ST GEORGE MINING LIMITED — Capital/Financing Update 2014

Dec 1, 2014

ASX / MEDIA RELEASE

2 December 2014

ST GEORGE ANNOUNCES BONUS ISSUE OF NEW OPTIONS

St George Mining Limited (ASX: SGQ) ('St George Mining' or 'the Company') is pleased to announce that the Company will issue bonus options to its shareholders to recognise their loyalty as the Company continues to advance towards a potential massive nickel sulphide discovery at its 100% owned East Laverton Property in Western Australia.

The entitlement is to be issued on a pro rata basis of one new option for every ten ordinary shares held by shareholders as at the Record Date. The option entitlement will be issued for nil consideration.

The principal terms and conditions of the new options are as follows:

• Class of security to be issued options over ordinary shares in the Company
• Number of securities to be issued 11,183,181 options
• Issue price of bonus options nil consideration
• Record Date to determine entitlement 5pm (WST) on 5 January 2015
• Exercise price of options ‐ $0.20
• Expiry date of options 5pm (WST) on 30 June 2017

Anyone who wishes to acquire the new options simply needs to be a registered shareholder in the Company on the Record Date. No application form will need to be completed.

A prospectus for the new options will be lodged with ASIC and announced on the ASX shortly. It is expected to be mailed to shareholders on or about 9 January 2015.

The Company will apply for Official Quotation of the new options on the ASX under the ASX code 'SGQO'. Trading of the options on ASX is planned to commence in late January 2015.

Further details of the new options will be provided in the prospectus.

St George Mining Executive Chairman, John Prineas said:

"Our field campaign this year has achieved several important milestones in the search for a massive nickel sulphide deposit. Our persistence is delivering tangible results and we believe that we are closer than ever to making a significant discovery.

"The ongoing support of our shareholders has been terrific and we wish to recognise their loyalty with this bonus issue of options."

For further information, please contact:

John Prineas Executive Chairman St George Mining Limited (+61) 411 421 253 John.prineas@stgm.com.au Colin Hay Professional Public Relations (+61) 08 9388 0944 mob 0404 683 355 colin.hay@ppr.com.au

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

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

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

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

Name of entity

St George Mining Limited

ABN

21 139 308 973

We (the entity) give ASX the following information.

Part 1 ‐ All issues

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

1 +Class of +securities issued or to be issued

Listed Options

11,183,181

• 2 Number of +securities issued or to be issued (if known) or maximum number which may be issued
• 3 Principal terms of the +securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)

Listed Options exercisable at $0.20 on or before 30 June 2017

+ See chapter 19 for defined terms.

4	Do the +securitiesrank equally inall respects from the +issuedatewith an existing +classof quoted+securities?If the additional +securitiesdo not	No – new class of options. Shares issued onexercise of options will be on same terms asfully paid ordinary shares on issue.
	rank equally, please state:the date from which they dotheextenttowhichtheyparticipateforthenextdividend,(inthecaseofatrust, distribution) or interest
	paymentthe extent to which they donot rank equally, other than inrelation to the next dividend,distributionorinterestpayment
5	Issue price or consideration	NIL
6	Purpose of the issue(If issued as consideration for theacquisitionofassets,clearlyidentify those assets)	Issued pursuant to a pro rata bonus issue ofListed Options to shareholders of the Company.
6a	Is the entity an +eligibleentity that	Yes
	hasobtainedsecurityholderapproval under rule 7.1A?
	If Yes, complete sections 6b – 6hin relation to the +securitiesthesubject of this Appendix 3B, andcomply with section 6i
6b	Thedatethesecurityholderresolutionunderrule7.1Awaspassed	25 November 2014
6c	+securitiesNumberofissuedwithout security holder approvalunder rule 7.1	N/A

+ See chapter 19 for defined terms.

• 6d Number of +securities issued with security holder approval under rule 7.1A
• 6e Number of +securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting)
• 6f Number of +securities issued under an exception in rule 7.2
• 6g If +securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation.
• 6h If +securities were issued under rule 7.1A for non‐cash consideration, state date on which valuation of consideration was released to ASX Market Announcements
• 6i Calculate the entity's remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements
• 7 +Issue dates

Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A.

Cross reference: item 33 of Appendix 3B.

		Number	+Class
8	+classNumberandofall+securitiesquotedonASX+securities(includingthein	111,831,806	FullyPaidOrdinaryShares
	section 2 if applicable)	11,183,181	Options ex. $0.20 onor before 30 June2017

N/A

N/A

N/A

N/A

11,183,181 Listed Options

See Annexure 1

16 January 2015

• See chapter 19 for defined terms.

		Number	+Class
9	+classNumberandofall	100	Performance Shares
	+securitiesnotquotedonASX+securities(includingtheinsection 2 if applicable)	979,525	Options ex. $0.30 onorbefore30June2016
		1,000,000	ClassCOptionsex.$0.40 on or before 28November 2015

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

N/A

Part 2 ‐ Pro rata issue

11	Issecurityholderapprovalrequired?	No
12	Is the issue renounceable or non‐renounceable?	Non‐renounceable
13	Ratio in which the +securities willbe offered	One(1)ListedOptionforeveryten(10)Shares held on the record date
14	+Class of +securities to which theoffer relates	Listed Options
15	+Recorddatetodetermineentitlements	5 January 2015
16	Will holdings on different registers(or subregisters) be aggregated forcalculating entitlements?	Yes
17	Policy for deciding entitlements inrelation to fractions	Fractional entitlements will be rounded up tothe nearest whole number.
18	Names of countries in which theentity has security holders who willnot be sent new offer documents	Shareholders that do not have a registeredaddress within Australia and New Zealand.
	Note: Security holders must be told how theirentitlements are to be dealt with.
	Cross reference: rule 7.7.

+ See chapter 19 for defined terms.

19	Closingdateforreceiptofacceptances or renunciations	N/A – Bonus Issue
20	Names of any underwriters	N/A
21	Amount of any underwriting fee orcommission	N/A
22	Names of any brokers to the issue	N/A
23	Fee or commission payable to thebroker to the issue	N/A
24	Amountofanyhandlingfeepayabletobrokerswholodgeacceptancesorrenunciationsonbehalf of security holders	N/A
25	Iftheissueiscontingentonsecurity holders' approval, the dateof the meeting	N/A
26	Date entitlement and acceptanceform and offer documents will besent to persons entitled	9 January 2015
27	If the entity has issued options, andthe terms entitle option holders toparticipate on exercise, the date onwhich notices will be sent to optionholders	17 December 2014
28	Date rights trading will begin (ifapplicable)	N/A
29	Daterightstradingwillend(ifapplicable)	N/A
30	How do security holders sell theirentitlementsinfullthroughabroker?	N/A
31	How do security holders sell part oftheir entitlements through a brokerand accept for the balance?	N/A

+ See chapter 19 for defined terms.

32 How do security holders dispose of their entitlements (except by sale through a broker)? N/A 33 +Issue date 16 January 2015

Part 3 ‐ Quotation of securities

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

• 34 Type of +securities (tick one)
• (a) +Securities described in Part 1

۰.
----

(b) All other +securities

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

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

• 35 If the +securities are +equity securities, the names of the 20 largest holders of the additional +securities, and the number and percentage of additional +securities held by those holders
• 36 If the +securities are +equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 ‐ 1,000 1,001 ‐ 5,000 5,001 ‐ 10,000 10,001 ‐ 100,000 100,001 and over

. .
I۹

37 A copy of any trust deed for the additional +securities

+ See chapter 19 for defined terms.

Entities that have ticked box 34(b)

38	+securitiesNumberofforwhich+quotation is sought	N/A
39	+Class+securitiesofforwhichquotation is sought	N/A
40	Do the +securities rank equally in allrespects from the +issue date with+classanexistingofquoted+securities?If the additional +securities do notrank equally, please state:the date from which they dotheextenttowhichtheyparticipateforthenextdividend, (in the case of a trust,distribution) or interest paymentthe extent to which they do notrankequally,otherthaninrelationtothenextdividend,distribution or interest payment	N/A
41	Reason for request for quotationnowExample: In the case of restricted securities, end ofrestriction period(ifissueduponconversionof+security,anotherclearlyidentifythat other +security)	N/A
42	Number and +class of all +securitiesquotedonASX(includingthe+securities in clause 38)	NumberN/A	+Class

+ See chapter 19 for defined terms.

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX's absolute discretion. ASX may quote the +securities on any conditions it decides.
• 2 We warrant the following to ASX.
  • The issue of the +securities to be quoted complies with the law and is not for an illegal purpose.
  • There is no reason why those +securities should not be granted +quotation.
  • An offer of the + securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

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

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any +securities to be quoted and that no‐one has any right to return any +securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the +securities be quoted.
• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the +securities be quoted.
• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.
• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: Sarah Shipway Date: 2 December 2014 Company secretary

Print name: Sarah Shipway

== == == == ==

+ See chapter 19 for defined terms.

Appendix 3B – Annexure 1

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

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

Part 1

Rule7.1–Issuesexceeding15%ofcapitalStep1:Calculate"A",thebasefigurefromwhichtheplacementcapacityiscalculated
Add the following:Number of fully paid +ordinary securities•issued in that 12 month period under anexception in rule 7.2Number of fully paid +ordinary securities•issued in that 12 month period withshareholder approvalNumber of partly paid +ordinary securities•that became fully paid in that 12 monthperiodNote:•Include only ordinary securities here – otherclasses of equity securities cannot be added•Include here (if applicable) the securities thesubject of the Appendix 3B to which thisform is annexed•It may be useful to set out issues ofsecurities on different dates as separate lineitems	6 December 2013 – 7,500,000 Fully PaidOrdinary Shares22 May 2014 – 9,795,250 Fully Paid OrdinaryShares22 July 2014 – 3,050,001 Fully Paid OrdinaryShares3 October 2014 – 18,005,554 Fully Paid OrdinaryShares9 October 2014 – 1,500,001 Fully Paid OrdinaryShares
Subtract the number of fully paid +ordinarysecurities cancelled during that 12 monthperiod	N/A
"A"	111,831,806

+ See chapter 19 for defined terms.

Step2:Calculate15%of"A"
"B"	0.15
	[Note: this value cannot be changed]
Multiply "A" by 0.15	16,774,770

Step 3: Calculate "C", the amount of placement capacity under rule 7.1 that has already been used

Insert number of +equity securities issued oragreed to be issued in that 12 month periodnot counting those issued:	N/A
•Under an exception in rule 7.2
•Under rule 7.1A
•With security holder approval under rule7.1 or rule 7.4
Note:
•This applies to equity securities, unlessspecifically excluded – not just ordinarysecurities
•Include here (if applicable) the securities thesubject of the Appendix 3B to which thisform is annexed
•It may be useful to set out issues ofsecurities on different dates as separate lineitems
"C"	NIL

Step 4: Subtract "C" from ["A" x "B"] to calculate remaining placement capacity under rule 7.1

"A" x 0.15	16,774,770
Note: number must be same as shown in Step 2
Subtract "C"	NIL
Note: number must be same as shown in Step 3
Total ["A" x 0.15] – "C"	16,774,770
	[Note: this is the remaining placement capacityunder rule 7.1]

+ See chapter 19 for defined terms.

Part 2

Rule7.1A–Additionalplacementcapacityforeligibleentities
Step1:Calculate"A",thebasefigurefromwhichtheplacementcapacityiscalculated
"A"	111,831,806
Note: number must be same as shown in Step 1of Part 1
Step2:Calculate10%of"A"
"D"	0.10
	Note: this value cannot be changed
Multiply "A" by 0.10	11,183,181
Step3:Calculate"E",theamountofplacementcapacityunderrule7.1Athathasalreadybeenused
Insert number of +equity securities issued oragreed to be issued in that 12 month periodunder rule 7.1A	N/A
Notes:•This applies to equity securities – not justordinary securities•Include here – if applicable – the securitiesthe subject of the Appendix 3B to which thisform is annexed•Do not include equity securities issuedunder rule 7.1 (they must be dealt with inPart 1), or for which specific security holderapproval has been obtained•It may be useful to set out issues ofsecurities on different dates as separate lineitems
"E"	NIL

+ See chapter 19 for defined terms.

Step4:Subtract"E"from["A"x"D"]tocalculateremainingplacementcapacityunderrule7.1A
"A" x 0.10	11,183,181
Note: number must be same as shown in Step 2
Subtract "E"	NIL
Note: number must be same as shown in Step 3
Total ["A" x 0.10] – "E"	11,183,181
	Note: this is the remaining placement capacityunder rule 7.1A

+ See chapter 19 for defined terms.