XREF LIMITED — Capital/Financing Update 2016

Jan 31, 2016

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King Solomon Mines Limited ARBN 122 404 666

Xref Limited NZBN 9429036173259

1 February 2016

Company Announcements Office Australian Securities Exchange

Issue of Options

King Solomon Mines Limited (King Solomon Mines or the Company) advises that it has issued 4,508,909 options, being 2,808,909 options to Taylor Collison Limited and 1,700,000 options to Directors (all on a post-Consolidation basis), as detailed in the Notice of Extraordinary General Meeting (EGM) for the meeting held on 26 November 2015, which approved the issue of these options. The options were issued to Taylor Collison Limited for the provision of corporate services in relation to the Xref Pty Ltd transaction with the Company, and to Simon O’Loughlin, Stephen McPhail, Simon Taylor and Timothy Mahony as a key component of their remuneration by the Company.

The issue of options has taken place after satisfaction of all the conditions precedent and completion of the acquisition of Xref Pty Ltd, including, but not limited to, the successful finalisation of the A$4 million fundraising under the Offer in the Replacement Prospectus dated 7 December 2015 (the Prospectus).

Attached is the Appendix 3B for the issue of these 4,508,909 options.

King Solomon Mines Limited

Robert J Waring

Company Secretary

Secondary Trading Exemption

The Act restricts the on-sale of securities issued without disclosure, unless the sale is exempt under section 708 or 708A. By the Company giving this notice, a sale of the Securities noted above will fall within the exemption in section 708A(5) of the Act.

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

• a) the Company issued the Securities without disclosure to investors under Part 6D.2 of the Act;

• b) as at 1 February 2016 the Company has complied with the provisions of Chapter 2M of the Act as they apply to the Company, and section 674 of the Act; and

• c) as at 1 February 2016 there is no information:

• i) that has been excluded from a continuous disclosure notice in accordance with the ASX Listing Rules; and

• ii) that investors and their professional advisers would reasonably require for the purpose of making an informed assessment of:

  • A) the assets and liabilities, financial position and performance, profits and losses and prospects of the Company; or

  • B) the rights and liabilities attaching to the Securities.

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 Options

• be issued

• 2 Number of[+] securities issued or to be issued (if known) or 4,508,909

• maximum number which may be issued

• 3 Principal terms of the +securities (e.g. if options, exercise price and expiry date; Exercise Price of A$0.23, expiry date of

• if partly paid[+] securities, the 1 February 2019, with terms as set out in the

• amount outstanding and due Notice for the Extraordinary General Meeting

• dates for payment; if +convertible securities, the (EGM) held on 26 November 2015. 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	The Company will make application for official quotation on ASX of new shares allotted on exercise of the options. Those shares, when issued, will participate equally in all respects with existing issued ordinary shares.
	The options were not issued for cash consideration, as set out in the cover letter for this announcement and in the Notice of EGM.
	2,808,909 options are issued to Taylor Collison Limited for the provision of corporate services in relation to the Xref Pty Ltd transaction with the Company, and 1,700,000 options are issued to the Directors as a key component of their remuneration by the Company. This transaction was approved by shareholders at the Company’s EGM held on 26 November 2015.
	Yes
	The Company received shareholder approval at its AGM on 28 August 2015 under ASX Listing Rule 7.1A.
	509,375

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

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)	Not Applicable	Not Applicable
	127,590,534, date of EGM 26 November 2015
	Not Applicable
	Not Applicable
	Not Applicable
	21,931,698
	1 February 2016
	Number	+Class
	39,448,668	Fully paid ordinary shares

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

9 Number and +class of all +securities not quoted on ASX (including the +securities in section 2 if applicable) * The conversion ratio of the Performance Rights into ordinary shares upon achievement of a relevant Performance Milestone is one ordinary share for each Performance Right. They are in escrow until early February 2018. 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	Number	+Class
	675,000 1,923,076 48,226,924 32,000 16,666,667 16,666,667 16,666,666 4,508,909	Fully paid ordinary shares, in escrow until 19 August 2016 Fully paid ordinary shares, in escrow until 18 January 2017 Fully paid ordinary shares, in escrow until early February 2018 29 July 2016 Options – exercise price $6.00 A Class Performance Rights B Class Performance Rights C Class Performance Rights * Options – expiry date 1 February 2019 – exercise price $0.23, in escrow until earlyFebruary2018
	The Company will make application for official quotation on ASX of new shares issued on exercise of the options. Those new shares allotted on exercise of the options will qualify for dividends declared after the date of their allotment.

Part 2 - Pro rata issue

11 to 33 – Not Applicable

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

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

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 to 42 – Not Applicable

• See chapter 19 for defined terms.

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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.

Sign here:

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Date: 1 February 2016

( ~~Director /~~ Company Secretary)

Print name: Robert J Waring

• See chapter 19 for defined terms.

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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

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Insert number of fully paid [+] ordinary
16,698,668
securities on issue 12 months before the
+ issue date or date of agreement to issue Post consolidation basis
Add the following:
• Number of fully paid [+] ordinary securities
issued in that 12 month period under an 73,065,625
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” 89,764,293
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• 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 13,464,644

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” 509,375

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

“A” x 0.15

13,464,644

Note: number must be same as shown in Step 2 Subtract “C” 509,375 Note: number must be same as shown in Step 3 Total [“A” x 0.15] – “C” 12,955,269 [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” 89,764,293 Note: number must be same as shown in Post consolidation basis 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 8,976,429

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” 0

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

“A” x 0.10 8,976,429 Note: number must be same as shown in Step 2 Subtract “E” 0 Note: number must be same as shown in Step 3 Total [“A” x 0.10] – “E” 8,976,429 Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

Appendix 3B Page 9

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