ST GEORGE MINING LIMITED — Capital/Financing Update 2014

May 21, 2014

ASX / MEDIA RELEASE

22 May 2014

ST GEORGE COMPLETES NICKEL EXPLORATION CAPITAL RAISING

HIGHLIGHTS:

• Heavily oversubscribed placement to sophisticated investors is completed
• High impact drilling of nickel sulphide targets to commence on 26 May 2014
• Ongoing exploration to increase pipeline of nickel sulphide targets

St George Mining Limited (ASX: SGQ) ('St George Mining' or 'the Company') is pleased to confirm that, further to the ASX release dated 15 May 2014, the Company has allotted 9,795,250 fully paid ordinary shares to raise a total of $1,175,430.

After the allotment of the above securities, the Company had the following securities on issue:

Fully Paid Ordinary Shares	89,276,250
Listed Options exercisable at $0.20 on or before 28 November 2014	48,508,000

John Prineas, Executive Chairman of St George Mining, said:

"The capital raising underwrites our 2014 drilling campaign and the ongoing EM survey which continues to deliver high quality nickel sulphide targets for our growing pipeline of prospects.

"With our first ever test drilling of EM conductors due to commence next week, it's a very exciting time for St George shareholders."

The shares issued under the Placement were issued pursuant to the Company's 15% placement capacity under ASX Listing Rule 7.1 and the Company's additional 10% placement capacity under ASX Listing Rule 7.1A. As such, the Company provides the below information under ASX Listing Rule 7.1A.4(b) in respect of the shares issued under ASX Listing Rule 7.1A.

(a) The Company issued 7,198,100 shares under ASX Listing Rule 7.1A which resulted in the following dilution to existing shareholders:

Number of shares on issue 12 months before the issue date	79,481,000
Shares issued under ASX Listing Rule 7.1A	7,198,100
Percentage of voting dilution to existing shareholders asa result of the shares issued pursuant to the Placement	10%

Further details of the approximate percentage of the issued capital post 7.1A placement held by the pre‐placement security holders and new security holders are as follows:

Percentage of pre‐placement security holders who did not 84% participate in the 7.1A placement

Percentage of pre‐placement security holders who did	16%
participate in the 7.1A placement

Percentage of participants in the 7.1A placement who were 65% not previously security holders

• (b) The Company issued the shares as a placement under ASX Listing Rule 7.1A as it was of the view that it was the most efficient and expedient mechanism to raise the funds required to achieve its stated objectives.
• (c) The Company confirms that there was no underwriter in respect of the Placement.
• (d) The fee payable by the Company in connection with the Placement comprises a cash fee of 6% of funds raised pursuant to the Placement and 979,525 Options exercisable at $0.30 on or before 30 June 2016.

The Appendix 3B and Cleansing Notice in respect to the securities issued pursuant to the Placement follows.

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

22 May 2014

ASX Limited Exchange Plaza 2 The Esplanade PERTH WA 6000

ST GEORGE MINING LIMITED SHARE PLACEMENT – NOTICE UNDER SECTION 708A(5)(e) OF THE CORPORATIONS ACT

On 22 May 2014, St George Mining Limited (Company) announced that 9,795,250 fully paid ordinary shares in the capital of the Company (Shares) were issued via a placement to Sophisticated and Professional Investors (as defined in the Corporations Act 2001 (the Act).

The Company hereby notifies ASX under section 708A(5)(e) of the Act that:

• (a) the Shares were issued without disclosure to investors under Part 6D.2 of the Act;
• (b) as at 22 May 2014, the Company has complied with the provisions of Chapter 2M of the Act as they apply to the Company;
• (c) as at 22 May 2014, the Company has complied with Section 674 of the Act;
• (d) as at 22 May 2014, there is no information to be disclosed which is excluded information (as defined in section 708A(7) of the Corporations Act) that is reasonable for investors and their professional advisers to expect to find in a disclosure document.

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

Ordinary Shares

9,795,250

• 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)

Fully Paid Ordinary Shares

+ See chapter 19 for defined terms.

4	Do the +securitiesrank equally inall respects from the +issuedatewith an existing +classof quoted+securities?	Yes
	If the additional +securitiesdo notrank equally, please state:the date from which they dotheextenttowhichtheyparticipateforthenextdividend,(inthecaseofatrust, distribution) or interestpaymentthe extent to which they donot rank equally, other than inrelation to the next dividend,distributionorinterestpayment
5	Issue price or consideration	$0.12
6	Purpose of the issue(If issued as consideration for theacquisitionofassets,clearlyidentify those assets)	Issuedpursuanttoaplacementtosophisticated investors
6a	Is the entity an +eligibleentity thathasobtainedsecurityholderapproval under rule 7.1A?If Yes, complete sections 6b – 6hin relation to the +securitiesthesubject of this Appendix 3B, andcomply with section 6i	Yes
6b	Thedatethesecurityholderresolutionunderrule7.1Awaspassed	5 November 2013
6c	+securitiesNumberofissuedwithout security holder approvalunder rule 7.1	2,597,150

+ 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.

8 Number and +class of all +securities quoted on ASX (including the +securities in section 2 if applicable)

Number +Class 89,276,250 48,508,000 Fully Paid Ordinary Shares Options exercisable at $0.20 on or before 28 November 2014

7,198,100

N/A

N/A

Yes

N/A

VWAP Date: 22 May 2014 Share Issue Date: 22 May 2014 15 Day VWAP: $0.1466 75% VWAP: $0.1099

Source: 2014 Orient Capital Pty Ltd

See Annexure 1

22 May 2014

• See chapter 19 for defined terms.

		Number	+Class
9	+classNumberandofall+securitiesnotquotedonASX	100	Performance shares
	+securities(includingtheinsection 2 if applicable)	750,000	ClassBOptionsexercisableat$0.25onorbefore28November 2014
		1,000,000	ClassCOptionsexercisableat$0.40onorbefore28November 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	IssecurityholderapprovalN/Arequired?
12	Is the issue renounceable or non‐N/Arenounceable?
13	Ratio in which the +securities willN/Abe offered
14	+Class of +securities to which theN/Aoffer relates
15	+RecorddatetodetermineN/Aentitlements
16	Will holdings on different registersN/A(or subregisters) be aggregated forcalculating entitlements?
17	Policy for deciding entitlements inN/Arelation to fractions

+ See chapter 19 for defined terms.

18	Names of countries in which theentity has security holders who willnot be sent new offer documents	N/A
	Note: Security holders must be told how theirentitlements are to be dealt with.
	Cross reference: rule 7.7.
19	Closingdateforreceiptofacceptances or renunciations	N/A
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	N/A
27	If the entity has issued options, andthe terms entitle option holders toparticipate on exercise, the date onwhich notices will be sent to optionholders	N/A
28	Date rights trading will begin (ifapplicable)	N/A
29	Daterightstradingwillend(ifapplicable)	N/A

+ See chapter 19 for defined terms.

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
32	How do security holders dispose oftheir entitlements (except by salethrough a broker)?	N/A
33	+Issue date	N/A

Part 3 ‐ Quotation of securities

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

34 Type of +securities (tick one)

(a) +Securities described in Part 1

(b) All other +securities

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

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

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

+ 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	+ClassN/A

+ 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: 22 May 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%ofcapital
Step1:Calculate"A",thebasefigurefromwhichtheplacementcapacityiscalculated
Insert number of fully paid +ordinary securitieson issue 12 months before the +issue date ordate of agreement to issue	71,981,000
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 monthperiod	NIL
Note:•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
Subtract the number of fully paid +ordinarysecurities cancelled during that 12 monthperiod	NIL
"A"	71,981,000

+ See chapter 19 for defined terms.

Step2:Calculate15%of"A"
"B"	0.15
	[Note: this value cannot be changed]
Multiply "A" by 0.15	10,797,150
Step3:Calculate"C",theamountofplacementcapacityunderrule7.1thathasalreadybeenused
Insert number of +equity securities issued oragreed to be issued in that 12 month periodnot counting those issued:	6 December 2013 – 7,500,000 Fully PaidOrdinary Shares

• Under an exception in rule 7.2 • Under rule 7.1A • With security holder approval under rule 7.1 or rule 7.4 Note: • This applies to equity securities, unless specifically excluded – not just ordinary securities • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items 22 May 2014 – 2,597,150 Fully Paid Ordinary Shares "C" 10,097,150

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

"A" x 0.15	10,797,150
Note: number must be same as shown in Step 2
Subtract "C"	10,097,150
Note: number must be same as shown in Step 3
Total ["A" x 0.15] – "C"	700,000
	[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"	71,981,000
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	7,198,100
Step3:Calculate"E",theamountofplacementcapacityunderrule7.1Athathasalreadybeenused
Insert number of +equity securities issued oragreed to be issued in that 12 month periodunder rule 7.1A	7,198,100 – Fully Paid Ordinary Shares
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"	7,198,100

+ See chapter 19 for defined terms.

Step4:Subtract"E"from["A"x"D"]tocalculateremainingplacementcapacityunderrule7.1A
"A" x 0.10	7,198,100
Note: number must be same as shown in Step 2
Subtract "E"	7,198,100
Note: number must be same as shown in Step 3
Total ["A" x 0.10] – "E"	NIL
	Note: this is the remaining placement capacityunder rule 7.1A

4845‐8723‐3563, v. 1

+ See chapter 19 for defined terms.