XREF LIMITED — Capital/Financing Update 2014

Oct 9, 2014

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King Solomon Mines Limited

ARBN 122 404 666 242 Marine Parade Otaki 5512, New Zealand Office (within Australia): 1 800 061 569 (outside Australia): +64 6 364 8462 Fax: +64 6 364 8497 enquiries@kingsolomonmines.com www.kingsolomonmines.com

10 October 2014

Company Announcements Office Australian Securities Exchange

Renounceable Rights Issue

King Solomon Mines Limited announces an underwritten Renounceable Rights Issue of three New Shares for every two existing shares held by shareholders at an issue price of A$0.002 per share. The proceeds of the Rights Issue will primarily be applied to increase the Company's cash reserves, initially by $919,188 (before deducting the costs of the Rights Issue) immediately after completion of the Rights Issue, as well as to provide the Company with additional capital for the purposes referred to in the Offer Document and also to increase the number of shares on issue by 459,594,209 from 306,396,139 shares, as at the date of this Offer Document, to 765,990,348 shares, assuming none of the options currently on issue are exercised prior to the Record Date.

The Australian Offer Document is expected to be lodged with ASX on 20 October 2014 together with the New Zealand Registered Prospectus (Short Form) and Investment Statement. The draft New Zealand Registered Prospectus (Short Form) and Investment Statement was lodged with the Register of Financial Service Providers in New Zealand for registration on 10 October 2014 and is available on website:

http://www.business.govt.nz/fsp

The details of the offer, as set out in the application for quotation (Appendix 3B), are attached.

Yours sincerely King Solomon Mines Limited

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Stephen McPhail

Managing Director

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

King Solomon Mines Limited (ASX Code: KSO)

ARBN

122 404 666

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 Fully paid ordinary shares be issued 2 Number of[+] securities issued or to be issued (if known) or Maximum number of 459,594,209 New Shares 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 Fully paid ordinary shares outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)

• See chapter 19 for defined terms.

Appendix 3B Page 1

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Appendix 3B New issue announcement

4 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 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 6a Is the entity an+eligible entity that 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 resolution under rule 7.1A was passed 6c Number of+securities issued without security holder approval under rule 7.1 6d Number of+securities issued with security holder approval under rule 7.1A	Yes, all shares issued pursuant to the Rights Issue will rank equally with King Solomon Mines Limited fully paid ordinary shares trading on the ASX under Code KSO.
	$0.002per share
	Renounceable pro-rata offer (Rights Issue) on the basis of three New Shares for every two existing shares held on the Record Date. The funds raised from the issue will be used for the purposes set out in the offer document.
	No
	Not applicable
	Not applicable
	Not applicable

• See chapter 19 for defined terms.

Appendix 3B Page 2

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Appendix 3B New issue announcement

6e Number of[+] securities issued with security holder approval under rule 7.3, or another Not applicable specific security holder approval (specify date of meeting) 6f Number of[+] securities issued Not applicable 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 Not applicable 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 Not applicable 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 – Not applicable 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 Expected to be 19 November 2014 pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B. Number +Class 8 Number and +class of all + 765,909,348 if the securities quoted on ASX ( including the +securities in Rights Issue is Fully paid ordinary shares section 2 if applicable) fully subscribed Number +Class 9 Number and +class of all +securities not quoted on ASX 29 July 2016 Options – ( including the +securities in 1,600,000 exercise price $0.12 section 2 if applicable) 10 Dividend policy (in the case of a trust, distribution policy) on the Full participation in any future dividends. increased capital (interests)

• See chapter 19 for defined terms.

Appendix 3B Page 3

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Appendix 3B New issue announcement

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 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	No
	Renounceable
	Three New Shares for every two existing shares held on the Record Date.
	Ordinary Fully Paid Shares
	24October 2014
	Yes
	Round up to the nearest whole New Share
	Any jurisdiction other than Australia and New Zealand
	12 November 2014
	Taylor Collison Limited
	The Underwriter will receive a management fee of 1% of all monies raised and an underwriting fee of 5% of the amount raised by the issue.
	Not applicable
	Not applicable
	Not applicable

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

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?	Not applicable
	29 October 2014
	Notices were sent on 9 October 2014
	22 October 2014
	5 November 2014
	If security holders wish to sell all of their Entitlement on ASX, they need to provide instructions to their stockbroker regarding the Entitlement which they wish to sell on ASX. Further information is set out in the offer document.
	Should security holders wish to only take up part of their Entitlement, then applications for New Shares under the Offer Document must be made on the Entitlement and Acceptance Form, which accompanies the Offer Document, in accordance with the instructions referred to in the Offer Document and on the Entitlement and Acceptance Form. Security holders must enter the number of New Shares they wish to take up and contact their broker in respect of the part of their entitlement they wish to sell. They must forward the Entitlement and Acceptance Form to the Company’s share register (Computershare) together with a cheque for the total amount payable or arrange payment by BPAY in respect to the New Shares accepted. Further information is set out in the offer document.

• See chapter 19 for defined terms.

Appendix 3B Page 5

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Appendix 3B New issue announcement

32 How do security holders dispose Security holders may elect to transfer all or a of their entitlements (except by proportion of their Entitlement to another sale through a broker)? person other than on ASX by forwarding a completed standard renunciation and transfer form (obtainable from Computershare) accompanied by the applicable transferee's cheque for the New Shares they wish to subscribe for. Further information is set out in the offer document.

• 33 +Issue date

19 November 2014

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

Entities that have ticked box 34(b)

38 Number of[+] securities for which + Not applicable quotation is sought

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

39 +Class of +securities for which Not applicable 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 Not applicable 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 Not applicable (if issued upon conversion of another[[+]] security, clearly identify that other[[+]] security)

Not applicable (if issued upon conversion of another[[+]] security, clearly identify that other[[+]] security) Number +Class 42 Number and[+] class of all[+] securities quoted on ASX ( including the Not applicable Not applicable +securities in clause 38)

• See chapter 19 for defined terms.

Appendix 3B Page 7

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Appendix 3B New issue announcement

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.

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Sign here: ............................................................ (Director)

Date: 10 October 2014

Print name: Stephen McPhail

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• See chapter 19 for defined terms.

Appendix 3B Page 8

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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

Insert number of fully paid[+] ordinary securities on issue 12 months before the + issue date or date of agreement to issue

• Add the following: The Company did not seek shareholder approval at its AGM under ASX

• • Number of fully paid[+] ordinary securities Listing Rule 7.1A. 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

• Subtract the number of fully paid[+] ordinary securities cancelled during that 12 month period “A”

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Step 2: Calculate 15% of “A”

“B” 0.15

[Note: this value cannot be changed]

Multiply “A” by 0.15

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

Insert number 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

“C”

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 Subtract “C”

Note: number must be same as shown in Step 3 Total [“A” x 0.15] – “C” [Note: this is the remaining placement capacity under rule 7.1]

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Part 2

Rule 7.1A – Additional placement capacity for eligible entities

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

“A” Note: number must be same as shown in Step 1 of Part 1

Step 2: Calculate 10% of “A”

“D” 0.10

Note: this value cannot be changed Multiply “A” by 0.10

Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used

Insert number of[+] equity securities issued 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”

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

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 Subtract “E” Note: number must be same as shown in Step 3 Total [“A” x 0.10] – “E” Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

Appendix 3B Page 12

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