ZEOTECH LIMITED — Capital/Financing Update 2013

Mar 25, 2013

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26 March 2013

OPTION DEAL SECURES AN ENTIRE COPPER GOLD SILVER SYSTEM IN SOUTHERN PERU

Highlights:

• Additional 5,622 hectares of volcanic system prospective for Epithermal and Porphyry mineralisation

• Completion of seven year option to acquire an indirect 80% interest over 11 additional

• exploration licences bordering the Company’s Rasuhuilca Project

• Secures complete access to entire Jarhuarazo volcanic alteration system, highly prospective for copper, gold and silver

• Peruvian portfolio increased to 8,387 hectares

• Option agreement to acquire 80% interest in the companies holding the 11 additional exploration licences bordering the Company’s Rasuhuilca Project

• Adjacent to recently announced historical adit channel sampling at Española 1 Prospect including:

  • 24.9m at 3.88% Cu, 2.98g/t Au and 66.63g/t Ag including 15.5m at 6.54% Cu, 4.77g/t Au and 103.86g/t Ag1

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• • Exploration model expanded to include an El-Indio style Copper-Gold Porphyry system .

Laconia Resources Limited ( ASX:LCR ) (" Laconia " or " the Company ") is pleased to announce that further to signing a Binding Term Sheet announced on 7 November 2012, it has negotiated and signed a formal option agreement ("the Option Agreement") to add 5,622 hectares, covering 11 exploration licences adjacent to its 100% owned Rasuhuilca Project located in the Andean volcanic arc of southern Peru. Similar to the highgrade Rasuhuilca Project, the new licences are considered highly prospective for Epithermal and Porphyry style Copper-Gold-Silver. The Option Agreement is for seven years and involves minimal initial outlay.

1 Refer ASX release 27 February 2013

Laconia's Managing Director Ian Stuart commented :

"The signing of this Option Agreement significantly expands our exploration ground in the highly prospective Andean volcanic arc, where we recently announced high-grade copper results which have subsequently seen the Company expand its exploration model to include an El-Indio style copper-gold porphyry system. Following on from these results, it is a great outcome for Laconia to have secured the entire volcanic system as the Company believes this area demonstrates significant potential to host epithermal and porphyry systems. The Company looks forward to advancing its exploration for a large Copper-Gold-Silver mineralised system, while concurrently expanding our existing high-grade gold silver resource."

The main terms of the Option Agreement are summarised as follows:

• Seven year Option Agreement to acquire an 80% ownership interest in Sallka Uno y Dos S.A.C. (“SALLKA”) and Andes Exploration of Peru Numero Dos S.A.C. (“ANDES DOS”), the companies holding the 11 Licenses;

• The Option Agreement is subject to the following conditions precedent: (i) Sallka formalizing its 100% ownership title over 2 of the 11 Licenses before May 31, 2013; and (ii) ANDES DOS formalizing its 100% ownership title over 9 of the 11 Licenses.

• Up front consideration of US$150,000 comprising US$60,000 paid to date leaving a balance of US$90,000 due by the date in which the conditions precedent are fulfilled.[2]

• Five annual option payments to the Vendors for a minimum of US$250,000 and maximum of US$300,000 calculated by an agreed mechanism linked to the degree of the positive percentage increase in the price of gold. The first annual payment is due in March 2014;

• Final option payment of a minimum of US$5M and maximum of US$6M to acquire 80% ownership interest, calculated by an agreed mechanism linked to the degree of the positive percentage increase in the price of gold;

• Post-acquisition, the Vendors to retain 2.25% net smelter royalty;

• Laconia is to spend $1.3M per annum of exploration over the 11 Licences. The first expenditure commitment is due by mid-2015; and

• Laconia is to manage and operate the exploration program.

2 Payments also attract General Sales tax of 18%

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Figure 1: Diagram showing location of Laconia's current Rasuhuilca Project and new earn-in option licence outlines. Stippled boundaries show areas of intense alteration and primary exploration targets.

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Exploration results from Española 1 Prospect highlight significance of ground position

Española 1 Prospect

The Company recently announced exploration results from its Española 1 Prospect, located approximately 900m to the north east of the Rasuhuilca Resource[3] . Mineralisation at Española 1 is hosted by a set of two veins of different orientation, plus tectonic and hydrothermal breccias. Historic channel sampling at the Española 1 Prospect includes sampling at surface and in an adit at the 4,810m level. The Española 1 prospect currently hosts an Exploration Target[4] for gold-silver of 54,000-154,000t at 3.75 - 3.9g/t Au, 57.7 - 79.2g/t Ag.

Information obtained from a Company site visit conducted in February 2013 supports the release of copper results contained in the historical database derived from underground channel samples (samples taken horizontally across the drive face every 2m along the drive). The drive samples reporting high copper values appear related to a WNW orientation, at an angle to those veins hosting gold-silver which have been previously reported at Española 1.

Underground drive sampling results are summarised below[5] . Composite samples over a total sample length of 23.05m of drive back samples for a mineralised length of 24.9m at 3.88% Cu, 2.98 g/t Au and 66.63 g/t Ag from samples 42001 to 42020.

• Including a composite result returning a mineralised length of 15.5m at 6.54% Cu, 4.77 g/t Au and 103.86 g/t Ag from samples 42001 to 42011

• Significant individual underground samples include;

• 2.1m at 8.4% Cu, 6.13 g/t Au and 111.7 g/t Ag from sample 42001 (entire width of drive)

• 2.2m at 6.8% Cu, 6.47 g/t Au and 141.8 g/t Ag from sample 42002 (entire width of drive)

• 1.1m at 9.7% Cu, 8.7 g/t Au and 152.8 g/t Ag from sample 42007

The veins at the Española 1 Prospect are dominated by various types of breccia, with varying styles of alteration including massive silicification and combined quartz-alunite alteration. Vein A (Española 1) is the dominant structure, and strikes about 320 degrees, to the north west. The dip of this vein is about -80 degrees to the south west. Vein B (Punto Triple) strikes north-south. It has a similar dip to Vein A, dipping at - 76 degrees to the west.

3 Refer ASX release 1 June 2012.

4 The potential quantity and grade of the Exploration Targets is conceptual. There has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource. Refer ASX release 4 February 2013. 5 Refer ASX release 27 February 2013

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Exploration activities planned for the Española 1 Prospect include re-sampling of surface and underground adit samples and further surface sampling of broader alteration zones. Drilling of orientated diamond core is planned for H2 2013 and H1 2014, subject to approvals.

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Figure 2: Plan view of the 4810m level adit at Española 1 showing copper results from historical channel sampling. Note that sampling is limited to the drive width and that some samples end in mineralisation. The photo inset shows part of the sample taken near the entrance to the adit that contains abundant enargite with sub-ordinate covellite. The hand lens used for scale is 60mm long.

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Figure 3: Schematic diagram of the Rasuhuilca Porphyry exploration model, showing alteration and metal zonation. Examples of prospects already identified are shown.

About the Rasuhuilca Project

Laconia Resources completed the acquisition of the Rasuhuilca Project[6] in the Southern Andes of Peru in June 2012. Rasuhuilca is an advanced, high grade gold and silver project which contains existing development levels and cross-cuts. The flagship project represents outstanding development potential in the current high gold and silver price environment. The project currently has an Inferred Resource estimate of 360,000 t @ 1.97 g/t gold and 179 g/t silver (at a 2.5 g/t gold-equivalent cut-off[7] ). The Company recently

6 Refer ASX Release 1 June 2012

7[ All cut-offs based on an Xg/t Au Eq are conceptual in nature only. There has been insufficient metallurgical testwork to date to determine ] eventual metallurgical recoveries and it is uncertain that the conceptual cut-offs used will be appropriate following further metallurgical testwork.

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reported five additional Exploration Targets[8] of 365,000 t to 792,000 t grading 2.4-3.1 g/t Au and 84.9122.4 g/t Ag at vein systems within Rasuhuilca adding significant potential to the project (See Figure 3). Previous explorers were aware of the potential scale and size of the Rasuhuilca Volcanic system and its Porphyry Copper-Gold potential due to its geological similarities to the El-Indio deposit in Peru ( Caddy, 1996. ). El Indio contained some 23.2 Mt at 6.6g/t Au, 50 g/t Ag and 4% Cu including a bonanza gold zone of 200kt at 209g/t Au ( Sillitoe, 1999) .

The Company has consequently expanded its compilation of historical data to include any available copper sampling undertaken across the project licences with the view that the project contains a buried and fully intact epithermal / porphyry system. Figure 3 details a schematic of the exploration model now being used by Laconia at Rasuhuilca. It contains examples of known vein and breccia systems on the Project and the current understanding of how they relate to the epithermal / porphyry model.

Generally across the historical data, assaying for copper was not routine, and conducted only towards the latter part of the work campaign by Buenaventura (post-2000). Verification of copper related sampling has been conducted separately from gold-silver vein analysis by Laconia. This release focuses on the copper sampling results identified at the Española 1 Prospect underground 4810m level adit.

Laconia continues the process of identifying and verifying all existing and available data from sampling conducted by the Cominco and Buenaventura companies and will continue with its process of re-sampling to “twin” existing surface and underground samples (this work currently in progress) and drill holes. New sampling work will be undertaken and together the data will provide increased confidence for upgrading resource estimates.

References

Caddy, S.W., 1996. “Preliminary Structural Analysis, Mineral Alteration Zoning, Target Concepts, and Recommended Exploration Approach, Jarhaurazo District, Southern Peru”; Internal Consulting Report for Echo Bay Exploration Inc.

Sillitoe, R.H., 1983. Enargite –Bearing Massive Sulfide Deposits High in Porphyry Copper Systems, Economic Geology Vol 78, 1983, pp348-352.

Sillitoe, R.H., 1999, Styles of high sulfidation gold, silver and copper mineralization in the porphyry and

8[The potential quantity and grade of the Exploration Targets is conceptual in nature. There has been insufficient exploration to estimate a ] Mineral Resource, and it is uncertain if further exploration will result in the estimation of a Mineral Resource. Refer ASX release 4 February 2013.

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epithermal environments, in G. Weber, ed., Pacrim ’99 Congress Proceedings: Australasian Institute of Mining and Metallurgy, 29-44.

ENDS

For further information please contact:

Ian Stuart Sam Burns Managing Director Media and Investor Relations Laconia Resources Six Degrees Investor Relations P: +61 8 9486 1599 M: 0400 164 067 E: istuart@laconia.com.au E: sam.burns@sdir.com.au www.laconia.com.au

About Laconia Resources

Laconia Resources is a Perth-based emerging precious and base metals exploration and development Company with a South American focus. The Company now has a Peruvian project portfolio covering 8,387 Ha, including the Rasuhuilca gold-silver development project, in addition to the Company’s portfolio of precious and base metal projects in Western Australia. A Feasibility Study was completed at Rasuhuilca in 2008 and Laconia aims to bring it into production as a high-grade, small-tonnage operation, and utilise the project’s revenues to unlock its exploration upside.

In Western Australia, the Company has a portfolio of advanced mineral projects in the Murchison and Pilbara regions, across 35 granted tenements covering an approximate 955km2. The Company has determined JORC compliant resources at its projects at Lennons’ Find, (Cu-Ag-Pb-Zn-Au), and most recently at Rasuhuilca in Peru (Au-Ag). The Company is focused on targeted exploration of its project areas, and further definition and expansion of its Resource base at its advanced projects.

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Competent Persons Statement

The information in this announcement that relates to Exploration Targets is based on information compiled by Mr Vincent Algar, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Algar is a Non-Executive Director and consultant of Laconia Resources Limited and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity currently being undertaken to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Algar consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears.

The information in this announcement that relates to the Rasuhuilca Mineral Resource is based on information compiled by Mr Michael Andrew, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Andrew is a Principal of Optiro Pty Ltd and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity currently being undertaken to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Andrew consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

The information in this announcement that relates to Española 1 Exploration Results has previously been included in ASX Release 27 February 2013, and was prepared by Mr Vincent Algar, a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. The Company confirms that is not aware of any new information or data that materially affects the information included in this announcement. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified..

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