania. On average some 35,000 tonnes of coal were mined annually, most of which was used for local electricity generation. Production ceased at Kiwira Colliery in 2009 due to reported high operational costs.

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Further exploration and investigation is warranted to estimate the Tanzanian coal resources and mineable reserves in accordance with internationally accepted standards in order to assess the development potential. Self-sufficiency would probably be the primary aim, although in the long term, Tanzania, with its coastal situation, may prove to possess export potential.

2.4 Coal Formation

Coal is formed in sedimentary basins when peat accumulated in swamps is altered physically and chemically. This process is called "coalification." During coalification, peat undergoes several changes as a result of bacterial decay, compaction, heat, and time (Figure 2-1). Peat deposits are quite varied and contain everything from pristine plant parts (roots, bark, spores, etc.) to decayed plants, mineral matter and even charcoal if the peat caught fire during accumulation.

For the peat to become coal, it must be buried by overlying sediment. Burial compact’s the peat and consequently, most water is squeezed out during the first stages of burial.

Over time, continued burial and the addition of heat cause complex hydrocarbon compounds in the peat to break down and alter in a variety of ways. The gaseous alteration products (e.g. methane) are typically expelled from the deposit, which becomes more carbon-rich as the other elements disperse. The stages of this trend proceed from plant debris through peat, lignite (brown coal), subbituminous coal, bituminous coal, anthracite coal, to graphite (a pure carbon mineral) are known as increasing coal rank. The rank of coal is dependent on the depth and length of time of burial and the amount of heat applied to the peat during coalification.

Because of the amount of compression and water loss that accompanies the compaction of peat after burial, it is estimated that it takes 10 vertical metres of original peat material to produce 1 vertical metre of bituminous coal.

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Figure 2-1: Coal formation from peat deposits over increasing time, pressure and heat

Source : Kentucky Geological Survey and University of Kentucky, 2006

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2.5 Infrastructure

The current level of infrastructure in Tanzania is poor. To address the problem of a transportation bottleneck developing within Tanzania and the East African region, an upgrade of infrastructure is required with the future development and rehabilitation of railways, roads and bridges, sea and lake ports, telecommunications, air transport facilities and ferry services planned. A plan of Tanzania showing existing infrastructure, neighbouring countries, the Port of Mtwarra and the general area of the proposed Mtwarra Development Corridor (MDC) is shown in Figure 2-2.

Railways exist in the north of Tanzania linking the capital Dar es Salaam with the far central W of the country via the town of Dodoma. A railway also connects the capital with the Kenyan railway system that was part of the now defunct East African Railway.

A road connects Mtwarra with Lindi, Kilwa and Kibiti in the coast onwards to Dar es Salaam. A road also exists from Mtwarra to Songea in the Ruvuma Region, to the Tanzania Zambia Highway road link at Makambaku (Iringa region).

The Mtwarra region with its districts Mtwarra urban, Masasi, Newala and; Tandahimba are connected by internal road links. The roads are typically in a bad state of repair as a result of limited funds allocated for road maintenance. Furthermore, road closures and further road damage occur frequently due to inclement and extreme weather.

The condition of rural roads is generally poor; consequently transportation and movement of farming and crop produce is hampered considerably. Bicycles are used widely for the transport of goods and people.

The MDC plan includes the construction of a railway line W from the Port of Mtwarra to allow the export of coal and mineral products from mines and primary producers located in the W of Tanzania and its neighbouring countries. The proposed Mtwarra Development Corridor (MDC) is a development initiative comprising southern Tanzania, northern Mozambique, northern and central Malawi, as well as eastern and northern Zambia.

The aim of the MDC is to develop a transportation corridor that will provide these regions with easier access to an upgraded deep water port at Mtwarra on the Indian Ocean in the far south of Tanzania. The MDC is one of several similar transport infrastructure and communications corridors that are planned and being developed within Tanzania by the national government in conjunction with neighbouring countries and international agencies to improve vastly the poor infrastructure and communications that currently exists within large areas of Tanzania.

The Port of Mtwarra was built in 1948 and has a designed capacity of 400,000 tpa but is currently operating at approximately 25% of its capacity. Road transport within the MDC area as in much of Africa is problematic and often perilous for up to five months of the year due to a combination of the weather and the poor state of local roads. Communications within the MDC area and outside within Tanzania and its neighbours are also rudimentary and affected seasonally.

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Figure 2-2: Map of Tanzania showing existing infrastructure, proposed Mtwarra Development Corridor and the Port of Mtwarra

Source: New World Encyclopaedia, 2011

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3 Geology of Tanzania

3.1 Overview

The geology of Tanzania comprises Precambrian metamorphic basement rocks and much younger Palaeozoic, Mesozoic and Cainozoic sedimentary sequences overlying the basement complexes (Figure 3-1).

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Figure 3-1: Simplified geology of Tanzania with Indigo tenements Source: Pinna et al., 2004

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The Northern and Southern Highland regions are part of the major East African Rift system which extends northwards through Kenya and Ethiopia. This rift system developed over the last 30 million years through extreme crustal tension, rift faulting and volcanic activity. The Central Plateau, which covers a large area in central and northern Tanzania, is composed of Precambrian crystalline basement rocks.

Much of the southern part of Tanzania is composed of sedimentary rocks of various ages (Palaeozoic to Recent), including the Karoo sequence, which extend from the coast at the Kenyan border SW to Lake Nyasa (Malawi).

The coastal plain consists of largely unconsolidated sediments (beach sands, dunes and salt marsh) together with some limestone deposits. Unconsolidated, recent sediments also fill depressions in parts of the eroded crystalline basement of central Tanzania.

3.2 Karoo Supergroup

Coal in Tanzania, like in other parts of central and southern Africa, occurs mainly in the lower part of the Karoo Supergroup. Sediments in this sequence are Permian in age. The setting of coal is comparable to other Gondwana-related coal deposits found in South America, India, Australia and Antarctica (Bennett, 1989). The term “Karoo” was extrapolated from the main Karoo Basin of South Africa to describe the sedimentary fill of all the other basins of similar age across the Gondwana super-continent. The location of the Karoo Basins in Tanzania with Indigo tenements and application areas is shown in Figure 3-2 and Figure 3-3.

Tectonism and climate provided the two primary controls on the sedimentary fill of the Karoo basins. Although broad litho-stratigraphic correlations can be drawn between the various Karoo basins, the litho-stratigraphic character of the Karoo sequence changes significantly across the African continent, and there are marked differences between the Karoo sequences of southern and central Africa (i.e., south of the equator) and those of northern Africa. Karoo Supergroup sediments were the result of a protracted physical weathering and erosion process and were deposited rapidly unconformably on the underlying Precambrian basement complexes. The Karoo sequence in Tanzania is mainly terrestrial, although thin marine intercalations occur in the east-central part of the country (Bennett, 1989). The Ruhuhu Basin in the southwest of the country is the northernmost of the Karoo basins that still contains a fairly complete succession of typical Karoo litho-facies units.

In Tanzania, the Karoo Supergroup succession is known as the Songea Group (Catuneau et al., 2005) and is preserved in narrow, elongated, partly fault-controlled and disconnected graben and half-graben areas that rest unconformably on crystalline basement of Precambrian age. The Karoo sequence displays overlapping and overstepping relationships on the basement, particularly in the southwest and west, reflecting the relief of the pre-Karoo surface. The pre-Karoo tectonic framework appears to have exerted an important control on the geometry and development of the Karoo basins and on the thickness of the sedimentary fill that accumulated (Bennett, 1989).

The known coalfields in Tanzania occur in the SW of the country in a series of unconnected Karoo (Permian age) basins that extend southeast from Lake Rukwa down, on the east side of Lake Nyasa (Malawi), towards the international border with Mozambique. In addition to the Permian coal deposits, lignite occurs in Jurassic and Tertiary age sediments in the coastal plains.

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----- Start of picture text -----

1 - Namwele-Mkomolo, Muze coalfields 5 – Ketewaka-Mchuchuma coalfield
2 - Galula coalfield 6 – Njuga coalfield
3 - Songwe-Kiwira Basin 7 – Mhukuru coalfield
4 - Ruhuhu Basin 8 – Mbamba Bay coalfield
IML concessions
----- End of picture text -----

Figure 3-2: Distribution of Karoo basins and coalfields in Tanzania with Indigo tenements

Note: Indigo tenements are shown in red colour. Modified from Semkiwa et al (1998)

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Figure 3-3: Indigo-controlled tenements in Tanzania with coalfields and historic tonnages

Source: Massano, 2011a

Note: Tonnage statements are non-JORC and are not endorsed by SRK

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The Karoo stratigraphy consists of eight subdivisions numbered K1 through K8, with K1 being the oldest subdivision and K8 the youngest (Figure 3-4).

Coal is contained in two formations (K2 and K4). These are the lower and upper coal measures which have been named the Mchuchuma Formation (K2) and Mhukuru Formation (K4) (Catuneau et al., 2005). In all but one of the coalfields, the better developed coal is found in the Lower Permian age Mchuchuma Formation (K2).

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Figure 3-4: Stratigraphy of the Karoo basins in southwest Tanzania

Source: After Catuneanu et al., 2005

3.2.1 K1

K1 sediments consist of sandstone and conglomerate and very hard, fine calcareous sandstones with bands of conglomerate. This sequence represents a very high energy depositional environment in the inland basins. Sedimentary facies consist of proximal alluvial fans, braided stream facies, coastal basins, fluvial channel and flood plain; and local alluvial fans from rivers sourced from glacial melt waters.

The underlying contact between rocks of the Karoo strata and the Precambrian basement is irregular with relief up to 300 m. K1 comprises the Idusi Formation which contains the basal Lisimba Member and the Lilanglu Member that were likely deposited in a cold, semi-arid climate.

3.2.2 K2

The K2 or Lower Coal Measures contain dark-coloured shale-siltstone beds, carbonaceous, shaly siltstone grading to sandstone and shale containing plant fragments. Associated with the siltstone in the Ketewaka Valley are lenticular masses of greenish-yellow and arkosic sandstone.

The basal Camp Sandstone is composed of coarse arkosic sandstone grading laterally in thickness. The lower part of the K2 coal measures comprise the K2e1 or Lower Coal-bearing Beds (SandstoneCoal Measures) which contain coal and coaly shales and arkosic sandstones, with nodules of ironstone.

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Coal seams associated with the lower sandstone-coal facies (K2e1) are better developed over the palaeo-valleys of this surface (Massano, 2011a). The lower or sandstone-coal facies (K2e1) contains thick coal seams with relatively low sulphur and ash contents. It consists of a succession of thick sandstones and arkoses separated by coal seams of commercial interest ranging in thickness from less than 1 m to 7.5 m with good continuity. The coal seams have relatively low sulphur and ash contents. The succession is generally about 45-75 m thick.

The upper part of the K2 coal measures comprises the K2e2 or Upper Coal Bearing Beds (ShaleCoal Measures), which are a less prospective series of coal seams and carbonaceous and coaly shales. The upper or shale-coal facies consists of a succession of shale, coaly shale and mudstone bands separated by thin, discontinuous coal seams generally of poor quality. The upper coal seams generally have relatively high sulphur and ash contents compared to those in the lower sandstonecoal facies. The succession is generally about 30-50 m thick with about 10% coal content.

In the Ketewaka-Nyantula area the coal-bearing beds are designated K2e, which are dominantly arenaceous and are not subdivided. The K2 sediments represent a very low energy depositional environment. The boundary between K2 and K3 sediments is marked by the presence of an unconformity which was probably the result of tectonic activity in the Upper Permian. K2 comprises the Mpera Sandstone and the Mchuchuma Formation which were deposited in a warm, humid climate in swamps, meanders and braided rivers.

3.2.3 K3

K3 comprises the basal Scarp Sandstone and the Mbuyura Formation. The Scarp Sandstone is a coarse, arkosic sandstone varying laterally in thickness. In the Ketewaka-Nyantula area the Scarp Sandstone directly overlies gneiss of the Precambrian basement. Above the Scarp Sandstone are the Green Beds which are in turn overlain by the Red Beds of sandstones, conglomerates and mudstones.

The K3 sediments were generally deposited in a high-energy depositional environment represented by fluvial sandstones and subordinate flood plain shales.

3.2.4 K4

The K4 sequence or Upper Coal Measures comprises the Mhukuru Formation which is composed of mudstone and siltstones with carbonaceous shale and thin, discontinuous, uneconomic coal seams. The sediments were deposited in a low energy flood plain environment that included short-lived lakes and active channels. The presence of abundant carbonaceous nodules in calcareous beds of the Selous and Kilosa Basins reflect a lacustrine environment. K4 beds in the coastal areas are sandy and directly overlay the basement units.

The K4 sequence is also the site of the precipitation of several roll-front uranium deposits in the Tanzanian Karoo-Songea sediments where the presence of carbonaceous material in the sandstones provided a reducing environment interface in some areas with an oxidising uranium-rich groundwater flow. Uranium in the groundwater is believed to be sourced from older crystalline, Precambrian rocks located outside the Karoo-Songea age sedimentary basins.

3.2.5 K5

K5 comprises the Ruhuhu Formation which consists of sandstones, thin limestones, siltstone and calcareous shales. K5 formations indicate that the depositional environment was a fluvial floodplain with relatively abundant lakes and rare fluvial channels. The base of K5 sediments in the Kilosa basin was deposited during a localised marine transgression. In the central inland, sandstones and siltstones occur which indicate a fluvial depositional environment.

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3.2.6 K6

K6 comprises the Usili Formation which consists of fluvial-lacustrine sandstones of Lower Triassic age deposited in a warm and humid climate in playa lakes and braided rivers.

3.2.7 K7

K7 sediments are composed of fluvial-lacustrine deposits of Middle Triassic age. The fluviallacustrine formations of K6 continue into the base of the K7 formations.

3.2.8 K8

K8 sediments are composed of fluvial channel sandstones and finer flood plain-related sediments. The Upper Triassic K8 formations are present in the Mchuchuma, Metewaka, Madaba and Hanga Basins. K8 coastal basin formations exposed in the Ngerengere – Kidugallo area mark the transition from a fluvial coastal plain to a shallow marine environment.

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4 Rukwa Project

4.1 Location and Physiography

The Rukwa Project is located in the Sumbawanga Region, Rukwa District of SW Tanzania, approximately 800 km SSW of the capital Dar-es-Salaam and 6 km N of the town of Sumbawanga. The Rukwa Project is located 220 km SE of the railhead at Tuduma, 150 km NW of the railhead at Mpanda and 120 km SE of the Kasanga Port and jetty on Lake Tanganyika.

The majority of tenements are located in the Rukwa Basin in the central west area of Lake Rukwa, located partially in the lake itself and on the central-western shore of the lake and hinterland (Figure 4-1, Figure 4-2). The North Lake Nyasa licence (HQ-P24980) is located in the far south-west of Tanzania south of the Rukwa basin (Figure 1-1) and forms a small, separate licence within this project. The tenements comprise a total area of 526.06 km[2] of which 519.47 km[2 ] occurs adjacent to or within the waters of Lake Rukwa.

Major land use projects are seasonal subsistence food crop farming and livestock keeping. The area experiences very good rainfall seasons giving it very good chance of subsistence farming. Rukwa region has reasonably well developed infrastructures including power supply and water. Construction projects are underway to refurbish an airstrip at Mpanda as well as connecting the region to Mbeya through a paved road.

4.2 Geology

The Rukwa Basin contains several small coalfields that contain seams of economic significance which are currently mined or have been mined in the past. These coalfields are the NamweleMkomolo, Muze and Galula Coalfields.

The Rukwa Project occurs in the far NW of the Rukwa Basin in the Namwele Coalfield. The Rukwa Basin contains Karoo-Songea Group sedimentary sequences up to 8 km thick, which are entirely fault-bounded against older Precambrian terranes. The basin lies between the larger rift valleys occupied by Lakes Tanganyika and Malawi (Nyasa). The flat plain at the bottom of the Lake Rukwa Trough is composed of Cainozoic sediments of Quaternary and Tertiary age which were deposited in a lake that once covered the whole of the trough up to the escarpment.

Several large streams meander along the bottom of narrow, steep-sided valleys cut into the recent sediments. The Rukwa Plain is about 914 m above sea level. A high plateau located SW of the trough, which is composed mainly of the Precambrian basement gneiss, has an average altitude of about 1,524 m. The Rukwa Project is situated to the west of, and at the base of, a NW-SE trending escarpment which overlooks the flat plain at the NW end of Lake Rukwa.

In the Rukwa Basin a group of thick, steeply-dipping sandstones above the coal seams form a prominent ridge which rises steeply and stands 91 m to 121 m above the Rukwa Plain. Behind this ridge is an elongated area of lower ground, which probably follows a large fault in the basement rocks. The highest point in the Karoo rocks of the Rukwa Basin coalfield is about 213 m above the Rukwa Plain (Massano, 2011a).

Geological information supplied by the vendor for the Rukwa Project is limited. However, it is known that coal strata of the Namwele-Mkomolo Coalfield strike generally NW-SE and dip regionally from 10° to 30° (Spence, 1954; McKinley, 1954; Semkiwa, 1998). The geology is complicated by normal and reverse faulting, which has been located via surface mapping, geophysical data interpretation and/or inferred from drill hole data. The geology of the Rukwa Basin and Indigo Rukwa Project tenements area is shown in Figure 4-3.

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No references to igneous dykes or intrusions within the Rukwa Basin or within tenements or applications controlled by Indigo have been found in documents supplied to SRK.

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Figure 4-1: Geology of the Rukwa Basin in SW Tanzania with Indigo and competitor tenements

Source: Massano, 2011

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Figure 4-2: Location of Indigo and Edenville tenements in the Rukwa Basin

Note: Tenement locations are provided by Indigo. Indigo tenements are shown in blue colour; Edenville tenement is shown in pink colour. Note overlap between Edenville licence and Indigo application HQP24426. Select expects this area of overlap is be excised from the licence upon grant.

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The available regional geological mapping and magnetic data indicate that parts of application areas within the Rukwa Project occur outside the Karoo-Songea Group sediments and within adjacent areas of non coal-bearing rocks of Archean age. However, SRK notes the regional nature of previous government mapping. Some application areas or parts of them occur within the waters of Lake Rukwa. The tenements of the Rukwa Project draped over an aerial photograph and topography are shown in Figure 4-4.

Various references to faulting are noted by SRK in the documents supplied by Indigo. However, no references were specific as to displacement of the faults. The significant NW-SE trending Ufipa Fault forms the dramatic escarpment on the western side of the Rukwa Rift Valley. The Rukwa Basin is a fault-controlled rift valley with faults generally trending NW-SE and NNW-SSE (Figure 4-1).

Figure 4-5 shows Indigo tenements applications of the Rukwa Project over the total magnetic intensity (TMI) of SW Tanzania. The TMI shows large areas of the Rukwa Basin occur in areas of Precambrian basement. Major lineaments have been identified from aerial photographs and ground mapping, with the majority of the lineaments probably representing faults with major vertical displacement and possibly igneous dykes.

4.3 Coalfields of the Rukwa Basin

4.3.1 Namwele-Mkomolo Coalfield

The Namwele-Mkomolo Coalfield is located near the far NW boundary of the Rukwa Basin and has a total area of about 46 km[2] . The basin lies near the western shoulder of the Rukwa Rift Valley and comprises two separate blocks of coal-bearing Karoo-Songea Group sedimentary rocks separated by crystalline Precambrian basement rocks of the Wimi Block (Massano, 2011a). The coal-bearing formations are thin and deteriorate along strike to the SE. The coalfield is mapped along strike for a distance of 10 km and has a general NW-NE elongated trend similar to the trend of Rukwa Rift Valley. Small-scale mining has occurred in the Namwele block. The coal was transported to the town of Mbeya via Tunduma and was used in the past to burn limestone for the production of lime but is now sent to the Mbeya cement factory.

The coalfield comprises two separate coal deposits (or blocks) which are the Namwele block and the Mkomolo block.
The Namwele block is located inside and to the south of the southern boundary of HQ-P24426 and covers an approximate area of 11 km[2] . The block is isolated and has been explored by underground workings (adits). It is thought to contain potentially marketable coal resources.
The coal seams at Namwele comprise dull to banded lithotypes, are blocky and pyritic (often massive) with Sulphur values up to 7.7%.
Vitrinite reflectance of the coal seams varies from 0.46-0.59 RoMax which ranks the coal as high volatile bituminous C/B (ASTM standard).
Vitrinite content ranges from 5%-70%. Partings in the seams commonly vary from 0.03 m - 0.20 m, while the Main Seam has a maximum parting thickness of 1 m.
A generalised coal quality of seams in the Namwele-Mkomolo Coalfield is shown in Table 4-1 and Table 4-2.

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Figure 4-3: Geology of the Lake Rukwa area with Indigo tenement applications

Source: Geological Survey of Tanzania (2004) Note: Tenement locations are provided by Indigo. Indigo tenements are shown in blue colour; Edenville tenement is shown in pink colour.

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Figure 4-4: View looking NW of Rukwa Project tenements draped over topography, the prominent escarpment formed by the Ufipa Fault and northern Lake Rukwa

Source: Google Earth

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Figure 4-5: Indigo Rukwa Project TMI image

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Table 4-1: Coal quality parameters of seams in the Namwele-Mkomolo Coalfield

Seam thickness (m)	Moisture (%)	Ash (%)	Fixed Carbon (dry weight %)	Sulphur (%)	Calorific value (J/g)
1.74	22.1	51.82	25.97	5.06	12,873
1.4	23.01	52.57	24.42	5.81	11,486
0.08	34.86	24.9	40.24	3.25	17,313
0.95	31.85	25.78	42.37	1.85	18,369

Source: NDC 2009

Table 4-2: Average coal quality parameters of 24 seams of the Namwele-Mkomolo Coalfield

Moisture (%)	5.3	3.9	3.27	5.61	4.53
Ash (%)	31.2	22.5	41.4	28.31	23.26
Volatile Matter (%)	30.2	33.9	22.35	30.92	33.75
Fixed Carbon (dry weight %)	33.3	36.7	32.98	35.16	38.46
Sulphur (%)	7.2	6.6	2.55	5.77	6.37
Calorific Value (kcal/kg)	4,526	5,221	3,221	4,582	5,332

Source: NDC 2009

The basal K1 sandstone unit unconformably overlies Precambrian biotite gneiss and is composed of grey, poorly stratified sandstones and arkoses with scattered pebbles of basement rocks. The thickness of K1 is 10-12 m.

The Lower Coal Measures consist of carbonaceous shale, mudstone and coal. The bottom of the coal measures is marked by the first appearance of coaly carbonaceous shales in both the Namwele and Mkomolo Coalfields. The top of the coal measures is represented by a gradual change from mudstone to a lacustrine, calcareous, grey, micaceous, sandy marl (carbonate-rich mudstone) calcareous series which forms a sharp upper contact. Marl occurs throughout the Rukwa Basin and forms an important marker horizon above the coal zones.

The youngest Karoo sequence occurring in the Namwele-Mkomolo coalfield is the K3 Upper Sandstones (McConnell, 1946, 1950; McKinlay, 1954) which are over 650 m thick.

4.3.2 Muze Coalfield

No Indigo tenements occur in the Muze Coalfield which is located in the far NW part of the Rukwa Basin 3.8 km NE of the north boundary of HQ-P24426HQ-P24426 and 21 km N of the town of Sumbawanga. The coalfield is situated on the east boundary of the Rukwa Basin NE of the Namwele-Mkomolo Coalfield and is bounded on its SW margin by the Ufipa Fault, a major fault which trends NW and has down-thrown the Muze Coalfield to the floor of the Rukwa Rift Valley at the base of the Ufipa Escarpment (Massano, 2011a). The faulted contact can be followed for about 2 km. In the SE of the coalfield, Karoo-Songea sedimentary sequences rest unconformably on a localised basement high in the Precambrian gneiss, which imposes a W-plunging, anticlinal structure on the overlying, younger, Karoo-Songea Group sequences that are draped over the basement. Outcrops of these younger sediments form a sharp contact with the gneiss. The general strike of the coalfield is NW and the sediments dip to the SW. The coal seam stratigraphy dips up to 20° to the NW. The coalfield is drained mainly by the Kalakala River.

In the NW of the coalfield, unconsolidated, Cainozoic, Neogene age Lake Rukwa sediments obscure the underlying Karoo-Songea Group rocks to the north and NW, which include coal-bearing

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formations. Around Muze settlement the lake sediments consist of sheets of sand and gravels. Outcrops of the Karoo-Songea sedimentary sequences occur mainly in gullies and stream courses.

Sections of Karoo-Songea sediments are poorly exposed along the Kalakala River and its tributary streams, in the centre and south of the coalfield. Karoo-Songea sediments in the Muze Coalfield consist of approximately 30 m of basal sandstone of the Idusi Formation (K1). The rocks of Idusi Formation occur SE of the Kalakala River. The basal K1 Idusi Formation consists of grey, gritty sandstones and some mudstone, variegated with calcareous nodules and, greenish marls with interbedded pebbles and sandstone.

The K2 Mchuchuma Formation is up to 45 m thick and contains the Lower and Upper Coal Measures. The coal measures contain a sequence of coal, sandstone and shale/mudstone which is overlain by about 200 m of grey siltstone, grey marls, limestone and fine sandstone with spheroidal concretions. These sediments with the upper and lower coal zones have been included as part of the Mchuchuma Formation (K2). The coal zone ranges in thickness from 2 m to 6 m. The coalbearing formation is composed primarily of sandstones, coaly shale, carbonaceous shale, mudstone and coal. An upper and a lower coal zone are separated by grey gritty sandstone with some mudstone, becoming shaly towards the top.

The Mchuchuma Formation is overlain by a sandstone unit composed of a coarse, micaceous sandstone and cross-bedded arkoses which have been correlated with the Scarp Sandstone Member of the Mbuyura Formation (K3) in the Ruhuhu basin.

Coal seams of workable thickness in the Muze Coalfield have been reported to occur along the Kalakala River and its tributaries, including the Mtumbuka stream. The coal seams can be followed along strike for a considerable distance. The coal outcrops at Mtumbuka stream represent the main Coal Zone in the Muze Coalfield which contains coal seams with cumulative thickness of approximately 6 m. The coal and carbonaceous shale sequences exposed at Mtumbuka Stream attain a thickness of more than 10 m and contain a coal seam 3.75 m thick.

Vitrinite reflectance analyses of various seams indicate a range of 0.48-0.52 Ro Max, ranking the coals as high volatile bituminous C. The coal is generally dull with rare dull-banded coal. Bores were sunk in the 1940s (GS 4 and 5). GS5 intersected a 35-45 m thick coal-bearing formation. Shaft No: 3 was sunk during the same period and intersected a coal seam 2.5 m thick in a coal zone 6 m thick. General coal quality included seams from 0.8 m to 2.95 m thick, 0.04-1.4% Sulphur, 9.302-17,653 J/g, 28-57% ash and 22.09-33.65% Volatile Matter (not verified by SRK).

Historical coal tonnage estimates for the Muze Coalfield (non-JORC Code (2004) compliant) by McKinlay (1965) list a total reserve of 10-50 Mt.

4.4 Previous exploration

To date, no exploration has been undertaken by Indigo within the tenements. The Rukwa Project is contiguous along strike and contained in the same basin with the property to the west explored by Edenville Energy PLC (EE) and the known coalfields of Namwele-Mkomolo Coalfield. SRK notes an overlap between EE licence and Indigo application HQP24426. Select expects this area of overlap is be excised from the licence upon grant.

Previous exploration in the broader area includes:

1895-97: Bornhardt established a five-fold stratigraphic succession of coal-bearing Karoo units.

1902: John Booth reported to the German Government on a free-lying coal outcrop accessible by a day’s walk. No report of John Booth’s investigations was made available to SRK by the vendor.

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Coal in the Rukwa Basin was also discovered by Mr Hopkins in July 1934. East African Goldfields Ltd, who at that time was working the Saza Mine on the opposite side of the Rukwa Trough, began exploration of the coalfield. The company hoped to prove enough coal to supply a thermal power station, which was to be built beside the Songwe River to supply electricity for the Saza Mine. The exploration continued up to 1935 during the dry season.

During the 1934-35 investigation, several prospecting trenches were dug. After the position of the outcrop was known, four audits and a vertical shaft 136 ft (~41.5 m) deep with a 41 ft (~12.5 m) long drift and a 41 ft (~12.5 m) crosscut at the base of the shaft investigated the coal.

Pitting and trenching was carried out in 1943 by the colonial government. Shafts were sunk with the aim of exploration for opening a mine. The coal zone was found to be about 4 m thick with a coal thickness of 2 m. Coal seams were intersected in another shaft 500 m away at great depth.

Geological mapping was completed by F M Coster who produced a geological map on a scale of 1:25 000. Coster estimated that there were 250,000 t of coal in one small block and at least 2,200,000 t in the main block. Several plans of the workings and coal sections are available, but the field note-books have been lost.

In 1948, W G Aitken of the Geological Survey of Tanganyika visited the south Rukwa area searching for more coal. The only coal outcrop seen was that in the Chizi River at the NW end of the Galula Coalfield, which had already been noted in the 1934 investigation.

Between 1951 and 1953, J Spence made a preliminary reconnaissance followed by detailed investigation of the coalfield. Several Karoo rocks were mapped for a distance of seven miles along strike and the group of coarse sandstones overlying the coal was mapped.

1976–79: Geosurvey International GmbH, under a West German aid program, completed airborne low resolution magnetic, gravity and radiometric surveys, which were flown on 1 km line spacing, followed by ground surveys. Compilation of Landsat and aerial photograph interpretation of lineaments was also undertaken.

4.4.1 Neighbouring tenements

Edenville Energy holds a 70% share of two exploration tenements and 66 Primary Mining Licences in the Namwele, Mkomolo and Muze Coalfields of the Rukwa Basin. One EE tenement is adjacent to and forms a common boundary with WTF tenement application HQ-P24426 along strike and in the far NW of their Rukwa Basin applications area Figure 4-3.

Recently EE have reported assay results for nine boreholes drilled at their Rukwa Coalfield Project. The reported raw coal analysis results have calorific values of the coal-rich horizons varying from 20.24-26.40 MJ/kg over 41 samples. The remaining samples of interbedded carbonaceous mudstones and sandstone between the coal-rich horizons are of lower quality. Float and Sink Analysis test work is now being conducted on several of these intersections in order to determine washability parameters. The recent drilling totalled 934.30 m.
EE as completed 2,585.10 m of drilling in 22 boreholes in the Mkomolo Coalfield. The analyses are being undertaken at the Inspectorate Laboratory, South Africa.
Drilling to date by EE has confirmed coal-bearing strata (Karoo Coal Measures) comprising a laminated and interbedded sequence of coals and mudstones, which include coal-rich horizons comprising a high proportion of coal. The remaining nine boreholes reported by the Company, all intersected the Karoo Coal Measures with thicknesses varying from 1.78 m to 18.45 m within which the thickness of the coal-rich horizons varies up to 8 m (Mayagilo, 2011).

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4.4.2 Coal potential in the Namwele and Mkomolo blocks

The coal deposits at Namwele-Mkomolo have been explored historically by pitting and underground development (McConnell 1947; McKinlay, 1954).

The coal-bearing sequence at Namwele is 5 to 6 m thick and includes coal seams ranging from 0.5 m to 2.6 m thick. The 2.6 m thick Main Seam occurred at 113 m depth in unmarked Shaft No: 2.
500 m from Shaft No: 2 (direction not specified) coal was found at great depth. A steep seam dip of 25° to the SW was calculated.
At Namwele, the thickest coal seam (Main Seam) occurs at the top of the coal. Outcrop of the main coal seam occurs at Kisapa Stream and its tributaries.
The coal seams are inter-bedded with a dark grey, nodular mudstone with plants remains, carbonaceous shales, coaly shale and shaly coal.
The coal seams vary considerably in thickness and are discontinuous along strike but no reference was made whether this was due to splitting or faulting. Workable coal has been observed in the Namwele block and consists of 3.75 m of coal and mudstone, of which 2 m is coal.
In the Mkomolo area, coal of economic significance occurs near the confluence of the Mtambala and Mkomolo Rivers.
The coal measures occur near the base of the Mchuchuma Formation and consist of carbonaceous shale, mudstone, siltstone and coal.
The number and thickness of coal seams varies considerably in both blocks.

4.4.3 Namwele-Mkomolo Coalfield historic tonnage estimates

While no formal current or historical statements of coal resources or mineable reserves contained within the tenements held by Indigo subsidiaries or within the Rukwa Basin in general are available, documentation of the following coal occurrences relate to the area;

Massano (2011a) notes that previous exploration in the Rukwa Basin has delineated estimated underground historic coal tonnage within the Main Seam with an average ash content of 25%.
Massano (2011a) states that the Rukwa Project proximate analysis results indicate high ash values (22–50%) for the coal seams (>0.50 m thick) in the Namwele-Mkomolo Coalfield.
Massano (2011a) states that the Namwele block of the Rukwa Project contained an historic coal tonnage.
Massano (2011a) reports that it was not possible to estimate coal tonnages contained within the Mkomolo area due to the lack of exploration data. However, an estimate was made based on surface exposures, trenches, pits and drilling.

SRK notes that the historic coal tonnage estimates and coal quality of Massano have not been substantiated by SRK and may not be compliant with the JORC Code.

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4.5 Project potential and SRK comment

The Rukwa Basin hosts a number of coalfields that contain seams of economic significance, which are currently mined or have been mined in the past, including the Namwele-Mkomolo, Muze and Galula Coalfields. The Rukwa Project occurs in the far NW of the Rukwa Basin in the Namwele Coalfield.

Outside exploration of the Namwele coalfield itself, much of the surface of the Rukwa Project licences are covered by Cainozoic alluvium of the Rukwa Beds or within the water of Lake Rukwa. In these areas any evidence of Karoo-Songea Group coal sequences has yet to be established by exploration. However, small areas of Karoo-Songea Group coal sequences exist 6 km NW (Mkomolo Coalfield), 4 km north (Muze Coalfield) and 140 km south of the project area (Galula Coalfield).

While there is no direct evidence that Karoo-Songea Group coal sequences exist below the alluvium and younger lake sediments, magnetic responses to the north and south of the licences could represent Karoo-Songea Group rocks that may be coal-bearing. The extension of these features into Select’s ground should be the focus for ongoing exploration, once these licences are fully granted.

Other exploration targets relate to potential fault-bounded coalfields within the Precambrian basement, but again further exploration is required to determine this.

SRK notes that exploration beneath Lake Rukwa will be costly, requiring a floating drilling rig and attendant equipment and as such this is not likely to form the initial focus.

Early efforts should be directed towards establishing whether the Karoo-Songea Group sediments which have been reported by EE as coal-bearing extend onto the application HQ-P24426 as a small basin within Precambrian metamorphic rocks. Identification of other potential Karoo-Songea Group sediments using detailed magnetic interpretation and or drilling will also be a high priority.

While minimal infrastructure is currently established in the Lake Rukwa area, limited to some weather-dependent roads, the area is within the proposed MDC where it is proposed that a railway line be built from Mtwarra Port on the coast through the area to enable the movement of any product coal to users within Tanzania and potentially for export.

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5 Ruhuhu Project

5.1 Location

The Ruhuhu Project comprises three separate groups of tenements and application areas (Figure 5-1). The Ruhuhu Basin is located in the far SW of Tanzania, 90 km north of the town of Songea and 900 km SW of the capital of Dar es Salaam. The tenements are approximately 35 km east of Lake Nyasa and 46 km east of the Tanzania-Malawi border. The basin is rift-derived and contains Karoo-Songea Group sedimentary sequences of Carboniferous to Triassic age that include the full K1-K8 Karoo succession.

The northern and central groups of tenements and application areas are situated wholly within or partly within or adjacent to the Ruhuhu Basin whereas the south-eastern group of tenement application areas are situated approximately 10 km south-east of the south-eastern boundary of the Ruhuhu Basin. The Ruhuhu Project tenements cover a total area of 494.54 km[2] .

The Ruhuhu Basin is accessed by a gravel road. Major land uses include cashew nut plantations and seasonal subsistence food crop farming. The area experiences high rainfall during the wet season allowing regular subsistence farming. The town of Songea has reasonably well developed infrastructure including power supply and water.

5.2 Geology

Geologically, the Ruhuhu Project is located in and adjacent to the SW Ruhuhu Basin. The Ruhuhu Basin trends NE-SW and is approximately 60 km wide and 173 km long, forming the largest Karoo Supergroup basin in SW Tanzania. The Ruhuhu Project is located partly within faultbounded Karoo-Songea Group sedimentary sequences and partly within adjacent, crystalline, Precambrian basement rocks. The Ruhuhu Project straddles a narrowing of the basin where lobes of Precambrian basement rocks protrude into the Ruhuhu Basin in the area covered by Indigo tenement PL 7048/2011 (Figure 5-2). Areas of terrestrial sediments composed of sand, laterite, gravel, silcrete and calcrete of Cainozoic age adjoin the SW and southern lobes of the basin.

The Ruhuhu Basin is a failed rift and was formed during the breakup of the East African Plate, which formed rift and graben structures that filled with continental-derived sedimentary sequences. Historical exploration indicates that coal seams occurring in the Mchuchuma (K2) Formation may be of economic significance. However, these seams in the overlying Mhukuru Formation (K4) do not have any potential economic significance as these seams are mostly composed of shaley coal.

The coal seams in the K2 Mchuchuma Formation range in thickness from < 1 m to 7.5 m with good continuity (Massano, 2011b). The underlying contact between rocks of the Karoo-Songea Group and the Precambrian basement is irregular with basement relief of up to 300 m. Coal seams associated with the lower sandstone-coal facies are better developed over the palaeo-valleys of this surface. Thick and persistent seams occur at the Mchuchuma-Ketewaka coalfield and at Mbalawala in the Ngaka coalfield.

Dips of coal strata are less than 15 and disturbed by block faulting of unstated displacement and dip. Figure 5-6 is a plan showing the Indigo tenements and applications controlled by Indigo of the Ruhuhu Project with detailed geology of the 1:125 000 map sheet which covers all the Indigo concessions except HQ-P22701. This geology plan shows major NE-SW trending faults dominate the Ruhuhu Project area with less prevalent N-S and NW-SE trends. These faults are related to the opening of the failed Ruhuhu Rift Valley which has a NE-SW trend (Figure 5-3). The more detailed 1:250 000 Tanzanian geology Manda sheet or adjacent geology sheets, supplied by Indigo as part of the data package, did not extend south-east to include tenement application HQ-P25014 and the granted licence PL7791/2012.

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Figure 5-1: Location of Indigo tenements in the Ruhuhu Project in SW Tanzania with access and topography

Note: Indigo tenements (and applications) are shown in blue colour. Uranex Ltd and Tancoal Energy Ltd owned tenements are also shown in purple and green colours respectively.

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Figure 5-2: Geology of the Ruhuhu Project with Indigo, Tancoal and Uranex tenements

Source: Geological Survey of Tanzania, 2004

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Figure 5-3: 1:125 000 geology (Manda sheet) of the Ruhuhu Project with four of seven Indigo tenements

Source: Geological Survey of Tanzania, 2004 Note: The above map supplied by the vendor does not extend east to Prospecting Licence application area HQ-P22701 or south-east to Prospecting Licence application area HQ-P25014 or the granted licence PL7791/2012).

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Figure 5-4: Total magnetic intensity image of Ruhuhu Project with the five northern and central area Indigo tenements

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Figure 5-5: Total magnetic intensity image of Ruhuhu Project with the two contiguous south-eastern area Indigo tenements

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Figure 5-6: Ruhuhu Project tenements controlled by Indigo, Tancoal and Uranex and regional lineaments

Source: Massano, 2011b

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Figure 5-7: Landsat image of Indigo tenements in and adjacent to the Ruhuhu Basin

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No references to igneous dykes or sills within the Ruhuhu Basin or within tenements or applications controlled by Indigo have been found in documents supplied to SRK by the vendor. However, as the Ruhuhu Basin is a rift-derived valley due to extensional tectonics, it is possible that igneous intrusions and sills may occur within coal seams of the Karoo-Songea Group in tenements of the Ruhuhu Project. Ruhuhu Project tenements and adjacent tenements held by Tancoal and Uranex draped on a TMI image of the Ruhuhu Project area are shown in Figure 5-4 and Figure 5-5. In the above plans, areas of Precambrian basement adjacent to fault-bounded areas of Karoo-Songea Group basin-fill sedimentary sequences are highlighted. A Landsat image of the Ruhuhu Project shows dark areas of Precambrian basement in outcrop, which contrast dramatically against the lighter areas of outcrops of basin-fill Karoo-Songea Group sedimentary sequences (Figure 5-7).

Lineaments picked from aerial photography, satellite imagery and magnetics data show dominant trends of NE-SW, with a secondary set trending NW-SE and minor sets trending E-W and N-S. These lineaments (shown pale coloured dashed lines) are most likely faults of unknown vertical displacement and dip (although highly likely sub-vertical-high angle dip). Some of the lineaments may possibly be igneous dykes. A plan of the mapped lineaments is shown in Figure 5-6.

5.3 Coalfields of the Ruhuhu Basin

The Ruhuhu Project is partly located and in the far north of the Ngaka Coalfield, which contains several dispersed blocks called the Mbalawala, Mbuyura and Mkapa blocks (Figure 3-3). The Tancoal Energy (formerly Atomic Resources) Joint Venture; between Intra Energy (70%) and the National Development Corporation of Tanzania (30%); holds the tenements of their Mbalawala Project which adjoins the Ruhuhu Project tenements to the south (see Ngaka location on Figure 5-7). Uranex also holds properties nearby in the Ruhuhu Basin which are outside the Ngaka Coalfield (Figure 5-2).

In September 2010, Atomic Resources Limited (Atomic) announced the results of a positive bankable feasibility study on the Mbalawala Project including initial reserves of 40 Mt and a resource of 251 Mt (ASX release 20/09/2010). Within this announcement Atomic also stated an Exploration Target range of between 160 and 320 Mt for the northern sub-basins of the Ngaka Coalfield, being the Mbuyura / Mkapa Blocks. This Exploration Target represents a potential quantity of coal that is conceptual in nature and there is insufficient exploration to define a Mineral Resource in this area under the JORC Code. The nature of an Exploration Target is such that it is uncertain if further exploration will result in the determination of a Mineral Resource.

5.4 Previous exploration

The Indigo-controlled Ruhuhu Project tenements and application areas are contiguous and contained in the same basin with the tenements held by other companies to the west. The Ruhuhu Basin has received limited exploration dating back to colonial times and includes (Massano, 2011b):

The first recorded geological reconnaissance of the sedimentary sequence in the Ruhuhu Valley was undertaken by Stockley (1931 and 1932). The work completed, which included the description of coal-bearing stream sections and the analyses of selected coal samples from exposure, enabled Stockley (1931 and 1936) to establish a litho-stratigraphic sequence for the Karoo, units K1 – K8.
McKinley (1954) later mapped the Mchuchuma-Ketewaka Coalfield area, on a scale of 1:25 000, on behalf of the Geological Survey of Tanganyika between 1947 and 1949. The program resulted in the re-establishment of the stratigraphic succession and subdivision of the K2.
In 1949 the Commonwealth Development Corporation (CDC) acquired the rights to explore and develop the Ruhuhu Coalfield. The main focus of the exploration work was in the MchuchumaKetewaka Coalfield areas, some 19 km to the west of Indigo’s Ruhuhu tenements. The work

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completed between 1949 to 1953 included geological mapping on a scale of 1:10 000, drilling of 30 cored boreholes for a total of 7,246.06 m, sinking of a shaft and sampling of the main coal seams. Based on this work, the Mchuchuma Coalfield area was estimated to contain some 200 Mt over a 22 km[2] area, at a specific gravity of 1.5 g/cc, seam thickness of 1.06 m and a depth of up to 305 m.

Scant work was undertaken from then until 1966 when a team from the People’s Republic of China reviewed the known coal potential of in Tanzania identifying key areas as being the Mchuchuma area and the Ketewaka area.
During 1970–72, the Mineral Resource Division in corroboration with Geological Survey of Tanzania completed 898.87 m of drilling, with four boreholes at Mchuchuma and three boreholes at Ketewaka and submitted coal samples to the University of Dar es Salaam to evaluate the possibility of developing a steel industry, using magnetite ore from Liganga and coal from the Mchuchuma-Ketewaka Coalfield.
1971: The Norwegian Agency of International Development engaged consultants to complete a study to establish the utilization of the Mchuchuma–Ketewaka coal Reserves in the iron and steel industry. Three large diameter bores were cored that enabled collection of 40 kg samples from 10 m, 15 m, and 20 m-deep boreholes drilled S of CDC’s Nyakapande shaft. Further trenching completed an 80 m-long trench enabling the collection of a 440 kg coal sample. The laboratory analysis was carried out by M/S Lurgi and M/S Elkem in 1971–72 and resulted in the conclusion that the coal is suitable to be used as a reducing agent for the SL/RN method of steel making albeit requiring a long retention time in the furnace due to a relatively low reactivity.
1973: A Coal Delegation from India conducted an assessment to develop the coal resources into a pilot underground mining operation with a production of 0.12 Mtpa.
1977: Germany Agency for Technical Co-operation, GTZ, and M/S Otto Gold, Rodeco and Suarbierg Interplan, conducted a feasibility study for an iron and steel industry based on Liganga iron ore and the coal Reserves of Mchuchuma. To complete the study, 24 channel samples, 23 bulk samples (each 30 kg) and 4 bulk (of 1-3 t) samples were collected and packed for analysis. The results concluded that the coal can be used in the process of sponge–iron manufacturing and that the caking property of the coal is eliminated by pre-carbonisation.
1976-79: Geosurvey International GmbH, under a West German aid program, completed airborne low resolution magnetic, gravity and radiometric surveys flown on a 1 km line spacing, followed by ground follow-up and surveying, as well as the compilation of Landsat and aerial photograph interpretation.

Within the Ruhuhu Basin several coalfields have reported non-JORC Code (2004) historic coal tonnages as reported by Semkiwa et al. (2005) including at:

Ketewaka;
Mchuchuma;
Ngaka-Mbalawala;
Mbuyura; and
Liweta.

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5.4.1 Recent exploration in the Ruhuhu Basin

A recent US$3 billion agreement between the Tanzania Government and China’s Sichuan Hongda will see the development and mining of the Mchuchuma-Ketewaka Coalfield. This project represents the single largest investment in East Africa and establishes funding to develop the Ruhuhu Coal Basin for domestic and export markets.
Other coalfield areas of the Ruhuhu Basin which have received more recent attention include the Ngaka Coalfield 15 km to the south of Indigo’s HQ-P23985 application area), the Lumecha Coalfield (some 50 km east of Indigo’s Ruhuhu Basin Project area) and the Manda area, some 25 km to the west of Indigo’s Ruhuhu Basin Project.
Australian-based company, Intra Energy (formerly Atomic), holds 4 tenements in the Ngaka Coalfield area and has recently reported a thermal coal Resource of 251 Mt within the K2. The coal is a medium volatile (26-27% ad) bituminous coal, with a moderate to high raw ash (18.9 -23.8% ad) and CV of 25-27 MJ/kg (ad) (Massano, 2011b, adopted from February 2011 AGM April presentation). Reported sulphur levels are moderate to high (1.5-1.6% ad).
Australian-based energy company Uranex, recently (November 2011) confirmed the presence of coal within the Lumecha Coalfield, some 50 km west of Indigo’s Ruhuhu Project. Preliminary drilling has intersected several coal seams interpreted to be contained within the K2. No coal quality data are available at this stage.
Australian-based coal explorer, Cokal Ltd, completed a 1,596 m drill program in the Manda area. Drilling to date is interpreted to have intersected the upper part of the Lower Karoo sequence, typically mudstones, sandstones and carbonaceous mudstones with thin (less than 10 – 15 cm) occasional coal bands. No viable coal seams have been identified to date.

5.5 Project potential and SRK Comment

The Ruhuhu Basin hosts a number of coalfields that contain seams of economic significance with historical and recent coal tonnage estimates, including the Ketewaka, Mchuchuma, NgakaMbalawala, Mbuyura and Liweta areas. The Ruhuhu Project is partly located and in the far north of the Ngaka Coalfield which contains several dispersed blocks called the Mbalawala, Mbuyura and Mkapa blocks.

Limited data are available upon which to base an assessment of the prospectivity of Indigo’s Ruhuhu Project as no exploration has been undertaken by Indigo in the tenements and no drilling or detailed mapping data are available for the tenement areas.

The NW block of tenements that make up the Ruhuhu Project corresponds with exposure of a belt of the Karoo-Songea Group sedimentary sequences and adjacent Precambrian rocks (Figure 5-7). The Karoo-Songea Group sedimentary sequences may be prospective for the coal-bearing K2 Mchuchuma Formation, but this needs to be confirmed by exploration. Areas of Precambrian basement are not considered prospective for coal.

The presence of the Ngaka Coalfield that is currently being explored by Intra Energy adjacent to the Ruhuhu Project licences to the south demonstrates the potential of the region should Select successfully identify a similar coal bearing sequence.

The two licences located to the SW are located entirely within Precambrian basement rocks and the absence of mapped Karoo-Songea Group sedimentary sequences K1-K8 of the Ruhuhu Basin decreases the prospectivity of these tenements. However, SRK notes that the existing mapping is limited and the exploration is required to preclude the identification of the coal-bearing K2 Mchuchuma Formation sedimentary sequence.

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SRK notes that there is currently minimal infrastructure developed in the area. However, an upside is that the area is located in the part of SW Tanzania where the proposed MDC to build a railway and other infrastructure to enable any future mined coal to be railed to local customers and possibly for export out of the Port of Mtwarra is planned.

The Ruhuhu Project covers a total area of approximately 494.5 km[2] of which 262.5 km[2] is granted. SVL has stated that assessment of this project will be a priority as four of the seven tenements are granted, one is granted but awaiting transfer to Indigo, one is an application area, while another tenement has an Offer to Grant made to the applicant (SVL, 2012). However, it has not been stated by Indigo in the data package supplied to date to SRK, which of the two application areas is under an Offer to Grant from the Tanzanian Government. In the opinion of SRK, the prioritising of exploration in the Ruhuhu Project seems logical and consistent with the granted or soon to be granted status of the large majority of the tenements.

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6 Mhukuru Project

6.1 Location

The Mhukuru Project tenements occur within the far south of Tanzania (Figure 6-1). The Indigo tenements comprise one granted tenement, three offers to grant and one Prospecting Licence application area located within the Karoo-Songea age South Selous Basin or adjacent areas of crystalline Precambrian basement. The northern group of two contiguous application areas is approximately 12 km north-west of the Mhukuru Coalfield whereas the southern, non-contiguous group of one granted Prospecting Licence and two Prospecting Licence application are located 22 km SSW and 26 km SW respectively of the Mhukuru Coalfield. The eastern Prospecting Licence application area is located approximately 20 km east-south-east of the Mhukuru Coalfield. The project covers a total area of 223.7 km[2 ] of which 11.4 km[2 ] is granted and 71.2 km[2 ] is under an Offer to Grant.

A competitor tenement held by Mantra Resources Ltd (Mantra) adjoins the eastern boundary of Prospecting Licence PL 7386/2011 and the eastern and southern boundary of Prospecting Licence application area HQ-P24982.

The project area is located in the far western portion of the Selous Basin in the Songea district and Ruvuma region of the far south-west of Tanzania, approximately 100 km south-west of the town of Songea, 20 km from the Mozambique border town of Mitomoni and 60 km east of the Mbamba Bay Coalfield.

The topography of the Mhukuru Project is undulating with the highest elevations reaching 600 to 700 m above sea level and the land rising gently from the Mhukuru Valley. Access to the project is by the Songea-Mitomoni road which runs south of Songea via the Mpitimbi Mission and up to the project area.

Major land use of the area comprises seasonal subsistence food crop farming and livestock farming. The area experiences good seasonal rainfall giving it very good prospect of subsistence farming. The entire area is thickly covered with Miombo forest and tall trees line the bank of the Ruvuma and Mhukuru Rivers, both of which flow well all year.

6.2 Geology

Geologically, the Mhukuru Project tenements are located within the central and western parts of the Karoo age South Selous Basin or wholly within or partly within, adjacent areas of non coal-bearing crystalline Precambrian basement (Figure 6-2 and Figure 6-3). Geological data for the area containing the Mhukuru Project is limited and no exploration has been undertaken by Indigo.

Based on the 1:250 000 scale Lihuhu South and QDS 310 mapped geology sheets, the tenement PL 7386/2011 and application area HQ-P24982 are mapped as entirely covered by Quaternary-Recent age sediments of sand, gravel and alluvium of unknown thickness. The dip of strata within the South Selous Basin and adjacent areas varies in magnitude from 5 to 45 and in dip direction from the E, to SE and NW. The various blocks of strata comprising the project area are mapped as fault-bounded, with the faults trending mainly NE and with a secondary set trending north-west.

No indication of the magnitude of vertical displacement of these faults has been found. These faults may be expressions of deep basement faults related to the rifting and extension that generated the Karoo sedimentary basins.

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Figure 6-1: Mhukuru Project with Indigo and Mantra tenements, access and topography Source: SRK 2011

Undifferentiated Karoo sedimentary sequences of the South Selous Basin outcrop in the east and south-east of HQ-P24982. The regional airborne magnetic data suggests that the area of recent Quaternary-Recent sediments may cover an extension of Karoo rocks of the South Selous Basin and that all of some application areas and parts of others likely exist outside Karoo sedimentary sequences (Figure 6-4). There may be potential for coal-bearing sequences to be present in the inferred underlying Karoo rocks, including the K2 and K4.

6.3 Coalfields of the South Selous Basin

The Mhukuru Coalfield is located 25 km to the north of Indigo’s project area in the South Selous Basin. According to Massano (2011c), the only workable seams in the Mhukuru Coalfield occur in the K4 (Mhukuru Formation). The Mhukuru Formation (K4) is more than 350 m thick throughout the coalfield, but contains few coal-bearing zones of potential workable thickness. Most of the coal seams have been assessed historically as having no workable thickness, as the coal zones consist of carbonaceous shales, coaly shales, mudstone and shaly coal (Massano, 2011c).

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The more prospective K2 (Mhukuru Formation) has not been mapped or intersected either on the surface or in underground exploration adits, which were driven by the Geological Survey in the 1940s to test for the occurrence of the K2 formation at depth. It has been suggested that the K2, if present, may occur at considerable depth in the central part of the coalfield (Massano, 2011c). The only coal zone of interest in the Mhukuru Coalfield is the Main Seam, which has been identified only in the northern part of the coalfield. The poor occurrence of the Main Seam in the southern area is thought to be due to grading of the Main Seam into coaly shale and shaly coal, which are common in this area (Massano, 2011c). The coal zone is about 3 m thick and has alternating layers of coal and mudstone. Total coal thickness is about 2 m, with the coal seams within the coal zone ranging from 0.05 to 0.20 m in thickness.

The Mhukuru Coalfield is divided into northern and southern parts by a fault trending E-W. The fault is prominent in the Mhukuru River and Migelegele Stream where dips of coal strata have been observed. In the northern area, the normal strike of beds is NW with dips of 10°-20° to the SW or SSW. In the southern area, the strike direction is SW and NW and the dip is 10°-15°. Considerable faulting has occurred in the Karoo-Songea Group rocks, which may have affected the distribution of the coal seams (Massano, 2011c).

An historical estimate of the coal tonnage in the Mhukuru Coalfield was quoted by Harkin (1953), based on the Main Seam in the K4 Mhukuru Formation. Massano (2011c) cited more recent exploration that included an underground historic coal tonnage estimate that is not quoted in accordance with the JORC Code.

6.4 Previous exploration

No current or historical exploration has been undertaken in the Mhukuru Project area. Previous exploration in the broader area has focussed on the Mhukuru Coalfield to the north.

The following summary is taken from Massano (2011c):

An exploration shaft was sunk by the Geological Survey in 1940s, about 200 m from the Mhukuru River which revealed a coal zone with reportedly workable seams.
Between 1949 and 1952 Daniel Harkin made a preliminary reconnaissance followed by detail investigation of the Mhukuru Coalfield. Several Karoo rocks were mapped for a distance of seven miles along strike followed by diamond drilling and resource calculations of the available coal resources in the coalfield.
In 1953 Harkin investigated the distribution of coal seams in the Mhukuru Coalfield by trenching, pitting and drilling. In the northern area, three drill holes A, A1, and A2, were sunk to explore the thickness and quality of coal seams. Adits were driven near the outcrop of the Main Seam where bulk samples were obtained for investigations.
In the southern area, four drill holes B, B1, B3 and C, were drilled to investigate the complete coal-bearing sequence, thickness, distribution and quality of the coal seams.
From 1976 to 1979 Geosurvey International GmbH, under a West German aid program, completed airborne low resolution magnetic, gravity and radiometric surveys (which was flown on a 1 km line spacing), ground follow-up and surveying. Compilation of Landsat and aerial photographs for interpretation also occurred.

6.4.1 Neighbouring tenements

Mantra Resources Ltd (Mantra) holds the adjoining property to the east of PL 7386/2011 and the east and south-east of HQ-P24982. However, no references regarding exploration in the Mantra tenement were found in the data provided by the vendor and from other sources.

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Figure 6-2: Geology of the Mhukuru Project and competitor tenement, SW Tanzania

Source: Geological Survey of Tanzania, 2004

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Figure 6-3: 1:125 000 mapped geology of the Mhukuru Project tenements in the South Selous Basin and adjacent areas

Source: Geological Survey of Tanzania, 2004 and SRK, 2011

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Figure 6-4: Geology of the Mhukuru Project in the South Selous Basin draped over magnetic data with Indigo tenements and application areas

Source: Geological Survey of Tanzania, 2004 and SRK, 2011

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6.5 Project potential and SRK comment

The South Selous Basin hosts the Mhukuru Coalfield. Documentation of this coalfield suggests the only workable seams occur in the K4 (Mhukuru Formation), which is thick (more than 350 m) but contains few coal-bearing zones of potential workable thickness.

The more prospective K2 (Mhukuru Formation) has not yet been identified in the Mhukuru Coalfield and if present, may occur at considerable depth in the central part of the coalfield (Massano, 2011c).

Therefore, the primary exploration target at the Mhukuru Project is the potential occurrence of the prospective K2 coal-bearing interval in Karoo sequence. Select’s exploration model involves identification of this unit which is inferred to be present underneath a cover of recent Cainozoic sediments and within undifferentiated Karoo sedimentary sequences.

The K4, if present, may also present a secondary exploration target. Whilst previous work has yet to establish the presence of the K4 unit within Karoo sequences in the South Selous Basin, if present, the K4 may contain similarly (or better) developed coal seams to the Mhukuru Coalfield area to the north.

The Mhukuru Project encompasses five licences in the southern Selous Basin and adjacent areas in south-west Tanzania, near the border with Mozambique and covering a total area of approximately 224 km[2] but at the time of writing only 11.4 km[2] of tenure has been granted. Further exploration is warranted to test the presence of K2 of K4 sequences at the Mhukuru Project, but this project will logically form a lower priority target for Select due to the low percentage of tenements currently granted compared to other project areas with a higher proportion of granted licences.

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7 Selous Project

7.1 Location

The Selous Project comprises eleven tenements (all granted), which are widely-dispersed but partially contiguous and cover a total area of 2480.74 km[2] in south-east Tanzania; a vast savannah belt that extends from central Tanzania south to the Mozambique border (Figure 7-1). The project is accessible from the east through the town of Kilwa and from the west through Morogoro and Mikumi to Ifakara on a surfaced road. A road from Songea provides access to the project area form the SW (Figure 7-1).

7.2 Geology

The Selous-Kilosa Basin is a failed rift basin derived from the break-up of East Africa and contains Late Palaeozoic-Triassic coal-bearing sedimentary sequences of the Karoo-Songea Group. The basin extends about 400 km NE from the South Selous Basin through Songea and Liwale to Morogoro. Previous exploration has been limited in the Selous Basin with about 50% of the total area of the basin covered by previous exploration activity and surveys (Figure 7-2).

The three eastern-most tenements of the Selous Project occur either wholly or partly in the adjoining Rufiji Basin to the east and have been grouped by Massano (2011d) as part of the Selous Project. The Rufiji Basin is an E-W trending basin of Karoo-Songea age that covers an area of 16,000 km[2] and extends from the Indian Ocean coast of Tanzania west to the Ulanga Basement spur. The Ulanga Basement spur is probably represented in Figure 7-3 by the two zones of high TMI (pinkish-red-yellow) in the west of PL 7402/2011 and in the central west edge of PL 7402/2011, which separate the much more extensive zones of low TMI, representing the Selous-Kilosa and Rufiji Basins. These basins appear from the TMI image to be contiguous to the NW and south.

The geology of the Selous and Rufiji Basins is poorly understood. Apart from mapping by the Geological Survey of Tanzania, exploration undertaken between the 1960s and 1970s and an oil exploration program by BHP-Billiton in 2009, very little information is available to characterise the geology of the two basins.

Sedimentary sequences within the Selous Basin comprise a package of Karoo-Songea Group, Jurassic and Cretaceous rocks up to 10 km thick that regionally dip to the east. The basin sequence is dominated by mudstones and sandstones. The uppermost Triassic-age Karoo sediments are unconformably overlain by an Early Miocene, sand-rich, fluvial, braided stream plain succession (Mayagilo (2011).

No igneous dykes or sills have been reported to occur within coal seams of the Selous-Kilosa-Rufiji Basin. However, based on the regional TMI image, a number of magnetic features (or zones) may represent basic igneous intrusions or sills occurring within or adjacent to coal seams (Figure 7-3). The magnitude of displacement or direction of dip of any faults within the Selous-Kilosa and Rufiji Basins is not known.

The Selous Basin strikes SSW-NE and the major fault trends in the basin trend NE-SW. NW-SE and E-W trending transfer-wrench faults of Jurassic age also occur and are related to formation of the rift that is now filled with Karro-Songea Group sedimentary sequences (Massano, 2011d). Faulting within the Rufiji Basin comprises largely E-W trending transfer faults on the S side, whereas in the N faulting trends NE-SW (Mayagilo, 2011).

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Figure 7-1: Location of Indigo tenements in the Selous-Kilosa and Rufiji Basins with access and topography

Source: Indigo and SRK, 2011

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Figure 7-2: Geology of the Selous-Kilosa and Rufiji Basins with Indigo tenements

Source: Geological Survey of Tanzania, 2004

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Figure 7-3: Location of Indigo-controlled Selous Project tenements with total magnetic intensity

Source: Indigo, 2011

7.3 Coalfields of the Selous Basin

The licences that make up the Selous Project do not cover any currently recognised coalfield areas in the Selous-Kilosa and Rufiji Basins. The South Selous Basin hosts the Mhukuru Coalfield as discussed above in the Mhukuru Project.

The Selous-Kilosa and Rufiji Basins are under-explored and there is no certainty that well-developed coal seams of economic significance exist in the basins, but this remains a possibility until proven otherwise by exploration.

Oil exploration drilling data compiled by BHP-Billiton suggests that coal seams exist within the Karoo sequences of the under-explored Selous-Kilosa and Rufiji Basins. However, no data was made available in the data package supplied by Indigo to SRK regarding the depth, thickness or quality of the coal seams intersected or whether the coal seams are associated with the prospective K2 or the K4 Karoo coal-bearing sequences.

In the opinion of SRK, exploration is required to determine the potential for prospective coal-bearing Karoo sequences to occur at an unknown depth beneath areas of younger, recent Cainozoic cover in the Indigo tenements of the Selous-Kilosa and Rufiji Basins.

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7.4 Previous exploration

No exploration has been carried out to date by Indigo in the tenements of the Selous Project.

According to Massano (2011d), the Selous Basin is under-explored with limited research and exploration activities completed. Previous exploration in the Selous-Kilosa and Rufiji Basins includes:

1976–79 - Geosurvey International GmbH, under a West German aid program, completed airborne low resolution magnetic, gravity and radiometric surveys, which were flown on 1 km line spacing and followed by ground surveying, as well as compilation of Landsat and aerial photographs interpretation.
2009 - BHP-Billiton reported that Karoo-Songea Group sedimentary sequences containing coal seams were penetrated by oil exploration wells in the Mvuha-Kisaki area. The Karoo-Songea sedimentary sequences in this area contained shale, sandstone and seams of coal. The coal was found in the Kisaki, Rufiji and Kidodi areas.

No reference to neighbouring tenements to the Selous Project was found in the data supplied to SRK by the vendor.

7.5 Project potential and SRK comment

The Indigo Selous Project does not cover any currently recognised coalfield areas in the SelousKilosa and Rufiji Basins. However, the vast sedimentary sequences of the Karoo-Songea Group can be considered little-researched and underexplored. Previous exploration suggests that coal seams exist within these Karoo sequences, but limited information exists on the depth, thickness of quality of these and whether the seams identified are associated with the prospective coal-bearing K2 or K4 Karoo sequences.

PL 7383/2011 is located in the far south of the project area and is the only tenement that appears to be contained 100% within Karoo-Songea Group sedimentary sequence in the national scale mapped geology (Figure 7-2). No 1:125 000 mapped geology sheets are available for this tenement.

PL7790/2012 is located in the far SW of the project area and on the national scale mapped geology appears to be contained 90% within the Karoo-Songea Group sedimentary sequence. PL 7381/2011 is also located in the SW of the project area and appears from the national scale mapped geology to be located approximately 30% within the Karoo-Songea Group sedimentary sequence, but the regional magnetic image of the tenement area suggests that the geological mapping may be incorrect in this area with a large portion of the tenement low or very low TMI (Figure 7-3).

PL 7380/2011 and PL 7400/2011 are two contiguous tenements located in the far centre west of the project area. Both licences are largely covered by unconsolidated, recent Cainozoic sediments and alluvium, which are likely to cover Karoo-Songea Group rocks at an unknown depth. Maps of nearby outcrops identify potentially coal-bearing K2 and K4 units (Figure 7-4) to the north and east of the tenements. These are likely beneath the Cainozoic unconsolidated sedimentary cover to the southwest beneath both tenements and Select will need to explore beneath this cover (via drilling and / or geophysical surveys) to establish this and determine whether K2 and K4 are coal-bearing in this part of the project area.

PL 7397/2011 and PL 7385/2011 are adjacent tenements in the far NW of the project area. Both licences appear to be largely covered by unconsolidated, undifferentiated alluvial sediments in close proximity to outcropping of Karoo-Songea Group sediments (Figure 7-5).

PL 7402/2011, PL 7366/2011 and PL 7401/2011 are three contiguous tenements aligned from north to south in the NE of the project area. The three tenements are located in the Selous or Rufiji

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basins. PL 7402/2011, PL 7366/2011 and PL 7401/2011 appear to be located 100% within Cainozoic alluvium and unconsolidated sediments of the Rufiji Basin, which may cover older KarooSongea Group rocks. PL 7365/2011 in the centre of the project area appears to be covered 95% by non-coal bearing Precambrian metamorphic rocks.

In summary, the Selous-Kilosa and Rufiji Basins are underexplored and there is potential for prospective Karoo sequences to occur at an unknown depth beneath areas of younger, recent Cainozoic cover. Limited more detailed mapping has identified potentially coal-bearing K2 and K4 units of the Karoo-Songea Group in close proximity to some licences, specifically PL 7380/2011 and PL 7400/2011 and field based exploration including detailed field mapping, drilling and seismic surveys are required to determine the prospectivity.

Initial reconnaissance by Select geologists has indicated that the extent of the lower Karoo sequences within areas mapped as alluvial cover on regional maps is much more widely distributed (Leeden, pers comm, 2012). The presence of such outcrops also implies the cover could be shallow in certain areas.

Given the large tenement area of the Selous Project, which comprises eleven licences covering a total area of 2,480.74 km[2] and more advanced status of grant compared to the other Indigo projects in Tanzania, Select can commence exploration to determine the prospectivity of this Project.

There is little infrastructure developed within parts of the Selous Project as the area is quite remote and contains broad areas of savannah lands, some of which are in National Parks. However, a railway line from Dar-es-Salaam to SW Tanzania passes through the Selous Project area from NW to SE, running directly through the middle of tenement PL 7400/2011.

If coal resources were to be identified, product coal could be transported to local markets via the railway and exported via the port at Dar-es-Salaam, if coal export infrastructure is built and the Port of Mtwarra if the proposed MDC is constructed and the port infrastructure upgraded.

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Figure 7-4: Indigo tenements PL 7400/2011 and PL 7380/2011 in the central-west Selous Basin with 1:125 000 geology sheet

Source: Geological Survey of Tanzania, 2004

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Figure 7-5: Indigo tenements PL 7385/2011 and PL 7397/2011 in the eastern Selous-Kilosa Basin with 1:125 000 geology sheet

Source: Geological Survey of Tanzania, 2004

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8 Uranium Exploration in Tanzania

Tanzania is to begin uranium mining and processing within three years from 2010, following the announcement of two commercial discoveries in the central and southern regions of the country. Uranex Resources (Uranex) and Mantra Resources (Mantra) have both received approval from the Tanzanian Government to commence mining. Mining will commence once the new Mining Act is passed by the parliament. The new Mining Act is geared to create a win-win situation unlike its predecessor, the Mining Act 1998, which gave disproportionate revenue benefits to mining companies.

Proactive Investors (www.proactiveinvestors.com.au) states (2011) that Uranex, an Australian-listed company with projects in Australia and Tanzania, had announced the discovery of new uranium mineralisation during pitting at its previously untested Mbuga G site in the northern part of the Manyoni Project in central Tanzania. In addition, further uranium mineralisation, some identified during its 2009 drilling campaign, has also been identified at Mbuga A, C West, D, and F.

The value of future uranium exports for Tanzania will be second to gold. After Ghana and South Africa, Tanzania is the third largest gold producer; which in 2009 earned the country $1,076.1 million. The mineral sector in general earned the country $111.5 million in 2009, contributing 3% of GDP.

Tanzania aims to ultimately exploit its uranium deposits for nuclear power electricity generation, exporting it to the East, Southern and Central African markets. At a recent meeting of the Forum of Nuclear Regulatory Bodies in Africa (FNRBA), in Abuja, Nigeria, the US pledged to help African countries interested in generating electricity from nuclear sources. Tanzania is a member of the FNRBA, along with Congo, Egypt, Libya, Morocco, Nigeria, South Africa, Namibia, and Tunisia.

8.1 Tanzanian uranium deposits and occurrences

Tanzania contains many occurrences and deposits of uranium and gamma-radiometric anomalies Figure 8-1 and Figure 8-2 which are both plotted with Indigo Prospecting Licences and applications together with other tenements. Models and summary descriptions of four Tanzanian uranium deposits are given below.

8.1.1 Models for uranium deposits in Tanzania

Four geological environments contain potentially significant uranium prospects in Tanzania:

1 In sandstones, which occur mainly in sediments of the Karoo-Songea Supergroup and Bukoban Supergroup – these are the "sandstone uranium, model 30c" of Cox and Singer (1986). In appearances and modes of formation, sandstones of the Karoo are similar to the sandstones which host uranium deposits in South African and in the Colorado Plateau area, western USA.
2 In carbonatite complexes of Mesozoic to Recent age – these are the "carbonatite, model 10" of Cox and Singer (1986).
3 In calcrete-related secondary environments in Quaternary deposits; e.g. Ndala, Itigi and Iseke.
4 At the unconformity between the Karagwe-Ankolean and Bukoban Supergroup for vein-type uranium mineralisation and also part of the Ubendian/ Bukoban unconformity.

In addition, minor occurrences of uranium and thorium are known in pegmatites, river and beach sands. None of these occurrences are likely to become economic, although small amounts of handsorted uraninite were recovered from pegmatites of the Uluguru Mountains before 1955.

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Figure 8-1: Plan of some Indigo-controlled tenements and applications in Tanzania with uranium occurrences and competitor tenements

Source: Geological Survey of Tanzania and Indigo, 2011

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Figure 8-2: Plan of some Indigo-controlled tenements and applications in Tanzania with radiometric anomalies and competitor tenements

Source: Geological Survey of Tanzania and Indigo (2011)

An untested environment in Tanzania is that related to unconformities in Proterozoic rocks classified as the unconformity U-Au model of Cox and Singer (1986), or the unconformity associated with uranium model 21" of Eckstrand (1984).

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8.1.2 Sandstone-hosted uranium deposits

Sandstone-hosted uranium deposits occur in fluvial or marginal-marine sandstones. The host rocks are typically medium- to coarse-grained, poorly sorted, and contain pyrite and organic (plant) matter. The organic matter is either disseminated or forms lignite seams. Uranium is mobile under oxidising conditions and precipitates under reducing conditions, and the presence of a reducing environment is essential for the formation of uranium deposits in sandstone. Hydrogen sulphide, which is an effective reductant and uranium precipitant, can be either generated by anaerobic decomposition of organic matter or it can be introduced from underlying or overlying oil or gas horizons, thereby creating a favourable environment in an otherwise unfavourable host rock.

Potentially favourable host continental sandstone are Post-Silurian in age (Finch, Wright & Adler,1982) as widespread development of land plants did not begin until the Silurian. Abundant plant growth occurred in humid paleo-climates mostly within the region bounded by latitudes 50° N and 50° S of the palaeo-equator.

Sandstones with a gentle dip, such as may occur along the margins of continental basins and coastal plains, are more favourable than steeply dipping sandstone for uranium mineralisation. This is because the rate and volume of groundwater and oxygen movement are likely to be greater in steeply dipping beds and therefore preservation of a reducing environment is less likely. Beds with low dips also provide large surface areas for the capture and introduction of uraniferous groundwater.

Based on shape of an ore body and its relationship to the depositional or structural environment, sandstone uranium deposits can be subdivided into three types (these may be gradational into each other) (Dahlkamp, 1993):

Tabular deposits consist of tabular or elongate lenticular zones of uranium mineralisation within selectively reduced sediments. The mineralised zones are oriented parallel to the direction of groundwater flow, but on a small-scale the ore zones may cut across sedimentary features of the host sandstone.
Roll-front deposits are crescent-shaped in cross-section, and mineralisation cuts across the bedding and extends from the overlying to the underlying impervious mudstone/siltstone layers. The mineralised zone is convex down the hydraulic gradient. Mineralisation usually has a diffuse boundary with reduced sandstone on the down-gradient side and sharp contacts with the oxidised sands on the up-gradient side. Tectonic-lithologic deposits occur along permeable fault zones which cut the sandstone mudstone sequence. Mineralisation forms tongue-shaped ore zones along the permeable sandstone layers adjacent to the fault. Often there are a number of mineralised zones ‘stacked’ vertically on top of each other within sandstone units adjacent to the fault zone.

Sandstone deposits contain a large proportion of the world’s known uranium resources, although these deposits are commonly of low- to medium-grade (0.05 to 0.4% U3O8). In each province or basin, there are usually many small- to medium-size deposits, some of which can contain up to 50, 000 t of U3O8. The cumulative tonnage in the province or basin is often very large containing up to several hundred thousand tonnes (Dahlkamp, 1993). Major sandstone uranium provinces include the Powder River Basin in Wyoming, Colorado Plateau and Gulf Coastal Plain of the USA, and the Tim Mersoi Basin of Niger.

Sandstone deposits comprise approximately 7% of Australia’s total uranium resources. Deposits of this type occur in the Frome Embayment (Beverley, Honeymoon, East Kalkaroo and Goulds Dam), McArthur Basin (deposits in the Westmoreland area), Gunbarrel Basin (Mulga Rock), Carnarvon Basin (Manyingee), Canning Basin (Oobagooma), Amadeus Basin (Angela, Pamela) and Ngalia Basin (Bigrlyi and Walbiri). Large areas of low-grade uranium mineralisation are known in Eocene

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palaeo-channel sediments of the Eucla Basin in the Eyre Peninsula region (South Australia). These include the Warrior deposit near Tarcoola, and the Yarranna deposit east of Ceduna.

In the southern portion of the Frome Embayment, uranium deposits occur in Tertiary palaeochannel sands. Oxidising groundwater, moving slowly through the channels, leached uranium from the sand and re-precipitated it at the redox interface, to form roll-front and tabular deposits.

Along the northern margins of the Amadeus and Ngalia Basins, uranium deposits occur in Late Devonian to Carboniferous continental sandstone. The geological setting is similar in both basins. The sandstones contain abundant plant remains, and the uranium was deposited at redox boundaries. In the Carnarvon Basin, the host rock of the Manyingee deposit is Cretaceous sandstone filling a palaeochannel eroded in the basement. Uranium has accumulated at a redox boundary within the sandstone.

Bahi swamp

Bahi swamp is a dry lake, or playa, over 1,000 km[2] in extent and bounded in the west by a Cenozoic fault scarp. During an exceptionally dry season in 1953, the Tanzanian Geological Survey drilled six diamond core holes to test the underlying sediments for salt and other minerals. Fawley (1954) reported results of the work. In 1958, the cores were scanned for radioactivity. An anomaly was located in Hole 19/53 at 224 feet (68 m) depth. Analysis showed 0.23% U3O8 in 6-inch (15 cm) section of indurated sediment which had been logged as "silcrete". Recovery of core from this bore apparently contained a felted layer of strontianite (strontium carbonate) crystals. No strontium analysis was performed.

The occurrence of uranium with strontianite is of more than academic interest, as either may be found in economic concentration in playa or calcrete environments. The Yeelirrie calcrete uranium deposit in Western Australia, while still not quite commercial, is often cited as an example of a mineralising process that could create ore under suitable circumstances. Nodules composed of strontium carbonate and sulphide occur in playa sediments at Bristol Dry Lake in southern California, where they were formerly harvested for their celestite (strontium sulphate) content. Thorough examination of the drill cores is warranted to test for the presence of uranium and other minerals that may have been missed in the initial investigation.

Madaba occurrence

Located in QDS 253 and in the N part of the Selous National Park, the area is accessed by a dry season road from Dar es Salaam via Utete/ Kingupira. The Madaba area is part of the LuweguMbarang'andu River basin of the East African Karoo Supergroup. The target area is about 25 km SE of Madaba hill.

Uranerzbergbau GmbH drilled 11 bore holes of which seven penetrated favourable stratigraphic sections of low grade U-mineralisation 0.7 m to 12 m at depth below the water table. The best intersection contained 0.040% U3O8 over 11.7 m including 0.122% U3O8 over 1.6 m from 79.5 to 81.1 m (Gross, 1982).

Gallapo Carbonatite

Uranerzbergbau GmbH investigated the Gallapo carbonatite in 1978. Based on geological mapping, the carbonatite rock reserves are estimated at 65 Mt. Gamma ray radiometric response of the two Gallapo carbonatite dykes averages 1,000 cps over a 400 m long traverse across a northern dyke and 350 cps on a 1 km long traverse on a southern carbonatite dyke. The uranium content of samples taken along the traverse on the northern dyke ranges between 5 and 283 ppm U3O8 with an average of 100 ppm. The uranium content in the samples taken along the traverse on the southern dyke ranges between 5 and 177 ppm U3O8 and averages 25 ppm U3O8.

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Mkuju Occurrence

The Mkuju occurrence is located in quarter degree sheets 278/3&4, 289/1&2 and 290/1. The geology of this area generally consists of sandstones, which are sub-divided into the Mkuju and Mbarang'andu groups of the Upper Karoo. Calcareous components are very rare in the Mkuju Group, although commonly encountered in the Mbarang'andu Group. Both groups show typical features of fluviatile depositional environments.

The investigations found over ten anomalies due to thorium and uranium, with background gamma radiometric total count values ranging between 75 and 120 cps. The results indicated that the Mkuju anomalies are confined to two litho-stratigraphic units which are the Upper and Lower Mkuju Groups.

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9 Uranium Occurrences and Deposits in Basins with Indigo-controlled tenements

Several uranium deposits and occurrences are present in sedimentary basins and crystalline, Precambrian basement rocks outside the sedimentary basins, which contain Indigo-controlled tenements and application areas.

Interpreted uranium exploration targets (red = first order and green = second order targets) based on airborne gamma ray radiometric data acquired by Geosurvey International in 1980 are shown in Figure 8-1 and Figure 8-2. Radiometric data such as uranium, thorium and potassium levels derived from airborne geophysical surveys respond to radiometric sources on the ground and within a few centimetres of the surface. Consequently, such data may not respond to uraniferous ore bodies that have no surface expression.

9.1 Sandstone-hosted type uranium deposit stratigraphy in SW Tanzania

The Tanzanian basins with Indigo-controlled prospecting licences and applications probably contain some Karoo-Songea Group sedimentary sequences, including the K4 Mhukuru Formation mostly present beneath younger cover. However, previous exploration has shown that the K4 Mhukuru Formation does not exist within the Karoo-Songea Group succession covered by Indigo tenements in the Rukwa Project of the Rukwa Basin.

Exploration drilling would be required to confirm their presence in some of the tenements. Uranium deposits and occurrences within these basins are dominantly contained within K4 Mhukuru Formation sandstone units, which are rich in pyritic and carbonaceous material, such as thin and discontinuous coal seams, shaly coal, coaly shale and carbonaceous shale (Impala Presentation, 2011).

9.2 Potential source rocks of the Tanzanian sandstone-hosted uranium deposits

Potential sources of the uranium for the sandstone-hosted roll-front type are uraniferous Archaean rocks of the stable cratonic areas of Tanzania or adjacent countries. In the mineralisation model, uranium-rich oxidising waters from the eroding the uranium-rich source rocks flowed from the cratonic areas, into the lower lying basinal areas saturating portions of the Karoo-Songea Group K4 Formation sandy sediments upslope and percolating through the K4 sediments downslope via the groundwater flow. When areas of the K4 reducing carbonaceous and pyrite-rich sandstones were intersected by the oxidising uranium-rich groundwater fluids, uranium oxide was precipitated filling the sandstone pores.

A conceptual model for the generation of sandstone-hosted roll-front uranium deposits similar to those occurring in Tanzania are shown in Figure 9-1.

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Figure 9-1: Conceptual models for sandstone-hosted uranium deposits with a (a) Single-fluid model, and (b) a two fluid model

Source: After Jaireth et al., 2008

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9.3 Rukwa Project uranium targets

9.3.1 Geosurvey International plans

The Rukwa Project consists of nine licences in the Rukwa Basin of SW Tanzania (Figure 4-2). Geological mapping and TMI survey data of the Rukwa Project tenements controlled by Indigo indicate that they contain small areas of Karoo-Songea Group sedimentary sequences. However, previous exploration has shown that while the K1-K3 Karoo-Songea succession occurs in the geologically mapped coalfields of the Rukwa Basin, the K4 Mhukuru Formation has not been found to date within the Rukwa Basin.

While there is no direct evidence that the Karoo-Songea Group K1-K4 succession exists beneath recent Cainozoic sediments at the bottom of and surrounding Lake Rukwa, it is possible that it may exist beneath the cover of recent sedimentary sequences in the area until proven otherwise by exploration.

No first or second order uranium targets were identified in or adjacent to the Rukwa Project area by Geosurvey International. However, Geosurvey International identified uranium targets in adjoining areas (Figure 8-1) including:

Two uraniferous carbonatite targets (one first order and one second order) and one igneous intrusive/ hydrothermal type (second order uranium target) located approximately 120 km to the E and NE respectively.
A large, fault-bounded radiometric province trending NW-SE was noted along the W shore of Lake Rukwa. The province (yellow highlight in Figure 8-2) is noted to comprise thick superficial cover usually with a distinct radiometric response.

Select has also included the North Lake Nyasa area tenement comprising application area HQP24980 within the Mhukuru Project area. This tenement is located either within the far northern waters of Lake Nyasa or on the north-western shore of the Lake. A ground survey and field mapping of the application area needs to be undertaken to determine whether all, or part, of the above two scenarios is the case.

As shown in Figure 8-1 and Figure 8-2, the uranium target and radiometric response plans compiled by Geosurvey International do not extend south and west to include the area containing HQ-P24980. Radiometric data was not included as part of the data package by the vendor for HQ-P24980, therefore limited assessment or inferences can be made about the uranium prospectivity of HQP24980 as no data was included by the vendor in the data package.

9.3.2 Rukwa Project tenements airborne gamma ray radiometric images

The K4 Mhukuru Formation, which is the host rock for sandstone-hosted roll-front type uranium deposits in Tanzania has not been mapped or intersected in drilling to date in coalfields the Rukwa Basin. The vendor supplied uranium, thorium and potassium (U-Th-K) images for three of the tenements of the Rukwa Project (HP-Qs-23805, 23806 and 23808) to SRK. Based on a review of these images, several observations can be made about the U-Th-K radiometric data for the Rukwa Project:

HP-Q23805 and HP Q23806 are located wholly within recent sediments around the edge of Lake Rukwa overlying Precambrian basement rocks at shallow depth (as indicated by magnetic data).
HP-Q23808 is located partly within Precambrian basement rocks and partly within recent sediments on the edge of Lake Rukwa. The TMI image shows Precambrian basement rocks beneath the Lake sediments.
It is likely that these tenements are not prospective for sandstone-hosted uranium deposits.

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In the opinion of SRK, prospecting licence applications HP-Q-23805, 23806 and 23808 show no obvious uranium anomalies over the area of Karoo-Songea Group sedimentary sequences or adjacent Precambrian basement rocks.

The K4 Mhukuru Formation, preferred host rock for sandstone-hosted roll-front type uranium deposits in Tanzania, has not been mapped or intersected in drilling to date in coalfields the Rukwa Basin. However, exploration is required to prove this is the case in areas of Karoo-Songea Group sedimentary sequences of the Rukwa Project exposed at the surface or beneath recent cover sediments adjacent to Lake Rukwa.

The radiometric data is too regional and of insufficient resolution for adequate assessment. Some improvement may be obtained by reprocessing. As the radiometric data only “sees” surface anomalies in the U, Th and K channels, exploration drilling will be required to determine the prospectivity of the Rukwa Project tenements.

9.4 Ruhuhu Project uranium targets

9.4.1 Geosurvey International plans

The Ruhuhu Project contains seven licences in the south-west of Tanzania (Figure 5-2). Geological mapping and TMI survey data covering the Ruhuhu Project tenements controlled by Indigo indicate that they contain small areas of Karoo-Songea Group sedimentary rocks except application area HQ-P25014 and the granted licence PL7791/2012, which occur in adjacent non coal-bearing, crystalline, Precambrian basement rocks. Previous exploration in Tanzania has shown that the entire K1-K8 Karoo-Songea succession is known to occur in parts of the geologically mapped coalfields of the Ruhuhu Basin.

The Karoo-Songea Group sedimentary sequences of the Ruhuhu Basin contain the favourable stratigraphy of the K4 Mhukuru Formation that hosts sandstone-hosted roll-front type uranium deposits in the basin. Geosurvey International has identified various types of uranium targets (Figure 8-1) adjacent to the Ruhuhu Project which show:

One second order sandstone-hosted type uranium target lies within or very close to the northeast corner of the Ruhuhu Project tenement HQ-P22701 (purple shape east of Lake Nyasa in Figure 8-1.
The nearest adjacent target is a sandstone-hosted type outside the Ruhuhu Project tenements located approximately 15 km south-west of the SW boundary of tenement PL 4945/2008.
No first or second order sandstone-hosted or other types of uranium targets occur within or adjacent to PL7791/2012 or HQ-P25014.

Geosurvey International also identified areas of high gamma ray radiometric response (three brown coloured areas in Figure 8-2 which they attribute to felsic igneous rocks (granites) occurring to the NW, S and SE of the project area.

9.4.2 Ruhuhu Project tenements airborne radiometric images

The Ruhuhu Project contains seven tenements, four of which HQ-P22701, PL 7051/2011, PL 7048/2011 and PL 4945/2008) have U, Th, and K intensity images supplied by the vendor.

Two uraniferous carbonatite targets (one first order and one second order) and one igneous intrusive/ hydrothermal type (second order uranium target) are located approximately 120 km to the E and NE respectively (Figure 8-1). PL7791/2012 and HQ-P25014 are located within a brown coloured area (Figure 8-2), indicating a high radiation anomaly probably due to the presence of felsic igneous rocks.

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The five tenements and applications comprising the northern and central groups of the Ruhuhu Project tenements may contain the Karoo-Songea Group K4 Mhukuru Formation (host unit for sandstone-hosted type uranium deposits in Tanzania) in the areas of each tenement that are located in a Karoo-Songea sedimentary basin. However, it is not apparent from the available geological mapping which parts of the tenements contain the K4 sedimentary sequence.

The southern group of two application area HQ-P25014 and the granted licence PL7791/2012, are not prospective for sandstone-hosted uranium deposits, as they do not contain any Karoo-Songea Group sedimentary sequences, because they are located in areas of crystalline, non-coal bearing Precambrian rocks outside the Karoo-Songea Ruhuhu sedimentary basin.

Some observations can be made about the U-Th-K radiometric data for the Ruhuhu Project:

In all five tenements, E-W trending striped patterns of high U, Th and K are apparent. The pattern may be a result of poor data processing and levelling and/ or widely spaced flight lines.
The radiometric data are too regional and of insufficient resolution for adequate assessment. Some improvement may be obtained by reprocessing. As the radiometric data only “see” surface anomalies in the U, Th and K channels, exploration drilling to determine the prospectivity of the five Ruhuhu Project tenements is required.

In the opinion of SRK, tenements HQ-P22701, PL 7051/2011, PL 7048/2011 and PL 4945/2008 show no obvious uranium anomalies over the area of Karoo-Songea Group sedimentary sequences or adjacent Precambrian basement rocks.

9.5 Mhukuru Project uranium targets

The Mhukuru Project contains five licences located in the far south of Tanzania close to the Mozambique border (Figure 6-2). No U-Th-K radiometric data for the tenement and application areas were supplied to SRK by the vendor.

Geosurvey International did not interpret any sandstone-type uranium targets within or adjacent to the tenements (Figure 8-1). Figure 8-2 shows mapped pink areas within and outside of the contiguous application areas HQ-P25015 and HQ-P23809, which are attributed to the presence of low radiation levels probably due to mafic and ultramafic igneous rocks (Geosurvey International).

The Mhukuru Coalfield is located near the north of the Mhukuru Project. The coalfield contains coal seams within the K4 Mhukuru Formation which is the host rock for sandstone-hosted roll-front type uranium deposits in Tanzania.

Due to the lack of exploration in the Mhukuru Project and the limited geological knowledge of the area, in SRK’s opinion, it is not proven that the K4 Mhukuru Formation exists in the tenement and application areas of the project. Exploration is required in PL 7386/2011, HQ-P24982, HQ-P25015 and HQ-P23809 to determine whether the sandstone-type host-rock K4 Mhukuru Formation exists in the project area and their prospectivity for uranium.

HQ-P24981 is not prospective for sandstone-hosted uranium deposits as it does not contain the Karoo-Songea Group sedimentary sequences. Exploration is required to determine whether HQP24981 is prospective for other types of uranium deposits.

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9.6 Selous Project uranium targets

The Selous Project is made up of eleven licences located in the Selous-Kilosa and Rufiji Basins in the central east of Tanzania (Figure 7-2). U-Th-K radiometric images covering the tenement and application areas were supplied to SRK by the vendor, except for granted licence PL7790/2012.

Geosurvey International did not interpret either sandstone-type uranium targets or other types of uranium targets within or adjacent to the tenement and application areas (Figure 8-1).

An extensive, arc-shaped zone of thick superficial cover with a distinct radiometric response mapped by Geosurvey International occurring partly within PL 7400/2011 and PL 7380/2011 and to the south-east of the application areas is shown in Figure 8-2.

There has been little previous exploration in the Selous-Kilosa and Rufiji Basins. Geological mapping shows coal outcrops and areas of Karoo-Songea Group sedimentary sequences occurring in the basins. While coal has been reported as occurring in several oil wells drilled by BHP Billiton in the basins it has not been determined whether the coal seams intersected belong to the KarooSongea Group K2 Mchuchuma Formation or the younger K4 Mhukuru Formation (which is the host rock for sandstone-type roll-front uranium deposits in Tanzania).

Exploration is required to determine whether Mhukuru Formation K4 sandstone-type uranium deposit host rocks exist in the Selous-Kilosa and Rufiji Basins.

9.6.1 Selous Project tenements airborne radiometric images

Several observations can be made about the U-Th-K radiometric data for the Selous Project. E-W trending striped patterns of high U, Th and K are apparent in the images. The pattern may be a result of poor data processing and levelling and/ or widely spaced flight lines. The radiometric data are too regional and of insufficient resolution for adequate assessment. Some improvement may be obtained by reprocessing.

As the radiometric data only “see” surface anomalies in the U, Th and K channels, exploration drilling is required to determine the prospectivity of the five Ruhuhu Project tenements.

No tenements of the Selous Project appear to be located directly in areas containing mapped KarooSongea Group sedimentary sequences (Figure 7-2). These tenements are located on areas of younger Cainozoic sedimentary sequences that may themselves cover underlying areas of KarooSongea Group rocks. The TMI image of the Selous Project area (Figure 7-3) provides evidence that this may be the case. However, further exploration is required to determine this.

Various tenements or portions of tenements of the Selous Project occur in mapped areas of Precambrian basement rocks (brown hatched areas), which would not be prospective for sandstonehosted roll-front type uranium deposits if the mapping is correct. However, exploration is required to confirm the geological mapping.

In SRK’s opinion, the Selous Project tenements show no obvious uranium anomalies over the area of Karoo-Songea Group sedimentary sequences or adjacent Precambrian basement rocks.

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10 Proposed Exploration Strategy and Budget

The exploration program proposed by Select is over a period of two years and is focused on the granted licences, which largely occur within the Ruhuhu Project, where the Company intends to undertake a maiden drilling program, whilst geological mapping is undertaken within the Selous and Mhukuru projects.

An exploration budget of $2,000,000 is proposed including $980,000 in Year 1 and $1,020,000 in Year 2 based on a capital raising of $3,500,000. SRK understands that if oversubscriptions are received, an additional $200,000 will be allocated to the exploration budget, which will be directed to geophysics. A summary of the proposed work and budget by activity is presented in Table 10-1 and by project in Table 10-2. If Year 1 exploration is encouraging, additional budget allocation may be sought for Year 2 exploration (Leeden pers. comm. 2012).

Table 10-1: Select proposed exploration program by activity

Proposed work	Year 1	Year 2	Total
Environmental Assessment and Rehabilitation	$32,000	$32,000	$64,000
Satellite data acquisition and interpretation	$80,000	-	$80,000
Geophysics (downhole geophysics)	$20,000	$30,000	$50,000
Geological mapping and reconnaissance work	$60,000	$100,000	$160,000
Drilling	$408,000	$458,000	$866,000
Geochemical analysis (assays)	$12,000	$32,000	$44,000
Field costs/ consumables/ vehicle rental	$32,000	$32,000	$64,000
Administration/ office rental	$96,000	$96,000	$192,000
Wages/ salaries/ contractors	$240,000	$240,000	$480,000
Sub-total	$980,000	$1,020,000	$2,000,000

Source: Leeden, 2012

The purpose of the proposed exploration is to define the geology, geometry and structure of Karoo age sedimentary basins and other areas within the tenements and application areas and to prioritise areas, to undertake targeted drilling in an effort to define and analyse any coal seams and uranium mineralisation intersected (Leeden, pers. comm. 2012).

Table 10-2: Select proposed exploration program by project

	Year 1	Year 2	Total
Ruhuhu Project	$650,000	$400,000	$1,050,000
Selous Project	$150,000	$300,000	$450,000
Mhukuru Project	$150,000	$300,000	$450,000
Rukwa Project	$30,000	$20,000	$50,000
Total	$980,000	$1,020,000	$2,000,000

Source: Leeden, 2012

Approximately half of the proposed exploration budget is allocated to the Ruhuhu Project with the remainder primarily spread over the granted Selous and Mhukuru tenements. Additional funds may be directed towards exploration of licences in the Rukwa Basin area once these areas are fully granted. Exploration expenditure has been allocated to currently granted tenements and excludes areas of the Selous Project that are located within the Selous Game Park.

The objective of Year 1 drilling is to understand the geology of the tenements and application areas with a focus on locating areas likely to contain coal resources and uranium mineralisation within the Karoo sequence K1-K8. Year 1 drilling is to be reverse circulation (RC) with downhole geophysics

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conducted in all RC holes to assist in stratigraphic correlation between boreholes. Year 2 drilling will target and core coal seams identified in Year 1 open hole drilling and uranium mineralisation. Any coal intersections and uranium mineralisation will be sent to an accredited laboratory in South Africa for analysis.

Over two years, it is budgeted to spend a total of $866,000 on drilling, of which 10,000 to 12,000 m is proposed to be open hole PCD drilling of an estimated 80 boreholes at an average depth of 150 m (with the chips logged, but not sampled for analysis). It is proposed that all boreholes will be downhole geophysically logged. Based on the open hole drilling in Year 1, it is also planned to drill 15 targeted core holes comprising 1,500 to 2,000 m of HQ core, which will be analysed in 0.5 m-long maximum sections to determine the quality of any carbonaceous horizons intersected. The cored holes are planned to be drilled in areas where coal has been identified in the previous open hole drilling program. Drilling rates in the exploration budget are based on a rate of $55 per metre drilled for open holes and $150 per metre for cored holes. These rates would seem reasonable.

Stratigraphic drill targets have been identified by Select and these targets will be investigated in the field and prioritised, following the completion of the acquisition of the project tenements from Indigo.

Select has also budgeted $50,000 over two years for downhole geophysical surveys and $160,000 over two years for geological mapping and reconnaissance work which is aimed at providing stratigraphic clarification for drill targeting.

The cost for geological reconnaissance work seems reasonable, with geologist costs covered in the budgeted wages/ salaries /contractors costs.

In SRK’s opinion, the proposed exploration strategy is considered appropriate and should improve Select’s understanding of the geology, geometry and structure of the projects and assist in identifying potential high priority drilling targets to be the focus of HQ core drilling in the second year.

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11 Conclusions

Select has assembled a portfolio of licences in Tanzania that offer the investor an opportunity for exposure to early stage coal and uranium exploration projects in East Africa. The assets are all located in the southern half of Tanzania and can be grouped into several geographical areas within the Ruhuhu Project, the Rukwa Project (including North Lake Nyasa), the Selous Project and the Mhukuru Project.

The Rukwa Basin contains several small coalfields that contain seams of economic significance, which are currently mined or have been mined in the past. These coalfields are the NamweleMkomolo, Muze and Galula Coalfields. The Rukwa Project is located in the vicinity of the Namwele Coalfield, which is currently being explored by Edenville Energy PLC (EE). Select will need to establish whether these coal bearing sequences extend into their licence areas, which are located immediately along strike of and contiguous with the EE ground. Outside of this immediate target, it should also be established whether other areas of Karoo-Songea Group coal sequences exist as pockets within the Precambrian basement. For example, there are several such areas known in proximity to the project such as 6 km to NW (Mkomolo Coalfield), 4 km to the north (Muze Coalfield) and 140 km to south of the project area (Galula Coalfield).

Future exploration should also establish whether Karoo-Songea Group coal sequences might occur below the Cainozoic cover and younger lake sediments that form much of the surface exposure on the leases. Regional magnetic responses to the north and south suggest this could be the case, but this remains to be established by field-based exploration across this approximately 922 km[2] project area once fully granted.

Other than some weather-dependent roads, minimal infrastructure and no railways exist in the Lake Rukwa area. However, an upside is that the area is within the proposed MDC where it is proposed that a railway line be built from Mtwarra Port on the coast through the area to enable the movement of any product coal to users within Tanzania and potentially for export.

The Ruhuhu Basin is located in the far south-west of Tanzania and contains Karoo-Songea Group sedimentary sequences of Carboniferous to Triassic age that include the full K1-K8 Karoo succession and a number of known coalfields. The Ruhuhu Project , covering 495 km[2] (of which 262 km[2] is fully granted) is partly located and in the north of the Ngaka Coalfield, comprising several separate blocks. Of particular interest is the Mbalawala Project in the Mbalawala Block, which is located within the adjacent licence to one of Selects tenements. Intra Energy’s (formerly Atomic’s) Mbalawala Project is at Bankable Feasibility Study Stage here and demonstrates the potential of this region to host significant thermal coal resources.

Granted licences in the NW block of tenements that make up the Ruhuhu Project will form a priority exploration focus for Select in order to identify and understand the distribution of the coal-bearing K2 Mchuchuma Formation within an exposed belt of Karoo-Songea Group sedimentary sequences. As for much of the Tanzanian coalfields, there is minimal existing infrastructure, but the Ruhuhu Project is also located within the proposed MDC.

The Mhukuru Project tenements occur mostly within in the far western portion of the Selous Basin in the Songea district and Ruvuma region in the far south-west of Tanzania. Within this region, workable coal seams in the Mhukuru Coalfield occur in the K4 (Mhukuru Formation), which is more than 350 m thick throughout the coalfield, but contains few coal-bearing zones. The primary exploration target at the Mhukuru Project is the potential occurrence of the prospective K2 coalbearing interval in Karoo sequence, which is inferred to be present underneath a cover of recent Cainozoic sediments and within undifferentiated Karoo sedimentary sequence of the South Selous Basin. At this time, one small licence areas has been fully granted.

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Select has presented an exploration budget of $2,000,000 over two years to advance exploration of the projects, including $980,000 in Year 1 and $1,020,000 in Year 2 based on a capital raising of $3,500,000. It is SRK’s understanding that if oversubscriptions are received, an additional $200,000 will be allocated to the exploration budget which will be directed to geophysics.

In SRK’s opinion, the proposed exploration programme of reconnaissance mapping, airborne geophysical survey and follow up drill testing is considered appropriate. This initial phase of work will improve Select’s understanding of the geology, geometry and structure of the projects to assist in identifying potential high priority drilling targets to be the focus of HQ core drilling in the second year. Should the drilling be successful in identifying coal bearing stratigraphy additional funds will need to be raised to advance any project to resource stage.

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References

Barth, 1990. Cited in Massano, E, (2011a, b, c and d) as noted below.

Borg and Shackleton, 1997, Cited in Massano, E, (2011a, b, c and d) as noted below.

Cairncross, 2001. Cited in Massano, E., (2011a, b, c and d) as noted below.

Catuneanu et al, 2005. Cited in Massano, E., (2011a, b, c and d) as noted below.

Harkin, D A, 1949. Summary of progress report – Mhukuru Coalfield, Songea District.

Harkin D A, Burks H G and Walton, J, 1953. The geology of Mhukuru coalfields, Short paper No: 28.

Impala Investments, 2011. An Energy Solution to the Emerging Global Demand, internal company PowerPoint presentation.
Kreuser et.al, 1988. Geometry and depositional history of Karoo (Permian) coal basins in Tanzania. Neues Jahrb. Geologie Paleontol , Monatsch.

Massano, E, 2011a. Technical Review Rukwa Project SW Tanzania , internal document prepared for Indigo Metals Ltd.

Massano, E, 2011b. Technical Review Ruhuhu Project SW Tanzania , internal document prepared for Indigo Metals Ltd.
Massano, E, 2011c. Technical Review Mhukuru Project SW Tanzania , internal document prepared for Indigo Metals Ltd.
Massano, E, 2011d. Technical Review Selous Project SW Tanzania, confidential internal document prepared for Indigo Metals Ltd.

McConnell, 1946. Cited in Massano, E, (2011a, b, c and d) as noted below.

McConnell, 1950. Cited in Massano, E, (2011a, b, c and d) as noted below.

McKinley, A C M, 1954. Outline of the geology of the lower Karroo rocks of the North Manda Area; Njombe District.

McKinley, A C M., 1965. The Coalfields and Coal occurrences of Tanzania, Geological Survey of Tanganyika Bulletin . 38, 82 pp.
NDC, 2009. Assessment of the coalfields in the Mtwarra development corridor in Tanzania and forecast for future coal usage up to the year 2025.
Quennell, A M, McKinley, A C M, Aitken, W G, 1956. Summary of the geology of Tanganyika. Geological Survey of Tanganyika , Memoir 1,pp 264.

Saggerso, 1969. Cited in Massano, E, (2011a, b, c and d) as noted above.

Semkiwa, P, et al, 1998. The Geology, Petrology, Palynology and Geochemistry of Permian coal basin in Tanzania 1: Namwele-Mkomolo, Muze and Galula Coalfields, International Journal of Coal Geology 36: 63-110.

Semkiwa, P M et al., 2005. Opportunities for Mineral Resource Development Tanzania, Government of the United Republic of Tanzania, Dar es Salaam, 130 pp.
Spence, J 1954. The Geology of Galula Coalfield, Mbeya District. Bulletin of the Geological Survey of Tanganyika, 25.

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Stockley, G M, 1931. New coal discovery in Tanganyika and coal resources of East and Central Africa, The Mining Magazine , June–July 1947.
Stockley, G M, 1931. The Ruhuhu coalfields Tanganyika territory, The Mining Magazine , August 1931.

Stockley, G M, 1932. Report on the geology of the Ruhuhu coalfields, Bulletin No. 2 .

Web site sources:

http://www.edenville energy.com/

http://www.mantraresources.com.au/

http://www.tancoalenergy.com/

http://www.uranex.com.au/

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Distribution Record

SRK Report Client Distribution Record

Project Number: SVL001

Date Issued: 7 September 2012

Name/Title	Company
Cherie Leeden	Select Vaccines Limited
Emma Wates	Grange Consulting

Rev No.	Date	Revised By	Revision Details
0	13/12/2011	Deborah Lord	Draft Report
3	02/03/2012	Graham Noon	Draft Report
4	02/04/2012	Deborah Lord	Draft Report
5	04/05/2012	Deborah Lord	Draft Prospectus
6	11/05/2012	Deborah Lord	Draft Prospectus
7	17/05/2012	Deborah Lord	Draft Prospectus
8	20/07/2012	Graham Noon	Final Report
9	30/07/2012	Matthew Greentree	Final Report
10	07/09/2012	Deborah Lord	Final Report

This Report is protected by copyright vested in SRK Consulting (Australasia) Pty Ltd. It may not be reproduced or transmitted in any form or by any means whatsoever to any person without the written permission of the copyright holder, SRK.

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7. INVESTIGATING ACCOUNTANT’S REPORT

133

SELECT EXPLORATION LIMITED

Investigating Accountant’s Report

6 September 2012

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6 September 2012

The Directors Select Exploration Limited c/o Grange Consulting Group Pty Ltd 945 Wellington Street West Perth WA 6005

Dear Sirs

INVESTIGATING ACCOUNTANT’S REPORT

1. Introduction

We have prepared this Investigating Accountant’s Report (“ Report ”) on historical financial information of Select Exploration Limited (“ Select ” or “ the Company ”) for inclusion in the Prospectus. Broadly, the Prospectus will offer 11,666,667 shares at an issue price of $0.30 each together with one free attaching option for every two shares issued ( “Attaching Options” ) to raise $3.5 million before costs (“ the Offer ”). This is the minimum subscription. Oversubscriptions of up to a further 1,666,666 shares at an issue price of $0.30 each together with one free attaching option for every two shares issued to raise up to a further $500,000 before costs may be accepted.

The Offer includes a priority offer of up to 8,166,667 Shares for existing Shareholders of Select. The following options will also be issued:

It is the intention of the Company to make an offer of Loyalty Options to all shareholders on the register of members at a date likely to be approximately two months after the date the Company’s shares are re-admitted to Official Quotation on the ASX. It is intended that the issue will be on the basis of one Loyalty Option for every two shares held at that time. The Loyalty Options will be issued for nominal consideration with an exercise price of $0.35 each and expiry date of 30 September 2015 ( “Loyalty Options” ). A disclosure document will be made available when the Loyalty Options are offered by the Company; and
The Loyalty Options on exercise will entitle the holder to one Secondary Option with an exercise price of $0.45 each and expiry date of 31 March 2017 ( “Secondary Options” ). These options will be issued pursuant to a disclosure document to be lodged with ASIC.

2. Basis of Preparation

This Report has been prepared to provide investors with information on the historical statement of comprehensive income, statement of financial position, and statement of changes in equity, and the pro-forma statement of financial position and statement of changes in equity, included in Appendices 1, 2 and 3.

This Report does not address the rights attaching to the shares to be issued in accordance with the Prospectus, nor the risk associated with the investment and has been prepared based on the complete Offer being achieved. Neither BDO Corporate Finance (WA) Pty Ltd nor its related entities (“ BDO ”) has been requested to consider the prospects for the Company, the shares on offer or related pricing issues, nor the merits and risks associated with becoming a shareholder and accordingly has not done so, and does not purport to do so. BDO accordingly takes no responsibility for these matters or for any matter or omission in the Prospectus, other than responsibility for this Report. Risk factors are set out in the Prospectus.

Expressions defined in the Prospectus have the same meaning in this Report.

3. Background

Select was admitted to the Australian Securities Exchange ( “ASX ”) on 26 May 1994. The Company was initially focussed on the development of vaccines up until September 2010 when the Company decided to sell this technology. Since the sale, the Company has been assessing and reviewing projects that may be suitable for its new strategic direction. In its most recent financial statements the Directors of the Company signalled their intentions to change the name of the company from Select Vaccines Limited to Select Exploration Limited in accordance with its newly established direction. Select Exploration Limited reflects the company’s proposed transition into coal and uranium exploration.

On 31 July 2012 the shareholders of the Company approved for the consolidation of the number of shares on issue on the basis that every 100 shares held be consolidated into one share.

On 19 March 2012, Select signed a Share Sale Agreement with Indigo Metals Limited ( “Indigo” ) to acquire 100% of the issued capital of Panama Resources Limited ( “Panama” ) and Shira Resources Limited ( “Shira” ) ( “Acquisition” ).

The consideration for the Acquisition will be as follows:

Payment of $600,000 (“ Cash Consideration ”), which can be paid in cash or in ordinary shares in Select, at Indigo’s election. If Indigo elects to be paid all or some of the Cash Consideration in shares, then the shares will be issued at $0.40 each;
14,750,000 ordinary shares in Select (“ Consideration Shares ”); and
A maximum of 50,000,000 Performance Shares in Select (“ Performance Shares ”).

The Performance Shares will convert to ordinary shares in Select upon the independent delineation of a JORC Inferred Resource, across the coal and uranium projects ( “Projects” ) owned by Panama and Shira, through their subsidiaries WTF Resources Ltd (“ WTF” ) and IBIS Resources Ltd (“ IBIS ”), within five years of the date of signing the Share Sale Agreement, being 19 March 2017.

There are two tranches of Performance Shares:

A maximum of 25,000,000 Class A Performance Shares, 2,500,000 of which convert into Select Shares on a one for one basis on the achievement of at least 100 million tonnes of a JORC Inferred coal Resource being defined on the Projects. Thereafter, for any subsequent resource of 1,000 tonnes of coal in all JORC categories being defined on the Projects, 25 Class A Performance Shares will convert into Select Shares on a one for one basis up to a maximum of 1 billion tonnes of coal; and
A maximum of 25,000,000 Class B Performance Shares, 2,500,000 of which convert into Select Shares on a one for one basis on the achievement of at least 5 million pounds of a JORC Inferred uranium Resource being defined on the Projects. Thereafter, for any subsequent resource of ten pounds of uranium in all JORC categories being defined on the Projects, 5 Class B Performance Shares will convert into Select shares on a one for one basis up to a maximum of 50 million pounds of uranium.

Settlement of the Share Sale Agreement is subject to, amongst other things, the successful completion of the Offer.

4. Scope

You have requested BDO to prepare an Investigating Accountant's Report covering the following financial information:

the historical statement of financial position as at 30 June 2012, and the statement of comprehensive income and statement of changes in equity for the period ended on that date, for Select;
the consolidated historical statement of financial position as at 30 June 2012 and the consolidated statement of changes in equity for the period ended on that date, for both Panama and Shira;
the pro-forma statement of financial position as at 30 June 2012, and the pro-forma statement of changes in equity for the period ended on that date, reflecting the actual position as at that date, major transactions between that date and the date of our report and the proposed capital raising under the Prospectus; and
the accounting policies applied by the Company in preparing its financial statements, (the " Financial Information ").

The historical financial information set out in the appendices to this Report has been extracted from the financial statements of Select for the half-year ended 30 June 2012.

The Directors are responsible for the preparation of the historical financial information including determination of the adjustments.

We have conducted our review of the historical financial information in accordance with the Australian Auditing and Assurance Standard ASRE 2405 “Review of Historical Financial Information Other than a Financial Report”. We made such inquiries and performed such procedures as we, in our professional judgment, considered reasonable in the circumstances including:

a review of work papers, accounting records and other documents pertaining to balances in existence at 30 June 2012;
a review of the assumptions used to compile the pro-forma Statement of Financial Position;
a review of the adjustments made to the pro-forma historical financial information;
a comparison of consistency in application of the recognition and measurement principles in Accounting Standards and other mandatory professional reporting requirements in Australia, and the accounting policies adopted by the Company disclosed in the appendices to this Report; and
enquiry of Directors and others.

These procedures do not provide all the evidence that would be required in an audit, thus the level of assurance provided is less than that given in an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.

Our review was limited primarily to an examination of the historical financial information, the pro-forma financial information, analytical review procedures and discussions with both management and directors. A review of this nature provides less assurance than an audit and, accordingly, this Report does not express an audit opinion on the historical information or proforma financial information included in this Report or elsewhere in the Prospectus.

In relation to the information presented in this Report:

support by another person, corporation or an unrelated entity has not been assumed;
the amounts shown in respect of assets do not purport to be the amounts that would have been realised if the assets were sold at the date of this Report; and
the going concern basis of accounting has been adopted.

5. Conclusion

Statement on Historical Financial Information

Based on our review, which was not an audit, nothing has come to our attention which would cause us to believe the historical financial information as set out in the Appendices to this report does not present fairly the financial performance for the half-year ended 30 June 2012 or the financial position as at 30 June 2012 in accordance with the measurement and recognition requirements (but not all of the disclosure requirements) of applicable Accounting Standards and other mandatory professional reporting requirements in Australia.

Statement on Pro-forma Financial Information

Based on our review, which was not an audit, nothing has come to our attention which would cause us to believe the pro-forma financial information does not present fairly the financial position of the Company as at 30 June 2012, in accordance with the measurement and recognition requirements (but not all of the disclosure requirements) of applicable Accounting Standards and other mandatory professional reporting requirements in Australia as if the proforma transactions had occurred on that date.

6. Subsequent Events

The pro-forma statement of financial position reflects the following events that have occurred subsequent to the period ended 30 June 2012:

The company consolidated the number of Shares and Options it has on issue on the basis that every 100 Shares and Options held be consolidated into one Share and one Option. The exercise price of all Options was increased by the same consolidation ratio;
As part of the Share Sale Agreement with Indigo Metals Limited all related party loans receivable and payable in Shira and Panama will be forgiven prior to completion of the Acquisition; and
The Company received approval at a general meeting held on 31 July 2012 to issue up to 2,000,000 Incentive Options to employees and consultants exercisable at $0.36 each on or before 30 June 2016. The Company has yet to issue these options to individuals and has advised that they will not be allocated until after the Offer. Therefore, we have not accounted for the issue of these options in this Report.

Apart from the matters dealt with in this Report, and having regard to the scope of our Report, to the best of our knowledge and belief, no other material transactions or events outside of the ordinary business of the Company have come to our attention that would require comment on, or adjustment to, the information referred to in our Report or that would cause such information to be misleading or deceptive.

7. Assumptions Adopted in Compiling the Pro-forma Statement of Financial Position

The pro-forma statement of financial position post issue is shown in Appendix 2. This has been prepared based on the reviewed financial statements as at 30 June 2012, the subsequent events set out in Section 6, and the following transactions and events relating to the issue of Shares under this Prospectus:

The issue of 11,666,667 Shares at an offer price of $0.30 each together with one free attaching option for every two shares issued to raise $3.5 million before costs pursuant to the Prospectus, based on the minimum subscription;
Costs of the Offer are estimated to be $529,000 based on the minimum subscription, which are to be offset against the contributed equity. As at 30 June 2012, $101,917 of these costs have been paid by the Company. Therefore, costs of $427,083 are still to be incurred by the Company; and
The following payments in consideration for the acquisition of 100% of the issued capital of Panama and Shira (and their subsidiaries, WTF and IBIS):
Cash Consideration of $600,000 (for the purposes of this report we have assumed that Indigo elects this payment to be made in cash rather than shares, refer section 3);
the issue of 14,750,000 ordinary shares at a deemed issue price of $0.30;
the issue of 25,000,000 Class A Performance Shares which will convert to ordinary shares upon certain performance milestones being achieved; and
the issue of 25,000,000 Class B Performance Shares which will convert to ordinary shares upon certain performance milestones being achieved.

8. Disclosures

BDO Corporate Finance (WA) Pty Ltd is the corporate advisory arm of BDO in Perth.

Neither BDO Corporate Finance (WA) Pty Ltd nor BDO, nor any director or executive or employee thereof, has any financial interest in the outcome of the proposed transaction except for the normal professional fee due for the preparation of this Report.

Consent to the inclusion of the Investigating Accountant’s Report in the Prospectus in the form and context in which it appears, has been given. At the date of this Report, this consent has not been withdrawn.

Yours faithfully

BDO Corporate Finance (WA) Pty Ltd

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Peter Toll

Director

APPENDIX 1 SELECT EXPLORATION LIMITED

STATEMENT OF COMPREHENSIVE INCOME

	Select Reviewed for the half year ended 30-Jun-12 $
Revenue from research & development activities Interest Administration expenses Loss before income tax Income tax benefit Loss for the half year	2,738 8,822 (470,400)
	(458,840) -
	(458,840)

This statement of comprehensive income shows the historical financial performance of the Company and is to be read in conjunction with the notes to and forming part of the historical financial information set out in Appendix 4. Past performance is not a guide to future performance.

APPENDIX 2 SELECT EXPLORATION LIMITED

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Notes	Panama Shira Select Consolidated Consolidated Reviewed as at Reviewed as at Reviewed as at Subsequent Pro-forma Pro-forma 30-Jun-12 30-Jun-12 30-Jun-12 events adjustments after issue $ $ $ $ $ $
CURRENT ASSETS Cash and cash equivalents 2 Trade and other receivables 3 Loans receivable 4 TOTAL CURRENT ASSETS NON CURRENT ASSETS Exploration expenditure 5 TOTAL NON CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Loans payable 6 TOTAL CURRENT LIABILITES TOTAL LIABILITIES NET ASSETS EQUITY Contributed equity 7 Reserves 8 Accumulated losses 9 TOTAL EQUITY	255,211 - - - 2,472,917 2,728,128 142,250 64 64 - (101,917) 40,461 - 9,840 9,840 (19,680) - -
	397,461 9,904 9,904 (19,680) 2,371,000 2,768,589 - 156,130 156,982 - 7,501,760 7,814,872
	- 156,130 156,982 - 7,501,760 7,814,872
	397,461 166,034 166,886 (19,680) 9,872,760 10,583,461
	43,982 - - - - 43,982 - 473,964 474,006 (947,970) - -
	43,982 473,964 474,006 (947,970) - 43,982
	43,982 473,964 474,006 (947,970) - 43,982
	353,479 (307,930) (307,120) 928,290 9,872,760 10,539,479
	37,883,647 9,840 9,840 - 7,376,320 45,279,647 - 20 20 - 2,789,960 2,790,000 (37,530,168) (317,790) (316,980) 928,290 (293,520) (37,530,168)
	353,479 (307,930) (307,120) 928,290 9,872,760 10,539,479

The pro-forma statement of financial position after Issue is as per the statement of financial position before Issue adjusted for any subsequent events and the transactions relating to the issue of shares pursuant to this Prospectus. The statement of financial position is to be read in conjunction with the notes to and forming part of the historical financial information set out in Appendix 4. Past performance is not a guide to future performance.

APPENDIX 3 SELECT EXPLORATION LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Notes	Panama Shira Select Consolidated Consolidated Reviewed as at Reviewed as at Reviewed as at Subsequent Pro-forma Pro-forma 30-Jun-12 30-Jun-12 30-Jun-12 events Adjustments After issue $ $ $ $ $ $
Balance as at 1 January 2012	(37,071,328) - - - - (37,071,328)
Comprehensive income for the period Profit/(Loss) for the period 9 Total comprehensive income for the period Transactions with equity holders in their capacity as equity holders Contributed equity, net of transaction costs 7 Reserves 8 Total transactions with equity holders Balance as at 30 June 2012	(458,840) (317,790) (316,980) 928,290 (293,520) (458,840)
	(458,840) (317,790) (316,980) 928,290 (293,520) (458,840)
	37,883,647 9,840 9,840 - 7,376,320 45,279,647 - 20 20 - 2,789,960 2,790,000
	37,883,647 9,860 9,860 - 10,166,280 48,069,647

	353,479 (307,930) (307,120) 928,290 9,872,760 10,539,479

The above consolidated statement of changes in equity is to be read in conjunction with the notes to and forming part of the historical financial information set out in Appendix 4.

APPENDIX 4 SELECT EXPLORATION LIMITED

NOTES TO AND FORMING PART OF THE HISTORICAL FINANCIAL INFORMATION

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies adopted in the preparation of the historical financial information included in this Report have been set out below.

(a) Basis of preparation of historical financial information

The historical financial information has been prepared in accordance with the recognition and measurement, but not all the disclosure requirements of the Australian equivalents to International Financial Reporting Standards (“ AIFRS ”), other authoritative pronouncements of the Australian Accounting Standards Board, Australian Accounting Interpretations and the Corporations Act 2001.

The historical financial information has been prepared on an accruals basis and is based on historical costs, modified, where applicable, by the measurement as fair value of selected noncurrent assets, financial assets and financial liabilities.

The preparation of the historical financial information requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the groups accounting policies.

(b) Going Concern

The historical financial information has been prepared on a going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business.

The ability of the Company to continue as a going concern is dependent on the success of the fundraising under the Prospectus. The Directors believe that the Company will continue as a going concern. As a result the financial information has been prepared on a going concern basis. However should the fundraising under the Prospectus be unsuccessful, the entity may not be able to continue as a going concern. No adjustments have been made relating to the recoverability and classification of liabilities that might be necessary should the Company not continue as a going concern.

(c) Reporting Basis and Conventions

The report is also prepared on an accrual basis and is based on historic costs and does not take into account changing money values or, except where specifically stated, current valuations of non-current assets.

The following is a summary of the material accounting policies adopted by the company in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.

(d) Principles of consolidation

The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by Select at the end of the reporting period. A controlled entity is any entity over which Select has the power to govern the financial and operating policies so as to obtain benefits from the entity’s activities. Control will generally exist when the parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity. In assessing the power to govern, the existence and effect of holdings of actual and potential voting rights are also considered.

Where controlled entities have entered or left the Company during the year, the financial performance of those entities are included only for the period of the year that they were controlled.

In preparing the historical financial information, all inter-group balances and transactions between entities in the consolidated group have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those adopted by the parent entity.

Business combinations

Business combinations occur where an acquirer obtains control over one or more businesses and results in the consolidation of its assets and liabilities.

A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The acquisition method requires that for each business combination one of the combining entities must be identified as the acquirer (i.e. parent entity). The business combination will be accounted for as at the acquisition date, which is the date that control over the acquiree is obtained by the parent entity. At this date, the parent shall recognise, in the consolidated accounts, and subject to certain limited exceptions, the fair value of the identifiable assets acquired and liabilities assumed. In addition, contingent liabilities of the acquiree will be recognised where a present obligation has been incurred and its fair value can be reliably measured.

The acquisition may result in the recognition of goodwill or a gain from a bargain purchase. The method adopted for the measurement of goodwill will impact on the measurement of any noncontrolling interest to be recognised in the acquiree where less than 100% ownership interest is held in the acquiree.

The acquisition date fair value of the consideration transferred for a business combination plus the acquisition date fair value of any previously held equity interest shall form the cost of the investment in the separate financial statements. Consideration may comprise the sum of the assets transferred by the acquirer, liabilities incurred by the acquirer to the former owners of the acquiree and the equity interests issued by the acquirer.

Fair value uplifts in the value of pre-existing equity holdings are taken to the statement of comprehensive income. Where changes in the value of such equity holdings had previously been recognised in other comprehensive income, such amounts are recycled to profit or loss.

Included in the measurement of consideration transferred is any asset or liability resulting from a contingent consideration arrangement. Any obligation incurred relating to contingent consideration is classified as either a financial liability or equity instrument, depending upon the nature of the arrangement. Rights to refunds of consideration previously paid are recognised as a receivable. Subsequent to initial recognition, contingent consideration classified as equity is not re-measured and its subsequent settlement is accounted for within equity.

Contingent consideration classified as an asset or a liability is re-measured each reporting period to fair value through the statement of comprehensive income unless the change in value can be identified as existing at acquisition date.

All transaction costs incurred in relation to the business combination are expensed to the statement of comprehensive income.

(e) Income Tax

The income tax expense/(revenue) for the year comprises current income tax expense/ (income) and deferred tax expense/(income).

Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at the end of the reporting period. Current tax liabilities/(assets) are therefore measured at the amounts expected to be paid to/(recovered from) the relevant taxation authority.

Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well unused tax losses.

Current and deferred income tax expense/(income) is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity.

Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at the end of the reporting period. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability.

Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.

Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.

(f) Cash and Cash Equivalents

Cash and cash equivalents includes cash at bank and in hand, deposits held at call with financial institutions, other short-term highly liquid deposits with an original maturity of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the statement of financial position.

(g) Trade and other receivables

Trade receivables are recognised and carried at original invoice amount less a provision for any uncollectible debts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred.

Receivables from related parties are recognised and carried at the normal amount due. Interest is taken up as income on an accrual basis.

(h) Revenue Recognition

Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts and volume rebates allowed.

Interest revenue is recognised using the effective interest rate method, which, for floating rate financial assets, is the rate inherent in the instrument.

Revenue from the rendering of a service is recognised upon the delivery of the service to the customers.

All revenue is stated net of the amount of goods and services tax (GST).

(i) Trade and Other Payables

Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services received by the Company during the reporting period which remains unpaid. The balance is recognised as a current liability with the amount being normally paid within 30 days of recognition of the liability.

(j) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST.

Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

(k) Exploration and Evaluation Expenditure

Exploration and evaluation expenditure, including costs of acquiring the licences, are capitalised as exploration and evaluation assets on an area of interest basis. Costs incurred before the Company has obtained the legal rights to explore the area are recognised in the statement of comprehensive income.

Exploration and evaluation assets are only recognised if the rights of the area of interest are current and either:

I. The expenditures are expected to be recouped through successful development and exploitation or from sale of the area of interest; or
II. Activities in the area of interest have not at the reporting date, reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the areas of interest are continuing.

Exploration and evaluation assets are assessed for impairment if (i) sufficient date exists to determine technical feasibility and commercial viability, and (ii) facts and circumstances suggest that the carrying amount exceeds the recoverable amount. For the purpose of impairment testing, exploration and evaluation assets are allocated to cash-generating units to which the

exploration activity relates. The cash generating unit shall not be larger than the area of interest.

Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to mining property and development assets within property, plant and equipment.

When an area of interest is abandoned or the directors decide that it is not commercial, and accumulated costs in respect of that area are written off in the financial period the decision is made.

(l) Impairment of assets

At each the end of each reporting period, the Company assesses whether there is any indication that an asset may be impaired. The assessment will include the consideration of external and internal sources of information including dividends received from subsidiaries, associates or jointly controlled entities deemed to be out of pre-acquisition profits. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the statement of comprehensive income.

(m) Contributed Equity

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

(n) Financial Instruments

Recognition and initial measurement

Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the Company commits itself to either the purchase or sale of the asset (ie trade date accounting is adopted).

Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified ‘at fair value through profit or loss’, in which case transaction costs are expensed to profit or loss immediately.

Classification and subsequent measurement

Finance instruments are subsequently measured at either of fair value, amortised cost using the effective interest rate method, or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled, between knowledgeable, willing parties. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted.

Loans and Receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost.

Loans and receivables are included in current assets, except for those which are not expected to mature within 12 months after the end of the reporting period. (All other loans and receivables are classified as non-current assets.)

Fair value

Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models.

Impairment

At the end of each reporting period, the Company assesses whether there is objective evidence that a financial instrument has been impaired.

(o) Leases

Lease payments for operating leases where substantially all of the risks and benefits are charged as expenses remain with the lessor, in the periods in which they are incurred.

(p) Accounting estimates and judgements

In the process of applying the accounting policies, management has made certain judgements or estimations which have an effect on the amounts recognised in the financial information.

The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:

Valuation of share based payment transactions

The valuation of share-based payment transactions is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using the Black-Scholes model taking into account the terms and conditions upon which the instruments were granted.

Options

The fair value of options issued is determined using the Black-Scholes model, taking into account the terms and conditions upon which the options were granted.

Determination of fair values on exploration and evaluation assets acquired in asset acquisitions

On initial recognition, the assets and liabilities of the acquired entity are included in the statement of financial position at their fair values. In measuring fair value of exploration projects, management considers generally accepted technical valuation methodologies and comparable transactions in determining the fair value. Due to the subjective nature of valuation with respect to exploration projects with limited exploration results, management have determined the price paid to be indicative of its fair value.

Determination of fair values of consideration paid in asset acquisitions

At the time of acquisition, consideration transferred is required to be measured at it acquisition date fair value. With respect to performance shares issued (contingent consideration), management are required to estimate the probability of performance milestones being achieved in determining the acquisition date fair value. Management will continue to monitor and assess the likelihood of this outcome based upon information available at each reporting period.

Recoverability of capitalised exploration and evaluation expenditure

The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, including whether the company decides to exploit the related lease itself, or, if not, whether it successfully recovers the related exploration and evaluation asset through sale.

Factors that could impact the future recoverability include the level of reserves and resources, future technological changes, costs of drilling and production, production rates, future legal changes (including changes to environmental restoration obligations) and changes to commodity prices.

Taxation

The Company is subject to income taxes in Australia. Significant judgement is required when determining the Company’s provision for income taxes. The Company estimates its tax liabilities based on the Company’s understanding of the tax law.

NOTE 2. CASH AND CASH EQUIVALENTS	Reviewed 30-Jun-12 $	Pro-forma After issue $
Cash and cash equivalents Adjustments to arise at the pro-forma balance: Reviewed balance of Select as at 30 June 2012 Pro-forma adjustments: Proceeds from shares issued under this Prospectus Capital raising costs Cash Consideration for acquisition of Panama and Shira Pro-forma Balance	255,211	2,728,128
		255,211 3,500,000 (427,083) (600,000)
		2,472,917
		2,728,128

NOTE 3. TRADE AND OTHER RECEIVABLES	Reviewed 30-Jun-12 $	Pro-forma After issue $
Trade and other receivables Adjustments to arise at the pro-forma balance: Reviewed balance of Select as at 30 June 2012 Acquisition of Panama and Shira Pro-forma adjustments: Transfer of prepaid capital raising costs of the Offer to be offset against contributed equity Pro-forma Balance	142,250	40,461
		142,250 128 (101,917)
		(101,917)
		40,461

NOTE 4. LOANS RECEIVABLE	Reviewed 30-Jun-12 $	Pro-forma After issue $
Loans receivable Adjustments to arise at the pro-forma balance: Reviewed balance of Select as at 30 June 2012 Acquisition of Panama and Shira Subsequent events: Forgiveness of related party loans receivable prior to Acquisition Pro-forma Balance	-	-
		- 19,680 (19,680)
		(19,680)
		-

NOTE 5. EXPLORATION EXPENDITURE	Reviewed 30-Jun-12 $	Pro-forma After issue $
Exploration expenditure Adjustments to arise at the pro-forma balance: Reviewed balance of Select as at 30 June 2012 Acquisition of Panama and Shira Pro-forma adjustments: Fair value increase from acquisitions of Panama and Shira (refer Note 10) Pro-forma Balance	-	7,814,872
		- 313,112 7,501,760
		7,501,760
		7,814,872

NOTE 6. LOANS PAYABLE	Reviewed 30-Jun-12 $	Pro-forma After issue $
Loans payable Adjustments to arise at the pro-forma balance: Reviewed balance of Select as at 30 June 2012 Acquisition of Panama and Shira Subsequent events: Forgiveness of related party loans payable prior to Acquisition Pro-forma Balance	-	-
		- 947,970 (947,970)
		(947,970)
		-

NOTE 7. CONTRIBUTED EQUITY	Reviewed Pro-forma 30-Jun-12 After issue $ $
Contributed equity Adjustments to arise at the pro-forma balance: Fully paid ordinary share capital of Select Acquisition of Panama and Shira Subsequent events: Consolidation of Select share capital on 1:100 basis Pro-forma adjustments: Proceeds from shares issued under this Prospectus Capital raising costs Consolidation adjustments on acquisition of Panama and Shira Consideration Shares for acquisition of Panama and Shira Pro-forma Balance	37,883,647 45,279,647
	Number of shares $ 1,132,109,065 37,883,647 - 19,680 (1,120,787,394) -
	11,321,671 37,903,327 11,666,667 3,500,000 - (529,000) - (19,680) 14,750,000 4,425,000
	26,416,667 7,376,320
	37,738,338 45,279,647

*The Company will also issue 50 million Performance Shares as part of the Acquisition. Refer Note 8 for further details.

NOTE 8. RESERVES	Reviewed 30-Jun-12 $	Pro-forma After issue $
Reserves Adjustments to arise at the pro-forma balance: Reviewed balance of Select as at 30 June 2012 Acquisition of Panama and Shira Pro-forma adjustments: Consolidation adjustments on acquisition of Panama and Shira Performance Shares issued for acquisition of Panama and Shira Pro-forma Balance	-	2,790,000
		- 40 (40) 2,790,000
		2,789,960
		2,790,000

Performance Shares on issue	Number	Value ($)
Performance shares currently on issue Class A Performance Shares(1) Class B Performance Shares(2) Total Performance Shares on issue	- 25,000,000 25,000,000	- 1,395,000 1,395,000
	50,000,000	2,790,000

The above Performance Shares will convert into fully paid ordinary shares upon satisfaction of the following:

1) A maximum of 25,000,000 Class A Performance Shares, 2,500,000 of which convert to Select Shares on a one for one basis on the achievement of at least 100 million tonnes of a JORC Inferred coal Resource being defined on the Projects. Thereafter, for any subsequent resource of 1,000 tonnes of coal in all JORC categories being defined on the Projects, 25 Class A Performance Shares will convert into Select Shares on a one for one basis up to a maximum of 1 billion tonnes of coal. For the purpose of the Acquisition we have valued the Class A Performance Shares at $1,395,000 as shown below:

MT Coal	Shares to be	Underlying
Resource	issued	share price ($)	Probability	Value ($)
100	2,500,000	0.30	40%	300,000
100	2,500,000	0.30	35%	262,500
100	2,500,000	0.30	30%	225,000
100	2,500,000	0.30	25%	187,500
100	2,500,000	0.30	20%	150,000
100	2,500,000	0.30	15%	112,500
100	2,500,000	0.30	10%	75,000
100	2,500,000	0.30	5%	37,500
100	2,500,000	0.30	5%	37,500
100	2,500,000	0.30	1%	7,500
1000	25,000,000			1,395,000

2) A maximum of 25,000,000 Class B Performance Shares, 2,500,000 of which convert to Select Shares on a one for one basis on the achievement of at least 5 million pounds of a JORC Inferred uranium Resource being defined on the Projects. Thereafter, for any subsequent resource of ten pounds of uranium in all JORC categories being defined on the Projects, 5 Class B Performance Shares will convert into Select Shares on a one for one basis up to a maximum of 50 million pounds of uranium. For the purpose of the Acquisition we have valued the Class B Performance Shares at $1,395,000 as shown below:

Mlb Uranium	Shares to be	Underlying
Resource	issued	share price ($)	Probability	Value ($)
5	2,500,000	0.30	40%	300,000
5	2,500,000	0.30	35%	262,500
5	2,500,000	0.30	30%	225,000
5	2,500,000	0.30	25%	187,500
5	2,500,000	0.30	20%	150,000
5	2,500,000	0.30	15%	112,500
5	2,500,000	0.30	10%	75,000
5	2,500,000	0.30	5%	37,500
5	2,500,000	0.30	5%	37,500
5	2,500,000	0.30	1%	7,500
50	25,000,000			1,395,000

The Company will have the following Options on issue upon completion of the Offer:

Options on issue	Number
Current options on issue (post-consolidation): Options with an exercise price of $0.20 and expiry date of 31 July 2013 4,175,091 Options to be issued: Incentive Options with an exercise price of $0.36 and expiry date of 30 June 2016 2,000,000 Attaching Options with an exercise price of $0.35 and expiry date of 30 Sept 2015 5,833,334 Total* 12,008,425 Options are to be granted to key employees and consultants and will be allocated after the Offer.* Options will be issued as part of the Offer and the number is based on the minimum subscription. **Total options on issue does not include Loyalty Options which will be issued on the basis of one option for every two shares held approximately two months after Company re-admitted to Official Quotation on ASX.	4,175,091 2,000,000 5,833,334
	12,008,425

Options on issue

Number

Current options on issue (post-consolidation):
Options with an exercise price of $0.20 and expiry date of 31 July 2013
4,175,091
Options to be issued:
Incentive Options with an exercise price of $0.36 and expiry date of 30 June 2016
2,000,000
Attaching Options with an exercise price of $0.35 and expiry date of 30 Sept 2015
5,833,334
Total*
*12,008,425
Options are to be granted to key employees and consultants and will be allocated after the Offer.
Options will be issued as part of the Offer and the number is based on the minimum subscription.
**Total options on issue does not include Loyalty Options which will be issued on the basis of one option for
every two shares held approximately two months after Company re-admitted to Official Quotation on ASX.

4,175,091
2,000,000
5,833,334

12,008,425

NOTE 9. ACCUMULATED LOSSES	Reviewed Pro-forma 30-Jun-12 After issue $ $	Reviewed Pro-forma 30-Jun-12 After issue $ $
Accumulated losses Adjustments to arise at the pro-forma balance: Reviewed balance of Select as at 30 June 2012 Acquisition of Panama and Shira Subsequent events: Forgiveness of related party loans receivable prior to Acquisition Forgiveness of related party loans payable prior to Acquisition Pro-forma adjustments: Consolidation adjustments on acquisition of Panama and Shira Pro-forma Balance	(37,530,168) (37,530,168)
		(37,530,168) (634,770) (19,680) 947,970
		928,290 (293,520)
		(293,520)
		(37,530,168)

NOTE 10: ASSET ACQUISTION

A summary of the acquisition details with respect to the proposed acquisitions of Panama and Shira is included in our report as set out below. These details have been determined for the purposes of the pro-forma adjustments as at 30 June 2012, however will require redetermination as at the successful acquisition date which may result in changes to the values as disclosed below. The net identifiable assets acquired below excludes the related party loans receivable and payable by both Shira and Panama as these will be forgiven prior to the completion of the Acquisition.

Details of the net assets acquired and purchase consideration are as follows:

	Fair value $
Trade and other receivables Loans receivable Exploration expenditure Loans payable Forgiveness of related party loan receivables prior to Acquisition Forgiveness of related party loan payables prior to Acquisition Net identifiable assets Purchase consideration comprises: Cash Consideration Consideration Shares Class A Performance Shares Class B Performance Shares Fair value attributable to exploration assets of acquired entity Pro-forma adjustment to exploration assets*	128 19,680 313,112 (947,970) (19,680) 947,970
	313,240
	600,000 4,425,000 1,395,000 1,395,000
	7,815,000
	7,501,760
	7,501,760

*The Consideration Shares have been valued using an underlying share price of $0.30 per share

**The Class A and Class B Performance Shares have been valued using an underlying share price of $0.30 per share and applying a probability of achieving the each conversion milestone based on the Director’s current expectation. Refer Note 8 for valuation of Performance Shares.

The acquisitions of both Panama and Shira are not deemed to be business combinations as neither entity is considered to be a business under AASB 3 Business Combinations. Therefore we have treated these transactions as asset acquisitions and the fair value of the underlying exploration assets held by both Panama and Shira is equal to the consideration amount of $7,815,000 to be paid by Select.

NOTE 11: RELATED PARTY DISCLOSURES

Transactions with Related Parties and Directors Interests are disclosed in the Prospectus.

NOTE 12: COMMITMENTS AND CONTINGENCIES

At the date of the report no material commitments or contingent liabilities exist that we are aware of, other than those disclosed in the Prospectus.

NOTE 13: HISTORICAL FINANCIAL INFORMATION

The Company does not consider it appropriate to disclose three years historical financial information because in the fourth quarter of 2010 the Company was restructured through a placement followed by a rights issue and moved its business away from the medical vaccine sector. Since the restructure the Company has assessed several projects for potential acquisition but for technical and/or commercial reasons none of these projects were progressed until December 2011 when the Company entered into a heads of agreement to acquire 32 licences in Tanzania through the acquisition of two Mauritian companies and their Tanzanian subsidiaries from Indigo Metals Limited. We have therefore included the most recent statement of comprehensive income and statement of financial position, reviewed as at 30 June 2012, as detailed at Appendix 1 and Appendix 2 respectively and consider that these provide sufficient detail of historical financial information for the Company.

As Shira and Panama (including WTF and IBIS) were only incorporated on 5 April 2011 and have had minimal operations since that date we consider the financial position, reviewed as at 30 June 2012 as detailed in Appendix 2, provides sufficient detail of historical financial information.

8. SOLICITOR’S REPORT

157

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WTF RESOURCES LIMITED

(“WTF”)

AND

IBIS RESOURCES LIMITED

(“IBIS”)

____

LEGAL DUE DILIGENCE REPORT TO SELECT VACCINES LIMITED ON THE CORPORATE STATUS OF WTF AND IBIS AND THE MINERAL RIGHTS HELD BY THEM

____

REXATTORNEYS REX HOUSE 145 Magore Street P.O. Box 7495 Dar Es Salaam Tanzania

Tel#: +255 22 2114292/2114899/2137191

Fax#: +255 22 2112830/2119474 E-mail: [email protected] Web: www.rexattorneys.co.tz

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Contents	Contents			Page
1.0	GENERAL BACKGROUND:
	1.1	Instructions	……………….………………	1
	1.2	Searches	……………….………………	2
	1.3	Documents Reviewed	……………….………………	2
	1.4	Assumptions	……………….………………	2
	1.5	Qualifications	……………….………………	3
2.0	LEGAL DUE DILIGENCE REPORT ON		THE CORPORATE
	STANDING OF THE COMPANIES:
	2.1	“Good Standing” Opinion	……………….………………	3
3.0	MINERAL RIGHTS TITLE STATUS:
	3.1	General	……………….………………	5
	3.2	Types of Mineral Rights	……………………………….	5
	3.3	Mining Licences, Special
		Mining Licences and
		Prospecting Licences	……………………………….	5
	3.4	Prospecting Licences	……………………………….	6
	3.5	Annual Rent	……………………………….	7
	3.6	Minimum Expenditure	……………………………….	8
	3.7	Title Search Finding	……………………………….	8
	3.8	Confirmation	……………………………….	12
4.0	LITIGATION:		……………………………….	13
5.0	CONCLUSION:		……………………………….	14

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Our Ref: REX/SVL/20/12/Vol.3/487/12 Date: 7[th] September, 2012

Select Vaccines Limited 945 Wellington St West Pert WA 6005 AUSTRALIA

Attn: Mr. Steven Wood

WTF RESOURCES LIMITED AND IBIS RESOURCES LIMITED

_____ LEGAL OPINION

------------------------------------

1.0 GENERAL BACKGROUND:

1.1 Instructions

You have asked us to undertake a legal due diligence study and provide certain opinions on the corporate standing of WTF Resources Limited (“WTF”) and IBIS Resources Limited ("IBIS") (together “the Companies”), and the mineral rights (the “Mineral Rights”) held by the Companies in Tanzania in which Mineral Rights Select Vaccines Limited (“Select”) seeks to acquire a beneficial interest through a direct cash purchase of AUD$600,000 of the Companies respective Mauritius shareholders and performance shares being issued and a share offer of 14,750,000 shares in Select to the sellor, and to issue a report, being “this Report”, and deliver our opinions thereon. We are a firm of lawyers duly qualified to practice in Tanzania and we provide this Report on matters relating to Tanzanian law alone. This Report has been prepared for due diligence purposes in relation to a prospectus (“Prospectus”) to be issued by Select for the offer of up to 13,333,333 shares each at an issue price of $0.30 to raise up to $4,000,000 (before costs) and we consent to the inclusion of this Report in the Prospectus.

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For the purposes of this Report we have reviewed documents and conducted searches at the Registry of Companies and the Registry of Mineral Rights (“the Registries” when referred to together) in Dar Es Salaam, Tanzania. The documents reviewed and the reports from the Registries are referred to hereinafter.

1.2 Searches

We have searched the Registry of Companies in respect of the Companies to establish their corporate standing including compliance with statutory requirements. We have also searched the Registry of Mineral Rights in Dar Es Salaam and reviewed the records maintained by the Commissioner for Minerals (the “Commissioner”) pursuant to the Mining Act No. 14 of 2010 (“the Mining Act”) to establish the status of the Mineral Rights.

1.3 Documents Reviewed

We have examined the documents listed in Schedule 1.

The Companies are obliged under the Companies Act No. 12 of 2002 (“the Companies Act”) to maintain a register of members and directors and a minute book. We have not seen or reviewed these statutory books in respect of either WTF or IBIS. However, we are satisfied with the documents reviewed at the Registry of Companies in respect of the Companies.

1.4 Assumptions

In preparing this Report we have made the following assumptions:

the accuracy and correctness of the instructions which we have received with respect to all matters of fact;
all facts stated in the documents and certificates upon which we have relied upon in providing this Report are correct.
the absence of any actual or pending litigation or agreements in respect of any of the Licence Holders and the Mineral Rights or applications for such rights the subject of this Report that may be prejudicial or have any material bearing or otherwise upon this Report, its recipients or the purpose for which it was prepared.

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1.5 Qualifications

Our Report has relied on official search reports from both Registries, however,

we are aware that such records may not be complete or up to date and that documents required to be filed, lodged or registered at either Registry may not have been filed immediately or even if filed may not be available for immediate inspection. The Report is therefore qualified to that extent.

2.0 LEGAL DUE DILIGENCE REPORT ON THE CORPORATE STANDING OF THE COMPANIES:

2.1 “Good Standing” Opinion:

2.1.1 On the basis of the search conducted at the Registry of Companies, we confirm as follows in respect of the Companies:-
The Companies are private limited liability companies duly incorporated and existing in Tanzania pursuant to the Companies Act No. 12 of 2002 (“the Companies Act”);
A “private company” is defined under the Companies Act as one that by its Articles of Association restricts the right to transfer its shares, limits the number of the members of the company to fifty and prohibits any invitation to the public to subscribe for shares or any debentures in the company.
The Companies are in good standing and are compliant with all the statutory requirements under Tanzanian law.
2.1.2 The particulars of the shareholders, shares in issue and current directors, any charges created, charges registered and the status of statutory returns in respect of each of the Companies as detailed hereinafter:-

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(a) WTF:

Authorised Share Capital – the authorized share capital of WTF is Tanzania Shillings Ten Billion (TZS 10,000,000,000/=) divided into 10,000 ordinary shares of Tanzania Shillings One Million (TZS 1,000,000/=) each. The shares are all fully paid up and issued to Panama Resources Limited of Mauritius (9,999 shares) and Ian Macliver (1 share).
Directors - the directors are Ian Macliver (Australian) and Richard Bevan (Australian).
Charges – no charges created.
Statutory Returns – the Company is current in filing its returns as required by law.

Registered office - The registered office is at 1[st] Floor, Alpha House, 25 Ursino Estate, New Bagamoyo Road, Dar Es Salaam.

Litigation – we are not aware of any pending cases against WTF.

(b) IBIS:

Authorised Share Capital – the authorized share capital of IBIS is Tanzania Shillings Ten Billion (TZS 10,000,000,000/=) divided into 10,000 ordinary shares of Tanzania Shillings One Million (1,000,000/=) each. The shares are all fully paid up and issued to Shira Resources Limited of Mauritius (9,999 shares) and Sean Tangney (1 share).
Directors - the directors of IBIS are Mark Titchener (Australian) and Sean Tangney (Irish).

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Charges - there are no charges created.
Statutory Returns – the Company is current in filing its returns as required by law.
Registered office - The registered office of IBIS is at 1[st] Floor, Alpha House, 25 Ursino Estate, New Bagamoyo Road, Dar Es Salaam.
Litigation – we are not aware of any pending cases against IBIS.

3.0 MINERAL RIGHTS TITLE STATUS

3.1 General

3.1.1 Rights for prospecting or mining for minerals are licenced under the Mining Act. The Minister has power to grant, renew, suspend or cancel any licence. However, the Minister is obliged to serve on the licence holder a default notice specifying the grounds on which the licence is liable to be suspended or cancelled indicating a specific period during which the default may be cured. The powers of the Minister or where the law specifies the Commissioner are exercisable in accordance with the powers conferred to them under the Mining Act. A Mineral Right is deemed a requisite and sufficient authority over the land in respect of which the right is granted. However, a separate authority (water grant) is required to divert water. A holder of a Mineral Right is also obliged to seek the prior consent of lawful occupiers before he can exercise his rights under the Mining Act. All licences issued under the Mining Act are referred to as Mineral Rights.

3.2 Types of Mineral Rights

The types of rights which may be granted under the Mining Act include prospecting licence, retention licence, special mining licence, mining licence, gemstone mining licence and a primary mining licence. Primary mining licences are restricted to Tanzanian citizens or corporate entities whose memberships are composed exclusively of Tanzanian citizens.

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3.3 Mining Licences, Special Mining Licences and Prospecting Licences:

3.3.1 Mining licences or special mining licences may be applied for by a prospecting licence holder who has established the existence of minerals in commercial quantities. Such applicant is referred to in the Mining Act as an Entitled Applicant. Mining licences are normally granted for a period not exceeding 10 years, and in the case of special mining licences for the estimated life of the ore body, as indicated in the feasibility study report or as the applicant may request, whichever is shorter. Mining licences may be renewed for a further period not exceeding 10 years and in the case of special mining licences for another period not exceeding the estimated life of the remaining ore body, unless the applicant is in default, the development has not proceeded with reasonable speed, minerals in reasonable quantities do not remain to be produced, the intended mining operations do not ensure the proper development of the mineral resources or applicant has not included the relevant environmental certificate under the Environmental Management Act.
3.3.2 The opinion we provide relating to mineral rights held by the Companies is based on the official search report from the Registry of Mineral Rights maintained by the Commissioner.

3.4 Prospecting Licences

3.4.1 WTF holds four (4) prospecting licences, IBIS sixteen (16) prospecting licences and Alka Chavda one (1) prospecting licence (the “Prospecting Licences”) (together “the Licenceholders”). The Prospecting Licence held by Alka Chavda is in the process of being transferred to WTF. 11 Prospecting Licences have been offered to be granted to either IBIS or WTF and there are 6 pending applications for prospecting licences (the “Applications”) five (5) of which have been lodged by WTF and one (1) that has been lodged by Aziza Kiombile which upon grant will be transferred to IBIS. A further breakdown of the Prospecting Licences and Applications is provided in the confirmation clauses 3.8.2 and 3.8.4 below.

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3.4.2 Under the Mining Act, the initial period of prospecting licences is four (4) years, followed by a first renewal period of three (3) years and a second renewal period of two (2) years. The maximum life span of a prospecting licence is therefore nine (9) years. Where the holder is not in default and at the end of the second renewal period, further period is required to complete a feasibility study already commenced, the prospecting licence may be renewed for such further periods but not exceeding two (2) years required for that purpose.
3.4.3 Save for PL 4945/2008, none of the Prospecting Licences are due for renewal as yet. A first renewal in respect of PL 4945/2008 was lodged on 04.03.2011 and offered on 16.11.2011.
3.4.4 The Mining Act stipulates that, in the case of a first renewal the holder of a prospecting licence shall relinquish fifty (50) percent of the area held during the initial prospecting period and a further fifty (50) percent of the balance in the second renewal. Information pertaining to the Mineral Rights held by the Companies showing the dates of applications and grant are provided in paragraph 3.7 below.
3.4.5 Pursuant to section 32 of the Mining Act, unless the holder is in default and the Minister has issued a default notice and given an opportunity to the licence holder to cure the default, the Commissioner is obliged to renew a prospecting licence upon application:
(a) at the end of the initial prospecting period, or as the case may be, at the end of the first renewal period; and
(b) at the end of the second renewal period for the period required to complete a feasibility study, if applicable.

The Licensing Authority must grant the application for renewal of a prospecting licence not later than six (6) weeks from the date on which the application is made, unless the holder has been issued a notice of default pursuant to Section 33(1) of the Mining Act.

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3.4.6 Where there are two or more competing applications for a grant of mineral rights over the same area, the person whose application was first registered under the Mining Act, provided there is no reason for disqualification, would be granted the mineral right.

3.5 Annual Rent:

The annual rent on a prospecting licence for its initial prospecting period is calculated by multiplying the area of the licence in square kilometres allocated in the grant by US$40: See paragraph 7(a) of the First Schedule of the Regulations. Subsequently, the annual rent for the first renewal of a prospecting licence is US$50 and for the second renewal US$60 per square kilometre.

3.6 Minimum Expenditure:

Regulations 8(1) and (2) of the Act provide for the amount to be expended annually on prospecting licences. Regulation 8(2)(a), (b) and (c) provides that the minimum expenditure required for a prospecting licence for the initial prospecting period is US$500 per square kilometre per annum. The maximum size for a prospecting licence during this period is two hundred (300) square kilometres. The minimum amount to be expanded on a prospecting licence for the first renewal period is US$2,000 per square kilometre per annum and in the case of the second renewal period is US$6,000 per square kilometre per annum.

The Ministry monitors the work commitment over a tenement by noting the expenditure in the quarterly reports lodged at the Ministry. Each licenceholder has an obligation to lodge quarterly and annual reports. This is an important mechanism available to the Ministry to monitor a licenceholder’s activities and expenditure.

3.7 Title Search Finding

Our search at the Registry of Mineral Rights confirmed the status of the Mineral Rights held by the Companies as follows:-

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MINERAL RIGHTS SUMMARY TABLE
S/No. License No. Area (km2) Registered Holder Date Issued Expiry Date 1st Renewal	Remarks
MHUKURU PROJECT
1 PL 7386/2011 11.41 IBIS 22.11.2011 21.11.2015	Current, valid and subsisting. Originally HQ-P 23655 lodged on 27.05.2011.
2 HQ-P 24982 WTF	Application lodged on 16.12.2011 was modified and was recommended with modifications on 15.05.2012
3 HQ-P 24981 WTF	Application lodged on 16.12.2011 and was recommended on 15.05.2012
4 HQ-P 25015* IBIS	Application lodged on 27.12.2011 and was recommended.
5 HQ-P 23809 WTF	Application lodged on 23.06.2011 and is still being processed.
SELOUS PROJECT
6 PL 7381/2011 116.59 IBIS 22.11.2011 21.11.2015	Current, valid and subsisting. Originally HQ-P 23654 lodged on 27.05.2011.
7 PL 7366/2011 293.17 IBIS 18.11.2011 17.11.2015	Current, valid and subsisting. Originally HQ-P 23669 lodged on 30.05.2011.
8 PL 7400/2011 296.08 IBIS 28.11.2011 27.11.2015	Current, valid and subsisting. Originally HQ-P 23670 lodged on 30.05.2011.
9 PL 7383/2011 48.08 IBIS 22.11.2011 21.11.2015	Current, valid and subsisting. Originally HQ-P 23656 lodged on 27.05.2011.
10 PL 7380/2011 295.48 IBIS 18.11.2011 17.11.2015	Current, valid and subsisting. Originally HQ-P 23668 lodged on 30.05.2011.

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11 PL 7402/2011 292.07 IBIS 28.11.2011 27.11.2015	Current, valid and subsisting. Originally HQ-P 23671 lodged on 30.05.2011.
12 PL 7365/2011 197.15 IBIS 18.11.2011 17.11.2015	Current, valid and subsisting. Originally HQ-P 23672 lodged on 30.05.2011.
13 PL 7401/2011 296.77 IBIS 28.11.2011 27.11.2015	Current, valid and subsisting. Originally HQ-P 23673 lodged on 30.05.2011.
14 PL 7397/2011 298.31 IBIS 28.11.2011 27.11.2015	Current, valid and subsisting. Originally HQ-P 23674 lodged on 30.05.2011.
15 PL 7385/2011 295.56 IBIS 22.11.2011 21.11.2015	Current, valid and subsisting. Originally HQ-P 23675 lodged on 30.05.2011.
16 PL 7790/2012 49.92 IBIS 27.03.2012 26.03.2016	Current, valid and subsisting. Originally HQ-P 25012 lodged on 27.12.2011.
RUHUHU PROJECT
17 HQ-P 22701 Aziza Kiombile	Application lodged on 25.10.2010 and is still being processed.
18 HQ-P 23985 IBIS	Application lodged on 25.07.2011 and was recommended.
19 HQ-P 25014 IBIS	Application lodged on 27.12.2011 was recommended with modifications on 15.05.2012.
20 PL 7791/2012 6.93 IBIS 23.03.2012 22.03.2016	Current, valid and subsisting. Originally HQ-P 25013 lodged on 27.12.2011.
21 PL 7051/2011 148.14 IBIS 21.04.2011 20.04.2015	Current, valid and subsisting. Transferred from Gulban Mhanze to Ibis Resources Limited on 03.06.2011.

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22 PL 7048/2011 81.49 IBIS 21.04.2011 20.04.2015	Current, valid and subsisting. Transferred from Mwavita Kajuna to Ibis Resources Limited on 04.06.2011.

23 PL 4945/2008 25.97 IBIS 04.04.2008 03.04.2011 04.04.2011	Current, valid and subsisting. Application HQ-G16858 for the first renewal was lodged on 04.03.2011 and offered on 16.11.2011. Transferred from Alfred A. Davis and Josephat A. Davis to Ibis Resources Limited on 03.06.2011.
RUKWA PROJECT
24 PL 7795/2012 95.34 WTF 03.04.2012 02.04.2016	Current, valid and subsisting. Originally HQ-P 24425 lodged on 04.10.2011.
25 PL 7794/2012 6.97 WTF 03.04.2012 02.04.2016	Current, valid and subsisting. Originally HQ-P 24541 lodged on 19.10.2011.
26 HQ-P 23805* WTF	Application lodged on 23.06.2011 and was recommended.
27 HQ-P 23806* WTF	Application lodged on 23.06.2011 and was recommended.
28 HQ-P 23808* WTF	Application lodged on 23.06.2011 and was recommended.
29 HQ-P 24426 WTF	Application lodged on 04.10.2011 and is still being processed.
30 HQ-P 24980 WTF	Application lodged on 16.12.2011 and was recommended on 15.05.2012
ADDITIONAL LICENCES
31 PL 7793/2012 107.6 WTF 03.04.2012 02.04.2016	Current, valid and subsisting. Originally HQ-P 24892 lodged on 29.11.2011.

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32 PL 7792/2012 15.64 WTF 03.04.2012 02.04.2016	Current, valid and subsisting. Originally HQ-P 24893 lodged on 29.11.2011.
33 HQ-P 24923 WTF	Application lodged on 02.12.2011 and is still being processed.

34 HQ-P 24922 WTF	Application lodged on 02.12.2011 and is still being processed.
35 HQ-P 24921 WTF	Application lodged on 02.12.2011 and is still being processed.
36 HQ-P 24920 WTF	Application lodged on 02.12.2011 was recommended with modifications on 15.05.2012
37 HQ-P 24919 WTF	Application lodged on 02.12.2011 was recommended with modifications on 15.05.2012.
38 PL 7783/2012 9.44 Alka Chavda 27.03.2012 26.03.2016	Current, valid and subsisting. Originally HQ-P 24443 lodged on 05.10.2011.

Although these licences have been recommended, the applicant has yet to be notified officially by receipt of a letter of notification of a grant from the Commissioner.
3.8 Confirmation
- 3.8.1 We confirm that we have reviewed information pertaining to twenty-one (21) Prospecting Licences and seventeen (17) Applications.
- 3.8.2 Four (4) Prospecting Licences are validly held by WTF, and sixteen (16) Prospecting Licences are validly held by IBIS. PL 7783/2012 is validly held by Alka Chavda. A transfer form for the transfer of this Prospecting Licence to WTF has been lodged with the Commissioner. The Licenceholders enjoy exclusive rights to undertake mineral exploration and if viable deposits are found to develop mines at the licensed areas. The Prospecting Licences have been validly granted pursuant to the Mining Act and are in good standing and have not been cancelled, suspended or expired as of the date of this Report and all other documents and filings

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(including renewal applications) necessary to maintain the licences in good standing have been completed to date;

3.8.3 The Companies have good interest in the Mineral Rights free and clear of liens and encumbrances. There is no pending winding up petition or application for the appointment of a receiver manager of the Companies.
3.8.4 Our findings on the Applications indicate that out of the seventeen (17) Applications:
(a) Eleven (11) have been offered to be granted (8 to WTF of which 3 have been modified and 3 to IBIS of which 1 has been modified). The Companies have paid the relevant fees in respect of these offers and are waiting for the Prospecting Licences to be granted. Upon acceptance of an offer for a grant, the licensing authority is required within four (4) weeks to grant and cause the licence to be issued to the applicant. However, in practice this usually takes longer especially due to the backlog of licensing and more recently the changes within the Ministry of Energy and Minerals. In respect of the Applications that have been modified, after those Applications were lodged, the Commissioner noted that a portion of the Application areas overlapped with existing licences and consequently the Commissioner modified the areas of these Applications to remove the overlap which is prohibited pursuant to Regulation 18; and
(b) Six (6) are still being processed (5 for WTF and one in the name of Aziza Kiombile which will be transferred to IBIS upon being granted).
3.8.5 There are no disputes that we are aware of relating to the Mineral Rights with any governmental or regional authority or any unrelated third party.
3.8.6 There are no provisions under Tanzanian law or regulation in relation to the Mineral Rights which would permit it to be forfeited or otherwise withdrawn in the event of change of ownership.

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4.0 LITIGATION:

We are not aware of any litigation, pending or actual, involving the Companies and the information availed to us does not suggest the existence of any litigation or dispute involving either of the Companies or the Mineral Rights.

5.0 CONCLUSION

This Report is issued for the benefit of the addressees and should not be relied upon by any other person without our express approval.

Yours Sincerely

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REXATTORNEYS

TM/

Select – DDR Final Aug01.12

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Schedule 1

Documents Reviewed

General:

Official search reports on the Mineral Rights from the Ministry of Energy and Minerals referenced MEM-C/M.100/86B dated 4[th] April, 2012;
Official search report on WTF from the Business Registration and Licensing Agency referenced MIT/RC/82568/03 dated 5[th ] April, 2012;
Official search report on IBIS from the Business Registration and Licensing Agency referenced MIT/RC/82571/03 dated 5[th ] April, 2012;

In respect of WTF:

a copy of certificate of incorporation of WTF number 82568 dated 5[th] April, 2011;
a copy of the Memorandum and Articles of Association;
Copy of Company Form No. 14a first directors and secretary and intended situation of registered office filed on 4[th] April, 2011;
Copy of Company Form No. 14b Declaration of Compliance on application for the registration of a company filed on 4[th] April, 2011;
Copy of Company Form No. 210b for the termination of Sean Tangney as director w.e.f. 31[st] March, 2012 and filed on 23[rd] April, 2012;
Copy of Company Form No. 210b for the termination of Mark Titchener as director w.e.f. 31[st] March, 2012 and filed on 23[rd] April, 2012;
Copy of Company Form No. 210a for the appointment of Richard Bevan as director w.e.f. 31[st] March, 2012 and filed on 23[rd] April, 2012;
Copy of Share Transfer Form for the transfer of 1 share from Mark Titchener to Ian Macliver dated 31[st] March, 2012 and stamp duty paid on 23[rd] April, 2012; and
Copy of Board of Directors resolution for changes on the Board and transfer of 1 share dated 31[st] March, 2012.
Copy of Company Form 66 Notice of Increase in Nominal Capital increasing the capital by Tanzania Shillings 9,000,000,000/= beyond the registered capital of Tanzania Shillings 1,000,000,000/= dated 31[st] May, 2011 and filed on 16[th] February, 2012.
Copy of Company Form 55a Return of Allotment of Shares allotting 9,995 shares with a nominal value of Tanzania Shillings 1,000,000/= each to Panama Resources Limited of Mauritius dated 31[st] May, 2011 and filed on 14[th] February, 2012.
Copy of Share Transfer Form transferring 4 ordinary shares from Indigo Metals Limited to Panama Resources Limited dated 14[th] June, 2011 and stamp duty paid on 17[th] June, 2011.
Copy of Minutes of the Board of Directors held on 31[st] May, 2011 resolving to increase the authorized nominal capital, allotment, transfer of shares to Panama Resources Limited and changes on the board, filed on 16[th] February, 2012.
Copies of letters of Notification of a Grant of a Mineral Right from the Commissioner for Minerals referenced MEM-C/M.100/86B dated 15[th] May, 2012 with respect to HQ-P24981, HQ-P24980, HQ-P24982, HQ-P24920 and HQ-P24919.

In respect of IBIS:

Copy of the certificate of incorporation of IBIS number 82571;
Copy of the Memorandum and Articles of Association;
Copy of Company Form No. 14a first directors and secretary and intended situation of registered office filed on 4[th] April, 2011;
Copy of Company Form No. 14b Declaration of Compliance on application for the registration of a company filed on 4[th] April, 2011
Copy of Company Form No. 210b for the termination of Ian Macliver as director w.e.f. 31[st] March, 2012 and filed on 23[rd] April, 2012;
Copy of Board of Directors resolution for changes on the Board dated 31[st] March, 2012.
Copy of Company Form 66 Notice of Increase in Nominal Capital increasing the capital by Tanzania Shillings 9,000,000,000/= beyond the registered capital of Tanzania Shillings 1,000,000,000/= dated 31[st] May, 2011 and filed on 16[th] February, 2012.
Copy of Company Form 55a Return of Allotment of Shares allotting 9,995 shares with a nominal value of Tanzania Shillings 1,000,000/= each to Shira Resources Limited of Mauritius dated 31[st] May, 2011 and filed on 10[th] February, 2012.
Copy of Share Transfer Form transferring 4 ordinary shares from Tanga Minerals Limited to Shira Resources Limited dated 14[th] June, 2011 and stamp duty paid on 17[th] June, 2011.
Copy of Minutes of the Extra-Ordinary General Meeting held on 31[st] May, 2011 resolving to increase the authorized nominal capital and allotment to Shira Resources Limited, filed on 16[th] February, 2012.
Copy of letter of Notification of a Grant of a Mineral Right from the Commissioner for Minerals referenced MEM-C/M.100/86B dated 15[th] May, 2012 with respect to HQ-P 25014.

9. RIGHTS ATTACHING TO SECURITIES

9.1 Rights attaching to Shares

Full details of the rights attaching to Shares are set out in the Company’s Constitution, a copy of which can be inspected, free of charge, at the Company’s registered office during normal business hours.

The following is a broad summary of the rights, privileges and restrictions attaching to all Shares under the Constitution. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders:

(a) General meeting and notices

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 sent to members under the Constitution, the Corporations Act or the Listing Rules.

(b) Voting rights

Subject to any rights or restrictions for the time being attached to any class or classes of shares, at a general meeting of the Company every holder of fully paid ordinary shares present in person or by an attorney; representative or proxy has one vote on a show of hands (unless a member has appointed 2 proxies) and one vote per share on a poll.

A person who holds a share which is not fully paid is entitled, on a poll, to a fraction of a vote equal to the proportion which the amount paid bears to the total issue price of the share.

Where there are 2 or more joint holders of a share and more than one of them is present at a meeting and tenders a vote in respect of the share, the Company will count only the vote cast by the member whose name appears first in the Company's register of members.

(c) Issues of further Shares

The Directors may, on behalf of the Company, issue, grant options over or otherwise dispose of unissued shares to any person on the terms, with the rights, and at the times that the Directors decide. However, the Directors must act in accordance with the restrictions imposed by the Constitution, Listing Rules, the Corporations Act and any rights for the time being attached to the shares in any special class of those shares.

(d) Variation of Rights

Unless otherwise provided by the Constitution or by the terms of issue of a class of shares, the rights attached to the shares in any class may be varied or cancelled only with the written consent of the holders of at least three‐quarters of the issued shares of the affected class, or by special resolution passed at a separate meeting of the holders of the issued shares of the affected class.

(e) Transfer of Shares

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

The Shares may be transferred by a proper transfer effected in accordance with the ASX Settlement Operating Rules, by any other method of transferring or dealing with Shares introduced by ASX and as otherwise permitted by the Corporations Act or by a written instrument of transfer in any usual form or in any other form approved by either the Directors or ASX that is permitted by the Corporations Act.

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The Directors may decline to register a transfer of Shares (other than a proper transfer in accordance with the ASTC Business Rules) where permitted to do so under the Listing Rules. If the Directors decline to register a transfer, the Company must, within 5 business days after the transfer is delivered to the Company, give the party lodging the transfer written notice of the refusal and the reason for the refusal. The Directors must decline to register a transfer of Shares when required by law, by the Listing Rules or by the ASX Settlement Operating Rules.

(f) Partly paid Shares

The Directors may, subject to compliance with the Constitution, the Corporations Act and Listing Rules, issue partly paid shares upon which there are outstanding amounts payable. These shares will have limited rights to vote and to receive dividends.

(g) Dividends

The Directors may from time to time determine dividends to be distributed to members according to their rights and interests. The Directors may fix the time for distribution and the methods of distribution. Subject to the terms of issue of shares, the Company may pay a dividend on one class of shares to the exclusion of another class.

Each share carries the right to participate in the dividend in the same proportion that the amount for the time being paid on the share (excluding any amount paid in advance of calls) bears to the total issue price of the share.

(h) Winding up

Subject to the rights of holders of shares with special rights in a winding‐up, if the Company is wound up, members will be entitled to participate in any surplus assets of the Company in proportion to the percentage of the capital paid‐up or credited as paid up on the shares when the winding up begins.

(i) Dividend reinvestment and Share plans

Subject to the requirements in the Corporations Act and the Listing Rules, the Directors may implement and maintain dividend reinvestment plans (under which any member may elect that dividends payable by the Company be reinvested by way of subscription for fully paid shares in the Company) and any other share plans (under which any member may elect to forego any dividends that may be payable on all or some of the shares held by that member and to receive instead some other entitlement, including the issue of fully paid shares).

(j) Directors

The Constitution states that the minimum number of Directors is 3.

(k) Powers of the Board

Except as otherwise required by the Corporations Act, any other law, the Listing Rules or the Constitution, the Directors have the power to manage the business of the Company and may exercise every right, power or capacity of the Company.

(l) Share buy backs

Subject to the provisions of the Corporations Act and the Listing Rules, the Company may buy back shares in itself on the terms and at times determined by Directors.

(m) Unmarketable parcels

The Company's constitution permits the Board to sell the Shares held by a Shareholder if they

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comprise less than a marketable parcel within the meaning of ASX Business Rules. The procedure may only be invoked once in any 12 month period and requires the Company to give the Shareholder notice of the intended sale.

If a Shareholder does not want his Shares sold, he may notify the Company accordingly.

(n) Capitalisation of profits

The Company may capitalise profits. Subject to the Constitution and the terms of the issue of shares, members are entitled to participate in a capital distribution in the same proportions in which they are entitled to participate in dividends.

(o) Capital reduction

Subject to the Corporations Act and Listing Rules, the Company may reduce its share capital.

(p) Preference Shares

The Company may issue preference shares including preference shares that are liable to be redeemed. The rights attaching to preference shares are those set out in the Constitution unless other rights have been approved by special resolution of the Company’s members.

9.2 Terms of Performance Shares

The Company will issue 25,000,000 Class A Performance Shares and 25,000,000 Class B Performance Shares to Indigo as part consideration for the Acquisition on the following terms and conditions.

Class A Performance Shares

Conversion of Class A Performance Shares

(a) ( Conversion on achievement of Coal Milestones ) On the achievement of at least 100 million tonnes of a JORC Inferred coal Resource being defined on the Tenements, 2,500,000 Class A Performance Shares will convert into Shares on a one for one basis and thereafter, for any subsequent resource of 1,000 tonnes of coal in all JORC categories being defined on the Tenements, 25 Class A Performance Shares will convert into Shares on a one for one basis ( Coal Milestones ) up to a maximum of 1 billion tonnes of coal.

By way of example, if an initial total resource in all JORC categories of 350 million tonnes of coal on the Tenements, on determination, 8,750,000 Performance Shares will convert into 8,750,000 Shares. If 12 months later, a further 50 million tonnes of coal is added to the total resource on the Tenements in all JORC categories (a total of 400 million tonnes), an additional 1,250,000 Performance Shares will convert into 1,250,000 Shares.

(b) ( Expiry ) The Coal Milestones must be achieved on or before 5.00 pm on the date which is 5 years after the date of the Share Sale Agreement ( Expiry Date ).

(c) ( Conversion on change of control ) If there is a Change of Control Event in relation to the Company prior to the conversion of the Class A Performance Shares, then:
(i) the maximum Coal Milestones will be deemed to have been achieved; and
(ii) each Class A Performance Share will automatically and immediately convert into Shares,

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however, if the number of Shares to be issued as a result of the conversion of Class A Performance Shares, together with the number of Shares to be issued as a result of the conversion of the Class B Performance Shares, due to a Change in Control Event is in excess of 10% of the total fully diluted share capital of Select at the time of the conversion, then the number of Class A Performance Share and Class B Performance Share to be converted will be pro‐rated so that the aggregate number of Shares issued upon conversion of the Class A Performance Shares and the Class B Performance Shares is equal to 10% of the entire fully diluted share capital of the Company.

(d) ( No conversion ) To the extent that Class A Performance Shares have not converted into Shares on or before the Expiry Date, then all such unconverted Class A Performance Shares held by each holder ( Class A Holder ) will automatically consolidate into one Class A Performance Share and will then convert into one Share.
(e) ( Conversion procedure ) The Company will issue a Class A Holder with a new holding statement for the Share or Shares as soon as practicable following the conversion of each Class A Performance Share.
(f) ( Ranking of shares ) Each Share into which the Class A Performance Shares will convert will upon issue:
(i) rank equally in all respects (including, without limitation, rights relating to dividends) with other issued Shares;
(ii) be issued credited as fully paid;
(iii) be duly authorised and issued by all necessary corporate action; and
(iv) be allotted and issued free from all liens, charges and encumbrances whether known about or not including statutory and other pre‐emption rights and any transfer restrictions.

Rights attaching to Class A Performance Shares

(g) ( Share capital ) Each Class A Performance Share is a share in the capital of the Company.
(h) ( General meetings ) Each Class A Performance Share confers on a Class A Holder the right to receive notices of general meetings and financial reports and accounts of the Company that are circulated to shareholders. A Class A Holder has the right to attend general meetings of shareholders of the Company.
(i) ( No Voting rights ) A Class A Performance Share does not entitle a Class A Holder to vote on any resolutions proposed at a general meeting of shareholders of the Company.
(j) ( No dividend rights ) A Class A Performance Share does not entitle a Class A Holder to any dividends.
(k) ( Rights on winding up ) Each Class A Performance Share entitles a Class A Holder to participate in the surplus profits or assets of the Company upon winding up of the Company, but only to the extent of $0.0001 per Class A Performance Share.
(l) ( Not transferable ) A Class A Performance Share is not transferable.
(m) ( Reorganisation of capital ) If there is a reorganisation (including, without limitation, consolidation, sub‐division, reduction or return) of the issued capital of the Company,

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the rights of a Class A Holder will be varied (as appropriate) in accordance with the Listing Rules which apply to reorganisation of capital at the time of the reorganisation.

(n) ( Quotation of shares on conversion ) An application will be made by the Company to ASX for Official Quotation of the Shares issued upon the conversion of each Class A Performance Share within the time period required by the Listing Rules.
(o) ( Participation in entitlements and bonus issues ) A Class A Performance Share does not entitle a Class A Holder to participate in new issues of capital offered to holders of Shares, such as bonus issues and entitlement issues.
(p) ( No other rights ) A Class A Performance Share does not give a Class A Holder any other rights other than those expressly provided by these terms and those provided at law where such rights at law cannot be excluded by these terms.

Class B Performance Shares

Conversion of Class B Performance Shares

(a) ( Conversion on achievement of Uranium Milestones ) On the achievement of at least 5 million pounds of a JORC Inferred uranium Resource being defined on the Tenements, 2,500,000 Class B Performance Shares will convert into Shares on a one for one basis and thereafter, for any subsequent resource of 10 pounds of uranium in all JORC categories being defined on the Tenements, 5 Class B Performance Shares will convert into Shares on a one for one basis ( Uranium Milestones ) up to a maximum of 50 million pounds of uranium.

By way of example, if an initial total resource in all JORC categories of 7.5 million pounds of uranium on the Tenements, on determination, 3,750,000 Performance Shares will convert into 3,750,000 Shares. If 12 months later, a further 2 million pounds of uranium is added to the total resource on the Tenements in all JORC categories (a total of 9.5 million pounds), an additional 1,000,000 Performance Shares will convert into 1,000,000 Shares.

(b) ( Expiry ) The Uranium Milestones must be achieved on or before 5.00 pm on the date which is 5 years after the date of the Share Sale Agreement ( Expiry Date ).
(c) ( Conversion on change of control ) If there is a Change of Control Event in relation to the Company prior to the conversion of the Class B Performance Shares, then:
(i) the Uranium Milestones will be deemed to have been achieved; and
(ii) each Class B Performance Share will automatically and immediately convert into Shares,

however, if the number of Shares to be issued as a result of the conversion of Class B Performance Shares, together with the number of Shares to be issued as a result of the conversion of the Class B Performance Shares, due to a Change in Control Event is in excess of 10% of the total fully diluted share capital of Select at the time of the conversion, then the number of Class B Performance Share and Class B Performance Share to be converted will be pro‐rated so that the aggregate number of Shares issued upon conversion of the Class B Performance Shares and the Class B Performance Shares is equal to 10% of the entire fully diluted share capital of the Company.

(d) ( No conversion ) To the extent that Class B Performance Shares have not converted into Shares, on or before the Expiry Date, then all such unconverted Class B

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Performance Shares held by each holder ( Class B Holder ) will automatically consolidate into one Class B Performance Share and will then convert into one Share.

(e) ( Conversion procedure ) The Company will issue a Class B Holder with a new holding statement for the Share or Shares as soon as practicable following the conversion of each Class B Performance Share.
(f) ( Ranking of shares ) Each Share into which the Class B Performance Shares will convert will upon issue:
(i) rank equally in all respects (including, without limitation, rights relating to dividends) with other issued Shares;
(ii) be issued credited as fully paid;
(iii) be duly authorised and issued by all necessary corporate action; and
(iv) be allotted and issued free from all liens, charges and encumbrances whether known about or not including statutory and other pre‐emption rights and any transfer restrictions.

Rights attaching to Class B Performance Shares

(g) ( Share capital ) Each Class B Performance Share is a share in the capital of the Company.
(h) ( General meetings ) Each Class B Performance Share confers on a Class B Holder the right to receive notices of general meetings and financial reports and accounts of the Company that are circulated to shareholders. A Class B Holder has the right to attend general meetings of shareholders of the Company.
(i) ( No Voting rights ) A Class B Performance Share does not entitle a Class B Holder to vote on any resolutions proposed at a general meeting of shareholders of the Company.
(j) ( No dividend rights ) A Class B Performance Share does not entitle a Class B Holder to any dividends.
(k) ( Rights on winding up ) Each Class B Performance Share entitles a Class B Holder to participate in the surplus profits or assets of the Company upon winding up of the Company, but only to the extent of $0.0001 per Class B Performance Share.
(l) ( Not transferable ) A Class B Performance Share is not transferable.
(m) ( Reorganisation of capital ) If there is a reorganisation (including, without limitation, consolidation, sub‐division, reduction or return) of the issued capital of the Company, the rights of a Class B Holder will be varied (as appropriate) in accordance with the Listing Rules which apply to reorganisation of capital at the time of the reorganisation.
(n) ( Quotation of shares on conversion ) An application will be made by the Company to ASX for Official Quotation of the Shares issued upon the conversion of each Class B Performance Share within the time period required by the Listing Rules.
(o) ( Participation in entitlements and bonus issues ) A Class B Performance Share does not entitle a Class B Holder to participate in new issues of capital offered to holders of Shares, such as bonus issues and entitlement issues.

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(p) ( No other rights ) A Class B Performance Share does not give a Class B Holder any other rights other than those expressly provided by these terms and those provided at law where such rights at law cannot be excluded by these terms.

9.3 Terms of Existing Listed Options

The general rights and liabilities attaching to the Existing Options can be summarised as follows:

(a) Each Existing Option entitles the holder to subscribe for and be allotted one ordinary share in the capital of the Company. The exercise price is $0.20 per Existing Option (the Exercise Price ).
(b) The Existing Options are exercisable at any time prior to 5.00pm (Melbourne time) on 31 July 2013 (the Expiry Date ), by notice in writing to the Company accompanied by payment of the Exercise Price.
(c) The Existing Options are transferable and are listed on the Official List of the ASX.
(d) Shares will be allotted and issued pursuant to the exercise of Existing Options not more than 10 business days after receipt of a properly executed notice of exercise and payment of the requisite application moneys.
(e) Shares issued upon exercise of the Existing Options will rank pari passu in all respects with the Company's then issued Shares. The Company will apply for Official Quotation by ASX of all Shares issued upon the exercise of Existing Options within 3 Business Days after the date of allotment of those Shares.
(f) There are no participating rights or entitlements inherent in the Existing Options and holders will not be entitled to participate in new issues of capital offered or made to the Shareholders during the currency of the Existing Options. However, the Company will send a notice to each optionholder at least 10 business days before the record date for any proposed issue of capital. This will give optionholders the opportunity to exercise their Existing Options prior to the date for determining entitlements to participate in any such issue.
(g) There are no rights to a change in the exercise price, or in the number of shares over which the Existing Options can be exercised, in the event of a bonus issue by the Company prior to the exercise of any Existing Options.
(h) In the event of any reorganisation of the issued capital of the Company on or prior to the Expiry Date, the rights of an option holder will be changed to the extent necessary to comply with the applicable Listing Rules at the time of the reorganisation.
(i) The Company will, at least 20 Business Days before the Expiry Date, send notices to the optionholders stating the name of the optionholder, the number of Existing Options held, the exercise price, and the consequences of non‐payment.

9.4 Terms of Incentive Options

The Company will issue up to 2,000,000 Incentive Options to key employees, consultants and advisors of the Company on the following terms as approved by Shareholders at the General Meeting:

(a) Each Incentive Option entitles the holder to subscribe for one Share upon exercise of the Incentive Option.
(b) Each Incentive Option has an exercise price of $0.36 ( Exercise Price ) and an expiry date of 30 June 2016 ( Expiry Date ).

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(c) The Incentive Options are exercisable at any time after grant and on or prior to the Expiry Date.
(d) The Incentive Options may be exercised by notice in writing to the Company ( Notice of Exercise ) and payment of the exercise price for each Option being exercised. Any Notice of Exercise of an Option received by the Company will be deemed to be a notice of the exercise of that Option as at the date of receipt.
(e) Shares issued on exercise of the Incentive Options rank equally with the then Shares of the Company.
(f) Application will be made by the Company to ASX for quotation of the Shares issued upon the exercise of the Incentive Options.
(g) There are no participation rights or entitlements inherent in the Incentive Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Incentive Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least ten business days after the issue is announced. This will give the holders of Incentive Options the opportunity to exercise their Incentive Options prior to the date for determining entitlements to participate in any such issue.
(h) If the Company makes a bonus issue of Shares or other securities to existing Shareholders (other than an issue in lieu or in satisfaction of dividends or by way of dividend reinvestment):
(i) the number of Shares which must be issued on the exercise of an Incentive Option will be increased by the number of Shares which the Optionholder would have received if the Optionholder had exercised the Incentive Option before the record date for the bonus issue; and
(ii) no change will be made to the Exercise Price.
(i) If the Company makes an issue of Shares pro rata to existing Shareholders there will be no adjustment of the Exercise Price of an Option.
(j) If there is any reconstruction of the issued share capital of the Company, the rights of the Optionholders may be varied to comply with the Listing Rules which apply to the reconstruction at the time of the reconstruction.
(k) No application for quotation of the Incentive Options will be made by the Company.
(l) The Incentive Options are transferable provided that the transfer of the Incentive Options complies with section 707(3) of the Corporations Act.

9.5 Terms of Attaching Options and Loyalty Options

The general rights and liabilities attaching to Attaching Options and Loyalty Options can be summarised as follows:

(a) Each Attaching Option and Loyalty Option entitles the holder to subscribe for and be allotted one ordinary share in the capital of the Company.
(b) Each Attaching Option and Loyalty Option has an exercise price of $0.35 ( Exercise Price ) and an expiry date of 30 September 2015 ( Expiry Date ).

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(c) Each Attaching Option and Loyalty Option is exercisable at any time after grant and on or prior to the Expiry Date.
(d) For each Attaching Option and Loyalty Option exercised prior to the Expiry Date the Company will grant one Secondary Option pursuant to a disclosure document to be lodged with ASIC on or about 30 September 2015.
(e) Attaching Options and Loyalty Options may be exercised by notice in writing to the Company ( Notice of Exercise ) and payment of the Exercise Price for each Attaching Option or Loyalty Option being exercised. Any Notice of Exercise of an Attaching Option or Loyalty Option received by the Company will be deemed to be a notice of the exercise of that Attaching Option or Loyalty Option as at the date of receipt.
(f) Shares will be allotted and issued pursuant to the exercise of Attaching Options and Loyalty Options not more than 10 business days after receipt of a properly executed notice of exercise and payment of the requisite application moneys.
(g) Shares issued upon exercise of the Attaching Options and Loyalty Options will rank equally in all respects with the Company's then issued Shares. The Company will apply for Official Quotation by ASX of all Shares issued upon the exercise of Attaching Options and Loyalty Options within 3 Business Days after the date of allotment of those Shares.
(h) There are no participating rights or entitlements inherent in the Attaching Options and Loyalty Options and holders will not be entitled to participate in new issues of capital offered or made to the Shareholders during the currency of the Attaching Options and Loyalty Options. However, the Company will send a notice to each optionholder at least 10 business days before the record date for any proposed issue of capital. This will give optionholders the opportunity to exercise their Attaching Options and/or Loyalty Options prior to the date for determining entitlements to participate in any such issue.
(i) There are no rights to a change in the exercise price, or in the number of shares over which the Attaching Options and Loyalty Options can be exercised, in the event of a bonus issue by the Company prior to the exercise of any Attaching Options and Loyalty Options.
(j) The Attaching Options and Loyalty Options will be unlisted Options at the time of grant. However the Company reserves the right to apply for quotation of the Attaching Options and Loyalty Options at such time as the Company in its absolute discretion determines. Should the Company make an application for official quotation of the Attaching Options and Loyalty Options and the ASX accepts the application for quotation of the Options then the Attaching Options and Loyalty Options will be listed options from the time that the ASX accepts such application.
(k) Until the ASX accepts an application for quotation of the Attaching Options and Loyalty Options then the Attaching Options and Loyalty Options are transferable provided that the transfer of Options complies with section 707(3) of the Corporations Act.
(l) Following the ASX accepting an application for quotation of the Attaching Options and Loyalty Options then the Attaching Options and Loyalty Options are freely transferable.
(m) In the event of any re‐organisation of the issued capital of the Company on or prior to the Expiry Date, the rights of an option holder will be changed to the extent necessary to comply with the applicable Listing Rules at the time of the re‐organisation.
(n) The Company will, at least 20 Business Days before the Expiry Date, send notices to the optionholders stating the name of the optionholder, the number of Attaching Options and/or Loyalty Options held, the exercise price, and the consequences of non‐payment.

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9.6 Terms of the Secondary Options

The general rights and liabilities attaching to Secondary Options can be summarised as follows:

(a) Each Secondary Option entitles the holder to subscribe for and be allotted one ordinary share in the capital of the Company.
(b) For each Attaching Option and Loyalty Option exercised prior to the relevant expiry date the Company will grant one Secondary Option pursuant to a disclosure document to be lodged with ASIC on or about 30 September 2015.
(c) Each Secondary Option has an exercise price of $0.45 ( Exercise Price ) and an expiry date of 31 March 2017 ( Expiry Date ).
(d) Each Secondary Option is exercisable at any time after grant and on or prior to the Expiry Date.
(e) Secondary Options may be exercised by notice in writing to the Company ( Notice of Exercise ) and payment of the Exercise Price for each Secondary Option being exercised. Any Notice of Exercise of a Secondary Option received by the Company will be deemed to be a notice of the exercise of that Secondary Option as at the date of receipt.
(f) Shares will be allotted and issued pursuant to the exercise of Secondary Options not more than 10 business days after receipt of a properly executed notice of exercise and payment of the requisite application moneys.
(g) Shares issued upon exercise of the Secondary Options will rank equally in all respects with the Company's then issued Shares. The Company will apply for Official Quotation by ASX of all Shares issued upon the exercise of Secondary Options within 3 Business Days after the date of allotment of those Shares.
(h) There are no participating rights or entitlements inherent in the Secondary Options and holders will not be entitled to participate in new issues of capital offered or made to the Shareholders during the currency of the Secondary Options. However, the Company will send a notice to each optionholder at least 10 business days before the record date for any proposed issue of capital. This will give optionholders the opportunity to exercise their Secondary Options prior to the date for determining entitlements to participate in any such issue.
(i) There are no rights to a change in the exercise price, or in the number of shares over which the Secondary Options can be exercised, in the event of a bonus issue by the Company prior to the exercise of any Secondary Options.
(j) The Secondary Options will be unlisted Options at the time of grant. However the Company reserves the right to apply for quotation of the Secondary Options at such time as the Company in its absolute discretion determines. Should the Company make an application for official quotation of the Secondary Options and the ASX accepts the application for quotation of the Options then the Secondary Options will be listed options from the time that the ASX accepts such application.
(k) Until the ASX accepts an application for quotation of the Secondary Options then the Secondary Options are transferable provided that the transfer of Options complies with section 707(3) of the Corporations Act.
(l) Following the ASX accepting an application for quotation of the Secondary Options then the Secondary Options are freely transferable.

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(m) In the event of any re‐organisation of the issued capital of the Company on or prior to the Expiry Date, the rights of an option holder will be changed to the extent necessary to comply with the applicable ASX Listing Rules at the time of the re‐organisation.
(n) The Company will, at least 20 Business Days before the Expiry Date, send notices to the optionholders stating the name of the optionholder, the number of Secondary Options held, the exercise price, and the consequences of non‐payment.
(o) Cheques shall be in Australian currency made payable to the Company and crossed "Not Negotiable". The application for shares on exercise of the Secondary Options with the appropriate remittance should be lodged at the Company's share registry.

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10. ADDITIONAL INFORMATION

10.1 Share Sale Agreement

The Company has entered into the Share Sale Agreement with Indigo to acquire 100% ownership of the companies which ultimately own the Tenements for consideration as follows:

(a) $600,000 cash ($20,000 of which is payable as a non‐refundable deposit upon execution of the Share Sale Agreement) ( Cash Consideration ) being a re‐imbursement of past exploration costs (based on exploration costs provided by the Indigo. The Company is in the process of verifying these exploration costs). The Indigo may elect to be paid the Cash Consideration, wholly or partly, in cash or in Shares. If the Indigo makes an election to be paid all or some of the Cash Consideration in Shares then the Shares will be issued at $0.40 per Share in satisfaction of the portion of the Cash Consideration to be paid in Shares. If the whole of the Cash Consideration is paid in Shares then Indigo will be issued an additional 1,500,000 Vendor Shares. The ASX must be satisfied that the Cash Consideration is a reimbursement of expenditure incurred in developing the Projects. To the extent that the Cash Consideration exceeds Indigo’s exploration expenditure in respect of the Projects once this figure has been verified, the parties will ensure that Indigo is paid that portion (if any) of the Cash Consideration in Shares;
(b) 14,750,000 Vendor Shares. Shareholders should note that if the whole of the Cash Consideration is paid in Shares then Indigo will be issued a total of 16,250,000 Vendor Shares (refer to paragraph (a) above for further information);
(c) 25,000,000 Class A Performance Shares;
(d)
25,000,000 Class B Performance Shares;
(e) The Share Sale Agreement is conditional upon, and subject to, a number of conditions. These conditions have either been satisfied or substantially satisfied, with the exception of the following conditions which remain outstanding at the date of this Prospectus:
(i) completion of due diligence; and
(ii) the Company obtaining all necessary regulatory approvals required in relation to the Acquisition including re‐compliance with Chapters 1 and 2 of the Listing Rules and approval of the relevant Tanzanian regulatory authorities.

Indigo has acknowledged that some or all of the Vendor Securities may be escrowed in accordance with the requirements of ASX.

There are normal commercial warranties associated with the Share Sale Agreement.

During the period from execution of the Share Sale Agreement until completion, the Company will manage the Tenements and be responsible for all outgoings.

10.2 Lead Manager Mandate

The Company has entered into an agreement dated 30 July 2012 with Patersons, as varied by a letter agreement dated 21 August 2012 (together the Lead Manager Mandate ) pursuant to which the Company has engaged Patersons to act as lead manager to the Offer. As lead manager, Patersons will provide all necessary assistance in managing and arranging the Offer as is customary for this type of offer, including providing strategic market advice and marketing services and managing the application and allocation processes.

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As remuneration for acting as Lead Manager, Patersons will receive:

(a) a lead manager fee of $60,000 (excluding GST) ( Lead Manager Fee ) payable upon completion of the Offer;
(b) a management fee of 1% of the gross amount raised under the Offer; and
(c) a selling fee of 5% of the gross amount raised under the Offer.

In addition, Patersons will be reimbursed for reasonable out‐of‐pocket expenses directly related to the Offer. If the Company terminates the agreement, or Patersons terminates the agreement for cause, the Company will pay the Lead Manager Fee as the termination fee and any accrued expenses up to the date of termination.

The Company has agreed to indemnify Patersons and its related companies, directors, agents and staff, ( Indemnified Parties ) from and against any and all demands, damages, losses, liabilities, costs or expenses, including legal costs on a full indemnity basis, which any Indemnified Party incurs or suffers arising out of, or in respect of, the Offer or the Lead Manager Mandate.

The Lead Manager Mandate contains covenants, warranties, representations and other terms that are standard for an agreement of this nature.

Pursuant to the Lead Manager Mandate, the Company has granted Patersons the first right of refusal to act in the lead role of any further equity capital raisings undertaken by the Company for a period of 12 months from the date of completion of the Offer.

10.3 Managing Director Elect Agreement

Outlined below is a summary of the material provisions of the executive services agreement between the Company and Mr Shane Cranswick.

(a) Appointment: Subject to the Company’s re‐compliance and re‐admission on ASX, the Company will engage Mr Cranswick as its Managing Director.
(b) Term: The employment will be subject to a three month probationary period, during which time either party may cease employment if it is deemed that the working relationship is not satisfactory. The Company can waive the probationary period at its discretion. Following the probationary period, the appointment is ongoing subject to the termination provisions.
(c) Remuneration:
(i) Salary: Mr Cranswick will receive an annual salary of $225,000 (inclusive of statutory superannuation) for services rendered, which will be reviewed annually.
(ii) Performance Rights: Mr Cranswick is entitled to the following Performance Rights:

Number of Performance Rights	Performance Condition	Milestone Date
100,000	Continuous employment with the Company	1 July 2013
100,000	Continuous employment with the Company	1 July 2014
100,000	Continuous employment with the Company and subject to a Market Price Test. The Market Price Test measures the increase in share price of the Company such that the performance rights will vest if the 10 day VWAP of trading in the Company’s shares at anytime from the	On or before 1 July 2013

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	Commencement Date up to the 1 July 2013 milestone date is not less than 50% above the price at which the capital raising is undertaken as part of the Company’s re‐ compliance.
100,000	Continuous employment with the Company and subject to a Market Price Test. The Market Price Test measures the increase in share price of the Company such that the performance rights will vest if the 10 day VWAP of trading in the Company’s shares at any time from the Commencement Date up to the 1 July 2014 milestone date is not less than 85% above the price at which the capital raising is undertaken as part of the Company’s re‐ compliance.	On or before 1 July 2014
200,000	Achievement of key performance indicators as agreed by the Board in relation to:  Meeting exploration timetables  Meeting exploration budgets  Maintenance of tenements	1 July 2013

(d) Termination:
(i) The Company may at its sole discretion terminate the employment of the Managing Director by giving one month’s written notice. The Company reserves the right to make a payment to the Managing Director in lieu of notice equal to the salary payable over the one month period.
(ii) The Managing Director may at his sole discretion terminate his employment by giving one month’s written notice to the Company.

10.4 Performance Share Offers

The Company is also offering pursuant to this Prospectus 25,000,000 Class A Performance Shares and 25,000,000 Class B Performance Shares to Indigo as part of the consideration for the Acquisition. Further details on the Acquisition are in Section 10.1.

The offer of Performance Share under this Prospectus is made only to Indigo as part of the consideration for the Acquisition. The purpose of the offer of the Performance Shares pursuant to this Prospectus is to ensure that Indigo can on‐sell the Shares issued on conversion of the Performance Shares pursuant to ASIC Class Order C04/671.The offer of Performance Shares can only be accepted by the parties specified above as being eligible to participate completing an application form to be provided by the Company together with a copy of this Prospectus.

10.5 Interests of Directors

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

(a) the formation or promotion of the Company; or

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(b) any property acquired or proposed to be acquired by the Company in connection with:
(i) its formation or promotion; or
(ii) the Offer; or
(c) the Offer,

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to a Director:

(a) as an inducement to become, or to qualify as, a Director; or
(b) for services provided in connection with:
(i) the formation or promotion of the Company; or
(ii) the Offer.

10.6 Interests of Experts and Advisers

Other than as set out below or elsewhere in this Prospectus, no:

(a) person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Prospectus;
(b) promoter of the Company; or
(c) financial services licensee named in this Prospectus as a financial services licensee involved in the Offer,

holds or has held within the 2 years preceding lodgement of this Prospectus with the ASIC, any interest in:

(i) the formation or promotion of the Company; or
(ii) any property acquired or proposed to be acquired by the Company in connection with:
(A) its formation or promotion; or
(B) the Offer; or
(iii) the Offer

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to any of these persons for services provided in connection with:

(d) the formation or promotion of the Company; or
(e) the Offer.

Patersons has acted as the lead manager in relation to the Offer. The Company estimates it will pay Patersons a total of $270,000 (excluding GST) for these services, based on the Minimum Subscription being raised. Further details in respect to the arrangements with Patersons are summarised in the Lead Manager Agreement in Section 10.2. During the two years preceding lodgement of this Prospectus with the ASIC, Patersons has received fees from the Company in the amount of approximately $161,000.

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SRK Consulting has acted as Independent Geologist in relation to the Tanzanian Projects and has prepared the Independent Geologist’s Report, which is included in Section 6. The Company will pay SRK Consulting a total of $30,000 (excluding GST) for these services. During the two years preceding lodgement of this Prospectus with the ASIC, SRK Consulting has received fees from the Company in the amount of approximately $86,000.

BDO Corporate Finance (WA) Pty Ltd has acted as Investigating Accountant and has prepared the Investigating Accountant’s Report, which is included in Section 7. The Company will pay BDO Corporate Finance (WA) Pty Ltd approximately $17,000 (excluding GST) for these services. During the 2 years preceding lodgement of this Prospectus with the ASIC, BDO Corporate Finance (WA) Pty Ltd has received fees from the Company in the amount of approximately $52,000.

BDO Audit (WA) Pty Ltd has been appointed as Auditor to the Company for which it will be paid usual commercial rates. During the two years preceding lodgement of this Prospectus with the ASIC, BDO Audit (WA) Pty Ltd has received fees from the Company in the amount of approximately $48,000.

Rex Attorney’s have prepared the Solicitor’s Report on the Tanzanian Projects, which is included in Section 8. The Company will pay approximately $20,000 for these services. Subsequently, fees will be charged in accordance with normal charge out rates. During the two years preceding lodgement of this Prospectus with the ASIC, Rex Attorney’s has received fees from the Company in the amount of approximately $28,000.

GTP Legal has acted as the solicitors to the Offer and the Australian solicitors to the Company in relation to the Offer. The Company estimates it will pay GTP Legal $40,000 (excluding GST) for these services. Subsequently, fees will be charged in accordance with normal charge out rates. During the two years preceding lodgement of this Prospectus with the ASIC, GTP Legal has received fees from the Company in the amount of approximately $72,000.

Grange Consulting has acted as corporate advisor to the Company in respect of the Offer. The Company estimates it will pay Grange Consulting $100,000 (excluding GST) for corporate advisory services provided to the Company in relation to the Offer. During the two years preceding lodgement of this Prospectus with the ASIC, Grange Consulting has received fees from the Company in the amount of approximately $169,000. Ian Macliver, a Director and Phil Warren the Company Secretary of Select are directors and shareholders of Grange Consulting.

10.7 Consents

Each of the parties referred to in this Section:

(a) does not make, or purport to make, any statement in this Prospectus other than those referred to in this Section;
(b) has not authorised or caused the issue of this Prospectus or the making of the Offer; and
(c) to the maximum extent permitted by law, expressly disclaims, makes no representations regarding and takes no responsibility for any statements in, or omissions from, any part of this Prospectus other than a reference to its name and a statement and/or report (if any) included in this Prospectus with the consent of that party as specified in this Section.

Patersons has given, and at the time of lodgement of this Prospectus with ASIC, has not withdrawn its consent to be named as lead manager to the Offer. Patersons was not involved in the preparation of any part of this Prospectus and did not authorise or cause the issue of this Prospectus. Patersons Securities Limited makes no express or implied representation or warranty in relation to the Company, this Prospectus or the Offer and does not make any statement in this Prospectus, nor is any statement in it based on any statement made by Patersons. To the maximum extent permitted by law, Patersons expressly disclaims and takes no responsibility for any material in, or omission from, this Prospectus other than the reference to its name.

191

SRK Consulting has given its written consent to being named as Independent Geologist to the Company in this Prospectus and to the inclusion of the Independent Geologist’s Report in Section 6 in the form and context in which the report is included, and to the inclusion of those statements in this Prospectus attributable to it in the form and context in which they are included. SRK Consulting has not withdrawn its consent prior to lodgement of this Prospectus with the ASIC.

BDO Corporate Finance (WA) Pty Ltd has given its written consent to being named as Investigating Accountant in this Prospectus and to the inclusion of the Investigating Accountant’s Report in Section 7 in the form and context in which the report is included. BDO Corporate Finance (WA) Pty Ltd has not withdrawn its consent prior to lodgement of this Prospectus with the ASIC.

BDO Audit (WA) Pty Ltd has given its written consent to being named in the Prospectus as the Company’s auditor and to the inclusion in the Prospectus of the reviewed financial statements of the Company for the period ending 30 June 2012, and to all statements based on those financial statements in the form and context in which they appear. BDO Audit (WA) Pty Ltd has not withdrawn its consent prior to lodgement of this Prospectus with the ASIC.

Rex Attorneys has given its written consent to being named as the Tanzanian solicitors to the Company in this Prospectus and to the inclusion of the Solicitor’s Report in Section 8 in the form and context in which the report is included. Rex Attorney’s has not withdrawn its consent prior to the lodgement of this Prospectus with the ASIC.

GTP Legal has given its written consent to being named as the Australian solicitors to the Company in this Prospectus. GTP Legal has not withdrawn its consent prior to the lodgement of this Prospectus with the ASIC.

Grange Consulting has given its written consent to being named as corporate advisor to the Offer in the form and context which it is named. Grange Consulting has not withdrawn its consent prior to the lodgement of this Prospectus with the ASIC. Grange Consulting makes no express or implied representation or warranty in relation to the Prospectus or the Offer and does not make any statement in this Prospectus, nor is any statement in it based on any statement made by Grange Consulting.

Security Transfer Registrars has given its written consent to being named in the Prospectus as the Company’s share registry. Security Transfer Registrars has not withdrawn its consent prior to lodgement of this Prospectus with the ASIC

10.8 Expenses of the Offer

The total expenses of the Offer (excluding GST) are estimated to be approximately $529,000 to $559,000 and are expected to be applied towards the items set out in the table below:

Item of Expenditure Minimum Subscription	Maximum Subscription
ASX and ASIC fees $47,000 Lead Manager Fee1 $270,000 Australian Legal Fees $40,000 Tanzanian Legal Fees $20,000 Independent Geologist’s Fees $30,000 Investigating Accountant’s Fees $17,000 Corporate Advisor Fees $100,000 Miscellaneous $5,000	$47,000 $300,000 $40,000 $20,000 $30,000 $17,000 $100,000 $5,000
TOTAL $529,000	$559,000

The Lead Manager Fee is based on a Lead Manager Fee of $60,000 and a 6% commission payable on the amount raised under the Offer

192

10.9 Litigation

As at the date of this Prospectus, the Company is not involved in any legal proceedings and the Directors are not aware of any legal proceedings pending or threatened against the Company.

10.10 Electronic Prospectus

Pursuant to Class Order 00/44, the ASIC has exempted compliance with certain provisions of the Corporations Act to allow distribution of an electronic prospectus and electronic application form on the basis of a paper prospectus lodged with the ASIC, and the publication of notices referring to an electronic prospectus or electronic application form, subject to compliance with certain conditions.

If you have received this Prospectus as an electronic Prospectus, please ensure that you have received the entire Prospectus accompanied by the Application Form. If you have not, please contact the Company and the Company will send you, for free, either a hard copy or a further electronic copy of this Prospectus or both. Alternatively, you may obtain a copy of this Prospectus from the website of the Company at www.selectex.com.au

10.11 Taxation

The acquisition and disposal of Shares in the Company will have tax consequences, which will differ depending on the individual financial affairs of each investor. All potential investors in the Company are urged to obtain independent financial advice about the consequences of acquiring Shares from a taxation viewpoint and generally.

To the maximum extent permitted by law, the Company, its officers and each of their respective advisors accept no liability and responsibility with respect to the taxation consequences of subscribing for Shares under this Prospectus.

10.12 Dividend Policy

The Company anticipates that significant expenditure will be incurred in the evaluation and development of the Company's projects. These activities, together with the possible acquisition of interests in other projects, are expected to dominate the two year period following the date of this Prospectus. Accordingly, the Company does not expect to declare any dividends during that period.

Any future determination as to the payment of dividends by the Company will be at the discretion of the Directors and will depend on the availability of distributable earnings and operating results, the financial condition of the Company, future capital requirements and general business and other factors considered relevant by the Directors. No assurance in relation to the payment of dividends or franking credits attaching to dividends can be given by the Company.

10.13 Continuous Disclosure Obligations

Following the re‐quotation of the Company to the Official List, the Company will be a “disclosing entity” (as defined in Section 111AC of the Corporations Act) and, as such, will be subject to regular reporting and disclosure obligations. Specifically, like all listed companies, the Company will be 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.

193

Price sensitive information will be publicly released through ASX before it is disclosed to shareholders and market participants. Distribution of other information to shareholders and market participants will also be managed through disclosure to the ASX. In addition, the Company will post this information on its website after the ASX confirms an announcement has been made, with the aim of making the information readily accessible to the widest audience.

194

11. DIRECTORS’ AUTHORISATION

This Prospectus is issued by the Company and its issue has been authorised by a resolution of the current Directors.

In accordance with Section 720 of the Corporations Act, each Director has consented to the lodgement of this Prospectus with the ASIC.

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_______ Ian Macliver Non‐executive Chairman For and on behalf of SELECT EXPLORATION LIMITED

Dated: 11[th] September 2012

195

12. GLOSSARY

Where the following terms are used in this Prospectus they have the following meanings:

$ means an Australian dollar.

Acquisition means the acquisition by the Company of Panama and Shira pursuant to the Share Sale Agreement.

Additional Tenements means the prospecting licences classified as Additional Licences in the Mineral Rights Summary Table in the Solicitors Report in Section 8.

Applicant means an application for Securities under this Prospectus.

ASX Settlement Operating Rules means the operating rules of ASX Settlement in its capacity as a CS facility licensee, except to the extent of any relief given by ASX Settlement in their application to the Company.

Application Forms means the General Application Forms and/or the Priority Application Forms.

ASIC means Australian Securities & Investments Commission.

ASX means ASX Limited (ACN 008 624 691).

Attaching Options means the Options proposed to be to be granted on the terms and conditions outlined in Section 9.5

Board means the board of Directors as constituted from time to time.

Cash Consideration means the consideration payable in cash to Indigo pursuant to the Share Sale Agreement.

Class A Performance Shares means the class A performance shares on the terms and conditions outlined in Section 9.2

Class B Performance Shares means the class B performance shares on the terms and conditions outlined in Section 9.2

Company or Select means Select Exploration Limited (ABN 25 062 063 692)

Conditions of the Offer has the meaning set out in Section 1.6.

Constitution means the constitution of the Company.

Corporations Act means the Corporations Act 2001 (Cth).

Current Directors means the current directors as at the date of this Prospectus.

Cypress Management means Cypress Management Services Pty Ltd (ACN 149 784 618).

Directors means the current and proposed directors of the Company at the date of this Prospectus.

Existing Options means the Options currently on issue on the terms set out in Section 9.3.

General Application Form means the application form attached to or accompanying this Prospectus relating to the General Offer.

General Offer has the meaning set out in Section 2.1.

196

General Offer Closing Date means the closing date of the General Offer as set out in Section 1.5 of this Prospectus (subject to the General Offer Closing Date being extended or the General Offer being closed early).

Grange Consulting means Grange Consulting Group Pty Ltd (ACN 154 869 066).

Incentive Options means the Options proposed to be granted on the terms and conditions outlined in Section 9.4

Independent Geologist’s Report means the independent geologist’s report in Section 6.

Indigo means Indigo Metals Ltd a company incorporated in Mauritius with a company number of 098613/C2/GBL.

Investigating Accountant’s Report means the investigating accountants report in Section 7.

Issue Price means $0.30.

July General Meeting means the general meeting of Shareholders held on 31 July 2012.

Lead Manager means Patersons Securities Limited (ABN 69 008 896 311).

Listing Rules means the listing rules of ASX.

Loyalty Offer means the proposed offer of Loyalty Options as set out in Section 0.

Loyalty Options means the Options proposed to be granted the terms and conditions outlined in Section 9.5.

Mauritian Shares means the fully paid ordinary shares in the capital of each of Panama and Shira.

Maximum Subscription means $4,000,000.

MDC has the meaning set out in Section 3.3.1

Minimum Subscription means $3,500,000.

Mining Act 2010 means the Mining Act 2010 of Tanzania

Mhukuru Project means the project outlined in Section 3.3.3.

Mhukuru Project Tenements means Mhukuru Project prospecting licences outlined in the Mineral Rights Summary Table in the Solicitors Report in Section 8

October General Meeting means the general meeting of Shareholders to be held on 9 October 2012 to consider, amongst other things, the grant of the Attaching Options.

Offer means the offer of Shares together with Attaching Options pursuant to this Prospectus as set out in Section 2 of this Prospectus.

Official List means the official list of ASX.

Official Quotation means official quotation by ASX in accordance with the Listing Rules.

Opening Date means the date specified as such in the indicative timetable in Section 1.5 and the date of this Prospectus.

Option means an option to acquire a Share.

197

Option holder means a holder of Options.

Panama means Panama Resources Ltd, a company incorporated in Mauritius.

Patersons means Patersons Securities Limited (ABN 69 008 896 311)

Performance Rights means the performance rights proposed to be issued pursuant to the Company’s performance rights plan to be approved at the July General Meeting.

Performance Shares means the Class A Performance Shares and the Class B Performance Shares to be issued to Indigo as part consideration for the Acquisition.

Priority Application Form means the personalised application form attached to or accompanying this Prospectus relating to the Priority Offer.

Priority Offer has the meaning set out in Section 2.1.

Priority Offer Closing Date means the closing date of the Priority Offer as set out in Section 1.5 of this Prospectus (subject to the Priority Offer Closing Date being extended or the Priority Offer being closed early).

Priority Offer Entitlement Date means the date specified as such in the indicative timetable in Section 1.5.

Project Tenements means the Ruhuhu Project Tenements, Rukwa Project Tenements, Selous Project Tenements and Mhukuru Project Tenements.

Prospectus means this prospectus.

Ruhuhu Project means the project outlined in Section 3.3.2.

Ruhuhu Project Tenements means the Ruhuhu Project prospecting licences outlined in the Mineral Rights Summary Table in the Solicitors Report in Section 8

Rukwa Project means the project outlined in Section 3.3.1.

Rukwa Project Tenements means the Rukwa Project prospecting licences outlined in the Mineral Rights Summary Table in the Solicitors Report in Section 8

Selous Project means the project outlined in Section 3.3.4

Selous Project Tenements means the Selous Project prospecting licences outlined in the Mineral Rights Summary Table in the Solicitors Report in Section 8

Secondary Options means the Options to be granted on the terms and condition in Section 9.6.

Section means a section of this Prospectus.

Securities means Shares, Options and Performance Shares.

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

Shareholder means a holder of Shares.

Share Sale Agreement means the share sale agreement between Indigo and the Company dated 19 March 2012, a summary of which is set out in Section 10.1 of this Prospectus.

Shira means Shira Resources Ltd, a company incorporated in Mauritius.

198

Tanzanian Tenements or Tenements means the Tanzanian prospecting licences (granted and under application) being acquired by the Company from Indigo pursuant to the Share Sale Agreement as outlined the Independent Solicitor’s Report in Section 8.

Tanzanian Projects or Projects means the Tanzanian exploration projects described in Section 3.3.

Unmarketable Parcel means a shareholding valued at less than $500.

Vendor means Indigo

Vendor Securities means the Vendor Shares and Performance Shares

Vendor Shares means Shares to be issued to Indigo in part consideration for the Acquisition in accordance with the terms and conditions of the Share Sale Agreement.

WST means Western Standard Time as observed in Perth, Western Australia.

199

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GENERAL - APPLICATION FORM

THIS DOCUMENT IS IMPORTANT. IF YOU ARE IN DOUBT AS TO HOW TO DEAL WITH IT, PLEASE CONTACT YOUR STOCK BROKER OR LICENSED PROFESSIONAL ADVISOR.

SHARE REGISTRY:

BROKER STAMP Broker Code Advisor Code

SELECT EXPLORATION LIMITED

Security Transfer Registrars Pty Ltd All Correspondence to: PO BOX 535, APPLECROSS WA 6953 ABN: 25 062 063 692 770 Canning Highway, APPLECROSS WA 6153 T: +61 8 9315 2333 F: +61 8 9315 2233 E: [email protected] W: www.securitytransfer.com.au

PLEASE READ CAREFULLY ALL INSTRUCTIONS ON THE REVERSE OF THIS FORM

Before completing this Application Form you should read the accompanying Prospectus and the instructions overleaf. Please print using BLOCK LETTERS.

(where applicable) CHESS HIN `X` If an incorrect CHESS HIN has been provided (e.g.: incorrect number, registration details do not match those registered) any securities issued will be held on the Issuer Sponsored subregister. (e.g.: THE SMITH SUPER FUND A/C) Account Designation < > Shares at AUD $0.30 per share Contact Number ( ) Contact Name Email Address `@` Tax File Number / Australian Business Number Tax File Number of Security Holder #2 (Joint Holdings Only) I/We apply for: , , A I/We lodge full application of monies of: $ , , . or such lesser number of Shares which may be allocated to me/us by their Directors. Title (e.g.: Dr, Mrs) Given Name(s) or Company Name Full Name of Applicant / Company Title (e.g.: Dr, Mrs) Given Name(s) or Company Name Joint Applicant #2 Title (e.g.: Dr, Mrs) Given Name(s) or Company Name Joint Applicant #3 Unit Street Number Street Name or PO BOX Postal Address / Postcode State Suburb/Town/City Country Name (if not Australia) I am a Select Exploration Limited shareholder and my HIN/SRN is: _NOTE: These boxes apply to SLT holders ONLY and must be marked for the Priority to apply._ GENERAL SHARE OFFER CLOSING AT 5.00PM WST ON 12 OCTOBER 2012 I**SSUE PRICE OF $0.30 CENTS PER SHARE WITH 1 NEW OPTION (EXPIRING 30 SEPTEMBER 2015 @ $0.35) FOR EVERY 2 SHARES ISSUED	(where applicable) CHESS HIN `X` If an incorrect CHESS HIN has been provided (e.g.: incorrect number, registration details do not match those registered) any securities issued will be held on the Issuer Sponsored subregister. (e.g.: THE SMITH SUPER FUND A/C) Account Designation < > Shares at AUD $0.30 per share Contact Number ( ) Contact Name Email Address `@` Tax File Number / Australian Business Number Tax File Number of Security Holder #2 (Joint Holdings Only) I/We apply for: , , A I/We lodge full application of monies of: $ , , . or such lesser number of Shares which may be allocated to me/us by their Directors. Title (e.g.: Dr, Mrs) Given Name(s) or Company Name Full Name of Applicant / Company Title (e.g.: Dr, Mrs) Given Name(s) or Company Name Joint Applicant #2 Title (e.g.: Dr, Mrs) Given Name(s) or Company Name Joint Applicant #3 Unit Street Number Street Name or PO BOX Postal Address / Postcode State Suburb/Town/City Country Name (if not Australia) I am a Select Exploration Limited shareholder and my HIN/SRN is: _NOTE: These boxes apply to SLT holders ONLY and must be marked for the Priority to apply._ GENERAL SHARE OFFER CLOSING AT 5.00PM WST ON 12 OCTOBER 2012 I**SSUE PRICE OF $0.30 CENTS PER SHARE WITH 1 NEW OPTION (EXPIRING 30 SEPTEMBER 2015 @ $0.35) FOR EVERY 2 SHARES ISSUED	(where applicable) CHESS HIN `X` If an incorrect CHESS HIN has been provided (e.g.: incorrect number, registration details do not match those registered) any securities issued will be held on the Issuer Sponsored subregister. (e.g.: THE SMITH SUPER FUND A/C) Account Designation < > Shares at AUD $0.30 per share Contact Number ( ) Contact Name Email Address `@` Tax File Number / Australian Business Number Tax File Number of Security Holder #2 (Joint Holdings Only) I/We apply for: , , A I/We lodge full application of monies of: $ , , . or such lesser number of Shares which may be allocated to me/us by their Directors. Title (e.g.: Dr, Mrs) Given Name(s) or Company Name Full Name of Applicant / Company Title (e.g.: Dr, Mrs) Given Name(s) or Company Name Joint Applicant #2 Title (e.g.: Dr, Mrs) Given Name(s) or Company Name Joint Applicant #3 Unit Street Number Street Name or PO BOX Postal Address / Postcode State Suburb/Town/City Country Name (if not Australia) I am a Select Exploration Limited shareholder and my HIN/SRN is: _NOTE: These boxes apply to SLT holders ONLY and must be marked for the Priority to apply._ GENERAL SHARE OFFER CLOSING AT 5.00PM WST ON 12 OCTOBER 2012 I**SSUE PRICE OF $0.30 CENTS PER SHARE WITH 1 NEW OPTION (EXPIRING 30 SEPTEMBER 2015 @ $0.35) FOR EVERY 2 SHARES ISSUED

Declaration and Statements: (1) I/We declare that all details and statements made by me/us are complete and accurate. (2) I/We agree to be bound by the Terms & Conditions set out in the Prospectus and by the Constitution of the Company. (3) I/We authorise the Company to complete and execute any documentation necessary to effect the issue of Securities to me/us. (4) I/We have received personally a copy of the Prospectus accompanied by or attached to this Application form, or a copy of the Application Form or a direct derivative of the Application Form before applying for the Securities. (5) I/We acknowledge that returning the Application Form with the application monies will constitute my/our offer to subscribe for Securities in the Company and that no notice of acceptance of the application will be provided.		E & O.E. REGISTRY DATE STAMP

Declaration and Statements: (1) I/We declare that all details and statements made by me/us are complete and accurate. (2) I/We agree to be bound by the Terms & Conditions set out in the Prospectus and by the Constitution of the Company.

REGISTRY DATE STAMP

(3) I/We authorise the Company to complete and execute any documentation necessary to effect the issue of Securities to me/us.

(4) I/We have received personally a copy of the Prospectus accompanied by or attached to this Application form, or a copy of the

Application Form or a direct derivative of the Application Form before applying for the Securities.

(5) I/We acknowledge that returning the Application Form with the application monies will constitute my/our offer to subscribe for Securities in the

Company and that no notice of acceptance of the application will be provided. E & O.E.

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8760522347

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TO MEET THE REQUIREMENTS OF THE CORPORATIONS ACT, THIS FORM MUST NOT BE HANDED TO ANY PERSON UNLESS IT IS ATTACHED TO OR ACCOMPANIED BY THE PROSPECTUS DATED 11 SEPTEMBER 2012 AND ANY RELEVANT SUPPLEMENTARY PROSPECTUS.

This Application Form relates to the Offer of 11,666,667 Fully Paid Shares in Select Exploration Limited (Company) at $0.30 per Share together with one free attaching option for every two Shares subscribed for (with oversubscriptions of up to 1,666,667 Shares in the Company at $0.30 per Share together with attaching options) pursuant to the prospectus dated 11 September 2012 (Prospectus). The expiry date of the Prospectus is the date which is 13 months after the date of the Prospectus. The Prospectus contains information about investing in the Securities of the Company and it is advisable to read this document before applying for Shares. A person who gives another person access to this Application Form must at the same time and by the same means give the other person access to the Prospectus, and any supplementary prospectus (if applicable). While the Prospectus is current, the Company will send paper copies of the Prospectus, and any supplementary prospectus (if applicable), and an Application Form, on request and without charge.

APPLICATION FORMS

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 7,000 Shares and thereafter in multiples of 500 Shares. The applicant(s) 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 a query in your Application Form. If your Application Form is not completed correctly, it may still be treated as valid. There is no requirement to sign 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

All cheques should be made payable to SELECT EXPLORATION LTD - SHARE ISSUE ACCOUNT and drawn on an Australian bank and expressed in Australian currency and crossed "Not Negotiable". Cheques or bank drafts drawn on overseas banks in Australian or any foreign currency will NOT be accepted. Any such cheques will be returned and the acceptance deemed to be invalid.

Sufficient cleared funds should be held in your account as your acceptance may be rejected if your cheque is dishonoured. Do not forward cash as receipts will not be issued.

LODGING OF APPLICATIONS

LODGING OF APPLICATIONS
Completed Application Forms and cheques must be:
Posted to:	OR	Delivered to:
Select Exploration Limited		Select Exploration Limited
C/- Security Transfer Registrars Pty Ltd		C/- Security Transfer Registrars Pty Ltd
PO Box 535		770 Canning Highway
APPLECROSS WA 6953		APPLECROSS WA 6153

Applications must be received by no later than 5.00pm (WST) on the Closing Date 12 October 2012 which may be changed immediately after the Opening Date at any time and at the discretion of the Company.

CHESS HIN/BROKER SPONSORED APPLICANTS

The Company intends to become an Issuer Sponsored participant in the ASX CHESS System. This enables a holder to receive a statement of holding rather than a certificate. If you are a CHESS participant (or are sponsored by a CHESS participant) and you wish to hold shares allotted to you under this Application on the CHESS subregister, enter your CHESS HIN. Otherwise, leave this box blank and your Shares will automatically be Issuer Sponsored on allotment.

TAX FILE NUMBERS

The collection of tax file number ("TFN") information is authorised and the tax laws and the Privacy Act strictly regulate 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 aware 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 Select Exploration Limited. At least one full given name and the surname 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:

TYPE OF INVESTOR Individual Use given names in full, not initials. Company Use the company's full title, not abbreviations. Joint Holdings Use full and complete names. Trusts Use trustee(s) personal name(s), Do not use the name of the trust. Deceased Estates Use the executor(s) personal name(s). Minor (a person under the age of 18) Use the name of a responsible adult with an appropriate designation. Partnerships Use the partners' personal names. Do not use the name of the partnership. Superannuation Funds Use the name of the trustee(s) of the super fund.	CORRECT Mr John Alfred Smith ABC Pty Ltd Mr Peter Robert Williams & Ms Louise Susan Williams Mrs Susan Jane Smith Ms Jane Mary Smith & Mr Frank William Smith Mr John Alfred Smith Mr John Robert Smith & Mr Michael John Smith Jane Smith Pty Ltd	INCORRECT J A Smith ABC P/L or ABC Co Peter Robert & Louise S Williams Sue Smith Family Trust Estate of Late John Smith or John Smith Deceased Master Peter Smith John Smith and Son Jane Smith Pty Ltd Superannuation Fund

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PRIVACY STATEMENT Personal information is collected on this form by Security Transfer Registrars Pty Ltd as the registrar for securities issuers for the purpose of maintaining registers of securityholders, facilitating distribution payments and other corporate actions and communications. Your personal details may be disclosed to related bodies corporate, to external service providers such as mail and print providers, or as otherwise required or permitted by law. Please refer to Section 2.13 of the Prospectus for further details about the collection, holding and use of your personal information. If you do not provide the information required on this Application Form, the Company may not be able to accept or process your Application. If you would like details of your personal information held by Security Transfer Registrars Pty Ltd or you would like to correct information that is inaccurate please contact them on the address on this form.

2776522348

AI assistant

RENT.COM.AU LIMITED — Capital/Financing Update 2012

65722_rns_2012-09-10_12d88a14-40b8-4c75-837a-761a74b5aae3.pdf

SELECT EXPLORATION LIMITED

(ABN 25 062 063 692)

PROSPECTUS

IMPORTANT INFORMATION

IMPORTANT NOTICE

DISCLAIMER

WEB SITE – ELECTRONIC PROSPECTUS

COMPETENT PERSON’S STATEMENTS

DEFINED TERMS AND OTHER MATTERS

CONTENTS

CORPORATE DIRECTORY

Directors

Current

Proposed Director

Company Secretary

Registered Office

Website

ASX Code:

Lead Manager

Independent Geologist

Australian Solicitors

Tanzanian Solicitors

Auditors

Investigating Accountant

Share Registry*

Corporate Advisor

CHAIRMAN’S LETTER

Dear Investor,

1. INVESTMENT OVERVIEW

1.1 BUSINESS MODEL – EXPLORATION COMPANY

1.2 RISK FACTORS

1.3 OBJECTIVES OF THE OFFER

1.4 SUMMARY OF THE OFFER

Key offer statistics

Note:

1.5 INDICATIVE TIMEABLE

1.6 CONDITIONS OF THE OFFER

(together the Conditions of the Offer )

In the event the Conditions of the Offer are not achieved then the Company will not proceed with the Offer and will repay all application monies received.

1.7 USE OF FUNDS

1.8 CAPITAL STRUCTURE

Notes

Notes:

Notes:

1.9 SUBSTANTIAL SHAREHOLDERS

Notes:

Notes:

1.10 FINANCIAL INFORMATION

1.11 DIRECTORS

Mr Ian Macliver

Ms Cherie Leeden

Mr Gary Seabrooke

Mark Titchener

Proposed Director

Shane Cranswick

1.12 RELATED PARTY DISCLOSURE

Remuneration and Current Security Holdings

Notes:

Director Participation in the Offer

Share Sale Agreement

Grange Consulting Engagements

Managing Director Elect Agreement and Consulting Services

Cypress Management Consulting Services Agreements

Exploration Manager Consulting Agreement

General Consulting Services Agreement – Cherie Leeden

General Consulting Services Agreement – Bangun Maruli

1.13 CORPORATE GOVERNANCE

2. DETAILS OF THE OFFER

2.1 The Offer

Priority Offer

General Offer

2.2 Minimum subscription

2.3 Oversubscriptions

2.4 Loyalty Offer

2.5 Applications

General Offer

Priority Offer

RENT.COM.AU LIMITED Capital/Financing Update 2012