ZEOTECH LIMITED — Capital/Financing Update 2012

Sep 12, 2012

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LACONIA RESOURCES LIMITED

ACN 137 984 297

OFFER DOCUMENT

For a pro rata non-renounceable rights offer to Eligible Shareholders on the basis of one (1) New Share for every two (2) Shares held by Shareholders on the Record Date at an issue price of $0.02 per Share to raise approximately $1,812,688 ( Offer ).

Underwriter

The Offer is fully underwritten by Indian Ocean Capital Pty Limited (ACN 051 227 877) (AFSL 246558). The Underwriting Agreement contains terms and conditions which may affect the obligations of the Underwriter, details of which are set out in Section 2.8 of this Offer Document.

IMPORTANT NOTICE

This document is not a prospectus . It does not contain all of the information that an investor would find in a prospectus or which may be required in order to make an informed investment decision regarding, or about the rights attaching to, the New Shares offered by this document.

This document is important and requires your immediate attention. It should be read in its entirety. If you do not understand its content or are in doubt as to the course you should follow, you should consult your stockbroker or professional adviser without delay.

This Offer opens on 27 September 2012 and closes at 5:00pm WST on 15 October 2012.

Valid acceptances must be received before that time.

Please read the instructions in this document and on the accompanying Entitlement and Acceptance Form regarding the acceptance of your Entitlement.

IMPORTANT NOTES

This Offer Document and enclosed personalised Entitlement and Acceptance Form have been prepared by Laconia Resources Limited (ACN 137 984 297) ( Laconia or the Company ). This Offer Document is dated 13 September 2012.

No party other than Laconia has authorised or caused the issue of this Offer Document, or takes any responsibility for, or makes, any statements, omissions, representations or undertakings in this Offer Document.

No person is authorised to give any information or to make any representation in connection with the Offer which is not contained in this Offer Document. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with the Offer.

Eligibility

Applications for Securities by Eligible Shareholders can only be made on an original Entitlement and Acceptance Form, as sent with this Offer Document. The Entitlement and Acceptance Form sets out an Eligible Shareholder's Entitlement to participate in the Offer.

Overseas shareholders

This Offer does not, and is not intended to, constitute an offer in any place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer or to issue this Offer Document.

It is not practicable for the Company to comply with the securities laws of overseas jurisdictions having regard to the number of overseas Shareholders, the number and value of the New Shares these Shareholders would be offered and the cost of complying with regulatory requirements in each relevant jurisdiction. Accordingly, the Offer is not being extended and New Shares will not be issued to Shareholders with a registered address which is outside Australia or New Zealand.

Shareholders resident in New Zealand should consult their professional advisors as to whether any government or other consents are required, or other formalities need to be observed, to enable them to take up their Entitlements under the Offer.

Privacy Act

If you complete an application for Securities, you will be providing personal information to the Company (directly or by the Company’s share registry). The Company collects, holds and uses that information to assess your application, service your needs as a Shareholder, facilitate distribution payments and corporate communications to you as a Shareholder and carry out administration.

The information may also be used from time to time and disclosed to persons inspecting the register, bidders for your securities in the context of takeovers, regulatory bodies, including the Australian Taxation Office, authorised securities brokers, print service providers, mail houses and the Share Registry.

You can access, correct and update the personal information that we hold about you. Please contact the Company or the Share Registry if you wish to do so at the relevant contact numbers set out in this Offer Document.

Collection, maintenance and disclosure of certain personal information is governed by legislation including the Privacy Act 1988 (Cth) (as amended), the Corporations Act and

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certain rules such as the ASX Settlement Operating Rules. You should note that if you do not provide the information required on the application for Shares, the Company may not be able to accept or process your application.

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TABLE OF CONTENTS	TABLE OF CONTENTS
1.	CHAIRMAN’S LETTER......................................................................................................5
2.	DETAILS OF THE OFFER...................................................................................................6
3.	ACTION REQUIRED BY SHAREHOLDERS ......................................................................14
4.	RISK FACTORS .............................................................................................................16
5.	CAPITAL STRUCTURE AND FINANCIAL INFORMATION ...............................................22
DEFINED	TERMS ..........................................................................................................................25

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1. CHAIRMAN’S LETTER

13 September 2012

Dear Shareholder

On behalf of Laconia Resources Limited ( Laconia or the Company ), I am pleased to invite you to participate in a pro rata non-renounceable entitlement issue on the basis of one (1) New Share for every two (2) Shares held on the Record Date at an issue price of $0.02 per New Share, to raise approximately $1,812,688 (the Offer ).

On 3 September 2012, the Company announced that it had completed a placement to sophisticated and professional investors of 23,643,751 fully paid ordinary shares to raise $472,875 under its 15% placement capacity. Further, in recognition of shareholder support, the Company announced its intention to undertake an equity raising of approximately $1.81 million.

The Company intends to apply the funds raised from the Offer as set out in Section 2.2 of this Offer Document.

Entitlements are non-renounceable and will not be tradeable on ASX or otherwise transferable. Shareholders who do not take up all or any part of their Entitlements will not receive any payment or value in respect of those Entitlements and their equity interest in the Company will be diluted.

The Offer is fully underwritten by Indian Ocean Capital Pty Ltd.

This Offer Document contains important information about the Offer, including:

• (a) details of the Offer, including key dates;

• (b) actions required by Shareholders; and

• (c) risk factors associated with the Offer.

Should you elect to participate in the Offer, you must complete the personalised Entitlement and Acceptance Form in accordance with the instructions provided.

This Offer Document should be read carefully and in its entirety before deciding whether or not to participate in the Offer. In particular, you should consider the key risk factors included in Section 4 of this Offer Document.

Shareholders who have any queries about the Offer should contact the Company at any time from 8:30am to 5:00pm during the Offer period.

On behalf of the Board of Laconia, I invite you to consider this investment opportunity and thank you for your ongoing support of our company.

Yours faithfully,

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Matthew Howison Chairman

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2. DETAILS OF THE OFFER

2.1 The Offer

The Company is making a pro rata non-renounceable offer of New Shares at an issue price of $0.02 each on the basis of one (1) New Share for every two (2) Shares held on the Record Date (the Offer ).

At the date this Offer Document is despatched to Shareholders, the Company has 181,268,761 Shares (including 26,505,000 escrowed to 21 June 2013), 24,100,000 Options, 14,500,000 Performance Shares (including 12,500,000 escrowed to 21 June 2013) and 1 Convertible Note (escrowed to 20 June 2013) on issue.

On the basis that no further Shares are issued or no Options exercised or Convertible Notes converted prior to the Record Date, the Offer is for 90,634,380 New Shares.

Where the determination of the Entitlement of any Eligible Shareholder results in a fraction of a New Share, such fraction will be rounded up or down to the nearest whole New Share.

2.2 Use of Funds

Completion of the Offer will result in an increase in cash in hand of up to approximately $1,812,688 (before the payment of costs associated with the Offer).

The Company intends to apply the funds raised from the Offer to:

• (a) fund the Company’s next phase of exploration, including its recently announced 2,200m underground diamond drilling programme at its Peru Rasuhuilca Project;

• (b) fund the issue costs associated with the Offer;

• (c) assess and progress potential new opportunities; and/or

• (d) pay for additional liabilities and provide working capital.

2.3 Indicative Timetable

Indicative Timetable
Event	Date
Announcement Entitlement Offer, lodge Appendix 3B and Notice sent to Optionholders	14 September 2012
Notice sent to Shareholders	17 September 2012
Ex date	18 September 2012
Record date for determining Shareholder entitlements	24 September 2012
Dispatch of Offer Document (Offer opens)	27 September 2012
Close of Offer	15 October 2012

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Securities quoted on a deferred settlement basis	16 October 2012
Notification to ASX of shortfall	17 October 2012
Despatch date/securities entered into Shareholders holdings	22 October 2012

• Subject to the Listing Rules, the Directors reserve the right to extend the Closing Date for the Offer at their discretion. Should this occur, the extension will have a consequential effect on the anticipated date of issue for the New Shares

** These dates are indicative only.

2.4 Entitlements and acceptance

The Entitlement of Eligible Shareholders to participate in the Offer will be determined on the Record Date. Your Entitlement is shown on the Entitlement and Acceptance form accompanying this Offer Document.

2.5

No Rights trading

The rights to New Shares under the Offer are non-renounceable. Accordingly, there will be no trading of rights on the ASX and you may not dispose of your rights to subscribe for New Shares under the Offer to any other party. If you do not take up your Entitlement to New Shares under the Offer by the Closing Date, the Offer to you will lapse.

2.6 Overseas Eligible Shareholders

No Offer will be made to Eligible Shareholders who have a registered address outside Australia and New Zealand.

New Shares to which any Eligible Shareholders who do not have a registered address in Australia or New Zealand would otherwise be entitled will form part of the Shortfall and will be placed in accordance with the Underwriting Agreement.

This Offer Document and accompanying Entitlement and Acceptance Form do not, nor are they intended to, constitute an offer in any place in which, or to any person to whom, it would not be lawful to make such an offer.

2.7 New Zealand Shareholders

New Zealand

The New Shares are not being offered or sold to the public within New Zealand other than to existing shareholders of the Company with registered addresses in New Zealand to whom the offer of New Shares is being made in reliance on the Securities Act (Overseas Companies) Exemption Notice 2002 (New Zealand).

In accordance with the Securities Act (Overseas Companies) Exemption Notice 2002 (NZ), a person who, on the Record Date was registered as a holder of Shares with a New Zealand address but who, as at the time of this Offer no longer holds Shares is not eligible to participate in this Offer.

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Notice to nominees and custodians

Nominees and custodians may not distribute any part of this Offer Document in any other country outside Australia, except to beneficial shareholders in New Zealand and any other country where the Company may determine it is lawful and practical to make the Rights Issue. Any person in New Zealand with a holding through a nominee may not participate in the Rights Issue.

2.8 Underwriting Agreement

On 13 September 2012, the Company and Indian Ocean Capital Pty Ltd ( IOC ) entered into an agreement ( Underwriting Agreement ) pursuant to which IOC agreed to fully underwrite the Offer.

Pursuant to the Underwriting Agreement, as consideration for underwriting the Offer, the Company has agreed to pay to the Underwriter (or its nominee) an underwriting fee of 15,000,000 Options subject to shareholder approval to be sought at the Company’s Annual General Meeting scheduled to be held in November 2012.

The obligation of the Underwriter to underwrite the Offer is subject to the following standard events of termination, the occurrence of which may allow the Underwriter to terminate its obligations under the Underwriting Agreement upon or at any time prior to completion of the Underwriting Agreement:

• (a) Default : default by the Company of any of its obligations under the Underwriting Agreement;

• (b) Incorrect or untrue representation : any representation, warranty or undertaking given by the Company in the Underwriting Agreement is or becomes untrue or incorrect;

• (c) Contravention of constitution or Law : a contravention by a Group Company of any provision of its constitution, the Corporations Act or any other applicable Law or any requirement of ASIC or ASX;

• (d) Restriction on issue : the Company is prevented from issuing the Entitlement within the time required by the Corporations Act, the Listing Rules, any statute, regulation or order of a court of competent jurisdiction by ASIC, ASX or any court of competent jurisdiction or any governmental or semi governmental agency or authority;

• (e) Hostilities : political or civil unrest not presently existing commences (whether war has been declared or not) or a major escalation in existing hostilities, political or civil unrest occurs (whether war has been declared or not) involving any one or more of Australia, the United States of America, the United Kingdom, any member state of the European Union, Japan, Singapore, or the Peoples Republic of China, or a terrorist act is perpetrated on any of those countries or any diplomatic, military, commercial or political establishment of any of those countries anywhere in the world;

• (f) Adverse change : an event occurs which gives rise to a Material Adverse Effect;

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• (g) Significant change : a "new circumstance" as referred to in section 719(1) of the Corporations Act arises that is materially adverse from the point of view of an investor;

• (h) Public statements : without the prior approval of the Underwriter a public statement is made by the Company in relation to the Offer;

• (i) Misleading information : any information supplied at any time by the Company or any person on its behalf to the Underwriter in respect of any aspect of the Offer or the affairs of any Group Company is or becomes misleading or deceptive or likely to mislead or deceive;

• (j) Change in Law or policy : there is introduced, or there is a public announcement of a proposal to introduce, into the Parliament of Australia or any of its States or Territories, any Act or prospective Act or budget, or the Reserve Bank of Australia or any Commonwealth or State authority adopts or announces a proposal to adopt any new, or any major change in, existing, monetary, taxation, exchange or fiscal policy, that adversely impacts on the Offer;

• (k)

• Prescribed Occurrence : a Prescribed Occurrence occurs;

• (l) Suspension of debt payments : the Company suspends payment of its debts generally;

• (m) Event of Insolvency : an Event of Insolvency occurs in respect of a Group Company;

• (n) Judgment against a Group Company : a judgment in an amount exceeding $250,000 is obtained against a Group Company and is not set aside or satisfied within 7 days;

• (o) Litigation : litigation, arbitration, administrative or industrial proceedings are after the date of the Underwriting Agreement commenced or threatened against any Group Company, other than any Claims foreshadowed by the Company;

• (p) Board and senior management composition : there is a change in the composition of the Board or a change in the senior management of the Company before Completion without the prior written consent of the Underwriter which cannot be unreasonably withheld or delayed;

• (q) Change in shareholdings : there is a material change in the major or controlling shareholdings of a Group Company or a takeover offer or scheme of arrangement pursuant to Chapter 5 or 6 of the Corporations Act is publicly announced in relation to a Group Company;

• (r) Timetable : there is a delay in any specified date in the Timetable which is greater than 10 Business Days;

• (s) Force Majeure : a Force Majeure affecting the Company's business lasting in excess of 7 days occurs;

• (t) Indictable offence : a director or a senior manager of a Group Company is charged with an indictable offence;

• (u) Certain resolutions passed : a Group Company passes or takes any steps to pass a resolution under section 254N, section 257A or section 260B of

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the Corporations Act, or a resolution to amend its constitution without the prior written consent of the Underwriter;

• (v) Capital structure : any Group Company alters its capital structure in any manner;

• (w) Breach of material contracts : any material contract or material agreement as advised to the Underwriter is terminated or substantially modified;

• (x) Investigation : any person is appointed under any legislation in respect of companies to investigate the affairs of a Group Company;

• (y) Market conditions : a suspension or material limitation in trading generally on ASX occurs or any material adverse change or disruption occurs in the existing financial markets, political or economic conditions of Australia, Japan, the United Kingdom, the United States of America or other international financial markets; or

• (z) Suspension : the Company is removed from the Official List or the Shares become suspended from quotation on ASX and that suspension is not lifted within 24 hours following such suspension.

The Underwriting Agreement also contains other terms and conditions, and representations and warranties that are considered standard for an agreement of this type.

2.9 Directors Interests and Participation

Each Director’s interest in the securities of the Company at the date of this Offer Document and their Entitlement is set out in the table below.

Director	Shares	Options	Performance Shares	Convertible Notes
Matthew Howison	2,575,0001	1,250,0002
Ian George Stuart	7,078,8003	2,500,0004
Saliba Sassine	26,505,0005		12,500,0006	17
Vincent James Algar	16,0008

Notes:

1. Matthew Howison’s Shares are held indirectly through Laconia Holdings Pty Ltd (2,500,000 Shares) and Kaos Partners Pty Limited (75,000 Shares).

2. 20 cent options expiring 30 September 2014 and held indirectly through Laconia Holdings Pty Ltd.

3. Ian Stuart’s Shares comprise 2,000,000 held by Ian Stuart directly, and 3,078,800 held indirectly through Scarfell Pty Ltd as trustee for The Stuart SuperFund A/C and 2,000,000 held indirectly through Eclectricity Pty Limited.

4. 20 cent options expiring 30 September 2014.

5. Saliba Sassine’s shares are held indirectly through Gold Mines of Peru Limited.

6. Saliba Sassine’s performance shares are held indirectly through Gold Mines of Peru Limited.

7. An unsecured conv ertible note with an aggregate face v alue of $650,000, conv ertible as to principal to 6,500,000 Shares at a conv ersion price equal to $0.10 per Share and attracting interest at the rate of 10% per annum. Interest accrues monthly and is only conv ertible to Shares (max of 1.3m). The note expires on 20 June 2014.

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1. Vincent Agar’s shares are held jointly with Isobel Algar.

The Directors intend to participate in the Offer for all or part of their Entitlement.

2.10 Effect of the Rights Issue on Control of the Company

The potential effect the Offer will have on the control of the Company is as follows:

• (a) if all Eligible Shareholders take up their Entitlement, each Eligible Shareholder's percentage interest in the total issued shares of the Company will remain the same and will not be diluted;

• (b) if some but not all Eligible Shareholders take up their Entitlement, and the Shortfall is taken up under the underwriting arrangement, the percentage interest in the total issued Shares of each Eligible Shareholder who does not take up their Entitlement will be diluted and the percentage interest of the total issued Shares of each Eligible Shareholder who does take up their Entitlement will remain the same. The precise level of change in the percentage interests will depend on the take up of Entitlements; and

• (c) the Underwriter presently is not a shareholder of the Company. However, the extent to which Shares are issued pursuant to the underwriting may increase the Underwriter’s voting power in the Company. The Underwriter is not a related party of the Company for the purpose of the Corporations Act. The Underwriter’s present relevant interest and changes under several scenarios are set out in the table below and are based on the assumption that the Underwriter takes up its full Entitlement under each scenario.

Event	Shares held by Underwriter	Voting power of Underwriter
Date of Offer Document	Nil	None
Completion of Entitlement Issue
• Fully subscribed	Nil	None
• 75% subscribed	22,658,595	8.33%
• 50% subscribed	45,317,190	16.66%
• 25% subscribed	67,975,785	24.99%

The number of Shares held by the Underwriter and its voting power in the table above show the potential effect of the underwriting of the Offer. However, it is unlikely that no Shareholders, other than the Underwriter, will take up Entitlements under the Offer. The underwriting obligation and therefore voting power of the Underwriter will reduce by a corresponding amount for the amount of Entitlements under the Offer taken up by Shareholders.

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Further, the Company understands that the Underwriter has entered into subunderwriting agreements pursuant to which its obligations to subscribe for the Shortfall has been allocated to various third parties. As such, it is unlikely that the Underwriter will actually subscribe for any New Shares making up the Shortfall.

2.11 Potential Dilution to Shareholders

Shareholders should note that if they do not participate in the Offer (or the Placement) their holdings are likely to be diluted by approximately 33% (as compared to their holdings and number of Shares on issue as at the date of the Prospectus). Examples of how the dilution may impact Shareholders are set out in the table below:

Holder	Holding as at Record date	% at Record Date	Entitlements under the Offer	Holdings if Offer not taken Up	% post Offer
Shareholder 1	10,000,000	5.52%	5,000,000	10,000,000	3.68%
Shareholder 2	5,000,000	2.75%	2,500,000	5,000,000	1.84%
Shareholder 3	1,500,000	0.82%	750,000	1,500,000	0.55%
Shareholder 4	400,000	0.22%	200,000	400,000	0.15%
Shareholder 5	50,000	0.03%	25,000	50,000	0.02%

It is not expected that the Offer will have any material effect on control of the Company.

2.12

Market Price of Shares

The highest and lowest market sale prices of the Company’s Shares on ASX during the three months immediately preceding the date of release of this Offer Document and the respective dates of those sales were:

Highest: $0.032 on 29 August 2012 Lowest: $0.02 on 7 August 2012

The latest available closing sale price of the Company’s Shares on ASX prior to the printing of this Offer Document was $0.024 on 13 September 2012.

2.13

Opening and Closing Dates

The Offer opens on the Opening Date, being 27 September 2012, and closes on the Closing Date, being 15 October 2012. The Company will accept Entitlement and Acceptance Forms until the Closing Date or such other date as the Directors in their absolute discretion shall determine, subject to the Listing Rules.

2.14

Issue and despatch

The expected dates for issue of New Shares offered by this Offer Document and despatch of holding statements is expected to occur on the dates specified in the Timetable set out in Section 2.3.

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It is the responsibility of applicants to determine the allocation prior to trading in the New Shares. Applicants who sell New Shares before they receive their holding statements will do so at their own risk.

2.15

ASX listing

Application for official quotation by ASX of the New Shares offered pursuant to this Offer Document will be made.

The fact that ASX may grant official quotation to the New Shares is not to be taken in any way as an indication of the merits of the Company or the New Shares now offered for subscription.

2.16

CHESS

The Company is a participant in CHESS, for those investors who have, or wish to have, a sponsoring stockbroker. Investors who do not wish to participate through CHESS will be issuer sponsored by the Company. Because the sub-registers are electronic, ownership of securities can be transferred without having to rely upon paper documentation.

Electronic registers mean that the Company will not be issuing certificates to investors. Instead, investors will be provided with a statement (similar to a bank account statement) that sets out the number of New Shares allotted to them under this Offer Document. The notice will also advise holders of their Holder Identification Number or Security Holder Reference Number and explain, for future reference, the sale and purchase procedures under CHESS and issuer sponsorship.

Further monthly statements will be provided to holders if there have been any changes in their security holding in the Company during the preceding month.

2.17

Taxation implications

The Directors do not consider it appropriate to give Shareholders advice regarding the taxation consequences of subscribing for New Shares under this Offer Document. The Company, its advisers and its officers do not accept any responsibility or liability for any such taxation consequences to Shareholders.

Shareholders should consult their professional tax adviser in connection with subscribing for New Shares under this Offer Document.

2.18 Risk factors

An investment in New Shares should be regarded as speculative. In addition to the general risks applicable to all investments in listed securities, there are specific risks associated with an investment in the Company which are described in Section 4 .

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3. ACTION REQUIRED BY SHAREHOLDERS

3.1 How to Accept the Offer

Your acceptance of the Offer must be made on the Entitlement and Acceptance Form accompanying this Offer Document. Your acceptance must not exceed your Entitlement as shown on that form. If it does, your acceptance will be deemed to be for the maximum Entitlement.

You may participate in the Offer as follows:

• (a) if you wish to accept your Entitlement in full:

• (i) complete the Entitlement and Acceptance Form, filling in the details in the spaces provided; and

• (ii) attach your cheque for the amount indicated on the Entitlement and Acceptance Form or pay via BPAY® by following the instructions set out in the Entitlement and Acceptance Form; or

• (b) if you only wish to accept part of your Entitlement:

• (i) fill in the number of Shares you wish to accept in the space provided on the Entitlement and Acceptance Form; and

• (ii) attach your cheque for the appropriate application monies (at $0.02 per Share) or pay via BPAY® by following the instructions set out in the Entitlement and Acceptance Form; or

• (c) if you do not wish to accept all or part of your Entitlement, you are not obliged to do anything.

All cheques must be drawn on an Australian bank or bank draft made payable in Australian currency to “Laconia Resources Limited – Share Account” and crossed “Not Negotiable” .

If paying via BPAY®, Applicants should be aware that their own financial institution may implement earlier cut off times with regards to electronic payment and it is the responsibility of the Applicant to ensure that funds are submitted through BPAY® by the date and time mentioned above. If you elect to pay via BPAY®, you must follow the instructions for BPAY® set out in the Entitlement and Acceptance Form and you will not need to return the Entitlement and Acceptance Form. It is your responsibility to ensure that funds submitted through BPAY® are received by 3.00pm (AEDT) on the Closing Date .

Your completed Entitlement and Acceptance Form and cheque must reach the Company no later than 5:00pm (WST) on the Closing Date.

The Offer is non-renounceable. Accordingly, a holder of Shares may not sell or transfer all or part of their Entitlement.

3.2 Entitlements not taken up

If you do not wish to accept any of your Entitlement, you are not obliged to do anything.

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3.3 Shortfall

If you do not wish to take up any part of your Entitlement you are not required to take any action. That part of your Entitlement not taken up will form part of the Shortfall and will revert to the Underwriter.

The offer of the Shortfall is a separate offer pursuant to this Offer Document. The issue price of any Shares offered pursuant to the Shortfall Offer shall be $0.02, being the price at which the Entitlement has been offered to Shareholders pursuant to this Offer Document. The Shortfall shall be placed at the direction of the Underwriter, and the Underwriter reserves the right to allot to an Applicant a lesser number of Shares than the number for which the Applicant applies, or to reject an application, or to not proceed with placing the Shortfall (pursuant to the terms of the Underwriting Agreement).

3.4 Applications for additional New Shares

Existing Shareholders will not be given the right to apply for additional shares beyond their entitlement.

3.5 Queries concerning your Entitlement

If you have any queries concerning your Entitlement please contact Security Transfer Registrars Pty Limited on (08) 9315 2333.

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4. RISK FACTORS

4.1 General

The Shares offered under this Offer Document should be considered speculative because of the nature of the Company’s business.

There are numerous risk factors involved with the Company’s business. Some of these risks can be mitigated by the use of safeguards and appropriate systems and controls, but some are outside the control of the Company and cannot be mitigated. Accordingly, an investment in the Company carries no guarantee with respect to the payment of dividends, return of capital or price at which securities will trade.

The following is a summary of the more material matters to be considered. However, this summary is not exhaustive and potential investors should examine the contents of this Offer Document in its entirety and consult their professional advisors before deciding whether to apply for the New Shares.

Based on the information available, a non-exhaustive list of risk factors which may affect the Company’s financial position, prospects and the price of its listed securities include the following.

SPECIFIC RISKS

4.2 Exploration and operational risk

The current and future operations of the Company, including exploration, appraisal and possible production activities may be affected by a range of factors, including:

• geological conditions;

• limitations on activities due to seasonal weather patterns and cyclone activity;

• alterations to joint venture programs and budgets;

• unanticipated operational and technical difficulties encountered in seismic survey, drilling and production activities;

• mechanical failure of operating plant and equipment;

• adverse weather conditions, industrial and environmental accidents, acts of terrorism or political or civil unrest and other force majeure events;

• industrial action, disputation or disruptions;

• unavailability of aircraft or drilling equipment to undertake airborne electromagnetic and other geological and geophysical investigations;

• shortages or unavailability of manpower or appropriately skilled manpower;

• unexpected shortages or increases in the costs of consumables, spare parts, plant and equipment; and

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• prevention or restriction of access by reason of political unrest, outbreak of hostilities, and inability to obtain consents or approvals.

4.3

Resource Estimate

Resource estimates are expressions of judgment based on knowledge, experience and industry practice. Estimates, which were valid when made, may change significantly when new information becomes available. In addition, resource estimates are imprecise and depend to some extent on interpretations, which may prove to be inaccurate. Should the Company encounter mineralisation or formations different from those predicted by past sampling and drilling, resource estimates may have to be adjusted and mining plans may have to be altered in a way which could have either a positive or negative effect on the Company’s operations.

4.4

Commodity Prices

The Company expects to derive any future revenue from the sale of commodities.

Consequently, the Company’s expected earnings will be closely related to the price of these commodities together with any terms of the off-take agreement(s) under which these metals will be sold.

Commodity prices fluctuate and are affected by numerous factors beyond the control of the Company. These factors include worldwide and regional supply and demand for the specific commodity, commodity trading on the futures markets, general world economic conditions and the outlook for interest rates, inflation and other economic factors on both a regional and global basis. These factors may have a positive or negative effect on the Company’s exploration, project development and production plans and activities, together with the ability to fund those plans and activities.

4.5

Future financing

The Company will be required to raise additional equity and/or debt capital to finance its activities in the future. There can be no assurance that the Company will be able to raise that finance on acceptable terms or in a timely manner.

Any additional equity financing will dilute shareholdings and debt financing, if available, may involve restrictions on financing and operating activities. If the Company is unable to obtain additional financing as needed, the Company may be required to reduce the scope of its operations and scale back its exploration programmes as the case may be.

4.6

Environmental risks

Exploration programmes impact on the environment. These impacts are minimised by the Company's application of best practice principles. The Company will be subject to environmental laws and regulations in connection with activities and operations it may pursue. The Company intends to conduct its activities in an environmentally responsible manner and in accordance with all applicable laws. However, the Company may be the subject of accidents or unforeseen circumstances that could subject it to extensive liability.

Approval may be required from the relevant authorities before the Company can undertake activities that are likely to impact the environment. Failure to

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obtain such approvals will prevent the Company from undertaking its desired activities. The Company is unable to predict the effect of additional environmental laws and regulations that may be adopted in the future, including whether any such laws or regulations would materially increase the Company's cost of doing business or affect its operations in any area.

4.7 Title

The exploration licences comprising some of the tenements which the Company holds or in which it has an interest may be the subject of applications for extension or renewal in the future. Although the Company believes that exploration licences and tenements will be extended or renewed (as the case may be) according to applicable laws, there can be no assurance that they will be extended or renewed or as to the terms of any such extension or renewal.

If an exploration licence or a tenement is not extended or renewed, the Company may suffer significant damage through loss of the opportunity to discover and/or develop any mineral resources on that tenement.

In addition, the Company cannot guarantee that those tenements that are applications for tenements will ultimately be granted in whole or in part.

4.8 Native Title

The Native Title Act 1993 (Cth) recognises and protects the rights and interests in Australia of Aboriginal and Torres Strait Islander people in land and waters, according to their traditional laws and customs. There is significant uncertainty associated with native title in Australia and this may impact on the Company’s operations and future plans.

Native title can be extinguished by valid grants of land or waters to people other than the native title holders or by valid use of land or waters. It can also be extinguished if the indigenous group has lost their connection with the relevant land or waters. Native title is not extinguished by the grant of mining licences, as they are not considered to be grants of exclusive possession. A valid mining lease prevails over native title to the extent of any inconsistency for the duration of the title.

All tenements granted prior to 1 January 1994 are valid or validated.

Tenements granted between 1 January 1994 and 23 December 1996 may be invalid if they fail to comply with the Native Title Act or for certain other reason because of native title. However, such invalid tenements may be validated if certain statutory criteria are met.

For tenements to be validly granted (or renewed) after 23 December 1996 the special “ right to negotiate ” regime established by the Native Title Act must be followed.

It is important to note that the existence of a native title claim is not an indication that native title in fact exists to the land covered by the claim, as this is a matter ultimately determined by the Federal Court.

The Company must also comply with Aboriginal heritage legislation requirements which require heritage survey work to be undertaken ahead of the commencement of mining operations.

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4.9 Joint venture/operator parties and contractors

The operations of the Company will require involvement with joint venture parties through incorporated or unincorporated joint ventures and contractors. The Directors are unable to predict the risk of:

• (a ) financial failure, default or non-compliance with respective obligations by a participant in any joint venture to which the Company is, or may become, a party;

• (b ) default insolvency or other managerial failure by any of the contractors used by the Company in its exploration activities; or

• (c) insolvency or other managerial failure by any of the other service providers used by the Company for any activity.

4.10 Sovereign risk

The Company’s Rasuhuilca gold-silver project is located in Peru, South America. Peru has been a stable democracy for a number of years with a democratically elected government that is supportive of foreign investment. However, there are always risks for companies operating in countries such as Peru and the Company cannot guarantee access, surety of title and tenure of its Peruvianbased assets and cannot guarantee that government policy in Peru will remain supportive of the mining and resources sector as it currently is.

4.11 Acquisition of Rasuhuilca gold-silver project in Peru

The Company entered into a Heads of Agreement to acquire the Peruvian subsidiaries of Gold Mines of Peru Limited ( GMP ) ( Acquisition ). Completion of the Acquisition took place on or about 1 June 2012. However, some post-completion matters still require formalising. The ability of the Company to formalise postcompletion matters pursuant to the Acquisition will depend on the other parties complying with their obligations pursuant to the Acquisition. In this regard, the Directors are unable to predict the risk of a party’s failure to perform its obligations and it may be necessary for the Company to approach a court to seek a legal remedy. Legal action can be costly and there can be no guarantee that a legal remedy will be ultimately granted on the appropriate terms. Outcomes in courts in Peru may be less predictable than in Australia, which could affect the enforceability of contracts entered into by the Company or its subsidiary in Peru.

4.12 Metallurgy

Metal and/or mineral recoveries are dependent upon the metallurgical process, and by its nature contain elements of significant risk such as:

• (a) identifying a metallurgical process through test work to produce a saleable metal and/or concentrate;

• (b) developing an economic process route to produce a metal and/or concentrate; and

• (c) changes in mineralogy in the ore deposit can result in inconsistent metal recovery, affecting the economic viability of the project.

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GENERAL RISKS

4.13 Economic Risks

General economic conditions, movements in interest and inflation rates and currency exchange rates may have an adverse effect on the Company’s exploration, development and production activities, as well as on its ability to fund those activities.

4.14 Market Conditions

Share market conditions may affect the value of the Company’s quoted securities regardless of the Company’s operating performance. Share market conditions are affected by many factors such as:

• (a) general economic outlook;

• (b) interest rates and inflation rates;

• (c) currency fluctuations;

• (d) changes in investor sentiment toward particular market sectors;

• (e) the demand for, and supply of, capital; and

• (f) terrorism or other hostilities.

The market price of securities can fall as well as rise and may be subject to varied and unpredictable influences on the market for equities in general and resource exploration stocks in particular. Neither the Company nor the Directors warrant the future performance of the Company or any return on an investment in the Company.

4.15 Potential Acquisitions

As part of its business strategy, the Company may make acquisitions of or significant investments in companies, products, technologies or resource projects. Any such future transaction would be accompanied by the risks commonly encountered in making acquisitions of companies, products, technologies or resource projects.

4.16

Exchange rate risk

Variations in exchange rates are unpredictable and the Company may incur losses or gains from time to time in respect of its activities in Peru or elsewhere overseas as a result of such variations.

4.17 Weather condition risk

Field operations including drilling may be delayed due to extreme weather conditions such as flooding, storms or cyclones.

4.18

Community risk

Carrying out activities on site may affect the neighbouring communities and local authorities. This can be of particular concern where the Company is operating in heavily populated areas. In this situation the Company would plan to carry out community consultation to take into account these concerns.

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However, there is a risk that in some circumstances there could be higher than normal community concern which could result in a project being denied permission to proceed or having permission withdrawn or having conditions imposed on continuation of the activities which make it unacceptable to the Company to proceed with those activities.

4.19 Reliance on key personnel

The responsibility of overseeing the day-to-day operations and the strategic management of the Company depends substantially on its senior management and its key personnel. There can be no assurance given that there will be no detrimental impact on the Company if one or more of these employees cease their employment.

4.20 Investment speculative

The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by investors in the Company. The above factors, and others not specifically referred to above, may in the future materially affect the financial performance of the Company and the value of the securities offered under this Offer Document. Therefore, the securities to be issued pursuant to this Offer Document carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those securities.

Potential investors should consider that the investment in the Company is speculative and should consult their professional advisers before deciding whether to apply for securities pursuant to this Offer Document.

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5. CAPITAL STRUCTURE AND FINANCIAL INFORMATION

5.1 Capital structure on completion of the Offer

Balance at the date of this Offer Document To be issued under the Offer(1) Balance after the Offer	Number of Shares Number of Options Number of Convertible Notes Performance Shares 181,268,761 24,100,000(2) 1(3) 14,500,000(4) 90,634,380 - - -
	271,903,141 24,100,000 1 14,500,000

• (1) The number of Shares to be issued under the Offer assumes that no Options are exercised or Convertible Notes converted before the Record Date.

• (2) This figure comprises of:

• a. 3,000,000 unlisted Options exercisable at $0.20 on or before 31 March 2013. The exercise price of these options will be adjusted in accordance with the formula set out in ASX Listing Rule 6.22.2;

• b. 200,000 unlisted Options exercisable at $0.15 on or before 31 August 2013. The exercise price of these options will be reduced according to the formula set out in clause 18 of the Employee Share Option Plan;

• c. 20,500,000 unlisted Options exercisable at $0.20 on or before 30 September 2014. The exercise price of these options will be adjusted in accordance with the formula set out in ASX Listing Rule 6.22.2; and

• d. 400,000 unlisted Options exercisable $0.08 on or before 16 May 2014. The exercise price of these options will be reduced according to the formula set out in clause 18 of the Employee Share Option Plan.

• (3) This figure comprises 1 unlisted convertible note (escrowed to 20 June 2013) convertible as to principal to 6,500,000 Shares at a conversion price equal to $0.10 per Share and attracting interest at the rate of 10% per annum.

• (4) This figures includes 12,500,000 Performance Shares escrowed to 21 June 2013. Each Performance Share will automatically convert into one Ordinary Share upon the Company announcing that it has commenced the commercial production of gold and or silver or gold and or silver ore on any part of the Rasuhuilca tenements.

• (5) Pursuant to the Sale and Purchase Agreement between the Company and Gold Mines of Peru Limited ( GMP ), the Company agreed to issue 2,102,750 fully paid shares to Alto Capital in consideration for introducing GMP and the Company to each other. As at the date of this Offer Document, the shares have not yet been issued to Alto Capital.

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5.2 Consolidated balance sheet

The Balance Sheet as at 30 June 2012 (unaudited) and the Pro Forma Balance Sheet shown on the following page have been prepared on the basis of the accounting policies normally adopted by the Company and reflect the changes to its financial position. The Pro Forma Balance Sheet has been prepared on the assumption that all Shares pursuant to the Offer are issued.

The Balance Sheets have been prepared to provide Shareholders with information on the assets and liabilities of the Company and pro-forma assets and liabilities of the Company as noted below. The historical and pro-forma financial information is presented in an abbreviated form, insofar as it does not include all of the disclosures required by Australian Accounting Standards applicable to annual financial statements.

Current Assets Cash and cash equivalents Other Total Current Assets Non-Current Assets Plant and equipment Investments in unlisted trusts Intangibles Other Assets Goodwill Total Non-Current Assets Total Assets Current Liabilities Trade and other payables Short-term borrowings Total Current Liabilities Non-Current Liabilities Long-term borrowings Total Non-Current Liabilities Total Liabilities Net Assets	Unaudited 30/06/2012 $ Pro Forma After 1:2 Rights Issue $ 926,388 3,182,927 109,231 109,231
	1,035,619 3,292,158
	169,596 169,596 4,166,217 4,166,217 98,492 98,492 82,411 82,411 1,500,817 1,500,817
	6,017,533 6,017,533
	7,053,152 9,309,691
	282,301 282,301 - -
	282,301 **282,301 **
	- -
	- -
	282,301 **282,301 **
	6,770,851 9,027,390

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Equity Issued Capital Reserve Accumulated losses Total Equity	11,855,059 14,111,598 229,026 229,026 (5,313,234) (5,313,234)
	6,770,851 9,027,390

5.3 Pro Forma Assumptions

The pro forma Statement of Financial Position has been prepared on the following assumptions:

• (a) a pro rata non-renounceable rights offer on the basis of one (1) New Share for every two (2) Shares held at the Record Date at an issue price of $0.02 per Share;

• (b) all New Shares issued pursuant to the Offer are issued; and

• (c) the total number of New Shares issued under the Offer is 90,634,380.

5.4 Dividend Policy

The Directors are not able to say when and if dividends will be paid in the future, as the payment of any dividends will depend on the future profitability, financial position and cash requirements of the Company.

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DEFINED TERMS

$ or A$ means an Australian dollar.

Applicant refers to a person who submits an Entitlement and Acceptance Form.

Application refers to the submission of an Entitlement and Acceptance Form.

ASX means ASX Limited (ACN 008 624 691) or, where the context permits, the Australian Securities Exchange operated by ASX Limited.

Board means the board of directors.

Closing Date means the closing date set out in Section 2.3 or such other date as may be determined by the Directors.

Company means Laconia Resources Limited (ACN 137 984 297).

Completion means the date on which the last of the Entitlement and, where applicable, the Shortfall, is issued in accordance with the Offer.

IOC means Indian Ocean Capital Pty Ltd (ACN 051 227 877) (AFSL 246558).

Directors means the directors of the Company.

Eligible Shareholder means a Shareholder whose details appear on the Company's register of Shareholders as at the Record Date whose registered address is in Australia or New Zealand.

Entitlement means the entitlement to subscribe for one (1) New Share for every two (2) Shares held by an Eligible Shareholder on the Record Date.

Entitlement and Acceptance Form means the Entitlement and Acceptance Form accompanying this Offer Document.

Event of Insolvency means any of the following events occurring in relation to a party:

• (a) a liquidator, receiver, receiver and manager, administrator, official manager or other controller (as defined in the Corporations Act), trustee or controlling trustee or similar official is appointed over any of the property or undertaking of the party;

• (b) the party is, or becomes unable to, pay its debts when they are due or is or becomes unable to pay its debts within the meaning of the Corporations Act, or is presumed to be insolvent under the Corporations Act;

• (c) the party ceases to carry on business; or

• (d) an application or order is made for the liquidation of the party or a resolution is passed or any steps are taken to liquidate or pass a resolution for the liquidation of the party, otherwise than for the purpose of an amalgamation or reconstruction.

Force Majeure means any act of God, war, revolution, or any other unlawful act against public order or authority, an industrial dispute, a governmental restraint, or any other event which is not within the control of the parties or any of them.

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Foreign Holder means a holder of a Share whose address, as shown in the records of the Share Registry, is a place outside of Australia or New Zealand.

Group Company means the Company and each Subsidiary.

Listing Rules means the Listing Rules of the ASX.

Material Adverse Effect means:

• (a) a material adverse effect on the outcome of the Offer or on the subsequent market for the Entitlement (including, without limitation, matters likely to have a material adverse effect on a decision of an investor to invest in Entitlement);

• (b) a material adverse effect on the financial condition, trading or financial position, performance, profits and losses, results, prospects, business or operations of the Company and its Subsidiaries either individually or taken as a whole; or

• (c) a material adverse effect on the tax position of the Company and its Subsidiaries either individually or taken as a whole.

New Share means a new Share proposed to be issued pursuant to this Offer.

Offer or Rights Issue means the pro rata non-renounceable offer of New Shares at an issue price of $0.02 each on the basis of one (1) New Share for every two (2) Shares held on the Record Date subscribed for pursuant to this Offer Document.

Offer Document means this Offer Document dated 13 September 2012.

Official List means the official list of ASX.

Opening Date means the opening date set out in Section 2.3.

Option means an option to acquire a Share.

Prescribed Occurrence means:

• (a) a Group Company converting all or any of its shares into a larger or smaller number of shares;

• (b) a Group Company resolving to reduce its share capital in any way;

• (c) a Group Company:

• (i) entering into a buy back agreement; or

• (ii) resolving to approve the terms of a buy back agreement under section 257C or 257D of the Corporations Act;

• (d) a Group Company making an issue of, or granting an option to subscribe for, any of its shares, or agreeing to make such an issue or grant such an option;

• (e) a Group Company issuing, or agreeing to issue, convertible notes;

• (f) a Group Company disposing, or agreeing to dispose, of the whole, or a substantial part, of its business or property;

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• (g) a Group Company charging, agreeing to charge, the whole, or a substantial part, of its business or property;

• (h) a Group Company resolving that it be wound up;

• (i) the appointment of a liquidator or provisional liquidator to a Group Company;

• (j) the making of an order by a court for the winding up of a Group Company;

• (k) an administrator of a Group Company, being appointed under sections 436A, 436B or 436C of the Corporations Act;

• (l) a Group Company executing a deed of company arrangement; or

• (m) the appointment of a receiver, or a receiver and manager, in relation to the whole or a substantial part, of the property of a Group Company.

Record Date means the record date set out in Section 2.3.

Section means a section of this Offer Document.

Securities means Shares and Options.

Share means an ordinary fully paid share in the capital of the Company.

Share Registry means Security Transfer Registrars Pty Ltd.

Shortfall means those New Shares under the Offer not applied for by the Closing Date .

Shortfall Offer means the offer of New Shares which form the Shortfall as detailed in Section 3.3 of this Offer Document.

Shareholder means a holder of Shares.

Valid Applications means an Application for Shares pursuant to the Offer:

• (a) that is received by the Company or a representative acting on its behalf on or before 5.00pm on the Closing Date at a place specified in the Application;

• (b) that is not withdrawn before it ceases to be capable of being withdrawn; and

• (c) in respect of which payment of $0.02 per Share for the relevant number of Entitlement Shares is received and is cleared (either before or after the Closing Date) when presented (either before or after the Closing Date) for payment by the relevant financial institution on which the payment is drawn.

Subsidiary means a subsidiary of the Company within the meaning of the Corporations Act.

Timetable means the timetable set out in clause 2.3 approved by ASX and as may from time to time be varied by written agreement by the Company and the Underwriter (each party acting reasonably) and ASX (if applicable).

WST means Australian Western Standard Time.

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