TESORO GOLD LTD — M&A Activity 2013

Dec 5, 2013

CONTINUATION INVESTMENTS LIMITED

5 December 2013

Manager of Company Announcements ASX Limited Level 8 Exchange Plaza 2 The Esplanade PERTH WA 6000

By E-Lodgement

UNSOLICITED TAKEOVER OFFER

On 25[th] November 2013, DMX Corporation Limited ( DMX ) announced an unsolicited and conditional takeover offer to acquire all the ordinary shares held by each Continuation Investments Limited ( COT ) shareholder ( Takeover Offer ).

The offer price is 7.2 cents cash per COT share ( Offer Price ) . The last closing price of COT’s shares prior to the date of this announcement was 7 cents on 2 December 2013. In the past 3 months prior to the date of this announcement, COT’s shares have traded as high as 7.3 cents, higher than the Offer Price offered by DMX for control of COT.

COT was made aware of the Takeover Offer minutes before the documentation was uploaded on the ASX electronic announcement platform.

The Board of COT immediately advised that it would review the Takeover Offer documentation and urged shareholders not to take any action in relation to the Takeover Offer.

In accordance with the Corporations Act, COT will release a Target Statement which responds to the Takeover Offer. The Board expects to release this within 15 days after COT receives notice from DMX that the Takeover Offer has been sent to COT shareholders.

Overall, the Takeover Offer is an obvious and opportunistic attempt to acquire control of COT without paying the competitive price which would typically be paid for a control transaction of this nature.

Whilst the Takeover Offer includes a minimum 50.1% condition, this may be waived by DMX. The board of directors responsible for the current suspended state of DMX have in the Board’s opinion identified acquiring control of COT as a way to cure past failures with their stewardship of DMX. Should DMX waive the 50.1% condition, it is possible that COT

______________ Continuation Investments Limited 945 Wellington Street WEST PERTH WA 6005 ABN 91 106 854 175 phone: (08) 9322 7600 fax: (08) 9322 7602 email: reception@grangeconsulting.com.au

CONTINUATION INVESTMENTS LIMITED

shareholders will be exposed to the same directors that have presided over DMX’s suspension from ASX.

Each of the directors of COT confirms that they WILL REJECT the Takeover Offer in respect of the shareholdings they control, and believe that the Takeover Offer significantly undervalues COT. The Board of Directors control shareholdings representing approximately 17.5% of COT’s issued and voting share capital as at 25 November 2013. .

Prior to release of COT’s target’s statement, the COT Board continues to recommend to shareholders to TAKE NO ACTION in respect of their shareholding in COT and the Takeover Offer.

COT’s has significant concerns with the Takeover Offer, including:

1. COT has concerns that the bidder’s statement issued by DMX in relation to the Takeover Offer is defective, contains potentially misleading statements and information and is deficient in certain respects. If left unresolved by DMX, COT will detail these concerns in its Target Statement.

2. While the Takeover Offer is subject to a minimum 50.1% condition, DMX is permitted to waive the 50.1% condition to the Takeover Offer and if it does, proceed to purchase any shares tendered into the Offer. In this scenario, the intentions of the management of DMX and their qualifications to conduct the business of COT are a critical factor to be considered by COT shareholders.

3. DMX currently has no operating business . DMX’s securities have been suspended from trading on the ASX for over 12 months and it has now announced that it intends to delist. DMX has not outlined any detailed plans, experience or capacity and expertise to raise any additional capital for COT in order to execute its investment strategy and it is proposing to use the same management team responsible for DMX’s current state of affairs to manage COT in the future. DMX’s statements of intentions for COT and its investment strategy are vague, conditional, and unsubstantiated .

4. DMX has not offered COT shareholders a premium for control under the Takeover Offer. Indeed, the Offer represents more than a 13.8% DISCOUNT to the net tangible asset ( NTA ) backing of a COT share as at 31[st] October 2013, as advised to ASX on 14[th] November 2013. The Board notes that COT’s NTA is made of cash-at-bank – effectively DMX is attempting to buy cash at a discount .

______________ Continuation Investments Limited 945 Wellington Street WEST PERTH WA 6005 ABN 91 106 854 175 phone: (08) 9322 7600 fax: (08) 9322 7602 email: reception@grangeconsulting.com.au

CONTINUATION INVESTMENTS LIMITED

1. COT has approximately $22 million of carry-forward tax losses which may be available to it. Assuming a tax rate of 30%, such losses are worth approximately $0.33 per COT share to the extent that they can be fully utilised against future earnings. The Takeover Offer ascribes no value to these tax losses.

2. Unlike DMX which is suspended from trading on the ASX, COT’s securities are freely tradable on ASX. The Takeover Offer ascribes no value to the Company’s ongoing status as a trading, ASX-listed company.

3. The Takeover Offer does not extend to COT option holders and is therefore prejudicial to such security holders’ interests.

4. Overall, DMX is seeking to acquire control of COT for significantly lower consideration than what the COT Board believes adequately values COT. The Takeover Offer ascribes a discounted value to COT’s cash reserves, and no value to its listed ASX status, its status as a Listed Investment Company, and the tax losses it has accumulated as a Listed Investment Company. Indeed, DMX’s Takeover Offer is a clear attempt to acquire a group of attractive assets at less than the cash reserves that COT controls by a management team that is responsible for having managed DMX into ASX imposed suspension and, ultimately, a scenario where it has decided to de-list.

Recent Background and Activities

The current COT Board has a strong mix of mining, finance and commercial skills and is diligently applying those skills to broaden the investments of COT.

Mr Jeremy King and Mr Andrew Worland were appointed to the COT Board in March 2012. Mr David Church was appointed in April 2013.

In April 2012 COT initiated a share split and a rights issue to create additional liquidity in the Company’s stock, allowing shareholders a greater opportunity to commercialise their investment in COT and provide additional working capital to the Company. This process, which successfully raised the full rights issue amount of $701,131, was completed in August 2012. Importantly, part of this process involved the COT Board introducing a shareholder base that is extremely well connected to capital markets and whom collectively are supportive of introducing business and investment opportunities of scale to the Company.

The directors of COT have clearly and regularly described to investors their ongoing review of the core business activities of COT, which may lead to a change of focus in the nature of investments undertaken by COT. In the meantime, the directors have successfully managed

______________ Continuation Investments Limited 945 Wellington Street WEST PERTH WA 6005 ABN 91 106 854 175 phone: (08) 9322 7600 fax: (08) 9322 7602 email: reception@grangeconsulting.com.au

CONTINUATION INVESTMENTS LIMITED

COT to ensure it continues to operate efficiently and is able to meet its listed investment company obligations under the ASX listing rules.

Over the past 12 months, in parallel with restructuring and improving COT’s capital structure, the Board has assessed a significant number of natural resource investment opportunities in the USA, Canada, Brazil, West Africa, South Africa, Asia and Australia in energy minerals, precious and base metals and bulk commodities. Each of these opportunities has been identified on the basis of scale, prospectivity and ability to deliver sustained share price appreciation for COT. In addition, through its extensive financing and mining network, COT has also reviewed the potential to provide financing for development stage mining properties. It continues to actively assess these opportunities which would be consistent with its status as a listed investment company.

In addition, COT regularly reviews business and investment opportunities referred to it by its shareholders in a wide variety of industries and business sectors.

However, overall, the Board of COT has taken a cautious approach to new investments given continued heightened market volatility both domestically and abroad, a strategy which in the Board’s view has been justified as values across most asset classes have generally deteriorated.

While COT has assessed a large number of opportunities and prospects, it has managed to do so at minimal due diligence cost, due to the extensive network of contacts within the professional investment and mining community that the Board brings to bear.

The directors of COT continue to operate the Company on as little cash expenditure as is prudently possible. Despite his significant involvement in assessing many investment opportunities, Mr King has not derived any income from COT for his professional legal and corporate advice that he has provided to COT. Further, Mr King has not drawn director fees since November 2012. Mr Church has not drawn director fees since his appointment to the Board in April 2013. Mr Worland held a full time executive position with COT between 1 January 2013 and 30 April 2013 in an effort to fast track the Company’s investment efforts. Mr Worland voluntarily terminated his own services agreement effective 30 April 2013 to ensure tight cost control within COT reflecting deteriorating capital markets at the time and has not drawn a salary or received director fees since.

In short, COT enjoys a healthy balance sheet, a low cost structure, a Board with the local and international credentials to create significant shareholder value and a supportive, involved and sophisticated shareholder base at a time when the Company continues to be exposed to a number of potentially exciting investment opportunities.

______________ Continuation Investments Limited 945 Wellington Street WEST PERTH WA 6005 ABN 91 106 854 175 phone: (08) 9322 7600 fax: (08) 9322 7602 email: reception@grangeconsulting.com.au

CONTINUATION INVESTMENTS LIMITED

Finally, the Board notes that as recently as mid-August DMX lodged a takeover offer for COT. That offer was ultimately withdrawn following a signed statement of over 73% of COT shareholders stating their intention to reject such offer.

The Board looks forward to continuing to work to deliver significant and sustained value to its shareholders, ideally without additional unnecessary, unhelpful and costly corporate distractions.

For and on Behalf of the Board

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Jeremy King Director

______________ Continuation Investments Limited 945 Wellington Street WEST PERTH WA 6005 ABN 91 106 854 175 phone: (08) 9322 7600 fax: (08) 9322 7602 email: reception@grangeconsulting.com.au