TESORO GOLD LTD — Capital/Financing Update 2015

Nov 30, 2015

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PLUKKA RE-COMPLIANCE DISCLOSURES

Capital Structure

Following completion of the consolidation of capital and the issue of all securities under the Prospectus, the capital structure of the Company is as follows:

Securities

Total

Shares 150,299,129 Unlisted Options - Advisor and Director Options ($0.20, 3 years)1 9,500,000 - Vesting Director Options ($0.20, 3 years)1 1,500,000 Performance Rights - Tranche 1 Performance Rights 7,000,000 - Tranche 2 Performance Rights 6,267,500 - Tranche 3 Performance Rights 6,267,500 Note 1: The full terms and conditions of the Advisor and Director Options and the Vesting Director Options are outlined in Annexure 1.

The escrow restrictions applying to the Company’s securities on issue is as follows:

Escrowed Securities	Escrowed for 24 months from re-quotation
Shares 55,405,671 Unlisted Options - Advisor and Director Options ($0.20, 3 years) 9,500,000 - Vesting Director Options ($0.20, 3 years) 1,500,000 Performance Rights - Tranche 1 Performance Rights 7,000,000 - Tranche 2 Performance Rights 6,267,500 - Tranche 3 Performance Rights 6,267,500

Statement of Commitments

The table below outlines the Company’s proposed use of funds following completion of the $10,000,000 raising pursuant to the Public Offer.

Source of funds	Actual Subscription
Cash on hand of the Company and Treasure Castle	$1,290,000
Funds raised under the Public Offer	$10,000,000
Total funds available	$11,290,000

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Use of funds
Marketing	$5,000,000
Retail store fit outs	$2,500,000
Systems development	$500,000
Costs of the Offers	$937,350
Working capital including retail store lease deposits	$2,352,650
Total funds applied	$11,290,000

Pro-forma Financial Position

The Company’s pro-forma statement of financial position following completion of the acquisition of Treasure Castle and the Public Offer capital raising of $10,000,000 is outlined below.

	Pro-forma
	30 June 2015
	$
CURRENT ASSETS	11,352,244 641,206 54,577
Cash and cash equivalents
Trade and other receivables
Inventories
TOTAL CURRENT ASSETS	12,048,026 76,368
NON CURRENT ASSETS
Property, plant and equipment
TOTAL NON CURRENT ASSETS	76,368
TOTAL ASSETS	12,124,394 486,313 1,097
CURRENT LIABILITIES
Trade and other payables
Borrowings
TOTAL CURRENT LIABILITIES	487,410 487,410
TOTAL LIABILITIES
NET ASSETS	11,636,984
EQUITY	20,000,089 1,269,400 (1,669) (9,630,836)
Issued capital
Reserves
Foreign Currency Translation Reserve
Accumulated losses
TOTAL EQUITY	11,636,984

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Annexure 1

Terms and conditions of Advisor and Director Options (New Options)

The rights and liabilities attaching to the New Options can be summarised as follows:

• (a) Each New Option entitles the holder to subscribe for one Share upon exercise of the Option.

• (b) The New Options have an exercise price of $0.20 ( Exercise Price ) and an expiry date of the date which is 3 years after the date on which the Company’s securities are reinstated to trading on ASX ( Expiry Date ).

• (c) The New Options are exercisable at any time on or prior to the Expiry Date.

• (d) The New 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 New Options will 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 New Options.

• (g) After a New Option is validly exercised, the Company must, within, 15 Business Days of the notice of exercise and receipt of cleared funds equal to the sum payable on the exercise of the New Option:

• (i) issue the Share; and

• (ii) do all such acts, matters and things to obtain the grant of official quotation of the Share on ASX no later than 5 Business Days after issuing the Shares.

• (h) There are no participation rights or entitlements inherent in the New Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the New Options. However, the Company will give the holders of New Options notice of the proposed issue prior to the date for determining entitlements to participate in any such issue.

• (i) 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):

• (iii) the number of Shares which must be issued on the exercise of an New Option will be increased by the number of Shares which the New Optionholder would have received if the New Optionholder had exercised the New Option before the record date for the bonus issue; and

• (iv) no change will be made to the Exercise Price.

• (j) If the Company makes an issue of Shares pro rata to existing Shareholders (other than an issue in lieu or in satisfaction of dividends or by way of dividend reinvestment) the Exercise Price of an New Option will be reduced according to the following formula:

New exercise price = O - E[P-(S+D)]

N+1

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Annexure 1

• O = the old Exercise Price of the New Option.

• E = the number of underlying Shares into which one New Option is exercisable.

• P = average market price per Share weighted by reference to volume of the underlying Shares during the 5 trading days ending on the day before the ex rights date or ex entitlements date.

• S = the subscription price of a Share under the pro rata issue.

• D = the dividend due but not yet paid on the existing underlying Shares (except those to be issued under the pro rata issue).

• N = the number of Shares with rights or entitlements that must be held to receive a right to one Share.

• (k) If there is any reconstruction of the issued share capital of the Company, the rights of the New Optionholders may be varied to comply with the Listing Rules which apply to the reconstruction at the time of the reconstruction.

• (l) The Company will not apply to ASX for quotation of the Options.

• (m) The Options are not transferable

• (n) Cheques shall be in Australian currency made payable to the Company and crossed "Not Negotiable". The application for shares on exercise of the Options with the appropriate remittance should be lodged at the Company's share registry.

Terms and Conditions of the Vesting Director Options (Vesting Options)

The Vesting Options are issued on the same terms and conditions as the New Options however will vest and become exercisable subject to the following conditions:

• (o) 500,000 Vesting Options will vest and become exercisable one year after issue;

• (p) 500,000 Vesting Options will vest and become exercisable two year after issue; and

• (q) 500,000 Vesting Options will vest and become exercisable three year after issue;

Vesting is conditional on Mr Francis Gouten remaining a Director of the Company (together the Vesting Conditions )

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