TARUGA MINERALS LIMITED — Capital/Financing Update 2016

Jun 5, 2016

ASX RELEASE

6 June 2016

Completion of In Specie Distribution and Change to Right’s Issue Entitlement Ratio

Taruga Gold Limited (ASX:TAR) (“ Taruga ” or the “ Company ”) is pleased to announce that the pro rata in specie distribution of the 1,025,000,000 shares in Kodal Minerals Plc ( Kodal Shares ) issued to Taruga as consideration for the disposal of its main undertaking, International Goldfields (Bermuda) Limited, has completed.

Eligible shareholders should expect to receive holding statements in the coming days containing details of their Kodal Shares.

Following the distribution, Taruga holds 2,129,886 Kodal Shares which will be sold, as soon as practicable, on behalf of ineligible shareholders as set out in section 6.11 of the Company’s Notice of Meeting lodged with ASX on 8 April 2016.

In addition, the Company is pleased to inform shareholders that the entitlement ratio under the upcoming Rights Issue prospectus will change to 2 New Shares for every 3 existing shares held at the record date, from the previously announced ratio of 1 New Share for every 3 existing shares held.

The effect of the changed entitlement ratio means that the Company will issue up to 16,713,565 New Shares to raise approximately $500,000 before costs. The previously announced issue price of $0.03 per New Share remains unchanged.

As announced on 16 May 2016, the timetable for the rights issue is as follows.

Event	Date
Lodge rights issue prospectus with ASIC and ASX	7 June 2016
Rights issue shares quoted on an “ex” basis	10 June 2016
Record Date for Rights Issue	14 June 2016
Placement shares issued and Rights issue opens	15 June 2016
Last date to extend closing date	23 June 2016
Rights Issue closes	28 June 2016
Securities quoted on a deferred settlement basis	29 June 2016
Notify ASX of under subscriptions	1 July 2016
Rights Issue Shares issued	5 July 2016
Trading commences	6 July 2015

==> picture [142 x 101] intentionally omitted <==

Additionally, management has agreed to a reduction in the total amount of outstanding director’s fees to be converted into shares in the Company. The revised figure is a total of 4,166,666 shares from the previously announced 5,836,014. The Company has applied for a waiver from ASX Listing Rule 14.7 so those shares may be issued after the record date for the rights issue.

Accompanying this announcement is a revised Appendix 3b.

Dan Smith

Director & Company Secretary Taruga Gold Limited +61 (8) 9486 4036

Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

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

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

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

Name of entity

Taruga Gold Limited ABN 19 153 868 789

We (the entity) give ASX the following information.

Part 1 - All issues

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

1 +Class of+securities issued or to be issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued 3 Principal terms of the+securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)	Ordinary shares
	Up to 16,713,565 ordinary fully paid shares
	Fully paid ordinary shares

• See chapter 19 for defined terms.

Appendix 3B Page 1

04/03/2013

Appendix 3B New issue announcement

4 Do the[+] securities rank equally in Yes – equal with existing ordinary fully paid all respects from the[+] issue date shares with an existing[+] class of quoted +securities? If the additional[+] securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration $0.03 per share 6 Purpose of the issue Funds raised will be used to fund continued (If issued as consideration for the exploration and holding costs of the Company’s acquisition of assets, clearly remaining West African tenements, for general identify those assets) working capital purposes, and to seek new mineral opportunities in West Africa or elsewhere 6a Is the entity an[+] eligible entity that N/A has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h in relation to the[+] securities the subject of this Appendix 3B , and comply with section 6i 6b The date the security holder N/A resolution under rule 7.1A was passed 6c Number of +securities issued N/A without security holder approval under rule 7.1 6d Number of[+] securities issued with N/A security holder approval under rule 7.1A

• See chapter 19 for defined terms.

Appendix 3B Page 2

04/03/2013

Appendix 3B New issue announcement

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)	N/A	N/A
	Up to 16,713,565 ordinary fully paid shares
	N/A
	N/A
	Refer Annexure 1
	5 July 2016
	Number	+Class
	41,783,9121	Ordinary shares

1 In addition, shareholders have approved the issue of up to 38,169,347 fully paid ordinary shares including up to 5,836,014 shares to be issued to directors. As announced today, the Company intends to issue less than the maximum amount approved to be issued to directors, namely 4,166,666. It is anticipated that these additional shares will be issued after the record date for the pro-rata issue.

• See chapter 19 for defined terms.

Appendix 3B Page 3

04/03/2013

Appendix 3B New issue announcement

Number +Class 9 Number and[+] class of all[+] securities 9,608,898 Options exercisable at 15 cents not quoted on ASX ( including the each on or before 31 May 2017 +securities in section 2 if applicable) 2,090,001 Options exercisable at 50 cents each on or before 1 December 2016 10 Dividend policy (in the case of a N/A trust, distribution policy) on the increased capital (interests)

Part 2 - Pro rata issue

11 Is security holder approval required? 12 Is the issue renounceable or non- renounceable? 13 Ratio in which the+securities will be offered 14 +Class of+securities to which the offer relates 15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has security holders who will not be sent new offer documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of acceptances or renunciations	No
	Non-renounceable
	Two (2) new shares for every three (3) shares held
	Ordinary fully paid shares
	14 June 2016
	No
	Fractional entitlements will be rounded up to the nearest whole number
	Only applicable in Australia and New Zealand
	28 June 2016

• See chapter 19 for defined terms.

Appendix 3B Page 4

04/03/2013

Appendix 3B New issue announcement

20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of security holders 25 If the issue is contingent on security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and offer documents will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do security holders sell their entitlements_in full_through a broker? 31 How do security holders sell_part_of their entitlements through a broker and accept for the balance?	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	15 June 2016
	The terms of the options do not require notices to be sent to optionholders. However, optionholders have had advance notice of the rights issue via the Company’s ASX announcements.
	N/A
	N/A
	N/A
	N/A

• See chapter 19 for defined terms.

Appendix 3B Page 5

04/03/2013

Appendix 3B New issue announcement

• 32 How do security holders dispose of N/A their entitlements (except by sale through a broker)?

• 33 +Issue date 5 July 2016

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.

Appendix 3B Page 6

04/03/2013

Appendix 3B New issue announcement

Entities that have ticked box 34(b)

38 Number of+securities for which +quotation is sought 39 +Class of +securities for which quotation is sought 40 Do the+securities rank equally in all respects from the+issue date with an existing+class of quoted+securities? If the additional+securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another +security, clearly identify that other +security) 42 Number and+class of all+securities quoted on ASX (_including_the +securities in clause 38)	-
	-
	-
	-
	Number	+Class
	-

• See chapter 19 for defined terms.

Appendix 3B Page 7

04/03/2013

Appendix 3B New issue announcement

Quotation agreement

• 4 +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: Date: 6 June 2016 Print name: Dan Smith

== == == == ==

• See chapter 19 for defined terms.

Appendix 3B Page 8

04/03/2013

Appendix 3B New issue announcement

Appendix 3B – Annexure 1

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

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

Part 1

Rule 7.1 – Issues exceeding 15% of capital

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

Part 1	Part 1
Rule 7.1 – Issues exceeding 15% of capital
Step 1: Calculate “A”, the base figure from which the placement capacity is calculated
Insertnumber of fully paid +ordinary securities on issue 12 months before the+issue date or date of agreement to issue	364,757,502 (pre-consolidation, 25:1)
Addthe following: • Number of fully paid+ordinary securities issued in that 12 month period under an exception in rule 7.2 • Number of fully paid+ordinary securities issued in that 12 month period with shareholder approval • Number of partly paid+ordinary securities that became fully paid in that 12 month period Note: • Include only ordinary securities here – other classes of equity securities cannot be added • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items	83,064,375 28 May 2015 (pre-consolidation) 15,777,775 10 July 2015 (pre-consolidation) 160,713,401 17 July 2015 (pre-consolidation) 16,713,565 (assuming full subscription under the rights issue)
Subtractthe number of fully paid +ordinary securities cancelled during that 12 month period	Nil
“A”	41,783,912 (post-consolidation)

• See chapter 19 for defined terms.

Appendix 3B Page 9

04/03/2013

Appendix 3B New issue announcement

Step 2: Calculate 15% of “A”

Step 2: Calculate 15% of “A”	Step 2: Calculate 15% of “A”
“B”	0.15
Multiply“A” by 0.15	6,267,586
Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used
Insertnumber of+equity securities issued or agreed to be issued in that 12 month period_not counting_those issued: • Under an exception in rule 7.2 • Under rule 7.1A • With security holder approval under rule 7.1 or rule 7.4 Note: • This applies to equity securities, unless specifically excluded – not just ordinary securities • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items	195,554
“C”	195,554
Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1
“A” x 0.15 Note: number must be same as shown in Step 2	6,267,586
Subtract“C” Note: number must be same as shown in Step 3	195,554
Total[“A” x 0.15] – “C”	6,072,032

• See chapter 19 for defined terms.

Appendix 3B Page 10

04/03/2013

Appendix 3B New issue announcement

Part 2

==> picture [355 x 12] intentionally omitted <==

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

Rule 7.1A – Additional placement capacity for eligible entities
----- End of picture text -----

==> picture [404 x 421] intentionally omitted <==

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

Step 1: Calculate “A”, the base figure from which the placement
capacity is calculated
“A” 41,783,912
Note: number must be same as shown in
Step 1 of Part 1
Step 2: Calculate 10% of “A”
“D” 0.10
Multiply “A” by 0.10 4,178,391
Step 3: Calculate “E”, the amount of placement capacity under rule
7.1A that has already been used
Insert number of [+] equity securities issued Nil
or agreed to be issued in that 12 month
period under rule 7.1A
Notes:
• This applies to equity securities – not
just ordinary securities
• Include here – if applicable – the
securities the subject of the Appendix
3B to which this form is annexed
• Do not include equity securities issued
under rule 7.1 (they must be dealt with
in Part 1), or for which specific security
holder approval has been obtained
• It may be useful to set out issues of
securities on different dates as
separate line items
“E” 4,178,391
----- End of picture text -----

• See chapter 19 for defined terms.

Appendix 3B Page 11

04/03/2013

Appendix 3B New issue announcement

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A	Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A
“A” x 0.10 Note: number must be same as shown in Step 2	4,178,391
Subtract“E” Note: number must be same as shown in Step 3	Nil
Total[“A” x 0.10] – “E”	4,178,391

• See chapter 19 for defined terms.

Appendix 3B Page 12

04/03/2013