ZEOTECH LIMITED — Capital/Financing Update 2018

Jun 5, 2018

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ACN 137 984 297

OFFER DOCUMENT

For a non-renounceable pro rata entitlement issue on the basis of one (1) New Share for every two (2) Shares held by Eligible Shareholders on the Record Date at an issue price of $0.01 per New Share, to raise up to $1,529,700 before the costs of the issue ( Offer ).

The Offer opens on 15 June 2018 and closes at 5.00pm (WST) on 26 June 2018 (unless extended). Valid acceptances must be received before the closing time.

Lead Manager and Underwriter

Westar Capital Limited (AFSL: 255789)

IMPORTANT NOTICE

This document is not a prospectus and has not been lodged with ASIC. 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.

The New Shares offered by this Offer Document should be considered speculative.

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

IMPORTANT NOTES

General

This Offer Document was prepared by Metalsearch Limited (ACN 137 984 297) ( Company ) and is dated 6 June 2018.

This Offer Document contains an offer to Eligible Shareholders of continuously quoted securities (as defined in the Corporations Act) of the Company and has been prepared in accordance with section 708AA of the Corporations Act (as amended by ASIC Corporations (Non-Traditional Rights Issues) Instrument 2016/84). In broad terms, section 708AA relates to rights issues by certain companies that do not require the provision of a prospectus or other disclosure document.

This Offer Document is not a prospectus and the level of disclosure in it is significantly less than that required in a prospectus. It does not contain all of the information which may be required by an investor to make a decision regarding the Offer. This document has not been lodged with ASIC.

The information in this Offer Document does not constitute investment or financial product advice. Eligible Shareholders should therefore consider whether the Shares offered under this Offer Document are a suitable investment in light of their own investment objectives and financial circumstances and the merits or risks involved, having regard to their own knowledge of the Company and the disclosures made by the Company to ASX. In particular, Eligible Shareholders should consider the risk factors set out in Section 3 of this Offer Document which could affect the performance of the Company or the value of their investment in the Company.

If after reading this Offer Document Eligible Shareholders have any questions regarding the Offer they should contact their stockbroker, accountant or other professional advisers before deciding whether or not to accept the Offer.

Neither ASX nor ASIC takes any responsibility for the contents of this Offer Document or the merits of the investment to which this Offer Document relates.

Information about the Company

Announcements released by the Company are available from the ASX website (www.asx.com.au) and the Company’s website (www.metalsearch.com.au). Although these announcements are not incorporated into this Offer Document, Eligible Shareholders should have regard to them before making a decision whether or not to participate in the Offer, or to otherwise invest in the Company.

The Company may release further announcements after the date of this Offer Document and throughout the Offer Period, which may be relevant to an Eligible Shareholder’s consideration of the Offer. Eligible Shareholders should check whether any announcements have been released by the Company after the date of this Offer Document before taking any action or deciding to do nothing in relation to the Offer. These announcements will be available from the ASX website (www.asx.com.au) and the Company’s website (www.metalsearch.com.au).

No representations

No person is authorised to give 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.

Forward-looking statements

This Offer Document contains forward-looking statements which incorporate an element of uncertainty or risk, such as ‘intends’, ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’ or ‘expects’, including certain intentions, expectations and plans of the Company, which may or may not be achieved. These statements are based on an evaluation of current economic and operating conditions, as well as assumptions regarding future events. These events are, as at the date of this Offer Document, expected to take place, but there cannot be any guarantee that such events will occur as anticipated or at all given that many of the events are outside the Company’s control.

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Accordingly, the Company and the Directors cannot and do not give any representation, warranty, guarantee or assurance that the results, performance or achievements expressed or implied by the forward-looking statements contained in this Offer Document will actually occur. Further, other than by lodgement of a replacement or supplementary offer document during the period of the Offer, if required by law, the Company may not update or revise any forward-looking statement if events subsequently occur or information subsequently becomes available that affects the original forwardlooking statement.

Applications

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

Overseas Shareholders

The Company is of the view that it is unreasonable to make the Offer under this Offer Document to Shareholders outside of Australia and New Zealand having regard to:

• the number of Shareholders registered outside of Australia and New Zealand;

• the number and value of the New Shares that would be offered to Shareholders registered outside of Australia and New Zealand; and

• the cost of complying with the legal requirements and requirements of regulatory authorities in the overseas jurisdictions.

Accordingly, the Company is not required to offer the New Shares under this Offer Document to Shareholders registered outside of Australia and New Zealand. Please refer to Section 1.15 for further information.

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

Past performance

Investors should note that the Company’s past performance, including past share price performance, cannot be relied upon as an indicator of (and provides no guidance as to) the Company’s future performance including the Company’s future financial position or share price performance.

Risks

Refer to the ‘Risk factors’ in Section 3 of this Offer Document.

Privacy Act

If you complete an Entitlement and Acceptance Form for New Shares, 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 Company’s Share Registry.

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

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Collection, maintenance and disclosure of certain personal information is governed by legislation including the Privacy Act 1998 (Cth), the Corporations Act and certain rules such as the ASX Settlement Operating Rules. You should note that if you do not provide the information required on the Entitlement and Acceptance Form for New Shares, the Company may not be able to accept or process your Application.

Definitions, Currency and Time

Capitalised terms in this Offer Document are generally defined terms. Their meaning is set out in Section 5 of this Offer Document.

All references in this Offer Document to “$”, “AUD” or “dollar” are references to Australian currency unless otherwise indicated.

All references in this document to time relate to Western Standard Time in Perth, Western Australia.

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CORPORATE DIRECTORY

Directors

Robert Hartley Downey Neville John Bassett Jeremy James Read

Lead Manager and Underwriter

Westar Capital Limited Level 4 216 St Georges Terrace Perth WA 6000

Company Secretary

Neville John Bassett

Registered and Principal Office

Level 4 216 St Georges Terrace Perth WA 6000

Telephone: (08) 62 6268 2622 Facsimile: (08) 6268 2699 Website: www.metalsearch.com.au

Share Registry*

Security Transfer Australia Pty. Ltd Suite 913, Exchange Tower 530 Little Collins Street Melbourne VIC 3000

Auditor*

Rothsay Chartered Accountants Level 1, Lincoln House 4 Ventnor Street West Perth, WA, 6005

Securities Exchange Listing

ASX Limited (Home Branch – Perth) ASX Code: MSE

• These parties are included for information purposes only. They have not been involved in the preparation of this Offer Document.

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TABLE OF CONTENTS 1. DETAILS OF THE OFFER………………………………………………………………………….. 6 2. ACTION REQUIRED BY SHAREHOLDERS ……………………………………………………12 3. RISK FACTORS……………………………………………………………………………………...15 4. ADDITIONAL INFORMATION………………………………………………………………………19 5. DEFINED TERMS……………………………………………………………………………….…....22

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1. DETAILS OF THE OFFER

1.1 The Offer

The Company is making a non-renounceable pro-rata offer to Eligible Shareholders of New Shares at on the basis of one (1) New Share for every two (2) Shares held on the Record Date, at an issue price of $0.01 each to raise up to $1,529,700 ( Offer ).

New Shares will be fully paid ordinary shares which, upon issue, will rank equally with existing Shares on issue.

Where the determination of the Entitlement of any Eligible Shareholder results in a fraction such fraction will be rounded down to the nearest whole number.

1.2 Eligibility

The Offer is made to Eligible Shareholders only, being Shareholder whose details appear on the Company’s register of Shareholders as at the Record Date with a registered address in Australia or New Zealand.

1.3 Indicative Timetable

Event	Date
Announcement of Rights Issue and Appendix 3B	30 May 2018
Release of Offer Document and section 708AA notice to ASX	6 June 2018
Notice sent to Shareholders	7 June 2018
“Ex” Date (date from which Shares commence trading without the entitlement to participate in the Offer)	8 June 2018
Record Date 5.00pm (WST) (date for determining Entitlements of Eligible Shareholders to participate in the Offer)	12 June 2018
Offer Document and Entitlement and Acceptance From sent to Eligible Shareholders	15 June 2018
Offer Opening Date	15 June 2018
Last date to extend the Offer Closing Date	21 June 2018
Offer Closing Date 5.00pm (WST)	26 June 2018
Shares quoted on a deferred settlement basis	27 June 2018
ASX notified of under subscriptions	29 June 2018
Anticipated date for the issue of the New Shares	3 July 2018
Deferred settlement trading ends	3 July 2018
Normal trading (on a T+2 basis) commences	4 July 2018

Note: The dates in the above timetable are indicative only and subject to change. Further, the dates are subject to the Listing Rules and other applicable laws. The Directors reserve the right to vary these dates.

1.4 Proposed Use of Funds

The application of funds raised from this Offer is summarised in the table below. For the purposes of detailing the use of funds raised under this Offer Document, it is assumed that other securities will not be issued by the Company between the date of this Offer Document and the Record Date.

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Proceeds of the Offer will contribute towards the continued evaluation of the Company’s Kraaipan Project in Botswana and further identifying and acquiring new projects, specifically targeting project opportunities in African countries. Specifically, proceeds of the Offer will be used to:

Use of funds	Full Subscription
Maintain its evaluation and exploration work on its Kraaipan Project in Botswana2	$172,850
Further project exploration and accelerate project generation activities2 & 3	$797,010
Capital raising costs	$76,485
Corporate and administrative costs and working capital	$483,355
Total	$1,529,700

Notes:

1. Exploration expenditures will be reviewed on an on-going basis, depending upon the nature of results forthcoming from the respective work programs. Actual expenditure may differ from the above estimates due to a change in market conditions, the development of new opportunities, the results obtained from exploration and other factors.

2. The above table represents statements of the intended use of the funds raised by the Company as at the date of this document. Exploration budgets may change as the conducted programs provide encouragement or disappointment and new opportunities may be identified elsewhere.

3. It is anticipated that the funds available as further project exploration and accelerate project generation activities may be applied towards any contingency resulting in unforeseen expenses associated with the Company’s projects, and also towards expenses incurred in identifying and generating new mineral exploration projects. Such expenses may include the cost of purchasing exploration data, commission expert reports/studies, acquiring exploration rights and due diligence costs of reviewing potentially suitable projects, including associated travel, legal and other professional expenses.

1.5 Effect of the Offer

The capital structure of the Company following completion of the Offer is summarised below:

Shares	Number
Shares on issue at date of the Offer	305,940,106
New Shares offered under the Offer2	152,970,053
Total Shares on issue at completion of the Offer1	458,910,159
Options	Number
Options on issue at date of the Offer
Listed Options exercisable at $0.60 on or before 30 September 2018	34,378,878
Unlisted Options exercisable at $0.14 on or before 30 September 2018	600,000
Options offered under the Offer	Nil
Total Options on issue at completion of the Offer	34,978,878

Notes:

1. The number of Shares on issue assumes that no Options currently on issue are exercised prior to the Record Date.

2. The number of New Shares issued assumes that the Offer is fully subscribed and that no Options currently on issue are exercised prior to the Record Date.

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The Company also has an obligation to issue further Shares upon the achievement before 26 January 2022 of certain milestones in respect to the Company’s Kraaipan Project in Botswana as follows:

• a. upon certification of a JORC compliant resource of gold or gold equivalent of 250,000oz which at least 50% is classified as Indicated or above (‘First Milestone’), Shares with a total value of $500,000 based on an issue price per Share equal to the higher of $0.02 or the 5 day volume weighted average price for Shares for the previous five days on which Shares traded prior to the announcement of the First Milestone;

• b. upon certification of a JORC compliant resource of 500,000oz gold or gold equivalent of which at least 50% is classified as Indicated or above (‘Second Milestone’), Shares with a total value of $1,000,000 based on an issue price per Share equal to the higher of $0.02 or the 5 day volume weighted average price for Shares for the previous five days on which Shares traded prior to the announcement of the Second Milestone;

• c. upon certification of a JORC compliant resource of 750,000oz gold or gold equivalent of which at least 50% is classified as Indicated or above (‘Third Milestone’), Shares with a total value of $1,000,000 based on an issue price per Share equal to the higher of $0.02 or the 5 day volume weighted average price for the previous five days on which Shares traded prior to the announcement of the Third Milestone; and

• d. upon certification of a JORC compliant resource of 1,000,000oz gold or gold equivalent of which at least 50% is classified as Indicated or above (Fourth Milestone), Shares with a total value of $1,000,000 based on an issue price per Share equal to the higher of $0.02 or the 5 day volume weighted average price for the previous five days on which Shares traded prior to the announcement of the Fourth Milestone.

The Company’s cash reserves following completion of the Offer, assuming the Offer is fully subscribed, will increase by approximately $1,453,215, being the gross proceeds of the Offer, less the costs of the Offer.

1.6 Entitlements and acceptance

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

In determining Entitlements, any fractional Entitlement will be rounded down to the nearest whole number.

Acceptance of Entitlement in Full

If you are an Eligible Shareholder and wish to take up all of your Entitlement under the Offer, please complete the Entitlement and Acceptance Form in accordance with the instructions set out in that form.

Partial Acceptance of Entitlement

If you are an Eligible Shareholder and wish to take up part of your Entitlement pursuant to the Offer, please complete the Entitlement and Acceptance Form in accordance with the instructions set out in that form and insert the number of New Shares for which you wish to accept (being less than your Entitlement as specified on the Entitlement and Acceptance Form).

Entitlements Not Taken Up

If you decide not to accept all or part of your Entitlement pursuant to the Offer, you are not required to take any action. The New Shares not accepted will form part of the Shortfall.

1.7 No Entitlement trading

The Entitlements to New Shares under the Offer are non-renounceable. Accordingly, there will be no trading of Entitlements on the ASX and you may not dispose of your Entitlement to subscribe for New Shares under the Offer to any other party.

If you do not take up your Entitlement under the Offer by the Closing Date, the Offer to you will lapse. Metalsearch Limited – Offer Document

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1.8 Underwriting

The Offer is fully underwritten by Westar Capital Limited. The Underwriting Agreement is subject to certain conditions including circumstances under which the Underwriter may terminate its obligations. The terms and conditions of the Underwriting Agreement, including underwriting fees, are summarised in Section 4.1 of this Offer Document.

1.9 Shortfall

If you do not wish to take up any part of your Entitlement under the Offer, you are not required to take any action. That part of your Entitlement not taken up will form part of the Shortfall and will be dealt with by the Underwriter in accordance with this Section 1.8 and 4.1.

1.10 Effect on Control

The Company has lodged with ASX a notice in accordance with section 708AA of the Corporations Act which sets out, among other things, the effect of the Offer on the control of the Company. This notice may be viewed on the websites of the Company and ASX.

If all Eligible Shareholders take up their Entitlements in full, the Offer will not diminish the percentage shareholding and voting power of each Eligible Shareholder.

If some Eligible Shareholders do not take up their Entitlement in full, then their percentage shareholding and voting power in the Company will be diluted. The percentage shareholding and voting power of non-resident Shareholders not eligible to participate in the Offer will also be diluted by New Shares issued under the Offer.

The Underwriter must ensure that no party will receive Shortfall Shares that in itself (i.e. the amount of the shortfall) would result in a voting power in the Company equal to or greater than 19.9%. Please see Section 4.1 for further details.

1.11 Opening and Closing Dates

The Offer opens on the Opening Date, being 15 June 2018. The Company will accept Entitlement and Acceptance Forms until 5.00pm (WST) on the Closing Date or such other date as the Directors determine, subject to the Listing Rules.

1.12 Issue and Dispatch

The issue of New Shares offered by this Offer Document and the dispatch of holding statements are expected to occur on 3 July 2018.

It is the responsibility of Applicants to determine their 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.

1.13 ASX Quotation

Application has been made to the ASX for quotation of the New Shares. 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. Issues of New Shares under the Offer will only be made after permission for their quotation on the ASX has been granted.

1.14 CHESS

The Company participates in the Clearing House Electronic Sub-register System, known as ‘CHESS’. All trading on ASX in Shares will be settled through CHESS. ASX Settlement Pty Ltd ( ASX Settlement ), a wholly owned subsidiary of ASX, operates CHESS in accordance with the Listing Rules and the ASX Settlement Rules.

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The Company’s Registry operates an electronic issuer-sponsored sub-register and an electronic CHESS sub-register. Both these sub-registers constitute the Company’s principal register of Shareholders.

Holders of Shares will not receive a certificate but will receive a statement of their holding of Shares.

If you are broker sponsored or other participant in CHESS, ASX Settlement will send you a CHESS statement. The CHESS statement will set out the number of Shares issued under this Offer Document, provide details of your holder identification number, and provide the participant identification number of the sponsor and the terms and conditions applicable to the Shares.

If you are registered on the issuer sponsored sub-register, your statement will be despatched by the Company’s Registry and will contain the number of Shares issued to you under this Offer Document and your security holder reference number (SRN).

A CHESS statement or issuer sponsored statement will routinely be sent to Shareholders at the end of any calendar month during which the balance of their Shareholding changes. Shareholders may request a statement at any other time, however, a charge may be made for additional statements

1.15 Treatment of 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.

The Company is of the view that it is unreasonable to make the Offer to Shareholders without registered addresses in Australia or New Zealand ( Ineligible Shareholders ) having regard to the:

• (a) number of Ineligible Shareholders;

• (b) number and value of New Shares that would be offered to Ineligible Shareholders; and

• (c) 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.

1.16 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.

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

1.17 Rights and Liabilities attaching to New Shares

The New Shares will rank equally in all respects with existing Shares (including, for example, with respect to dividends, voting and bonus issues). Full details of the rights and liabilities attaching to Shares are set out in the Company's Constitution, a copy of which is available for inspection at the Company's registered office during normal business hours.

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1.18 Risk Factors

As with any securities investment, there are risks associated with investing in the Company. The principal risks that could affect the financial and market performance of the Company are detailed in Section 3 of this Offer Document. The New Shares on offer under this Offer Document should be considered speculative. Accordingly, before deciding to invest in the Company, investors should read this Offer Document in its entirety and should consider all factors in light of their individual circumstances and seek appropriate professional advice.

Factors affecting an investment in the Company include stock market fluctuations, exploration and development risks, resource and reserve estimates, joint venture risk, insurance risk, competition risks, foreign currency exchange rate fluctuations, economic risks and external market factors, additional requirements for capital and governmental policy regarding environmental protection.

1.19 Withdrawal of Offer

The Directors may at any time decide to withdraw this Offer Document and the Offer at any time prior to the issue of New Shares under the Offer. If the Offer is withdrawn, the Company will return all Application Money (without interest) within 28 days of giving such notice of withdrawal.

1.20 Governing Law

This Offer Document and the contracts formed on acceptance of the Entitlement and Application Form are governed by the laws applicable in Western Australia. Each Applicant for New Shares submits to the exclusive jurisdiction of the courts of Western Australia and the courts of the Commonwealth of Australia sitting in Perth, Western Australia.

1.21 Nominees, Trustees and Custodians

Shareholders resident in Australia or New Zealand holding Shares on behalf of persons who are resident overseas are responsible for ensuring that taking up an Entitlement does not breach regulations in the relevant overseas jurisdiction. Return of a duly completed Entitlement and Acceptance Form will be taken by the Company to constitute a representation that there has been no breach of those regulations.

Shareholders resident in Australia or New Zealand holding shares on behalf of persons who are resident overseas should seek independent advice as to how they should proceed.

1.22 Enquiries concerning Offer Document

This document is important and should be read in its entirety. Persons who are in any doubt as to the course of action to be followed should consult their stockbroker, solicitor, accountant or other professional adviser without delay.

If you have any questions regarding your Entitlement or the Offer, please contact the Company on (08) 6268 2622 (for calls within Australia) or +61 8 6268 2622 (outside Australia), from 8.30am to 5.00pm WST, Monday to Friday.

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2 ACTION REQUIRED BY SHAREHOLDERS

2.1 How to Accept the Offer

If you are an Eligible Shareholder and you wish to take up all or part of your Entitlement, you must accept the Offer by completing the personalised Entitlement and Acceptance Form mailed to you with this Offer Document. Your personalised Entitlement and Acceptance Form will detail your Entitlement to New Shares under the Offer. You should complete the form in accordance with the instructions set out in that form.

Acceptance of Entitlement in Full

If you are an Eligible Shareholder and wish to take up all of your Entitlement under the Offer, please complete the Entitlement and Acceptance Form in accordance with the instructions set out in that form.

Partial Acceptance of Entitlement

If you are an Eligible Shareholder and wish to take up part of your Entitlement pursuant to the Offer, please complete the Entitlement and Acceptance Form in accordance with the instructions set out in that form and insert the number of New Shares you wish to accept (being less than your Entitlement as specified on the Entitlement and Acceptance Form).

Non-Acceptance of Entitlement

If you do not wish to take up any part of your Entitlement under the Offer, you are not required to take any action. If you decide not to accept all or part of your Entitlement, the New Shares not accepted will form part of the Shortfall and will be dealt with in accordance with Section 1.9.

2.2 Acceptance of Terms and Form of Payment

All Applications for New Shares must be made on the Entitlement and Acceptance Form. Any Application will be treated as an offer from the Applicant to acquire New Shares on the terms and conditions set out in this Offer Document. The Directors reserve the right to reject any Applications for New Shares.

If you are paying by cheque please make the cheque payable to ‘ Metalsearch Limited Offer A/C ’ and cross it ‘Not Negotiable. Please ensure that your completed Entitlement and Acceptance Form and your cheque is received by the Company's Share Registry no later than 5.00pm (WST) on the Closing Date at:

By Post:

Metalsearch Limited C/- Security Transfer Australia Pty Ltd PO Box 52 Collin Street West VIC 8007

By Hand:

Metalsearch Limited C/- Security Transfer Australia Pty. Ltd Suite 913, Exchange Tower 530 Little Collins Street Melbourne VIC 3000

Those who elect to pay via BPAY must follow the instructions for BPAY set out in the Entitlement and Acceptance Form. Investors who elect to pay by BPAY will not need to return their completed Entitlement and Acceptance Form.

Please note that payment via BPAY must be made by no later than 4:00pm (WST) on 26 June 2018.

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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 have multiple holdings you will have multiple BPAY customer reference numbers. To ensure you receive your Entitlement in respect of that holding, you must use the customer reference number shown on each personalised Entitlement and Acceptance Form when paying for any New Shares that you wish to apply for in respect of that holding.

2.3 Application Money and refunds

Application Money will be held on trust for applicants until New Shares are issued under this Offer Document.

Any Application Money received in excess of an Applicant’s final allocation of New Shares (including any Shortfall Shares) will be refunded as soon as possible after issue.

If the Offer is withdrawn, all Application Money will be refunded as soon as possible. Refund payments will be by cheque made payable to the registered holder and will be sent to the address last recorded on the Company’s register of shareholders.

Interest will not be paid to Applicants on any Application Money which is refunded and any interest earned on Application Money will belong to the Company.

2.4 Effect of taking up your Entitlement

Submitting an Entitlement and Acceptance Form or making payment using BPAY® constitutes a binding offer to subscribe for New Shares on the terms and conditions set out in this Offer Document. Once lodged, an Entitlement and Acceptance Form cannot be withdrawn. The Entitlement and Acceptance Form does not need to be signed to be binding.

If an Entitlement and Acceptance Form is not completed or submitted correctly, it may still be treated as a valid Application. The Company’s decision whether to treat an Application as valid and how to construe, amend or complete or submit the Application is final.

The Company reserves the right (in its sole discretion) to:

• (a) reject any Application that it believes comes from a person who is not an Eligible Shareholder; and

• (b) reduce the number of New Shares allocated to Eligible Shareholders, or persons claiming to be Eligible Shareholders, if their claim to be entitled to participate in the Offer proves to be false, exaggerated or unsubstantiated.

2.5

ASX quotation

The Company has applied to ASX for quotation of the New Shares. If ASX does not grant quotation to the New Shares, then the Company will not issue any of the New Shares and will refund all Application Money without interest.

2.6 Issue of New Shares

The Company expects to issue the New Shares under the Offer on 3 July 2018 and send holding statements for the New Shares on that date. The New Shares will not be issued until ASX grants quotation of the New Shares.

It is your responsibility to determine your holdings before trading in New Shares. Any person who sells New Shares before receiving confirmation of their holding will do so at their own risk.

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2.7 Enquiries concerning your Entitlement

If you have any questions regarding your Entitlement or the Offer, please contact the Company on (08) 6268 2622 (for calls within Australia) or +61 8 6268 2622 (outside Australia), from 8.30am to 5.00pm WST, Monday to Friday.

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3 RISK FACTORS

3.1 General

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

The following is a summary of the more material matters to be considered and should be read in conjunction with specific matters referred to in the Company’s announcements and reports. Please note that the 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.

Applicants should give careful consideration to each of the risks. The risks below identify some of the key risks specific to an investment in the Company. However, these risks should not be taken as an exhaustive list of all risks which the Company could be subject to.

3.2 Company and Transaction Specific Risks

A number of specific risk factors that may impact the future performance of the Company are described below. Eligible Shareholders should note that this list is not exhaustive.

(i) Lease and licence risks

The Company’s mining exploration activities are dependent upon the grant, or as the case may be, the maintenance of appropriate licences, concessions, leases, permits and regulatory consents which may be withdrawn or made subject to limitations. The maintaining of tenements, obtaining renewals, or getting tenements granted, may depend on the Company being successful in obtaining the required statutory approvals for its proposed activities and that the licences, concessions, leases, permits or consents it holds will be renewed as and when required. There is no assurance that such renewals will be given as a matter of course and there is no assurance that new conditions will not be imposed in connection with them.

In particular, there is a risk that prospecting licence PL232/2016, which forms the Kraaipan Project and prospecting licences PL064/2017 and PL065/2017 which form the Kraaipan West Project, may not be renewed when required, may be withdrawn, may be made subject to limitations at the discretion of the government or authorities of Botswana, or that changes to the conditions of that licence will impact the Company’s activities.

(ii) Future capital requirements

The Company’s ongoing activities may require substantial financing in the future for its business activities. Any additional equity financing may be dilutive to Shareholders, may be undertaken at lower prices than the current market price or may involve restrictive covenants which limit the Company’s operations and business strategy.

Although the Directors believe that additional capital can be obtained, no assurances can be made that appropriate capital or funding, if and when needed, will be available on terms favourable to the Company or at all. If the Company is unable to obtain additional financing as needed, it may be required to reduce, delay or suspend its operations and this could have a material adverse effect on the Company’s activities and could affect the Company’s ability to continue as a going concern.

(iii) Exploration risks

Mining exploration and development is a high risk undertaking. The success of the Project depends on the delineation of economically minable reserves and resources, access to required development capital, movement in the price of commodities, securing and maintaining title to the Company's exploration and mining tenements and obtaining all consents and approvals necessary for the conduct of its exploration activities.

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Exploration on the Company's tenements may be unsuccessful, resulting in a reduction of the value of those tenements, diminution in the cash reserves of the Company and possible relinquishment of exploration tenements.

The exploration costs of the Company are based on certain assumptions with respect to the method and timing of exploration. By their nature, these estimates and assumptions are subject to significant uncertainties and, accordingly, the actual costs may materially differ from these estimates and assumptions. Accordingly, no assurance can be given that cost estimates and underlying assumptions will be realised in practice, which may materially and adversely affect the Company’s viability.

(iv) Resource estimates

Resource estimates are expressions of judgment based on knowledge, experience and industry practice. Estimates which were valid when originally calculated may alter significantly when new information or techniques become available. In addition, by their very nature, resource estimates are imprecise and depend, to some extent, on interpretations, which may prove to be inaccurate and require adjustment. As further information becomes available through additional fieldwork and analysis, the estimates are likely to change. This may result in alterations to development and mining plans which may, in turn, adversely affect the Company’s operations.

(v) Ability to exploit successful discoveries

It may not always be possible for the Company to exploit successful discoveries which may be made in areas in which the Company has an interest. Such exploitation would involve obtaining the necessary licences or clearances from relevant authorities or land beneficiaries that may require conditions to be satisfied and/or the exercise of discretions by such authorities. It may or may not be possible for such conditions to be satisfied. Further, the decision to proceed to further exploitation may require participation of other companies whose interests and objectives may not be the same as the Company's.

(vi) Mining and development risks

Profitability depends on successful exploration and/or acquisition of reserves, design and construction of efficient processing facilities, competent operation and management and proficient financial management.

Mining and development operations can be hampered by force majeure circumstances, environmental considerations and cost overruns for unforeseen events.

(vii) Title risks

Interests in tenements are governed by legislation in their respective jurisdictions and are evidenced by the granting of licences or leases. Each licence or lease is for a specific term and carries with it reporting commitments, as well as other conditions requiring compliance. Consequently, the Company could lose title to or its interest in tenements if licence conditions are not met or if insufficient funds are available to meet expenditure commitments.

(viii) Environment and government approvals

The operations and activities of the Company are subject to environmental laws and regulations. As with most exploration projects and mining operations, the Company's operations and activities are expected to have an impact on the environment, particularly if advanced exploration or mine development proceeds. The Company attempts to conduct its operations and activities to the highest standard of environmental obligation, including compliance with all environmental laws.

(ix) In-country / political risks

The operations and activities of the Company are exposed to political, economic and other risks and uncertainties associated with operating in Botswana. These risks and uncertainties include, but are not limited to currency exchange rates; changing political conditions; restrictions on border crossings and trade; changes to laws and policies; labour unrest; foreign exchange and currency controls; renegotiation or nullification of existing concessions, licenses and permits; and failure to agree to terms of required agreements with relevant governments and authorities.

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(x) Country Risk

The Company holds assets located in Botswana but may acquire assets in other foreign jurisdictions in the future. There are risks associated with exploration and mining activities and investments generally in foreign countries that may adversely affect the business, costs, expenditure and profitability of the Company. These risks include:

• (a) changes in foreign country government, government policies, regulatory regime, economic change, civil instability, attitudes towards foreigners or their businesses in their country;

• (b) land access and environmental regulation may be adverse or beneficial; and

• (c) the applicable legal regime including investment into and repatriation of revenue out of the foreign country.

(xi) Joint venture parties, agents and contractors

There is a risk of financial failure or default by a participant in any joint venture to which the Company may become a party or the insolvency or managerial failure by any of the contractors used by the Company in any of its activities or the insolvency or other managerial failure by any of the other service providers used by the Company for any activity.

(xii) Exchange rate fluctuations

International prices of most commodities are denominated in United States dollars, whereas the income and expenditure of the Company will be largely in Botswana and Australian currencies. This will expose the Company to the fluctuations and volatility of the rate of exchange between the United States dollar, the Botswana pula and the Australian dollar, subject to any currency hedging the Company may undertake. The exchange rate is affected by numerous factors beyond the control of the Company, including international markets, interest rates, inflation and the general economic outlook.

(xiii) Realising value from projects

The operations of the Company may be affected by various factors, including failure to locate or identify mineral deposits, failure to achieve predicted grades in exploration and mining, operational and technical difficulties encountered in mining, difficulties in commissioning and operating plant and equipment, mechanical failure or plant breakdown, unanticipated metallurgical problems which may affect extraction costs, adverse weather conditions, industrial and environmental accidents, industrial disputes, and unexpected shortages or increases in the costs of consumables, spare parts, plant and equipment.

The Directors have between them significant mineral exploration and operational experience. However, no assurances can be given that the Company will achieve commercial viability through the successful exploration and/or mining of its tenement interests. Until the Company is able to realise value from its projects, it is likely to incur ongoing operating losses.

(xiv) Access risks

Where the area of any mining tenements (or part thereof) are subject to other land interests or activities, resource companies are required to negotiate access, compensation and mining agreements with the beneficial party in order to gain access, explore, develop and mine the resource. Negotiation and execution of such agreements are subject to the willingness of beneficial parties to co-operate with resource entities. Land use may also affect the timing of access to such land. As such, the Company maintains a high standard of co-operative working with beneficial title holders.

(xv) Mineral assemblage and consistency

The value of, and ability to mine, a resource is partially dependent on the mineral assemblage and / or quality and surrounding geological and soil setting. Information is not always necessarily available at the commencement of exploration, and is established at varying stages

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throughout development. Such data can affect the Company’s ability to successfully extract, treat or sell the product. The Company makes all efforts to determine this information at practical stages throughout exploration to reduce risks associated with mineral assemblage and quality.

(xvi) Competition

The Company competes with other companies, including major mining companies in Australia and internationally. Some of these companies have greater financial and other resources than the Company and, as a result, may be in a better position to compete for future business opportunities. There can be no assurance that the Company can compete effectively with these companies.

(xvii) Insurance risk

In certain circumstances the Company’s insurance may not be of a nature or level to provide adequate insurance cover. The occurrence of an event that is not covered or fully covered by insurance could have a material adverse effect on the business, financial condition and results of the Company.

Insurance of all risks associated with mineral exploration and production is not always available and where available the costs can be prohibitive.

(xviii) Key personnel

Recruiting and retaining qualified personnel are important to the Company’s success, particularly for the Company’s operations in Botswana. The number of persons skilled in the exploration and development of mining properties is limited and competition for such persons is strong. There can be no assurance that there will be no detrimental impact on the Company if such persons employed cease their employment with the Company.

(xix) Share market conditions

The market price of Company’s Securities may be subject to varied and unpredictable influences on the market for equities in general and resources stocks in particular.

3.4 Speculative Nature of Investment

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 New Shares offered under this Offer Document. Therefore, the New Shares offered pursuant to this Offer Document carry no guarantee with respect to the payment of dividends, returns of capital or the market value of the 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 New Shares.

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4 ADDITIONAL INFORMATION

4.1 Underwriting Agreement

The Offer is fully underwritten by Westar Capital Limited. Pursuant to the Underwriting Agreement, the Underwriter will be entitled to a maximum fee of 5% (exclusive of GST) of the dollar amount underwritten.

The Underwriting Agreement provides that:

• a) the Underwriter must ensure that no party will receive Shortfall Shares that in itself (ie. the amount of the shortfall) would result in a voting power in the Company equal to or greater than 19.9%; and

• b) the Underwriter may terminate the Underwriting Agreement and be relieved of its obligations if certain events occur, which are usual and appropriate for agreements of this nature in the circumstances.

The Underwriter may terminate its obligations under this Agreement if:

• a) ( Share Price ): the share price of the Company trading on the ASX under the ASX code of “MSE” finishes trading for two consecutive days with a closing share price that is less than the Price;

• b) ( Indices fall ): the S&P ASX 200 Index is at any time after the date of this Agreement 10% or more below its respective level as at the close of business on the Business Day prior to the date of this Agreement;

• c)

• ( Announcement ): the Company does not lodge an appendix 3B by the Lodgement Date;

• d) ( No Official Quotation ): ASX has advised the Company that it will or may not grant official quotation to the Underwritten Securities on or prior to the Shortfall Notice Deadline Date;

• e) ( Misleading Rights Issue Documentation ): it transpires that there is a statement in the Rights Issue Documentation that is misleading or deceptive or likely to mislead or deceive, or that there is an omission from the Rights Issue Documentation or if any statement in the Rights Issue Documentation becomes misleading or deceptive or likely to mislead or deceive or if the issue of the Rights Issue Documentation is or becomes misleading or deceptive or likely to mislead or deceive;

• f) ( Restriction on issue ): the Company is prevented from issuing the Underwritten Securities within the time required by this Agreement, 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;

• g) ( Withdrawal of consent to Rights Issue Documentation ): any person (other than the Underwriter) who has previously consented to the inclusion of its, his or her name in the Rights Issue Documentation or to be named in the Rights Issue Documentation, withdraws that consent;

• h) ( ASIC or other prosecution ): ASIC gives notice of any deficiency in the Rights Issue Documentation or related documents or ASIC gives notice of an intention to hold a hearing, examination or investigation, or it requires information to be disclosed in connection with the Offer of the Company;

• i) ( Takeovers Panel ): the Takeovers Panel makes a declaration that circumstances in relation to the affairs of the Company are unacceptable circumstances under Pt 6.10 of the Corporations Act, or an application for such a declaration is made to the Takeovers Panel;

• j) ( Hostilities ): there is an outbreak of hostilities or a material escalation of hostilities (whether or not war has been declared) after the date of this agreement involving one or more of Australia, New Zealand, Indonesia, Japan, Russia, the United Kingdom, the United States of America, India, Pakistan, or the Peoples Republic of China, Israel or any member of the European

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Union, 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;

• k) ( Authorisation ): any authorisation which is material to anything referred to in the Rights Issue Documentation is repealed, revoked or terminated or expires, or is modified or amended in a manner unacceptable to the Underwriter;

• l) ( Event of Insolvency ): an Event of Insolvency occurs in respect of a Relevant Company;

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

• n) ( Termination Events ): subject always to clause 10.3, upon the occurrence of any of the following events:

• (i) ( Default ): default or breach by the Company under this Agreement of any terms, condition, covenant or undertaking;

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

• (iii) ( Contravention of constitution or Act ): a contravention by a Relevant Company of any provision of its constitution, the Corporations Act, the Listing Rules or any other applicable legislation or any policy or requirement of ASIC or ASX;

• (iv) ( Adverse change ): an event occurs which gives rise to a Material Adverse Effect or any adverse change or any development including a prospective adverse change after the date of this Agreement in the assets, liabilities, financial position, trading results, profits, forecasts, losses, prospects, business or operations of any Relevant Company;

• (v) ( Error in Due Diligence Results ): it transpires that any of the Due Diligence Results was false, misleading or deceptive or that there was an omission from them;

• (vi) ( 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;

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

• (viii) ( 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 Relevant Company is or becomes misleading or deceptive or likely to mislead or deceive;

• (ix) ( Change in Act 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;

• (x)

• ( Prescribed Occurrence ): a Prescribed Occurrence occurs;

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

• (xii) ( Judgment against a Relevant Company ): a judgment in an amount exceeding $50,000 is obtained against a Relevant Company and is not set aside or satisfied within 7 days;

• (xiii) ( Litigation ): litigation, arbitration, administrative or industrial proceedings are after the date of this Agreement commenced against any Relevant Company, which have real prospects of resulting in a judgment against a Relevant Company exceeding $100,000 other than any claims foreshadowed in the Rights Issue Documentation;

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• (xiv) ( 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 the date of issue of the Underwritten Securities without the prior written consent of the Underwriter;

• (xv) ( Change in shareholdings ): there is a material change in the major or controlling shareholdings of a Relevant 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 Relevant Company;

• (xvi) ( Timetable ): there is a delay in any specified date in the Timetable which is greater than 3 Business Days and the Underwriter has not given its prior written consent agreeing to a delay exceeding 3 Business Days;

• (xvii) ( Force Majeure ): a Force Majeure affecting the Company's business or any obligation under the Agreement lasting in excess of 7 days occurs;

• (xviii) ( Certain resolutions passed ): a Relevant Company passes or takes any steps to pass a resolution under Section 254N, Section 257A or Section 260B of the Corporations Act or a resolution to amend its constitution without the prior written consent of the Underwriter;

• (xix) ( Capital Structure ): any Relevant Company alters its capital structure in any manner not contemplated by the Offer;

• (xx) ( Breach of Material Contracts ): any of the Contracts is terminated or substantially modified;

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

• (xxii) ( 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.

The events listed in (n) above do not entitle the Underwriter to exercise its rights of termination unless, in the reasonable opinion of the Underwriter reached in good faith, it has or is likely to have, or those events together have, or could reasonably be expected to have, a Material Adverse Effect or could give rise to a liability of the Underwriter under the Corporations Act.

The effect on control of the Company will be as follows:

• a) If all shareholders of the Company on the record date of 12 June 2018 take up their entitlements under the Offer, then the issue of New Shares under the Offer will have no effect on the control of the Company.

• b) If the shareholders take up none or only some of their entitlements under the Offer then the issue of New Shares under the Offer will have limited effect on control of the Company. As indicated above, the Underwriter must ensure that no party will receive Shortfall Shares that in itself (ie. The amount of the shortfall) would result in a voting power in the Company equal to or greater than 19.9%.

4.2 Section 708AA (2) (f) Notice

The Company has lodged with ASX a notice in accordance with section 708AA of the Corporations Act which sets out, amongst other information, the effect of the Offer on the control of the Company, taking into account the identity and current shareholdings of the sub-underwriters to the Offer. This notice may be reviewed on the websites of the Company and ASX.

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5 DEFINED TERMS

Applicant means a person who submits an Entitlement and Acceptance Form.

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

Application Monies means monies received from persons applying for New Shares.

ASIC means the Australian Securities and Investments Commission.

Associate has the meaning set out in the Listing Rules.

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

Closing Date means the closing date of the Offer, being 5.00pm (WST) on 26 June 2018.

Company means Metalsearch Limited (ACN 137 984 297).

Corporations Act means the Corporations Act 2001 (Cth).

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 with a registered address in Australia or New Zealand.

Entitlement means the entitlement to subscribe for New Shares under this Offer and Entitlements has a corresponding meaning.

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

Ineligible Shareholder means a Shareholder who is not an Eligible Shareholder.

Listing Rules means the ASX Listing Rules published and distributed by ASX.

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

Offer means the offer of New Shares under this Offer Document, as set out in Section 1.1.

Offer Document means this Offer Document dated 6 June 2018.

Opening Date means the opening date of the Offer, being 15 June 2018.

Option means an option to acquire a Share.

Optionholder means a holder of Options.

Record Date means 5.00pm (WST) on 12 June 2018.

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

Share Registry means Security Transfer Australia Pty Ltd.

Shareholder means a holder of Shares.

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

Underwriter means Westar Capital Limited (ACN 009 372 838)

Underwriting Agreement means the underwriting agreement dated 5 June 2018 between the Underwriter and the Company

WST means Australian Western Standard Time.

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