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EXTERRA RESOURCES LIMITED

DIRECTORY

DIRECTORS Peter Cunningham Chairman John Davis Managing Director Justin Brown Non-Executive Director Peter Cole Non-Executive Director Gary Morgan Non-Executive Director

COMPANY SECRETARY

Dennis Wilkins

REGISTERED OFFICE

23 Altona Street West Perth WA 6005

Website: www.exterraresources.com.au

Email: [email protected] Tel: +61 8 9481 7288 Fax: +61 8 9389 2199

CORPORATE ADVISER

DWCorporate Pty Ltd 23 Altona Street West Perth WA 6005


LEGAL ADVISER

House Legal 86 First Avenue Mount Lawley WA 6050

Email: [email protected] Tel: +61 (0)413 481 525

INDEPENDENT GEOLOGIST

Ravensgate Minerals Industry Consultants 49 Ord Street West Perth WA 6005

Email: [email protected] Ph: +61 8 9226 3606 Fax: +61 8 9226 3607

AUDITOR

Rothsay Chartered Accountants 96 Parry Street Perth WA 6000 Email: [email protected] Tel: +61 8 9227 0552 Fax: +61 8 9227 6011

INDEPENDENT ACCOUNTANT

Rothsay Consulting Services Pty Ltd 96 Parry Street Perth WA 6000


SHARE REGISTRY

Security Transfer Registrars Pty Ltd 770 Canning Highway Applecross WA 6153


LEAD MANAGER

Pursuit Capital Level 2, 28 Kings Park Road West Perth WA 6005

Email: [email protected] Ph: +61 8 6267 9030

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INVESTMENT HIGHLIGHTS & RISKS SUMMARY

• A gold focussed exploration company with a near term production opportunity.

• A dedicated and experienced management team able to take advantage of a strong gold market.

• Rights to acquire 100% interest in three projects (Linden, Zelica, Egerton) with JORC Code Compliant Resources totalling 145,105 ozs.

• Rights to acquire 90% interest in the Giant Well project, with potential to host significant gold mineralisation.

• Resources and priority targets for immediate drill testing on listing.

• Diamond drilling by Exterra during January 2011 at the Linden project, Second Fortune prospect, to validate historic drilling, returned results consistent with historical drilling and with several intercepts containing visible gold. These results supported the calculation of a maiden JORC Code Compliant Resource.

• RC drilling by Exterra during 2010 at the Linden project around known and new prospects highlight the potential for further discoveries over the Linden project area, with further drilling planned to follow-up immediately after listing.

Exterra Resources Limited is an Australian mineral exploration company established to deliver shareholder value by identifying, acquiring and developing mineral projects that possess the potential for early cashflow. The Board has extensive and relevant experience in the acquisition, exploration, development and finance industries and has assembled an advanced portfolio of gold exploration and development projects. The Company has selected the projects based on high grade historical production, near term production opportunity, sampling results and significant exploration potential, combined with robust geological concepts. The above highlights are a brief summary and should be read in context with the balance of this Prospectus.

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Table A below, from page 9 of the Independent Geologist’s Report, summarizes the JORC Code Compliant Resources for the Linden, Zelica and Egerton projects.

Table A: Exterra Resources - Summary of JORC (2004) Resources (1 Ravensgate 2011 estimate using a 4 g/t Au cut-off, 2 Regal Resources 2007 estimate, 3 Resource

Evaluations 2005 estimate using a 2 g/t Au cut-off)

Prospect

Linden Project

Classification Tonnes Grade (g/t Au) Contained Ounces Au

Second Fortune1

Measured Resource - - -

Indicated Resource - - -

Inferred Resource 207,000 7.9 52,270

Total 207,000 7.9 52,270

Zelica2

Zelica Project

Measured Resource 190,000 2.3 14,128



Total 1,187,656 2.2 85,664

Hibernian3

Egerton Project


Indicated Resource 46,400 5.3 7,841


Total 116,300 6.4 23,811

All

TOTAL - All Projects



Inferred Resource 1,242,456 3.3 129,975

Total 1,510,956 3.3 161,745

LINDEN PROJECT (90 - 100% interest)

• Second Fortune prospect contains a JORC Code Compliant Resource of 207,000 Tonnes @ 7.9 g/t Au for 52,270 ozs over 400m of strike and to 250m in depth. (Refer to Table A on page 9 of the Independent Geologist’s Report where the full list of Measured, Indicated and Inferred Resources are tabled).

• Second Fortune vein strikes over 600m and is open down plunge below 250m.

• Diamond drilling by Exterra early 2011, with 5 holes completed (1,075m), intersected the Second Fortune mineralisation and confirmed the grade and location of the vein system with results including 0.3m @ 46.9 g/t Au, 0.6m @ 24.8 g/t Au, 0.7m @ 44.6 g/t Au.

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• Second Fortune gold mine with historic production and infrastructure including shaft, camp, offices, water and power supply.

• Granted Mining Leases.

• Near term mine development potential with toll treatment opportunities.

• Reconnaissance RC drilling by Exterra during 2010 at Linden, covering a broad area, targeting structural/geological sites or old workings reported results including 1m @ 37.1 g/t Au, 1m @ 97.4 g/t Au, 11m @ 6.7 g/t Au, 8m @ 9.5 g/t Au (from 89 drill holes, total 5,418m), which highlights the potential of the area, particularly as very little work has been done on the project in the last 10 years.

ZELICA PROJECT (100% interest)

• JORC Code Compliant Resource of 1.2 million tonnes @ 2.22 g/t Au for 85,700 ozs. (Refer to Table A on page 9 of the Independent Geologist’s Report where the full list of Measured, Indicated and Inferred Resources are tabled).

• The deepest mineralised intercepts are around 65 metres below surface and the structure appears to be open at depth.

• Metallurgical test work indicates that recoveries in excess of 90% could be achieved by vat leaching.

• Vat leach ponds have been developed on site but not commissioned.

EGERTON PROJECT (100% interest)

• Hibernian prospect contains a JORC Code Compliant Resource of 116,300 T @ 6.4 g/t Au for 23,811 ozs. (Refer to Table A on page 9 of the Independent Geologist’s Report where the full list of Measured, Indicated and Inferred Resources are tabled).

• High grade intercepts within Hibernian resource include 2m @ 147.0 g/t Au, 5m @ 78.90 g/t Au and 5m @ 96.7 g/t Au in quartz veins.

• Deposit only shallowly tested to 70 metres below surface, with potential for additional resources in repeated shoots below this level and along strike.

• Hibernian Shear Zone over 8km in length and sparsely tested.

GIANT WELL PROJECT (90% interest)

• 48 sq km granted exploration licence.

• Potential to host significant gold mineralisation.

• Prior exploration has identified a gold soil anomaly over 2km of strike.

• Priority targets warrant further work.

RISKS SUMMARY There are risks associated with investing in the share market generally and in this Company specifically. These risks are more fully detailed in Section 4 of the

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Prospectus, however, listed below are, in the Directors opinion, the key risks associated with this investment.

Key Risks

No guarantee that tenements in application stage will ultimately be granted.

Environmental bond review by the State Government may affect Company funding.

No assurance can be given that the cost estimates of proposed exploration expenditures and the underlying assumptions will be realised in practice, which may materially and adversely affect the Company’s viability.

General Risks

Economic resources may not be discovered. Gold and base metals exploration and development is a high-risk undertaking.

There can be no assurance that exploration of existing and acquired projects or any other exploration properties that may be acquired in the future will result in the discovery of an economic resource. Even if an apparently viable resource is identified, there is no certainty that it can be economically exploited.

Successful development of projects may not occur. The business of exploration, project development and mining contains risks by its very nature. To prosper, it depends on the successful exploration and/or acquisition of reserves, design and construction of efficient production/processing facilities, competent operation and managerial performance and proficient marketing of the product. In particular, exploration is a speculative endeavour and force majeure circumstances, cost overruns and other unforeseen events can hamper mining operations. No assurances can be given that if mineral reserves are discovered the Company will be able to profitably develop such reserves as intended.

The Company may be unable to realise value from its projects. The operations of the Company may be affected by various factors, including failure to locate or identify mineral deposits; if mineral deposits are identified and developed, failure to achieve predicted grades in 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.

No assurances can be given that Exterra will achieve commercial viability through the successful exploration and/or mining of its tenement interests. Until Exterra is able to realise value from its projects, it is likely to incur ongoing operating losses.

Access to land may be stopped. Interests in mineral tenements in Australia are governed by State legislation and are evidenced by the granting of licenses or leases. Each license or lease is for a specific term and carries with it annual expenditure and reporting commitments, as well as other conditions requiring compliance.

Consequently, the Company could lose title to or its interest in tenements if license conditions are not met or if insufficient funds are available to meet expenditure commitments.

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It is also possible that, in relation to tenements in which the Company has or may in the future acquire an interest there may be areas over which legitimate common law native title rights of Aboriginal Australians exist. If native title rights do exist, the ability of the Company to gain access to tenements (through obtaining consent of any relevant landowner), or to progress from the exploration phase to the development and mining phases of operations may be adversely affected.

The Directors will closely monitor the potential effect of native title claims involving tenements in which the Company has or may have an interest.

Reference should be made to the relevant section of the Solicitor’s Report on Tenements set out in Section 7 of this Prospectus for information on the issue of title and a description of the native title regime.

The Company may not be able to secure additional capital if required. The Company’s capital requirements depend on numerous factors. Depending on the Company’s ability to generate income from its operations, the Company may require further financing in addition to amounts raised under the capital raising. 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, it may be required to reduce the scope of its operations and scale back its exploration programs as the case may be.

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Exterra Resources Ltd project locations

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CHAIRMAN’S LETTER

Dear Investor, On behalf of the Directors of Exterra Resources Limited I am pleased to present this Prospectus for the Company’s initial public offer of Shares and invite you to become a Shareholder in the Company.

Exterra has been formed as a vehicle to acquire and develop gold assets with a strategy of rapid development, early production and growth through reinvestment of cash-flow to expand the company.

Exterra's focus will initially be on several small to medium scale high grade projects that we believe have the potential to be developed cost effectively and which are located near processing infrastructure, minimising initial capital requirements.

The Company's portfolio reflects this strategy with two high grade projects at Linden and Egerton, both with a production historyand a recent acquisition of an advanced project at Zelica, with JORC Code Compliant Resources, combined with an exploration project in the Leonora region with the potential to host significant gold mineralisation.

The Company has already undertaken diamond and RC drilling at Linden around both known and new prospects. The results have confirmed the high grade nature of the Second Fortune prospect at Linden and highlighted the potential for further discoveries over the Linden project area, with further drilling planned to follow-up immediately after listing.

The directors of Exterra are an experienced team with a strong background in gold exploration and mining. Combined with a robust portfolio, the prospect of early production and a prevailing environment of continuing strong gold prices, the Board believes that Exterra is well placed to enhance value for shareholders in the coming years.

Whilst the risks associated with mineral exploration are always high, the directors of Exterra are convinced that the potential rewards justify the implementation of our plans and I encourage you to read this prospectus in detail and consider subscribing for shares.

Yours faithfully

Peter Cunningham Chairman

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TABLE OF CONTENTS

TABLE OF CONTENTS 1. DETAILS OF THE OFFER ......................................................................... 13

1.1 Pro Forma Capital Structure ....................................................................... 13 1.2 Options ....................................................................................................... 13 1.3 Indicative Timetable .................................................................................... 14 1.4 Shares Offered for Subscription ................................................................. 14 1.5 Minimum Subscription ................................................................................ 14 1.6 Purpose Of The Offer ................................................................................. 14 1.7 Underwriting ............................................................................................... 16 1.8 Risks ........................................................................................................... 16 1.9 Brokerage and Handling Fees .................................................................... 16 1.10 Cash Flow Projections ............................................................................ 16 1.11 Allotment and Allocation Of Shares ........................................................ 16 1.12 Applicants outside Australia ................................................................... 16 1.13 ASX Listing ............................................................................................. 17 1.14 CHESS and Issuer Sponsored Holdings ................................................ 17 1.15 Taxation Implications .............................................................................. 17 1.16 Enquiries in Relation to the Offer ............................................................ 17 1.17 How to Apply .......................................................................................... 18 1.18 Escrow Provisions .................................................................................. 18 1.19 Electronic Prospectus ............................................................................. 18 1.20 Privacy Disclosure .................................................................................. 18

2. COMPANY OVERVIEW AND THE PROJECTS ........................................ 19

2.1 The Company ............................................................................................. 19 2.2 Corporate Objectives .................................................................................. 19 2.3 Projects Overview ....................................................................................... 19 2.4 Exploration Expenditure Summary ............................................................. 29

3. BOARD AND MANAGEMENT ................................................................... 31

3.1 Board of Directors ....................................................................................... 31 3.2 Company Secretary .................................................................................... 31 3.3 Corporate Governance ............................................................................... 32

4. RISK FACTORS ......................................................................................... 39

4.1 Economic resources may not be discovered .............................................. 39 4.2 Investment Risks ........................................................................................ 39 4.3 Specific risks associated with the Company ............................................... 44 4.4 Speculative Nature of Investment ............................................................... 44

5. INDEPENDENT GEOLOGIST’S REPORT ................................................ 45

6. INDEPENDENT ACCOUNTANT’S REPORT ............................................ 97

7. SOLICITOR’S REPORT ON TENEMENTS ............................................. 113

8. ADDITIONAL INFORMATION ................................................................. 127

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TABLE OF CONTENTS

8.1 Rights Attaching to Shares ....................................................................... 127 8.2 Summary of Material Contracts ................................................................ 128 8.3 Interests of Directors of the Company ...................................................... 133 8.4 Other Interests .......................................................................................... 134 8.5 Interests of Persons Named in this Prospectus ........................................ 135 8.6 Consents .................................................................................................. 136 8.7 Expenses of the Offer ............................................................................... 137 8.8 Taxation .................................................................................................... 137 8.9 Exposure Period ....................................................................................... 137 8.10 Litigation ............................................................................................... 137 8.11 Electronic Prospectus ........................................................................... 138 8.12 Terms and Conditions of Options ......................................................... 138 8.13 Employee Share Option Plan .............................................................. 140 8.14 Consent by the Directors ...................................................................... 142

9. GLOSSARY OF NAMES AND TERMS ................................................... 143

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IMPORTANT NOTICE

12

IMPORTANT NOTICE

This Prospectus is dated 5 April 2011

A copy of this Prospectus was lodged with ASIC on 5 April 2011. Neither ASIC nor ASX takes any responsibility for the contents of this Prospectus.

This Prospectus will be issued in paper form and as an electronic Prospectus, which may be viewed online at www.exterraresources.com.au. The offer of Shares pursuant to this Prospectus is available to persons receiving an electronic version of this Prospectus in Australia. The Corporations Act prohibits any person from passing on the Application Form to another person unless it is attached to or accompanied by a complete and unaltered version of this Prospectus. During the Offer Period, any person may obtain a hard copy of this Prospectus by contacting the Company by e-mail at [email protected].

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

No Shares will be issued on the basis of this Prospectus later than 13 months after the date of this Prospectus. Application will be made within seven days after the date of this Prospectus for permission for the Shares offered by this Prospectus to be listed for Quotation.

This Prospectus does not constitute an offer in any place in which, or to any person to whom, it would not be lawful to make an offer. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

In accordance with Chapter 6D of the Corporations Act, this Prospectus is subject to an Exposure Period of 7 days from the date of lodgement of the Prospectus with ASIC. This period may be extended by ASIC for a further period of 7 days. The purpose of this Exposure Period is to enable the Prospectus to be examined by market participants prior to the raising of the funds, which examination may result in the identification of deficiencies in this Prospectus. If this Prospectus is found to be deficient, Applications received during the Exposure Period will be dealt with in accordance with section 724 of the Corporations Act. Applications received prior to the expiration of the Exposure Period will not be processed until after the Exposure Period. No preference will be conferred upon Applications received during the Exposure Period.

Applicants should read this document in its entirety and, if in any doubt, consult with their professional advisers before deciding whether to apply for Shares. There are risks associated with an investment in Exterra Resources Limited and the Shares offered under this Prospectus must be regarded as a speculative investment. The Shares offered under this Prospectus carry no guarantee with respect to return on capital investment, payment of dividends or the future value of the Shares.

Certain abbreviations and other defined terms are used throughout this Prospectus. Defined terms are generally identifiable by the use of an upper case first letter. Details of the definitions and abbreviations used are set out in Section 9 (Glossary of Names and Terms) of this Prospectus and also within its body.

All amounts are in Australian dollars unless otherwise specified.

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TABLE OF CONTENTS

13

The people and assets depicted in photographs in this Prospectus are not employees or assets of Exterra Resources Limited, unless otherwise stated. Diagrams appearing in this Prospectus are illustrative only and may not be drawn to scale.

1. DETAILS OF THE OFFER

1.1 Pro Forma Capital Structure The pro-forma capital structure of Exterra Resources Limited is summarised below and assumes the Offer is fully subscribed.

Shares Number % Over

subscription % Over

subscribed Shares on issue at date of Offer 46,410,001 52.79 46,410,001 45.10 Shares to be issued as vendor consideration 11,500,000 13.08 11,500,000 11.17 Shares which may be issued on conversion of convertible note 10,000,000 11.38 10,000,000 9.72 Shares to be issued pursuant to Offer

20,000,000 22.75 20,000,000 19.43

Oversubscriptions 15,000,000 14.58 Issued capital on completion of Offer 87,910,001 100.00 102,910,001 100.00 Amount to be raised

$4,000,000

$7,000,000

1.2 Options 20,850,000 unlisted Options (8,500,000 exercisable at 25 cents at any time prior to 31 December 2014, 11,000,000 exercisable at 30 cents at any time prior to 31 December 2014 and 1,350,000 exercisable at 20 cents at any time prior to 30 September 2013) have been issued to certain of the promoters, vendors and advisers or their nominees. The terms and conditions of these Options are set out in Section 8.12. Further details of the Company’s issued capital are contained in the Independent Accountant’s Report in Section 6.

Shares

$0.25 Options Expiry

31/12/2014


31/12/2014


30/09/2013

$0.20 Options Expiry 20161

Options on issue at date of Offer 8,500,000 11,000,000 1,350,000

Options to be issued as vendor consideration

2,250,000

Options to be issued to Pursuit Capital

500,000

Total Options on completion of Offer 8,500,000 11,000,000 3,600,000 500,000

1 Expiry date of options will be 5 years after the date of allotment.

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SECTION 1: Details of the Offer

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1.3 Indicative Timetable

Opening Date for Applications: 13 April 2011

Closing Date for Applications: 13 May 2011

Dispatch of Statements of Shareholdings: 19 May 2011

Quotation of Shares on ASX expected to commence: 26 May 2011

These dates are indicative only and may vary. Exterra reserves the right to close the Offer early, or extend the Closing Date without prior notice. Applicants are therefore encouraged to submit Applications as soon as possible after the Opening Date.

1.4 Shares Offered for Subscription Subject to Section 1.11, this Prospectus invites investors to apply for a total of 20,000,000 Shares at an issue price of 20 cents per Share to raise $4,000,000 before expenses of the Offer. Oversubscription of a further 15,000,000 Shares at an issue price of 20 cents each to raise up to a further $3,000,000 may be accepted. All Shares issued pursuant to this Prospectus will be issued as fully paid and will rank equally in all respects with the Shares already on issue.

Applications must be for a minimum of 10,000 Shares ($2,000) and thereafter in multiples of 2,000 Shares ($400), and can only be made by completing the Application Form attached to this Prospectus.

1.5 Minimum Subscription The minimum subscription to the Offer is 20,000,000 Shares raising $4,000,000 before expenses of the Offer. In accordance with the Corporations Act, no Shares will be allotted by the Company until the minimum subscription has been received.

If the minimum subscription is not achieved within 4 months after the date of this Prospectus, the Company will either repay the Application Monies to Applicants or issue a supplementary or replacement Prospectus and allow Applicants one month to withdraw their Applications and be repaid their Application Monies.

1.6 Purpose Of The Offer The purpose of the Offer is to provide Exterra with funding to prioritise and evaluate projects and identify potential acquisition opportunities.

Use of Funds over 2 years Minimum funds

$ Maximum funds

$ Pre-Offer cash and receivables $418,000

$418,000

Total raised in the Offer $4,000,000 $7,000,000 Total Funds Available $4,418,000 $7,418,000 Exploration Expenditure – Year 1

• Linden $550,000 $910,000

• Zelica $100,000 $420,000

• Egerton $200,000 $280,000

• Giant Well $50,000 $70,000

Exploration Expenditure – Year 2

• Linden $550,000 $1,050,000

• Zelica $300,000 $420,000

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• Egerton $200,000 $280,000

• Giant Well $50,000 $70,000 Exploration expenditure – sub total $2,000,000 $3,500,000

Expenses of the offer $398,200 $580,700 Reimbursement of vendor expenses $500,000 $500,000 Vendor consideration $200,000 $200,000 Interest on converting note $246,777 $246,777 Administration $1,053,166 $929,754

Unallocated working capital $19,857 $1,460,769

Total Funds Applied $4,418,000 $7,418,000

Notes:

1. It is the intention of the Company to allow the converting note to run its term and for the repayment to be satisfied by the issue of fully paid shares. However, the Board will monitor the progress of the Company going forward and, taking into account the prevailing market conditions and the state of the balance sheet, will periodically review the merits of paying out the note prior to expiry. If the Company is required to pay out the note before its expiry, this will be funded from working capital or from funds allocated for exploration and administration.

2. Exterra’s rights to the Tunza Tenements are limited to a right to acquire a 90% interest only. The Tunza Tenements (P39/2974, P39/2975 and P39/2976) form part of the Linden Project but are subject of plaints by Tunza Holdings Pty Ltd. The plaints seek the forfeiture of the Tunza Tenements. Haoma is required to use its best endeavours to defend those plaints, however, as those titles are at risk and could be subject to forfeiture, Exterra has not attributed any value, or committed any exploration funds, to the Tunza Tenements in this Prospectus.

3. Exterra’s rights to the Eucalyptus Tenements are limited to a right to earn an interest up to 80 - 90% only. The Eucalyptus Tenements are subject to actions for forfeiture and are therefore at risk of forfeiture. Exterra is not managing the legal action to defend the forfeiture of the Eucalyptus Tenements and cannot make any comment about the likelihood of that action being successful. Consequently, Exterra has not attributed any value, or committed any exploration funds to, the Eucalyptus Tenements in this Prospectus. If the Company is required to meet the minimum expenditure requirements on the Eucalyptus tenements in the first two years, this will be funded from funds allocated for other exploration or administration.

4. Exploration expenditures will be reviewed on an on-going basis, depending upon the progressive results of the proposed work programs.

The above table states the intended use of the funds raised by the Company as at the date of this Prospectus. However, it must be recognised that all exploration budgets may change as the conducted programs provide encouragement or disappointment and new opportunities may be identified elsewhere.

Further, it is the Company’s intention to increase and accelerate its exploration and drilling programs to achieve results as soon as practicable and, subject to encouraging results being obtained, to delineate resources. The Company may seek to raise additional funds within two years after listing on ASX to the extent

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16

required to increase and accelerate the exploration and drilling programs as determined by the Board.

Following the completion of the Offer, the Company will have sufficient working capital to carry out its stated objectives. 1.7 Underwriting The Offer is not underwritten.

1.8 Risks An investment in Exterra is speculative in nature. Risks associated with investments in exploration companies such as Exterra are generally considered high. Investment risks include share market volatilities, exploration and operating risks, risks associated with obtaining insurance, risks associated with achieving a commercial return, inability to satisfy future capital needs, inability to obtain environmental approvals, general economic climate changes, government regulation and policy changes, commodity and exchange rate volatilities, risks of losing key personnel, tenure risks and risks associated with obtaining access to land.

Investors are directed to Section 4 of this Prospectus which provides further details of the above risks and some other risks associated with making an investment in the Company.

1.9 Brokerage and Handling Fees The Company will pay the lead manager, Pursuit Capital (AFSL 339211), a commission of 6% on the total amount raised under the Offer. Out of the commission Pursuit may pay other Australian Financial Services Licence holders a fee for Applications bearing their stamp.

1.10 Cash Flow Projections Exterra is a gold exploration company. Given the speculative nature of exploration and gold development and production, there are significant uncertainties associated with forecasting future revenue. On this basis, the Directors believe that reliable forecasts cannot be prepared and accordingly have not included forecasts in this Prospectus.

1.11 Allotment and Allocation Of Shares Subject to ASX granting approval for the Company to be admitted to the Official List, the allotment of Shares to Applicants will occur as soon as possible after the Offer is closed, following which statements of shareholdings will be dispatched. It is the responsibility of Applicants to determine the number of Shares allotted to them prior to trading in Shares. Applicants who sell Shares before they receive their holding statements will do so at their own risk.

Pending the issue of the Shares, or return of the Application Monies, the Application Monies will be held in trust for the Applicants.

The Directors have the right to allocate Shares under the Offer. The Company may reject any Application or allocate any Applicant fewer Shares than applied for under the Offer.

If an Application is not accepted, or is accepted in part only, the relevant part of the Application Monies will be refunded. Interest will not be paid on Application Monies refunded.

1.12 Applicants outside Australia This Prospectus does not constitute an offer of securities in any jurisdiction where, or to any person to whom, it would not be lawful to issue the Prospectus or make the Offer. It is the responsibility of any Applicant who is resident outside Australia to ensure compliance with all laws of any country relevant to their Application, and any such

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Applicant should consult their professional advisers as to whether any government or other consents are required, or whether any formalities need to be observed to enable them to apply for and be allotted Shares.

No action has been taken to register or qualify the Shares or the Offer or otherwise to permit a public offering of the Shares in any jurisdiction outside Australia.

1.13 ASX Listing Within 7 days after the date of this Prospectus, application will be made for the Company to be admitted to the Official List and for the Shares offered by this Prospectus to be granted Quotation.

If approval for Quotation is not granted within 3 months after the date of this Prospectus, the Company will not allot or issue any Shares, and will repay all Application Monies without interest as soon as practicable.

ASX takes no responsibility for the contents of this Prospectus. The fact that ASX may admit Exterra to its Official List is not to be taken in any way as an indication of the merits of the Company or the Shares offered pursuant to this Prospectus.

1.14 CHESS and Issuer Sponsored Holdings Exterra will apply to participate in CHESS, operated by ASTC (a wholly owned subsidiary of ASX), in accordance with the Listing Rules and ASTC Settlement Rules. On admission to CHESS, the Company will operate an electronic issuer-sponsored subregister and an electronic CHESS subregister. The two subregisters together will make up the Company’s register of securities.

Under CHESS, the Company will not issue certificates to Shareholders. Instead, the Company will provide Shareholders with a holding statement (which is similar to a bank account statement) that sets out the number of Shares allotted to that Shareholder under this Prospectus.

This statement will also advise investors of either their Holder Identification Number in the case of a holding on the CHESS sub-register or Security Holder Reference Number in the case of a holding on the issuer–sponsored sub-register.

A statement will be routinely sent to holders at the end of any calendar month during which their holding changes. A holder may request a statement at any other time however a charge may be incurred for additional statements.

1.15 Taxation Implications The Directors do not consider that it is appropriate to give persons advice regarding the taxation consequences of subscribing for Shares under this Prospectus.

The Company, its advisers and its officers do not accept any responsibility or liability for any such taxation consequences to persons. As a result, persons should consult their professional tax adviser in connection with subscribing for Shares under this Prospectus.

1.16 Enquiries in Relation to the Offer This Prospectus provides information for potential investors in Exterra, and should be read in its entirety. If, after reading this Prospectus, you have any questions about any aspect of an investment in Exterra, please contact your stockbroker, accountant or independent financial adviser. Additional copies of the Prospectus or further advice on how to complete the Application Form can be obtained by contacting or visiting:

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Exterra Resources Limited 23 Altona St West Perth WA 6005 08 9481 7288 www.exterraresources.com.au

1.17 How to Apply Applications for Shares under the Offer can only be made on the Application Form attached to this Prospectus.

The Application Form must be completed in accordance with the instructions set out on the back of each Application Form. Completed Application Forms and accompanying cheques should, at any time after the Opening Date be:

Posted to: Exterra Resources Limited c/- Security Transfer Registrars Pty Ltd 770 Canning Highway Applecross WA 6153

Delivered to: Exterra Resources Limited c/- Security Transfer Registrars Pty Ltd 770 Canning Highway Applecross WA 6153

Cheques must be made payable to “Exterra Resources Limited – Trust Account” and crossed “Not Negotiable”.

No brokerage or stamp duty is payable by Applicants.

Applications must be for a minimum of 10,000 Shares ($2,000) and thereafter in multiples of 2,000 Shares ($400) at the issue price of 20 cents per Share.

1.18 Escrow Provisions Securities on issue as at the date of this Prospectus may be subject to the restricted securities provisions of the Listing Rules. Accordingly, a proportion of such securities may be required to be held in escrow for up to 24 months and may not be transferred, assigned or otherwise disposed of during that period. Agreements in respect of all such restricted securities have been or will be entered into in accordance with the Listing Rules and as required by ASX.

1.19 Electronic Prospectus This Prospectus is available on-line at www.exterraresources.com.au.

1.20 Privacy Disclosure The Company collects information in relation to each Applicant as provided on an Application Form (Information) for the purposes of processing the Application Form and, should the Application be successful, to administer the Applicant’s security holding in the Company (Purposes).

The Company may use the Information for the Purposes and the Company may disclose the Information for the Purposes to the Share Registrar, the Company’s related bodies corporate, agents, contractors and third party service providers, and to ASX, ASIC and other regulatory authorities.

The Information may also be used and disclosed to persons inspecting the register, including bidders for Shares in the context of take-overs, licensed securities dealers, mail houses, and regulatory bodies including the Australian Taxation Office.

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SECTION 2: Company Overview and the Projects

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2. COMPANY OVERVIEW AND THE PROJECTS 2.1 The Company Exterra was incorporated for the purpose of acquiring, exploring and developing mineral interests in Australia on 10 July 2009 as Exterra Resources Pty Ltd. It changed its name to Exterra Resources Limited on 12 February 2010.

In late 2009 the Company entered into four agreements with various vendors, giving the Company the rights to acquire between 90% and 100% of the tenements that make up the Linden project, 100% of the tenements that make up the Egerton project and 90% of the tenements that make up the Giant Well project, all located within Western Australia. In March 2011 the Company entered into an agreement giving the Company the rights to acquire 100% of the tenements that make up the Zelica project.

See Section 8.2 of this Prospectus for a full summary of the acquisition agreements.

The Company’s current projects are described in the Projects Overview in Section 2.3 of this Prospectus.

2.2 Corporate Objectives Exterra’s objective is to become a successful explorer, efficient miner, and reliable producer of gold.

The Company’s management strategy and purpose of this Offer is to provide Exterra with funding to:

• complete the acquisition of the projects;

• develop the high-grade underground gold deposits at the Linden project (Second Fortune mine) and Egerton project (Hibernian mine) ) and review the potential for vat leach and/or open pit mining at the Zelica project;

• expand and upgrade the existing resources at the Linden, Zelica and Egerton projects with infill and extension drilling and outline new resources with systematic exploration of current and new prospects;

• continue to identify new opportunities to acquire and/or discover and develop quality deposits via direct acquisition from internal cash-flow or via alliances to share risk; and

• provide working capital for the Company.

2.3 Projects Overview This section contains a brief summary of the Company’s projects. Potential investors are referred to in the Independent Geologist’s Report in Section 5 of this Prospectus, where the projects and exploration programs are outlined in detail.

Exterra has the rights to acquire an interest in the tenements on four projects covering 316 km2 of renowned mineral fields of Western Australia. The projects contain JORC Code Compliant Resources, one with proven historical production, and major geological structures prospective for further gold discoveries. Previous exploration work within the projects has recorded high grades of gold at or near the surface. Associated infrastructure and toll treatment options provide a near term gold production opportunity.

The Company’s targeting of high grade gold projects is based on identifying projects with current resources, resource potential and available infrastructure to provide near term, high margin production opportunities.

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On the basis of low sovereign risk and strong gold endowment, Exterra focussed project acquisition within Western Australia and within the Archaean Yilgarn and Proterozoic Gascoyne provinces.

(a) Linden Project (90 - 100% interest)

• Second Fortune prospect contains a JORC Code Compliant Resource of 207,000 Tonnes @ 7.9 g/t Au for 52,270 ozs with the potential to increase this resource with extensional drilling along strike and down dip. (Refer to Table A on page 9 of the Independent Geologist’s Report where the full list of Measured, Indicated and Inferred Resources are tabled).

• Second Fortune gold mine with historic production and infrastructure including shaft, camp, offices, water and power supply.

• Diamond drilling by Exterra during January 2011, with 5 holes completed (1,075m), intersected the Second Fortune mineralisation and confirmed the grade and location of the vein system with results including 0.3m @ 46.9 g/t Au, 0.6m @ 24.8 g/t Au, 0.7m @ 44.6 g/t Au.

• Second Fortune vein strikes over 600m and is open down plunge below 250m .

• Granted mining leases.

• Near term mine development potential with toll treatment opportunities.

• 2008 discovery of quartz vein systems of 800m and 1,100m strike at Quartz Ridge with chip sampling ranging up to 104 g/t Au, 1.55% Mo and untested by systematic drilling.

• Reconnaissance RC drilling by Exterra during 2010 at Linden, covering a broad area, targeting structural/geological sites or old workings reported results including 1m @ 37.1 g/t Au, 1m @ 97.4 g/t Au, 11m @ 6.7 g/t Au, 8m @ 9.5 g/t Au (from 89 drill holes, total 5,418m), which highlights the potential of the area, particularly as very little work has been done on the project in the last 10 years.

Table B below from the Independent Geologist’s Report summaries the Inferred Resource at varying Au grade cut offs for the Second Fortune prospect at Linden.

Table B Second Fortune Prospect: Summary of Inferred Resource at varying Au grade cut-offs

Cut-off g/t Au Tonnes Grade (g/t) Contained Ounce Au

2.0 250,000 7.0 56,430

4.0 207,000 7.9 52,270

6.0 127,000 9.6 39,230 For

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Exterra Resources Linden, Zelica and Giant Well project locations

Exterra owns the rights to acquire an interest in 100% of 10 granted mining leases and one granted exploration licences and 90% of three granted prospecting licences covering 44.80 km2 of the Linden Goldfield. The project is within approximately 86 km of Carosue Dam and 30 km of Sunrise Dam producing mines.

The tenements contain the Second Fortune prospect, a high grade, narrow vein system with gold mineralisation occurring within a sequence of northwest striking, steeply west dipping felsic volcanoclastics and shales. Gold mineralisation is associated with an arcuate narrow quartz vein (0.2m to 2.0m width) that has a strike of over 600m. Drilling to date has been over 250m of strike and to a maximum depth of 250m. .

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The main Second Fortune vein was mined in the late 1980’s and much of the surface and underground infrastructure remains in place, including a shaft, camp, water bores and power supply. The upper part of the vein has been developed over 300m of strike.

In early 2011 Exterra completed a 5 hole (1,075m) diamond drilling programme testing along the strike of the main Second Fortune vein to validate historic drilling (LNDD001 – LNDD005). Drilling returned encouraging results consistent with historical drilling with several intercepts containing visible gold.

Hole id From (m)

To (m)

Interval (m)

Au (g/t) Prospect

LNDD001 146.7 147.0 0.3 46.9 Second Fortune





For a full list of the significant assay results from the Second Fortune vein (>1g/t Au) see Table 4 on page 26 of the Independent Geologist’s Report.

Exterra propose to commence RC and diamond drilling immediately on listing at the Second Fortune prospect to upgrade and extend this JORC Code Compliant Resource and form the basis for mining studies and near term production.

In addition, RAB and RC drilling south and 200m west of the main Second Fortune vein has identified a new vein position. This steeply dipping, potentially 200m long striking vein has several narrow high grade intercepts (including 1m @ 10.1 g/t Au), and is sparsely drilled.

Much of the previous work within the Linden project area focussed on delineating large shallow (<50m deep) deposits amenable to open pit mining. Potential remains at Hill East/Sophisticated Lady to identify smaller near surface deposits that potentially could be mined as high grade open pits.

At the Quartz Ridge prospect, rock chip sampling and costeaning outlined two quartz vein systems of at least 800m and 1,100m strike respectively with observed gold grades up to 104 g/t Au and with molybdenum grades up to 1.55%. This area will also become an immediate target for further exploration.

In 2010, Exterra completed a preliminary RC drill program comprising of 5418 metres in 89 holes as a reconnaissance program to assess the overall exploration potential of the tenement package.

The project area was known for its high grade gold production from underground quartz reefs some of which reported grades greater than 0.5 oz to the tonne. The recent drilling has identified the potential for broader scale moderate grade open-pitable mineralisation.

The program covered a number of prospects, some 12km from north to south on the Linden Project area, testing various old workings, outcropping quartz veins and structural/geological targets. Very little work has been done on the Linden project until this recent drilling program.

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Significant results are summarised below:

Hole id From (m)

To (m)

Interval (m)

Au (g/t) Prospect

LNRC3 14 26 12 1.7 Mt Linden East

LNRC6 15 19 4 5.3 Ailsa

LNRC6 25 36 11 7.0 Ailsa

LNRC14 4 5 1 37.1 Wimmera

LNRC35 31 38 7 1.9 Burgess Luck

LNRC42 28 36 8 9.5 Cuckoo Hawk

LNRC42 38 40 2 11.3 Cuckoo Hawk

LNRC54 24 25 1 12.4 May Prince

LNRC76 23 24 1 97.4 Linden Star West

For a full list of the significant assay results from the Linden project area from Exterra’s 2010 RC drilling see Table 7 on page 29 of the Independent Geologist’s Report.

Refer to Figure 4 on page 22 of the Independent Geologist’s Report for a plan showing prospect locations.

Exterra’s rights to the Tunza Tenements (P39/2974-2976) are limited to a right to acquire a 90% interest only. The Tunza Tenements form part of the Linden Project but are subject of plaints by Tunza Holdings Pty Ltd. The plaints seek the forfeiture of the Tunza Tenements. Haoma is required to use its best endeavours to defend those plaints, however, as those titles are at risk and could be subject to forfeiture, Exterra has not attributed any value, or committed any exploration funds, to the Tunza Tenements in this Prospectus.

(b) Zelica Project (rights to acquire 100% interest)

• JORC Code Compliant Resource of 1.2 million tonnes @ 2.22 g/t Au for 85,700 ozs. (Refer to Table A on page 9 of the Independent Geologist’s Report where the full list of Measured, Indicated and Inferred Resources are tabled) on granted tenement EL39/578.

• The deepest mineralised intercepts are around 65 metres below surface and the structure appears to be open at depth. (4)

• Metallurgical test work indicates that recoveries in excess of 90% could be achieved by vat leaching.

• Vat leach ponds have been developed on site but not commissioned.

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Table C below from the Independent Geologist’s Report provides a summary of the JORC Code Compliant Resources on the Zelica Project.

The Zelica project is located only 20km to the north west of the Linden project and has identified mineralisation over a strike length of 900m with the deepest drilling intercepts at approximately 65 metres below surface and appearing to be open at depth.

Metallurgical test work in 2006 indicated that recoveries in excess of 90% could be obtained by vat leaching, with fast leach times and low reagent consumption. Plans were made to establish a 600,000 tpa Vat Leach operation, however the project was not implemented. Three vat ponds were built and remain on site for potential use.

Table C Zelica Project: Summary of Resources

Classification Tonnes Grade (g/t) Contained Ounce Au

Measured Resource (Zelica stockpile)

35,000 1.35 1,519

Measured Resource (Zelica pit)

155,000 2.53 12,609


TOTAL 1,187,656 2.24 85,664

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Zelica Project: Geology and License Areas

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(c) Egerton Project (rights to acquire 100% interest)

• Hibernian gold prospect contains a JORC Code Compliant Resource of 116,400 T @ 6.4 g/t Au for 23,811 oz. (Refer to Table A on page 9 of the Independent Geologist’s Report where the full list of Measured, Indicated and Inferred Resources are tabled).

• High grade intercepts within Hibernian resource include 2m @ 147.0 g/t Au, 5m @ 78.9 g/t Au and 5m @ 96.7 g/t Au in quartz veins.

• 48m deep shaft sunk during the 1990’s, available for access following refurbishment.

• Deposit only shallowly tested to 70 metres below surface, with potential for additional resources in repeated shoots below this level and along strike.

• Granted mining leases and exploration licences.

• Hibernian Shear Zone over 8 km in length and sparsely tested.

Table D below from the Independent Geologist’s Report provides a summary of the JORC Compliant Resource at Egerton.

Table D Hibernian Prospect, Egerton Project - Summary of Resources (2 g/t Au cut-off)





TOTAL 116,400 6.4 23,811

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Exterra Resources Egerton project location

Exterra owns the rights to acquire 100% of two granted mining leases and two granted exploration licences covering 179.59 km2 of the Lower Proterozoic Egerton inlier, located in the Gascoyne province 200 km north west of Meekatharra. The Gascoyne province hosts a number of major deposits including Peak Hill (>1 Moz), Fortnum-Labouchere (>1Moz) and the recently discovered Sandfire Resources NL’s Degrussa project (>0.4 Moz Au, 530Kt Cu).

The tenements contain the Hibernian prospect, a high grade, narrow vein system with gold mineralisation occurring within discrete quartz veins within a broader north-northeast striking zone of shearing and deformation within a mafic dominated host rock package. High grade mineralisation has been interpreted as being within elongate shoots up to 10m in dip extent, but continuous in strike extent up to 170m. Shoots often have observed grades >10 g/t Au. Outside of the high grade quartz shoots grades are generally less than 0.1 g/t Au .

The Hibernian deposit was mined in the late 1990’s, including the sinking of a shaft to 48m with total production from the Egerton field to date of approximately 8,500 ozs. The project may be suited to small scale, selective underground mining and, due to some of the high grade resources being within 20m of the surface, to high grade open pit mining.

The Hibernian deposit has only been explored to 70 metres below surface and there is potential to expand the current JORC Code Compliant Resource with drilling testing deeper extensions to known shoots and testing for new shoot positions. Exterra proposes to commence RC and diamond drilling immediately on listing to upgrade and extend this resource as the basis for mining studies and near term production.

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Within the Egerton project area there are other targets which will form the basis for the on-going exploration programme including the Hibernian shear zone, which extends for over 8 km of strike beyond the deposit and is poorly explored.

Prospects include Hibernian West (210m west of the Hibernian resource area) where limited drilling in 2004/5 returned 6m @ 3.36 g/t Au (25m), 4m @1.72 g/t Au. The prospect remains poorly tested and mineralisation is open at depth and along strike.

At the Western Deeps prospect 7 RC holes were drilled between 2004 and 2007, with the best intercept being 4m @ 3.22 g/t Au from 9m in a steeply dipping shear zone. At the Mako prospect, 3 km east of Hibernian, a strong gold soil anomaly is present over 1 km of strike.

At the Gaffney’s Find prospect, located 12 km west of the Hibernia prospect, a number of small shallow underground workings sit on an exposed mineralised shear zone, extending over 4 km, with intercepts including 4m @ 72.3 g/t Au from 22m and 5m @ 15.9 g/t Au from 49m. The area is intensely prospected at surface by dry blowing.

(d) Giant Well Project (90% interest) The Giant Well project covers a total area of 48 km2 and is located approximately 45 km north east of the town of Leonora,.

Key points include:

• 48 km2 of tenement holding as a granted exploration licence.

• Mineralised shear zone exceeding 500m identified at Cow Bell Dig prospect.

• Potential for further discoveries.

The project is located within the Murrin greenstone belt adjacent to the Keith-Kilkenny and Celia Tectonic Zones.

A mineralised shear zone has been identified by RAB drilling and incorporates the Cow Bell Dig prospect (500m strike) and continues to the north and south under alluvial and colluvial cover. Better results include 7m @ 3.91 g/t Au from 45m, 3m @ 11.4 g/t Au from 21m, 4m @ 2.23 g/t Au from 29m. For a full list of significant results from historial drilling at Giant Well, see Table 17 on page 51 of the Independent Geologist’s Report.

The project area is covered by widespread transported overburden, which has hampered previous exploration, but the potential exists for further shear-hosted gold mineralisation.

(e) Eucalyptus project (80% – 90% interest, subject to risk of forfeiture)

• JORC Code Compliant Resource of 973,000 tonnes @ 2.73 g/t Au for 88,500 ozs .

• Approximately 39 km2 of granted mining leases and prospecting licences located adjacent to the Zelica project.

• Exterra to assume rights and interests under joint venture agreement earning up to 80 – 90% interest in tenements.

• Acquisition is conditional on, amongst others, the resolution of forfeiture action on the tenements. The tenements are subject to application for forfeiture and

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are therefore at risk of forfeiture. Exterra is not managing the legal action to defend the forfeiture of the Eucalyptus Tenements and cannot make any comment about the likelihood of that action being successful. Consequently, Exterra has not attributed any value, or committed any exploration funds to, the Eucalyptus Tenements in this Prospectus.

• If the legal actions against the Eucalyptus Tenements are terminated or successfully defended whilst this Prospectus remains open, a supplementary Prospectus will be issued describing the Eucalyptus Tenements in more detail and allocating funds to their exploration.

2.4 Exploration Expenditure Summary The Company intends initially to fund its exploration activities from the proceeds of the Offer, as outlined in the table below and as presented in more detail in Table 18 on page 53 of the Independent Geologist’s Report in section 5 of this Prospectus. It should be noted that budgets were formulated on the basis of the recommendations from the Independent Geologist’s Report and will be subject to assessment and modification on an ongoing basis depending on progressive results. The Company will be continually reviewing all exploration activities, which may lead to increased or decreased levels of expenditure on certain interests reflecting a change in emphasis. Subject to the above, the following expenditure is proposed:

EXPLORATION EXPENDITURE SUMMARY – MINIMUM SUBSCRIPTION

Location Year 1 Year 2 Total Linden $550,000 $550,000 $1,100,000 Zelica $100,000 $300,000 $400,000 Egerton $200,000 $200,000 $400,000 Giant Well $50,000 $50,000 $100,000 Total $900,000 $1,100,000 $2,000,000

EXPLORATION EXPENDITURE SUMMARY – MAXIMUM SUBSCRIPTION

Location Year 1 Year 2 Total Linden $910,000 $1,050,000 $1,960,000 Zelica $420,000 $420,000 $840,000 Egerton $280,000 $280,000 $560,000 Giant Well $70,000 $70,000 $140,000 Total $1,680,000 $1,820,000 $3,500,000

Notes

1. In the event that the funds raised fall between the minimum and maximum subscription, expenditure will be allocated pro-rata on the bases of the expenditure tables above.

2. Exterra’s rights to the Tunza Tenements are limited to a right to acquire a 90% interest only. The Tunza Tenements form part of the Linden Project but are subject of plaints by Tunza Holdings Pty Ltd. The plaints seek the forfeiture of the Tunza Tenements. Haoma is required

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to use its best endeavours to defend those plaints, however, as those titles are at risk and could be subject to forfeiture, Exterra has not attributed any value, or committed any exploration funds, to the Tunza Tenements in this Prospectus.

3. Exterra’s rights to the Eucalyptus Tenements are limited to a right to earn an interest up to 80 - 90% only. The Eucalyptus Tenements are subject to actions for forfeiture and are therefore at risk of forfeiture. Exterra is not managing the legal action to defend the forfeiture of the Eucalyptus Tenements and cannot make any comment about the likelihood of that action being successful. Consequently, Exterra has not attributed any value, or committed any exploration funds to, the Eucalyptus Tenements in this Prospectus. If the Company is required to meet the minimum expenditure requirements on the Eucalyptus tenements in the first two years, this will be funded from funds allocated for other exploration or administration.

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SECTION 3: Board and Management

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3. BOARD AND MANAGEMENT 3.1 Board of Directors Peter Cunningham – Chairman Mr Peter Cunningham has a degree in Applied Science (Mining Engineering). Mr Cunningham has thirty years experience in mine development and operations. He was an Executive Director of Hill 50 Gold NL and Abelle Limited, and Managing Director of Bluestone Tin Limited in the period 1998 to 2005. Presently Mr Cunningham is Managing Director of Auvex Resources Limited and Chairman of Auvex Manganese Limited.

John Davis – Managing Director Mr John Davis is a Geologist with more than 30 years experience in mineral exploration and development in Australia and Southern Africa, including gold, base metals and rare metals. Mr Davis has extensive experience in the gold sector, from regional exploration, resource development to production, including as Exploration Manager/Chief Geologist for Metana Minerals NL. Mr Davis was founding Managing Director of Jabiru Metals Ltd, where he played a key role in the discovery of the Jaguar base metal deposit, and a Technical Director of Monarch Gold Mining Co Ltd.

Justin Brown – Non-Executive Director Mr Justin Brown is a geologist with extensive experience in minerals exploration in Australia, New Zealand and Africa. Mr Brown has a strong technical background with experience in mineral exploration and mining from grass roots target generation through to resource mining and mine production. Mr Brown’s successful career in the mining industry includes a position managing exploration for a large multinational company in the Leonora, Edjudina and Marvel Loch regions of Western Australia. Mr Brown has in recent years expanded his corporate involvement in the industry and is currently Managing Director of ASX listed company Montezuma Mining Company Limited.

Gary Morgan – Non-Executive Director Mr Gary Morgan is a businessman who has developed a substantial market research business now operating in Australia, New Zealand, USA, UK and Indonesia. Mr Morgan is Executive Chairman of Australia’s most highly regarded research company, Roy Morgan Research Pty Ltd, whose clients include major Australian companies, multi-national companies and institutions operating in Australia.

Mr Morgan is Chairman of Haoma Mining NL, which has mineral tenements located in the Marble Bar/Pilbara Region, Western Australia and at Ravenswood, Queensland.

Peter Cole – Non-Executive Director Mr Peter Cole has 35 years experience in the mining and processing industry, and has extensive knowledge of site management, processing and the research fields.

Mr Cole is currently the General Manager of Haoma Mining NL and Kitchener Mining NL.

3.2 Company Secretary Dennis Wilkins Mr Dennis Wilkins is an accountant who has been a director, company secretary or acted in a corporate consulting capacity to listed resource companies for over 20 years. Mr Wilkins is the principal of DWCorporate Pty Ltd which provides corporate advisory

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services to the exploration and mining sector. Mr Wilkins is a director of Key Petroleum Ltd and Minemakers Limited.

3.3 Corporate Governance The Board is responsible for the overall corporate governance of the Company, and it recognises the need for the highest standards of ethical behaviour and accountability. The Board is committed to administering its Corporate Governance structures to promote integrity and responsible decision-making.

The following policies and procedures have been implemented and are available in full on the company’s website at www.exterraresources.com.au.

• Board Charter;

• Audit Committee Charter;

• Remuneration Committee Charter;

• Nomination Committee Charter;

• Code of Conduct;

• Code of Conduct for Directors and Executives;

• Securities Trading Policy;

• Risk Management Policy;

• Shareholder Communication Policy;

• Continuous Disclosure Policy;

• Diversity Policy; and

• Directors Independence Questionnaire.

In accordance with the recommendations of the ASX, information published on the Company’s web site includes charters of the Board and its subcommittees, codes of conduct and other policies and procedures relating to the board and its responsibilities.

To the extent that they are relevant to the organisation, the Company has adopted the Eight Corporate Governance Principles and Best Practice Recommendations as published by the ASX Corporate Governance Council. Principle 1 – Lay solid foundations for management and oversight Recommendation 1.1: Companies should establish the functions reserved to the board and those delegated to senior executives and disclose those functions

The Board’s primary role is to represent shareholders and to promote and protect the interests of Exterra by governing the Company.

To fulfil this role the Board is responsible, amongst other things, for:

overseeing the Company’s commitment to the health and safety of employees and contractors, the environment and sustainable development;

overseeing the activities of the Company, including its control and accountability systems;

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appointing and removing the Managing Director, Company Secretary, and other senior executives, evaluating their performance, reviewing their remuneration and ensuring an appropriate succession plan;

setting the strategic objectives of the Company and monitoring its progress against those objectives;

reviewing, ratifying and monitoring systems of risk management and internal control;

setting the operational and financial objectives and goals for the Company;

ensuring that there are effective corporate governance policies and practices in place;

approving and monitoring budgets, capital management and acquisitions and divestments;

approving and monitoring all financial reporting to the market;

appointment of external auditors and principal professional advisors; and

formal determinations that are required by the Company’s constitutional documents or by law or other external regulation.

Beyond those matters, the Board has delegated all authority to the Managing Director for management of the Company’s business within any limits imposed by the Board.

Recommendation 1.2: Companies should disclose the process for evaluating the performance of senior executives

The company currently only employs one executive being the Managing Director. The Company has established a Remuneration Committee which is responsible for the evaluation of all senior executives.

Principle 2 – Structure the board to add value Recommendation 2.1: A majority of the board should be independent directors.

The board compromises five directors, four of whom are non-executive, however only the chair is classified as independent. The board believes that this is both appropriate and acceptable at this stage of the Company’s development

Recommendation 2.2: The chair should be an independent director.

The chair is independent.

Recommendation 2.3: The roles of chair and chief executive officer should not be exercised by the same individual.

These positions are held by separate persons.

Recommendation 2.4: The board should establish a nomination committee

Established and operates under the Nomination Committee Charter. The nomination committee’s main responsibilities include, but are not limited to:

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to implement processes to assess the necessary and desirable competencies of board members including, experience, expertise, skills and performance of the board and its committees;

to provide new directors with an induction to the Company; to provide all directors with access to ongoing education relevant to their

position in the Company; provide a succession plan for directors and Managing Director in order to

maintain an appropriate mix of skills, experience, expertise and diversity on the Board;

evaluate the performance of the managing director; review time required for non-executive directors to perform their duties; annually evaluate the performance and effectiveness of the Board to

facilitate the directors fulfilling their responsibilities in a manner that serves the interests of shareholders;

before recommending an incumbent, replacement or additional director, review his or her qualifications, including capability, availability to serve, conflicts of interest, and other relevant factors and record that review and recommendation in the minutes;

assist in identifying, interviewing and recruiting candidates for the Board including reviewing whether professional intermediaries should be used to identify candidates;

annually review and report to the Board on the proportion of women at all levels of the Company; and

annually review the composition of each committee and present recommendations for committee memberships to the Board as needed.

Recommendation 2.5: Companies should disclose the process for evaluating the performance of the board, its committees and individual directors.

Disclosed under the Nomination Committee Charter, which is available on the company’s website.

Principle 3 – Promote ethical and responsible decision-making Recommendation 3.1: Companies should establish a code of conduct and disclose the code

The board has established a Code of Conduct for Directors and Executives and a general Code of Conduct which all employees and directors are expected, at a minimum to follow. The Code of Conduct categorises five main areas:

• the treatment each other with respect and dignity; • respect for the law and acting accordingly; • fairness and honest in our dealings; • use of the Company’s property responsibly and in the best interest of the

Company and its reputation; and • responsibility for our actions and accountability for their consequences.

Recommendation 3.2: Companies should establish a policy concerning diversity and disclose the policy or a summary of that policy. The policy should include requirements for the Board to establish measurable objectives for achieving gender diversity and for the Board to assess annually both the objectives and progress in achieving them.

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Recommendation 3.3: Companies should disclose in each annual report the measurable objectives for achieving gender diversity set by the Board in accordance with the diversity policy and progress towards achieving them. The Company has established a Diversity Policy, however, the policy does not include requirements for the board to establish measurable objectives for achieving gender diversity. Given the Company’s size and stage of development as an exploration company, the board does not think it is yet appropriate to include measurable objectives in relation to gender. As the Company grows and requires more employees, the Company will review this policy and amend as appropriate.

Recommendation 3.4: Companies should disclose in each annual report the measurable objectives for achieving gender diversity set by the Board in accordance with the diversity policy and progress towards achieving them. The Company will be complying with this recommendation in each annual report.

Principle 4 – Safeguard integrity in financial reporting Recommendation 4.1: The board should establish an audit committee Recommendation 4.2: The audit committee should be structured so that it:

o consists only of non-executive directors

o consists of a majority of independent directors

o is chaired by an independent chair, who is not chair of the board

o has at least three members

Recommendation 4.3: The audit committee should have a formal charter

Exterra has established an Audit Committee consisting of the Company Secretary and three non-executive directors, only one of whom is classified as independent. As there is only one independent director, it is not possible to have an independent chair that is not chair of the board. The Audit Committee operates under the Audit Committee Charter which lists the main responsibilities of the Committee, being:

review the annual, half-year and concise (if any) financial reports and other financial information distributed externally, including new accounting policies to ensure compliance with International Accounting Standards and generally accepted accounting principles;

monitor corporate risk assessment processes;

consider whether non-audit services provided by the external auditor are consistent with maintaining the external auditor's independence. The external auditor is to provide an annual declaration of independence;

review the nomination and performance of the external auditor;

monitor the establishment of appropriate ethical standards; monitor the procedures to ensure compliance with the Corporations Act and

the ASX Listing Rules and all other regulatory requirements; address any matters outstanding with auditors, Australian Taxation Office,

Australian Securities and Investments Commission, ASX Limited and financial institutions;

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review the performance of the external auditors on an annual basis and meets with them during the year as follows: to discuss the external audit, identifying any significant changes in

structure, operations, internal controls or accounting policies likely to impact the financial statements and to review the fees proposed for the audit work to be performed;

to review the half-year and preliminary final report prior to lodgement with the ASX, and any significant adjustments required as a result of the auditor's findings;

recommend Board approval of these documents and to finalise half-year and annual reporting;

review the results and findings of the auditor, the adequacy of accounting and financial controls and to monitor the implementation of any recommendations made;

review the draft financial report and recommend Board approval of the financial report; and

organise, review and report as required on any special reviews or investigations deemed necessary by the Board.

Principle 5 – Make timely and balanced disclosure Recommendation 5.1: Companies should establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance

Exterra has adopted a Continuous Disclosure Policy, a copy of which is available on the Company’s website

The policy aims to:

• ensure that the Company, as a minimum, complies with its continuous disclosure obligations under the Corporations Act and ASX Limited Listing Rules and as much as possible seeks to achieve and exceed best practice;

• provide shareholders and the market with timely, direct and equal access to information issued by the Company; and

• promote investor confidence in the integrity of the Company and its securities.

Principle 6 – Respect the rights of shareholders Recommendation 6.1: Companies should design a communications policy for promoting effective communication with shareholders and encouraging their participation at general meetings.

The Company has a Shareholder Communication Policy, a copy of which is available on the Company’s website. The Policy specifically encourages full participation of shareholders at the Annual General Meeting to ensure a high level of accountability and identification with the Company’s strategy and goals and outlines the various ways in which the Company communicates with shareholders.

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Principle 7 – Recognise and manage risk Recommendation 7.1: Companies should establish policies for the oversight and management of material business risks

The Company has established a Risk Management Committee to monitor and review on behalf of the Board the system of risk management which the Group has established. This system aims to identify, assess, monitor and manage operational and compliance risks.

Recommendation 7.2: The board should require management to design and implement the risk management and internal control system to manage the company’s material business risks and report to it on whether those risks are being managed effectively.

The Risk Management Committee determines the Group’s ‘risk profile’ and is responsible for overseeing and approving risk management strategy and policies, internal compliance and non-financial internal control.

The Committee will report to the Board on this system of risk management and make appropriate recommendations to ensure the adequacy of the system.

Recommendation 7.3: The board should disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief financial officer (or equivalent) that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks

When required, the Board will receive written assurances from the CEO and CFO (or equivalent) in relation to the above statement.

Principle 8 – Remunerate fairly and responsibly

Recommendation 8.1: The board should establish a remuneration committee.

Recommendation 8.2: The Remuneration Committee should be structured so that it:

o consists of a majority of independent directors;

o is chaired by an independent director;

o has at least three members.

Recommendation 8.3: Companies should clearly distinguish the structure of non-executive directors’ remuneration from that of executive directors and senior executives.

Exterra has established a Remuneration Committee consisting of three non-executive directors, only one of whom is classified as independent. As there is only one independent director, it is not possible to have an independent chair that is not chair of the board.

The Remuneration Committee operates under the Remuneration Committee Charter. The Charter states that no executive is to be directly involved in deciding their own remuneration and that, when making recommendations to the Board, the Committee should clearly distinguish the structure of non-executive director’s remuneration from

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that of executive directors and senior executives. The Charter lists the main responsibilities of the Committee as follows:

• assist the Board in fulfilling its responsibilities in respect of establishing appropriate remuneration levels and policies including incentive policies for directors and senior executives;

• assess the market to ensure that senior executives are being rewarded commensurate with their responsibilities;

• obtain the best possible advice in establishing salary levels;

• set policies for senior executives’ remuneration;

• review the salary levels of senior executives and make recommendations to the Board on any proposed increases;

• review recommendations from the Managing Director relating to proposed merit increases;

• propose, for full Board approval, the terms and conditions of employment for the managing director;

• undertake a review, which will be reported to and confirmed by the full Board, of the Managing Director’s performance, at least annually, including setting the Managing Director goals for the coming year and reviewing progress in achieving those goals;

• review, and report to the Board, recommendations from the Managing Director on each senior executive’s performance evaluations;

• set the criteria for negotiating any enterprise bargain agreement;

• review the Company’s recruitment, retention and termination policies and procedures for senior management;

• review and make recommendations to the Board on the Company’s incentive schemes;

• review and make recommendations to the Board on the Company’s superannuation arrangements; and

• review the remuneration of both executive and non-executive Directors and make recommendations to the Board on any proposed changes.

The Board will consider on an ongoing basis its Corporate Governance procedures and whether they are sufficient as the Company’s activities develop in size, nature and scope.

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SECTION 4: Risk Factors

39

4. RISK FACTORS

An investment in Exterra is speculative and prospective investors in the Company should consider the risk factors described in this Section, together with the information contained elsewhere in this Prospectus, before deciding whether to apply for Shares. The risk factors outlined in this Section should not be taken as an exhaustive list of the risk factors to which the Company and its Shareholders are exposed.

4.1 Economic resources may not be discovered Gold and base metals exploration and development is a high-risk undertaking.

There can be no assurance that exploration of existing and acquired projects or any other exploration properties that may be acquired in the future will result in the discovery of an economic resource. Even if an apparently viable resource is identified, there is no certainty that it can be economically exploited.

4.2 Investment Risks The business activities of the Company are subject to various risks that may impact on the future performance of the Company. 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.

There are a number of investment risk factors that investors should consider and seek independent advice on, before deciding whether or not to invest in Shares. Such factors include, but are not limited to, the following:

(a) External economic factors may negatively impact prospects Changes in the general economic climate in which the Company operates may adversely affect the financial performance of the Company. Factors which contribute to that general economic climate include contractions in the world economy or increases in the rate of inflation resulting from domestic or international conditions (including movements in domestic interest rates and reduced economic activity), the level of direct or indirect competition against the Company, international currency fluctuations, new or increased government taxes or duties or changes in taxation laws and changes in government regulatory policy.

The demand for, and price of, commodities is highly dependent on a variety of factors, including international supply and demand, the level of consumer product demand, weather conditions, the price and availability of alternative commodities, actions taken by governments and international cartels, and global economic and political developments. Commodity prices have fluctuated widely in recent years and may continue to fluctuate significantly in the future. Fluctuations in commodity prices and, in particular, a material decline in the price of commodities may have a material adverse effect on the Company's business, financial condition and results of operations.

Revenue and expenditure of the Company may be domiciled in currencies other than Australian dollars and as such expose the Company to foreign exchange movements, which may have a positive or

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negative influence on the Australian dollar equivalent of such revenue and expenditure.

There may be material changes to government policies or legislation affecting the level of mining and exploration activities. In particular, there may be changes as a result of the Commonwealth government’s proposed resources super profits tax and changes to State imposed royalties.

The Company will appropriately monitor and assess such risks and may from time to time implement measures, such as foreign exchange currency hedging, to assist manage these risks. However, the implementation of such measures may not eliminate all such risks and the measures themselves may expose the Company to related risks.

(b) The overall share market may negatively impact an investment in the Company The market price of the Shares may fall as well as rise and may be subject to varied and unpredictable domestic and international influences on the market for equities in general. This may also affect the Company’s ability to raise development capital.

(c) Acts of terrorism and outbreak of international hostilities may negatively impact prospects Acts of terrorism or an outbreak of international hostilities may adversely affect the operations of the Company or more generally the operation of global markets, including the stock market.

(d) Successful development of projects may not occur The business of exploration, project development and mining contains risks by its very nature. To prosper, it depends on the successful exploration and/or acquisition of reserves, design and construction of efficient production/processing facilities, competent operation and managerial performance and proficient marketing of the product. In particular, exploration is a speculative endeavour and force majeure circumstances, cost overruns and other unforeseen events can hamper mining operations. No assurances can be given that if mineral reserves are discovered the Company will be able to profitably develop such reserves as intended.

(e) The Company may be unable to obtain environmental approvals The Company's exploration programs will, in general, be subject to approval by state and federal governmental authorities. Although the Company believes that it is in compliance in all material respects with all applicable environmental laws and regulations, there are certain risks inherent to its activities, such as accidents or other unforeseen circumstances, which could subject the Company to extensive liability. Further, the Company may require approval from the relevant authorities before it can undertake activities which are likely to impact the environment. Failure to 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 which may be adopted in the future, including whether any such laws or regulations would materially increase the

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Company's cost of doing business or affect its operations in any area. The Company believes that it is in material compliance with all applicable laws relating to the protection of the environment. However, there can be no assurances that new environmental laws, regulations or stricter enforcement policies, once implemented, will not oblige the Company to incur significant expenses and undertake significant investments in such respect which could have a material adverse effect on the Company's business, financial condition and results of operations.

(f) Operating risks may negatively impact exploration activities Mineral exploration activities are subject to numerous risks, many of which are beyond the Company's control. The Company's operations may be curtailed, delayed or cancelled as a result of weather conditions, mechanical difficulties, shortage or delays in the delivery of equipment and compliance with governmental requirements.

Industry operating risks include the risk of environmental hazards, the occurrence of which could result in substantial losses to the Company due to injury or loss of life, severe damage to or destruction of property, natural resources and equipment, pollution or other environmental damage, cleanup responsibilities, regulatory investigation and penalties and suspension of operations. Damages occurring as a result of such risks may give rise to claims against the Company. Although the Company believes that it or the operator will carry adequate insurance with respect to its operations in accordance with industry practice, in certain circumstances the Company's or the operator's insurance may not cover or be adequate to cover the consequences of such events. Moreover, there can be no assurance that the Company will be able to maintain adequate insurance in the future at rates that it considers reasonable.

(g) The Company may be unable to realise value from its projects The operations of the Company may be affected by various factors, including failure to locate or identify mineral deposits; if mineral deposits are identified and developed, failure to achieve predicted grades in 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.

No assurances can be given that Exterra will achieve commercial viability through the successful exploration and/or mining of its tenement interests. Until Exterra is able to realise value from its projects, it is likely to incur ongoing operating losses.

(h) The Company may not be able to secure insurance The Company intends to insure its operations in accordance with industry practice. However, 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

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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.

(i) A commercial return may not be achievable Even if the Company discovers commercial quantities of minerals, there is a risk that the Company will not achieve a commercial return. The Company may not be able to transport the minerals at a reasonable cost or may not be able to sell the minerals to customers at a price which would cover its operating and capital costs. The Company has to receive regulatory and environmental approval to convert its exploration licenses into mining leases. There is a risk that these approvals may not be obtained.

(j) Failure to meet payment obligations may result in dilution or forfeiture Under the tenement conditions and certain other contractual agreements to which the Company is or may in the future become party, the Company is or may become subject to payment and other obligations. In particular, the tenement owners are required to expend the funds necessary to meet the minimum expenditure commitments attaching to the tenements. Failure to meet these commitments will render the tenements liable to be cancelled. Further, if any contractual obligations are not complied with when due, in addition to any other remedies which may be available to the other parties, this could result in dilution or forfeiture of interests held by the Company. The Company may not have, or be able to obtain, financing for all such obligations as they arise.

(k) Resource estimates may be inaccurate 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. 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.

In addition, a number of assumptions have been used by the Independent Geologist in the Independent Geologist’s Report. If any of these assumptions are incorrect, whether positive or negative, this will have an effect on any estimates which have been made. Investors must read these assumptions in detail in order to fully understand the manner in which the estimates have been arrived at.

(l) Access to land may be stopped Interests in mineral tenements in Australia are governed by State legislation and are evidenced by the granting of licenses or leases. Each license or lease is for a specific term and carries with it annual

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expenditure and reporting commitments, as well as other conditions requiring compliance.

Consequently, the Company could lose title to or its interest in tenements if license conditions are not met or if insufficient funds are available to meet expenditure commitments.

It is also possible that, in relation to tenements in which the Company has or may in the future acquire an interest there may be areas over which legitimate common law native title rights of Aboriginal Australians exist. If native title rights do exist, the ability of the Company to gain access to tenements (through obtaining consent of any relevant landowner), or to progress from the exploration phase to the development and mining phases of operations may be adversely affected.

The Directors will closely monitor the potential effect of native title claims involving tenements in which the Company has or may have an interest.

Reference should be made to the relevant section of the Solicitor’s Report on Tenements set out in Section 7 of this Prospectus for information on the issue of title and a description of the native title regime.

(m) The Company may not be able to secure additional capital if required The Company’s capital requirements depend on numerous factors. Depending on the Company’s ability to generate income from its operations, the Company may require further financing in addition to amounts raised under the capital raising. 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, it may be required to reduce the scope of its operations and scale back its exploration programs as the case may be.

(n) Joint venture parties and contractors may go bankrupt The Directors are unable to predict the risk of financial failure or default by a participant in any joint venture to which the Company may become a party, insolvency or other managerial failure by any of the contractors used by the Company in its exploration activities.

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

(p) Industrial disputes may prevent exploration and production The Company’s projects and businesses may be adversely impacted by industrial disputes by employees of the Company, its contractors, its contract counterparties and/or other third parties. The Company will endeavour to provide working conditions, including salaries, which are consistent with best industry practice for the country and/or region in

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which it conducts its project and businesses. The Company will also endeavour to ensure its contractors and contract counterparties also adopt such practices. However, the risk of industrial disputes and the potential negative impact on a project or business of the Company cannot be fully mitigated.

4.3 Specific risks associated with the Company There are also a number of specific risks associated with the Company which may adversely affect the Company’s financial position, prospects and price of its listed securities. In particular, the Company is subject to risks relating to the exploration and development of mineral properties which are not generally associated with other businesses.

Set out below are specific risks that may adversely affect the Company:

(a) the Company cannot guarantee that those tenements in which it has an interest and which are still in the application stage will ultimately be granted in whole or in part pursuant to the applicable legislation;

(b) the Western Australian Department of Mines and Petroleum (Department) from time to time reviews the environmental bonds that are placed on tenements. The Directors are not in a position to state whether a review is imminent or whether the outcome of such a review would be detrimental to the funding needs of the Company; and

(c) the proposed exploration expenditures described in the Section 2.4 of this Prospectus 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 the cost estimates and the underlying assumptions will be realised in practice, which may materially and adversely affect the Company’s viability.

4.4 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 Shares offered under this Prospectus.

Therefore, the Shares to be issued pursuant to this Prospectus carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those Shares.

Potential investors should consider that the investment in the Company is speculative and should consult their professional advisers before deciding whether to apply for Shares in the Company.

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INDEPENDENT GEOLOGIST‟S REPORT

on the

Mineral Properties in Western Australia

for


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4 April 2011

The Directors Exterra Resources Limited 16 Ogilvie Road Mount Pleasant Western Australia Dear Sirs

Independent Geologist’s Report on the mineral assets of Exterra Resources Limited

Corvidae Pty Ltd as Trustee for Ravensgate Unit Trust Trading as Ravensgate („Ravensgate‟) has been commissioned by Exterra Resources Limited (ACN 138 222 705) („Exterra‟) to provide an Independent Geologist‟s Report on the Company‟s projects in Western Australia. This report is to be included in a prospectus („Prospectus‟) to be lodged by Exterra with the Australian Securities and Investments Commission („ASIC‟), offering for subscription up to 20 Million fully paid ordinary shares in Exterra at an issue price of $0.20 per share, to raise a total of up to $4 million (before costs associated with the issue). Should the offer be over-subscribed then Exterra will issue up to a further 15 Million fully paid ordinary shares to raise an additional $3 million. The funds raised will be used for the purpose of exploration, evaluation and development of Exterra‟s mineral properties. This review is based on information provided by the title holders along with technical reports by consultants, previous tenement holders and other relevant published and unpublished data for the tenement areas concerned. A listing of the principal sources of information is included in this report. Ravensgate has endeavoured, by making all reasonable enquiries, to confirm the authenticity, accuracy and completeness of the technical data upon which this report is based. Exterra was given a final draft of this report and thereby given an opportunity to identify any material errors or omissions in it. Ravensgate has not verified the status of tenure or any related access issues, which has been addressed elsewhere in the Prospectus. Exterra provided Ravensgate with detailed information including numerous technical reports relating to the various mineral properties. Ravensgate has made all reasonable enquiries to verify the exploration data and associated information provided by Exterra. This report has been prepared in accordance with the rules and guidelines issued by such bodies as the Australian Securities Exchange („ASX‟), and the ASIC which pertain to Independent Expert Reports. If statements made in this report have been attributed to third parties, Ravensgate has endeavoured where possible to make all reasonable enquiries to ensure that consent has been obtained and not withdrawn before lodgement of the Prospectus with ASIC. In consideration of the definition and guidelines provided by the ASX and in the JORC Code, these properties are classified as exploration projects which are inherently speculative in nature. The properties are considered to be sufficiently prospective, although subject to varying degrees of risk, to warrant further exploration and development of their economic potential consistent with the programs proposed by Exterra. Exterra intends to raise $4 million (and up to $7 million should the offer be over-subscribed) of which at least half is understood to be committed to the exploration and development of their mineral properties. Ravensgate considers the proposed exploration program to be consistent with

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the status and mineral potential of the projects. The planned exploration expenditure is considered to be sufficient to meet the costs of the exploration program and is adequate to meet the statutory annual expenditure for the tenements. This independent geologist‟s report has been compiled based on information available up to and including the date of this report. Consent has been given for the distribution of this report in the form and context in which it appears. Ravensgate and its employees are not, nor intend to be, directors, officers or employees of Exterra and have no material interest in any of the projects or Exterra. The relationship with Exterra is solely one of professional association between client and independent consultant. The review work and this report are prepared in return for professional fees based upon agreed commercial rates and the payment of these fees is in no way contingent on the results of this Report. Yours faithfully

Don Maclean For and on behalf of: RAVENSGATE

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INDEPENDENT GEOLOGIST‟S REPORT

on the

Mineral Properties in Western Australia

for


4 April 2011

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INDEPENDENT GEOLOGIST’S REPORT

Prepared by RAVENSGATE on behalf of:

Exterra Resources Limited

Author(s): Don Maclean Principal Consultant MSc (Hons) Geology, MAIG, MSEG

H. Kate Holdsworth Senior GIS Geologist BSc (Hons) Geology, MAusIMM

Reviewer: Stephen Hyland Principal Consultant BSc (Geol), MAusIMM, CIMM, GAA, MAICD.

Date: 4 April 2011

Copies: Exterra Resources Limited (2)

Ravensgate (1)

_______________________ Don Maclean For and on behalf of: RAVENSGATE

This document has been prepared for the exclusive use of Exterra Resources Limited and the information contained within it is based on instructions, information and data supplied by them. No warranty or guarantee, whether expressed or implied, is made by Ravensgate with respect to the completeness or accuracy of this document and no party, other than the client, is authorised to or should place any reliance whatsoever on the whole or any part or parts of the document. Ravensgate does not undertake or accept any responsibility or liability in any way whatsoever to any person or entity in respect of the whole or any part or parts of this document, or any errors in or omissions from it, whether arising from negligence or any other basis in law whatsoever.

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TABLE OF CONTENTS

1. EXECUTIVE SUMMARY ................................................................................................ 9

1.1 INTRODUCTION ............................................................................................. 9

1.2 LINDEN GOLD PROJECT ................................................................................. 10

1.3 ZELICA GOLD PROJECT .................................................................................. 11

1.4 EGERTON GOLD PROJECT............................................................................... 12

1.5 GIANT WELL PROJECT ................................................................................... 12

1.6 CORPORATE STRATEGY ................................................................................. 13

2. INTRODUCTION ...................................................................................................... 14

2.1 Terms of Reference ..................................................................................... 14

2.2 Qualifications, Experience and Independence ...................................................... 14

2.3 Principal Sources of Information ...................................................................... 15

2.4 Background Information ................................................................................ 15

2.5 Tenure ..................................................................................................... 16

2.6 Project Background ...................................................................................... 16

3. LINDEN PROJECT .................................................................................................... 21

3.1 Location and Access ..................................................................................... 21

3.2 Tenure ..................................................................................................... 21

3.3 Geology and Mineralisation ............................................................................ 21

3.4 Historic Production ...................................................................................... 23

3.5 Exploration History ...................................................................................... 23

3.6 Recent Exploration ...................................................................................... 23

3.7 Resources .................................................................................................. 31

3.8 Exploration Potential .................................................................................... 32

4. ZELICA PROJECT .................................................................................................... 35


4.2 Tenure ..................................................................................................... 35





5. EGERTON PROJECT ................................................................................................. 41


5.2 Tenure ..................................................................................................... 41





6. GIANT WELL PROJECT ............................................................................................. 47


6.2 Tenure ..................................................................................................... 47


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7. EXPLORATION STRATEGY AND BUDGET ........................................................................ 52

8. REFERENCES ......................................................................................................... 54

9. GLOSSARY OF TECHNICAL TERMS ............................................................................... 57

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LIST OF TABLES

Table A Exterra Resources - Summary of JORC (2004) Resources (1 Ravensgate 2011 estimate using a 5 g/t Au cut-off, 2 Regal Resources 2007 estimate, 3 Resource Evaluations 2005 estimate using a 2 g/t Au cut-off) ................................................................................................................ 9

Table B Second Fortune Prospect: Summary of Inferred Resource at varying Au grade cut-offs ........... 10

Table C Zelica Project: Summary of Resources ...................................................................... 11

Table D Hibernian Prospect, Egerton Project - Summary of Resources (2 g/t Au cut-off) ................... 12

Table 1 Exterra Resources Pty Ltd Tenement Schedule ........................................................... 17

Table 2 Linden Project – Historic Gold Production .................................................................. 23

Table 3 Second Fortune Prospect: Exploration History ............................................................ 25

Table 4 Second Fortune Prospect – significant assay results from the Second Fortune Vein (>1 g/t Au) . 26

Table 5 Linden Project: Exploration History ......................................................................... 27

Table 6 Significant Historic Assay Results – Linden Project Area (>2 g/t) ...................................... 28

Table 7 Significant Assay Results – Linden Project Area – Exterra 2010 RC Drilling (>1g/t Au) ............. 29

Table 8 Second Fortune Prospect: Summary of Inferred Resource at varying Au grade cut-offs ........... 31

Table 9 Zelica Project: Exploration History ......................................................................... 37

Table 10 Significant RC, RAB, AC and Diamond drilling results from historical drilling at the Zelica Project (>2g/t Au) .............................................................................................................. 38

Table 11 Zelica Project: Summary of Resources ...................................................................... 39

Table 12 Egerton Project: Exploration History ....................................................................... 43

Table 13 Hibernian Prospect, Egerton Project: Summary of Resources (2.0 g/t Au cut-off) ................. 44

Table 14 Significant results (>10 g/t Au) from historical drilling at the Egerton Project – Hibernian Prospect ................................................................................................................. 45

Table 15 Significant results (>10 g/t Au) from historical drilling at the Egerton Project – Gafney’s Find Prospect ................................................................................................................. 46

Table 16 Giant Well Project: Exploration History ................................................................... 49

Table 17 Significant results from historical drilling at the Giant Well Project ................................ 51

Table 18 Exterra Exploration Budget ................................................................................... 53

LIST OF FIGURES

Figure 1 Locality Map of Exterra’s West Australian Gold Projects ............................................... 18

Figure 2 Locality Map of Exterra’s Eastern Goldfields projects .................................................. 19

Figure 3 Locality Map of Exterra’s Egerton Project (after NGM, 2004) ......................................... 20

Figure 4 Linden Project Location and Geology ......................................................................... 22

Figure 5 Linden Project – Exterra 2010 RC Drilling Program Significant Results (>10 gram*metres) ...... 30

Figure 6 Second Fortune Long Section ................................................................................. 34

Figure 7 Zelica Project: Geology and License Areas ................................................................ 36

Figure 8 Egerton Location and Geology (after NGM, 2004) ........................................................ 41

Figure 9 Hibernian Prospect – Long Section looking north (after NGM, 2004).................................. 46

Figure 10 Giant Well Project: Location and Geology (after Legendre, 2009) .................................. 48

Figure 11 Drilling at Cowbell Dig Prospect (after Legendre, 2009) ............................................... 50

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1. EXECUTIVE SUMMARY

1.1 INTRODUCTION

Ravensgate was requested by Exterra Resources Limited (Exterra), to complete an Independent Geologist‟s Report on its mineral assets in Western Australia. Exterra is seeking to list on the Australian Securities Exchange (ASX) in order to raise working capital to fund the future technical assessment of its Australian projects. Exterra have indicated that their corporate focus is on the exploration and development of small to medium sized high grade, high margin, gold deposits that have near term potential to be developed and fund future growth of the company. Exterra has four gold projects located in the Eastern Goldfields and Gascoyne regions of Western Australia. Three of these projects (Linden, Zelica, Egerton) have JORC (2004) reported resource

estimates (Table A).

Table A Exterra Resources - Summary of JORC (2004) Resources (1 Ravensgate 2011 estimate using a 4 g/t Au cut-off, 2 Regal Resources 2007 estimate, 3 Resource Evaluations

2005 estimate using a 2 g/t Au cut-off)

Prospect

Linden Project

Classification Tonnes Grade (g/t Au) Contained Ounces

Au

Second Fortune1

Measured Resource - - -



Total 207,000 7.9 52,270

Zelica2

Zelica Project




Total 1,187,656 2.2 85,664

Hibernian3

Egerton Project




Total 116,300 6.4 23,811

All

TOTAL - All Projects



Inferred Resource 1,242,456 3.3 129,975

Total 1,510,956 3.3 161,745

The majority of Exterra‟s gold projects lie within the Achaean Yilgarn Craton in a 700km belt of elongate deformed and folded mafic, ultramafic rocks and volcanic sediments intruded by granitoids which is referred to as the Norseman-Wiluna Belt. This world class gold province has been a prolific producer of gold since its discovery in the late 1800s from numerous reported

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deposit areas. The largest and most famous is the Kalgoorlie “Golden Mile” deposit, which has produced over 50 Million ounces of gold since its discovery in 1893. Most gold deposits within the belt are of orogenic lode-gold style, with gold understood to be sourced from metamorphic derived fluids with mineralisation occurring late in the deformation history. Gold mineralisation occurs in many different host rocks, although it is more commonly hosted within mafic

lithologies, and it is invariably associated with quartz veining and / or shear zones (Witt, 1997).

1.2 LINDEN GOLD PROJECT

Exterra‟s Linden Gold Project lies at the southern end of the highly gold endowed Laverton Tectonic Zone which lies on the eastern margin of the Norseman-Wiluna Belt. The Laverton Tectonic Zone hosts a number of world class gold deposits including Wallaby, Granny Smith and Sunrise Dam. The Linden Project comprises the majority of the historic Linden Goldfield, which produced over 34,500 ounces of gold from a number of small high grade mines during the last century. Exterra have indicated that their initial focus will be on the Second Fortune prospect where there is potential to develop a small underground operation. This narrow high grade vein was discovered and mined by open pit and a shallow underground mine in the 1980s. The upper portions of the vein (down to 65 metres below surface) has been developed over 300 metres of strike, and drilling indicates the vein extends to 250 metres below surface and is open at depth. Observed better drill intercepts include 0.5m at 40.7 g/t Au, 1.6 m at 12.3 g/t Au, 1.4 m at 10.3 g/t Au and 0.5 m at 22.3 g/t Au. Recently (2011) Exterra completed a 5 hole (1,075m) diamond drilling program testing along the strike of the main Second Fortune Vein to validate historic drilling. Drilling returned results consistent with historical drilling with several intercepts containing visible gold. Better intersections returned from this drilling program include 0.3m at

46.9 g/t Au, 0.6m at 24.8 g/t Au, 0.7m at 44.6 g/t Au and 0.5m at 11.9 g/t Au.

Table B Second Fortune Prospect: Summary of Inferred Resource at varying Au grade cut-offs


2.0 250,000 7.0 56,430

4.0 207,000 7.9 52,270

6.0 127,000 9.6 39,230

In March 2011 Ravensgate completed an initial JORC (2004) compliant Resource Estimate at Second Fortune. An Inferred Resource of 207,000t at 7.9 g/t Au using a cut-off of 4.0 g/t Au was estimated (Table B). The resource estimate is interpolated using ordinary kriging and the vein was modelled to a minimum width of 1 metre. Given the high-grade „nuggetty‟ nature of mineralisation Ravensgate considers with additional appropriately spaced drilling there is potential to improve this estimate and allow material to be upgraded to higher JORC (2004) resource categories. There is also potential to increase this resource with extensional drilling

along strike and down dip.

Elsewhere in the Linden Project a number of zones of mineralisation have been identified by previous workers that warrant further evaluation. To the southwest of the main Second Fortune vein lies a sparsely drilled narrow vein that is potentially 200 metres in strike length, and is interpreted to be open down dip. There are several narrow intercepts observed including 1m at 10.3 g/t Au. Surface rock chip sampling and costeaning has identified two zones (one zone has 800m of strike, the other 1,100 metres strike length) of quartz veining up to several metres in width in the Quartz Ridge area that have observed gold grades from rock chip samples ranging up to 104 g/t and molybdenum grades up to 1.55%. In the northern part of the project area lie the strike extensions of the basalt/dolerite sequence that hosts the Devon gold prospect (which lies

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on a neighbouring property). Of note is that much of the work by previous explorers has focussed on testing for large-tonnage, low-grade, near surface (<50 metre depth) deposits that would be amenable to open pit mining. Potential remains to identify small high grade gold deposits that can be mined as small open pits or underground operations, particularly as there are numerous small historic high grade workings in the project area. In addition there is sparse drilling coverage below 50 metres and there is potential to identify new vein positions and more substantial gold

mineralised systems.

Exterra have recently (2010) completed a shallow reconnaissance RC drilling program throughout the Linden project area testing around historic workings, outcropping veins, known and new prospects. The program intercepted a number of gold mineralised intercepts that highlight the potential of the area including 4m at 5.3 g/t Au and 11m at 6.7 g/t Au (Ailsa prospect), 1m at 37.1 g/t Au (Wimmera prospect), 8m at 9.5 g/t Au and 2m at 11.3 g/t Au (Cuckoo Hawk prospect) and 1m at 97.4 g/t Au (Linden Star West prospect). Additional work and drilling is warranted to

follow up on these results.

1.3 ZELICA GOLD PROJECT

The Zelica Project is located within the Murrin-Mt Margaret block of the Achaean Norseman-Wiluna greenstone belt near the historic Eucalyptus gold mining centre. Gold mineralisation at Zelica occurs within a metasedimentary horizon comprising highly sheared quartz sericite and chlorite schists. Narrow auriferous quartz veins are noted to parallel this shearing. This unit dips steeply east and has been identified over a strike length of 900m. The project area is deeply

weathered and is covered by widespread alluvial and lateritic material.

The Zelica project has undergone significant exploration by a number of companies in the past. The main Zelica license (E39/1578) has been extensively explored with shallow RAB, RC and AC drilling which has identified mineralisation over strike length of 900m. The deepest mineralised intercepts are around 65 metres below surface and the structure appears to be open at depth. A small shallow open pit was developed at Zelica in the late 1980s and 35,000 tonnes of low grade

material was stockpiled.

The Zelica deposit has a JORC (2004) reported Measured Resource of 190,000t at 2.31 g/t Au and an Inferred Resource of 997,656 tonnes at 2.26 g/t Au (Table C). These resources were estimated internally by Regal Resources in 2007 by using polygonal estimation techniques and extrapolating grades to half way between drill sections or a maximum of 40 metres. Ravensgate recommends updating this resource as there appears to have been additional drilling completed at the project

since this estimate was reported.

Table C Zelica Project: Summary of Resources



35,000 1.35 1,519


155,000 2.53 12,609


TOTAL 1,187,656 2.24 85,664

Metallurgical testwork was carried out at Zelica by the Keogh/Jarrahmond Joint Venture in the 1980s and 1990s indicating that recoveries in excess of 90% could be obtained by vat leaching with crushing and agglomeration, and a recovery of 44% could be achieved from low grade material with no secondary processing. Further testwork was carried out by Belminco Pty Ltd in

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2006 for Regal Resources which validated this earlier testwork, indicating fast leach times and low reagent consumption. Plans were made to establish a 600,000tpa Vat Leach operation however this was never implemented. In light of the recent strong gold price Ravensgate recommends re-reviewing the potential for establishing a Vat Leach operation at Zelica.

1.4 EGERTON GOLD PROJECT

Exterra‟s Egerton Project lies in the Gascoyne region of West Australia where other notable deposits include Fortnum, Peak Hill and Sandfire Resources NL recently discovered high-grade

Degrussa Cu-Au-Ag deposit.

At Egerton a small structurally complex but very high grade Proterozoic mesothermal gold system has been identified by previous workers at the historically mined Hibernian prospect. Mineralisation is hosted by mafic and sedimentary rocks in multiple narrow, elongate, „pencil shaped‟, gently southwest plunging ore shoots with some of the better drill intercepts including

5m at 96.7 g/t Au, 5m at 85.0 g/t Au and 5 m at 78.9 g/t Au.

In 2005 a combined Measured, Indicated and Inferred Resource of 116,400 tonnes at 6.4 g/t Au for 23,811 ounces was estimated at the Hibernian prospect at Egerton by Finore Pty Ltd in accordance with the guidelines of the JORC Code (2004) (Table D). This includes a combined Measured and Indicated Resource of 78,500 tonnes at 7.0 g/t Au for 17,640 ounces. This Resource may be suited to small scale selective underground mining. There is a 48 metre deep shaft at Hibernian that was sunk in the 1990s that could be refurbished for access. In addition some of the resource lies within 20 metres of surface which could potentially be mined as a small open pit. Preliminary metallurgical work on the mineralisation by Bemex suggests that metallurgical recoveries would be greater than 95%. Detailed engineering scoping studies and further economic

evaluation is required to assess the potential to develop the Hibernian prospect.

Table D Hibernian Prospect, Egerton Project - Summary of Resources (2 g/t Au cut-off)





TOTAL 116,400 6.4 23,811

The Hibernian deposit has only been shallowly explored to date with drilling, testing to approximately 70 metres below surface. The mafic and sedimentary rock package which hosts mineralisation extends 8km to the west of Hibernian has only been sparsely drill tested to date and there is potential to identify new vein systems within this unit. Elsewhere in the project area drilling has been limited in extent and shallow, there is potential to identify extensions to known

systems and identify new prospects.

1.5 GIANT WELL PROJECT

Exterra‟s Giant Well project lies in Achaean Norseman-Wiluna belt within the Murrin Greenstone Belt east of Leonora. Other notable gold deposits within this belt include Navigator Resources Leonora project. Exterra‟s project is of a “grass roots” exploration nature, with previous work on the project largely consisting of surface geochemical surveys followed up by limited amounts of RAB drilling. Previous workers have identified a 2km strike length gold in soil anomaly at Giant Well. At the Cow Bell Dig prospect 2 km to the west of Giant Well a 500m long soil gold anomaly

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was identified, with follow up RAB drilling returning results including 3m at 11.4 g/t Au and 3m at 10.2 g/t Au. This project has potential to host significant gold mineralisation and further

exploration using geochemical, geophysical and targeted drilling programs are warranted.

1.6 CORPORATE STRATEGY

Exterra have indicated that they will be initially focusing their exploration efforts on the Second Fortune prospect at their Linden Project and the Hibernian prospect at the Egerton Project as these have the greatest short term potential to meet their corporate goal of developing small to medium sized, high grade, higher margin gold deposits. The Zelica Project will also be a major focus given that there is short term potential to develop a vat leach gold operation at the project and it is in close proximity to the Linden Project.

In addition Exterra have a number of advanced exploration targets identified elsewhere within their Linden, Egerton and Zelica Projects, and a number of exploration areas within their Giant Well Project. Many of these areas have received little exploration attention in recent years. They intend to reassess these areas in a systematic fashion, identify and prioritise targets for drilling or further work and complete staged exploration programs to evaluate their potential.

Exterra are understood to have committed over half of the funds intended to be raised in the IPO to the exploration and development of their mineral properties. Exterra have indicated they will undertake a systematic, staged approach to their exploration program, and will be monitoring, assessing and refocussing their exploration programs as necessary. Ravensgate considers the proposed exploration program to be consistent with the status and mineral potential of the projects. Proposed expenditure is sufficient to meet the costs of the exploration program and

meet statutory tenement expenditure requirements.

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2. INTRODUCTION

2.1 Terms of Reference

Ravensgate was requested by Exterra Resources Limited (Exterra), to complete an Independent Geologist‟s Report on its mineral assets in Western Australia. Exterra is seeking to list on the ASX in order to raise working capital to fund the future technical assessment of its projects. A requirement of listing is the completion of an Independent Geologist‟s Report (IGR) on the

mineral assets of the company.

This report has been prepared in accordance with the Code and Guidelines for Assessment and Valuation of Mineral Assets and Mineral Securities for Independent Expert Reports (The ValMin Code) and the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore

Reserves (the JORC Code – Dec 2004).

Ravensgate has not attempted to establish the legal status of tenements within the project area including with respect to Native Title claims. Ravensgate has not independently verified ownership and current standing of the tenements and is not qualified to make legal assessment or representations in this regard. Details of the legal ownership of the mineral assets are dealt with

elsewhere in the Prospectus.

The Independent Geologist‟s Report is based on information available up to and including the date of this report. Ravensgate has endeavoured, by making all reasonable enquiries, to confirm the authenticity, accuracy and completeness of the technical data upon which this report is

based.

Consent has been given for the distribution of this report in the form and context in which it

appears.

2.2 Qualifications, Experience and Independence

Ravensgate is an independent, privately owned consulting firm and has been providing exploration, mining and mineral resource consulting services to the minerals industry since 1997.

Primary-author: Don Maclean, MSc (Hons) Geology, Member of Australian Institute of Geoscientists, Member of the Society of Economic Geologists

Principal Consultant

Mr Don Maclean is a geologist with more than 15 years experience in the minerals industry. Don has worked in a number of different geological environments in Australasia and Europe, primarily in gold and base metals. He has a broad skill base, having worked in regional and near mine exploration, resource development, open pit and underground geology as well as in senior company management roles. Maclean holds the relevant qualifications and professional associations required by the ASX, JORC and ValMin Codes in Australia.

Co-author: H. Kate Holdsworth, BSc (Hons) Geology, Member of Australasian Institute of Mining and Metallurgy

Senior GIS Geologist

Mrs H. Kate Holdsworth is a senior GIS geologist with over 17 years GIS experience who joined the Ravensgate team in September 2006. During her tenure at Ravensgate, she has contributed to the compilation of numerous Independent Geologists Reports, Valuation Reports, GIS projects as well as having assisted clients with their exploration reporting requirements and QA/QC investigations into client‟s data quality.

Prior to joining Ravensgate, she worked for Giscoe Pty Ltd, a GIS company in Johannesburg, for ten years, where she was involved in diverse GIS projects, including database creation, database

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population and data validation. Kate has four years experience in GIS with the Geological Survey

of South Africa, where she was a member of their GIS database design team.

Peer Reviewer: Stephen Hyland – BSc Geology, Member of Australasian Institute of Mining and

Metallurgy, CIMM, GAA and MAICD.

Principal Consultant

Stephen Hyland has had extensive experience of over 20 years in exploration geology and resource modelling and has worked extensively within Australia as well as offshore in Africa, Eastern and Western Europe, Central and South East Asia, modelling base metals, gold, precious metals and industrial minerals. Stephen Hyland‟s extensive resource modelling experience commenced whilst working with Eagle Mining Corporation NL in the diverse and complex Yandal Gold Province where for three and half years he was their Principal Resource Geologist. Whilst the majority of his time there had been developing the historically successful Nimary Mine, he also assisted the regional exploration group with preliminary resource assessment of Eagle‟s numerous exploration and mining leases. Since 1997 Stephen Hyland has been a full time Consultant with the minerals consulting firm Ravensgate where he is responsible for all geological modelling and reviews, mineral deposit evaluation, computational modelling, resource estimation, resource reporting for ASX / JORC and other regulatory compliance areas. Primarily Stephen Hyland specialises in Geological and Resource Block Modelling generally with the widely used Medsystem / MineSight 3D mine-evaluation and design software. Stephen Hyland holds the relevant qualifications and professional associations required by the ASX, JORC and ValMin Codes

in Australia. He is a Qualified Person under the rules of the CIMM and NI43-101.

Neither Ravensgate nor any of its employees or associates is an insider, associate or affiliate of Exterra or any associated company. Neither Ravensgate nor any of its affiliates have acted

previously in any capacity for Exterra or any of its associates or affiliates.

Ravensgate‟s professional fees are based on time charged for work actually carried out, and are

not contingent on any prior understanding concerning the conclusions to be reached.

2.3 Principal Sources of Information

This review is based on the information provided by the current title holders, the technical reports of consultants and previous explorers, as well as other published and unpublished data

relevant to the area.

Ravensgate has carried out, to a limited extent, its own independent assessment of the quality of the geological data. The status of agreements, royalties or tenement standing pertaining to the assets was, however, not investigated and was not a task assigned to Ravensgate. This report is based on public information, some of which was supplied by Exterra, or other publicly sourced data. Ravensgate did not visit the project areas as most are quite familiar to the author who has made previous visits to properties in close proximity to the areas concerned and a site visit would

not have a significant material effect on the conclusions and opinions expressed in this report.

The authors have endeavoured, by exercising reasonable due diligence along with other associated enquiries, to confirm the authenticity and completeness of the technical data upon which this report is based. Exterra was given a final draft of this report and requested to identify

any material errors or omissions prior to its finalization and ultimate lodgement.

2.4 Background Information

Exterra is an unlisted public minerals resource company which was incorporated in 2009. Exterra has acquired a portfolio of exploration properties in Western Australia. Exterra proposes to raise $4 million (and up to $7 million should the offer be oversubscribed) by way of a placement of shares through an initial public offering (IPO). The reader is referred to the Solicitor‟s Report which is included in this Prospectus for a summary of the tenement status. Exterra has six gold projects in Western Australia. Refer to Table 1 for the tenement details and Figure 1 for project

locations.

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2.5 Tenure

Exterra have consolidated a substantial gold tenement holding within the Norseman-Wiluna Belt and in the Gascoyne Region of Western Australia. Exterra has granted or in application a total of 27 gold tenements which cover an area of 315.67 km2. The majority are granted tenements (20 tenements). All of Exterra‟s quoted JORC (2004) compliant resources lie on granted tenements. Ravensgate has not independently verified ownership and current standing of the tenements and is not qualified to make legal assessment or representations in this regard. Details of the legal

ownership of the mineral assets are dealt with elsewhere in the Prospectus.

2.6 Project Background

Exterra have assembled an extensive package of advanced exploration projects throughout Western Australia, primarily within the Norseman-Wiluna Belt and in the Gascoyne Region (Figure 1). The tenement holdings can be grouped into four main project areas based on geology and

geographic location:

Linden

Zelica

Egerton

Giant Well

Exterras‟s Linden, Zelica and Giant Well gold projects lie within the Achaean Yilgarn Craton in a 700km belt of elongate deformed and folded mafic, ultramafic rocks and volcanic sediments intruded by granitoids which is known as the Norseman-Wiluna Belt (Figure 2). This world class gold province has been a prolific producer of gold since its discovery in the late 1800s from numerous deposits. The largest and most famous is the Kalgoorlie “Golden Mile” deposit, which has produced over 50 Million ounces of gold since its discovery in 1893 (KCGM, 2003). Most gold deposits within the belt are of orogenic lode-gold style, with gold understood to be sourced from metamorphic derived fluids and associated mineralisation occurring late in the deformation history. Gold mineralisation occurs in many different host rocks, although it is more commonly hosted within mafic lithologies. It is invariably associated with quartz veining and / or shear

zones (Witt, 1997).

The Linden Gold Project lies at the southern end of the highly gold endowed Laverton Tectonic Zone which lies on the eastern margin of the Norseman-Wiluna Belt. The Laverton Tectonic Zone host a number of world class gold deposits including Wallaby (7.1 Moz Au, Salier et al, 2004), Granny Smith (1.8 Moz Au (past production) Mindex, 2010) and Sunrise Dam (7 Moz Au (past

production and resources), Anglogold Ashanti, 2009).

The Zelica Project is located within the Murrin-Mt Margaret block of the Achaean Norseman-Wiluna greenstone belt which is bounded to the east by the Laverton Tectonic Zone and to the

west by the Kilkenny Mobile Zone.

The Giant Well Project lies in the Achaean Norseman-Wiluna belt within the Murrin Greenstone Belt east of Leonora. Other notable gold deposits within this belt include Navigator Resources 750Koz Au Leonora project.

The Egerton Project lies in the Gascoyne region within a Proterozoic sedimentary basin mantling the northern margin of the Yilgarn Craton (Figure 3). Notable deposits in this region include Peak Hill (1 Moz Au, Montezuma, 2007) Fortnum (1 Moz Au, Glen Eagle Gold, 2005), Labouchere, Horseshoe Lights and Sandfire Resources NL recently discovered Degrussa Cu-Au-Ag deposit (0.4

Moz Au, 370Kt Cu, 3.4 Moz Ag – February 2010 JORC (2004) Resource).

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Table 1 Exterra Resources Pty Ltd Tenement Schedule

Project Tenement Area Square km Status

Zelica E39/1578 1.02 GRANTED

Zelica E39/1627 3.00 APPLICATION

TOTAL PROJECT AREA 4.02

Giant Well E37/1022 48.00 GRANTED


Egerton M52/343 1.20 GRANTED

Egerton M52/567 0.39 GRANTED

Egerton E52/2515 73.00 GRANTED

Egerton E52/2117 105.00 GRANTED


Linden E39/1232 11.00 GRANTED

Linden E39/1600 38.86 APPLICATION

Linden M39/255 0.19 GRANTED




Linden M39/500 4.54 APPLICATION1

Linden M39/629 0.68 APPLICATION1







Linden P39/2974 1.44 GRANTED



Linden P39/4525 1.44 APPLICATION2



TOTAL PROJECT AREA 84.06 1 Mining lease application over

granted exploration licence area 2 Prospecting License application over Mining License application

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Figure 1 Locality Map of Exterra’s West Australian Gold Projects

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Figure 2 Locality Map of Exterra’s Eastern Goldfields projects

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Figure 3 Locality Map of Exterra’s Egerton Project (after NGM, 2004)

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3. LINDEN PROJECT

3.1 Location and Access

The Linden project lies 200 km northeast of Kalgoorlie and 75 km south of Laverton, lying on the western margin of Lake Carey. The area is well serviced by a network of dirt roads.

3.2 Tenure

The Linden Project comprises three granted prospecting permits (P39/2974-2976), two granted exploration licences (E39/00293 and E39/01232), and five granted mining permits (M39/00255, M39/00649-650 and M39/00794-00795. In addition there are two mining license applications that cover already granted exploration license areas (M39/500 and M39/629) and three prospecting license applications over these areas as well. There is also one exploration license application (E39/1600). Total project area is 84.06km2. Tenement details are presented in Table 1 and in Figure 4.

3.3 Geology and Mineralisation

The Linden Gold Project lies at the southern end of the highly gold endowed Laverton Tectonic Zone which lies on the eastern margin of the Norseman-Wiluna Belt. The Laverton Tectonic Zone host a number of world class gold deposits including Wallaby (7.1 Moz Au, Salier et al, 2004), Granny Smith (>1.8 Moz Au (past production) Mindex, 2010) and Sunrise Dam (7 Moz Au (past production and resources), Anglogold Ashanti, 2009) (Figure 2).

The geology at Linden is comprised of a north to northwest striking greenstone sequence of Achaean ultramafic and mafic volcanics and mafic intrusives, felsic to intermediate volcanics and volcaniclastics, with minor chert and sediments. These have been intruded by felsic to intermediate porphyries and cross cutting Proterozoic dolerite dikes. A large granite dome lies to the east of the property, and there are several smaller internal granites within the greenstone

belt.

The project area is situated on the north-eastern limb of a major steeply plunging anticline (Mt Linden Anticline) which dominates the structure of the area (Marjoribanks, 1986). A major shear

zone flanks the west of the project area (The Mt Celia Shear Zone).

Weathering in the area varies from several to tens of metres in depth, with well developed saprolitic profiles in areas of deeper weathering, and poorly developed saprolite in shallower areas of weathering. Much of the area has thin (1 to 4m) cover of transported colluvium, aeolian sands and poorly developed soils. In the east of the project area is Lake Carey, where cover is

comprised of four meters of lacustrine clays and several deeper paleochannels.

Within the project area gold mineralisation is invariably associated with north and northwest striking structures and sheared lithological contacts (Peters, 1996). In most of the historically mined deposits gold mineralisation is associated with narrow (<2m) steeply dipping quartz veins with strike and dip extents in the order of tens of metres, with the notable exceptions of the Second Fortune and Hill East deposits, where veining has been identified over several hundred

metres of strike.

At the Second Fortune Mine gold mineralisation occurs within a sequence of northwest striking steeply west dipping felsics volcaniclastics and shales, which have been intruded by a tabular dacitic porphyry body. Gold mineralisation is associated with an arcuate narrow quartz vein (0.2m to 2m width) vein that has a strike of over 600 metres and dips steeply to the west. Within the vein is locally abundant pyrite with wall rock alteration characterised by a thin selvedge of

sericitic and chlorite alteration.

At Hill East gold mineralisation is hosted within narrow quartz veins and stockworks within an 800 metre long, 200 metre wide zone of sheared and deformed basalt. At the Quartz Ridge deposit, gold mineralisation is hosted in narrow quartz veins within granite and the surrounding mafic

country rock. Mineralisation has been identified over a 150 by 80 metre area.

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Figure 4 Linden Project Location and Geology

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3.4 Historic Production

There are numerous small workings in the project area which were worked from early to mid last century. Most of the production was sourced from small narrow high grade veins, with the largest producers being the Democrat, Democrat North and Local Lady Mines. Historic mine production from Exterra‟s Linden tenements is shown in Table 2.

In more recent times (1979) Mr Eugene Grenich discovered the Second Fortune deposit after completing a trenching program in the proximity of a vein (known as the Mess Fury mine) that had been worked by his father from 1941 to 1953. This was worked as an open pit operation from 1980 to 1982, until it was purportedly closed by the Mines Department due to excessively steep

pit walls. Production was 6,072 tonnes at 13.7 g/t Au for 2,674 ounces.

Following several drilling programs the mine was redeveloped in 1987 by Golden Fortune Mining. A small CIP plant was commissioned and a camp constructed. A shaft was sunk to 62 metres below surface, and ore development and limited stoping carried out on two levels. The company got into financial difficulties in 1988 and the mine was placed on care and maintenance.

Production was 5,831 tonnes at 13.2 g/t Au for 2,267 ounces.

Table 2 Linden Project – Historic Gold Production

Mine Years Tonnes Grade (g/t) Ounces Au

Second Fortune 1980-1988 11,904 13.4 5,144

Local Lady 1936-1951 9,055 30.0 8,734

Democrat 1909-1949 7,393 60.9 14,475

North Democrat 1939-1950 3,178 59.9 6,120

Lady Evelyn NA 12 183.0 71

True Blue Jacket NA 12 45.0 17

Marloo NA 35 7.5 8

TOTAL PRODUCTION 34,569

3.5 Exploration History

Much of the historic exploration within Exterra‟s Linden project completed by previous companies has focussed on the exploration and development of the Second Fortune gold deposit, and assessing the surrounding area for deposits that are amenable to open cut mining. A summary of this work is presented in Table 3 and Table 4. A summary of work on other prospects within the Linden project area is presented in Table 5 and significant drilling results are presented in

Table6.

3.6 Recent Exploration

Of note is that very little work has been done on the Linden project in the past 10 years until recently (2010), when Exterra completed an extensive shallow RC drilling reconnaissance drill program throughout the Linden Project area. Exterra drilled a total of 89 shallow RC drill holes for a total of 5,418 metres. The program was designed to test around historic workings and outcropping quartz veins as well as testing around known and new prospects. 29% of the holes intercepted 1 metre intercepts above 1 g/t Au (Table 7, Figure 5). The program intercepted a number of gold mineralised intercepts that highlight the potential of the area including 4m at 5.3 g/t Au and 11m at 6.7 g/t Au (Ailsa prospect), 1m at 37.1 g/t Au (Wimmera prospect), 8m at 9.5 g/t Au and 2m at 11.3 g/t Au (Cuckoo Hawk prospect) and 1m at 97.4 g/t Au (Linden Star West

prospect).

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In early 2011 Exterra completed a 5 hole (1,075m) diamond drilling program testing along the strike of the main Second Fortune Vein to validate historic drilling (LNDD001-LNDD005) (Figure 6). Drilling returned encouraging results consistent with historical drilling with several intercepts containing visible gold. Assay results are summarised in Table 4 with better results from the main Second Fortune Vein including 0.6m at 24.8 g/t Au, 0.7m at 44.6 g/t Au and 0.5m at 11.1 g/t Au.

Drilling also intercepted a narrow hanging wall lode which returned 0.3m at 46.9 g/t Au.

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Table 3 Second Fortune Prospect: Exploration History

Date Company Findings

1979 E Grenich Completed a trenching program and discovered the main Second Fortune vein under 3 metres of laterite cover. A small slot open cut was developed over the 400 metre strike length of the vein.

1983-1985 National Resource Exploration (NRE)

Completed a 9 hole diamond drilling program (LRD1-LRD9) testing depth extensions of the Second Fortune vein between 50 and 70 metres below surface. Based on the drilling they concluded the grades and tonnages were insufficient to deepen the open pit, and the resource was considered too small on which to establish a small underground operation at the prevailing gold price. They recommended a mining engineer assess the economic potential of selective underground mining.

1986 MV Foster and Associates

Completed a program of rockchip sampling from the open pit and underground sampling. A 7 hole (370m) (PH1-PDH7) diamond drilling program was drilled to infill the NRE drilling. They noted that drilling confirmed the continuity of the main vein. Based on this work they completed resource estimation work to input into a feasibility study.

1987-1988 Golden Fortune Mining NL

Completed a 26 hole RC pre-collared diamond drilling program (3,626m) and 14 underground diamond holes testing the main Second Fortune vein down to 250 metres below surface. From this drilling they noted that mineralisation was open at depth below 250 metres and they postulated that within the main vein there were several high grade shoots plunging steeply north. The company ran into financial difficulty and was unable to continue development of the mine.

1997-2000 Goldfields Exploration Pty Ltd

Goldfields drilled a diamond hole to test the Second Fortune vein 210 metres below surface and 50 metres to the south of the old workings. The vein was intercepted at the target position (1 m at 1.9 g/t Au) and although the grade was low it was surmised that the vein remained open to the south. A RAB program of 138 holes (4,987m) testing the northern extensions of the Second Fortune Vein was completed. The known strike extent of the vein was extended to 1.1 km, with 55 holes returning 4 m composite greater than 0.1 g/t Au, and the best result 16m at 6.7 g/t Au from 16 metres (SFRB045). It was also noted that there was a wide anomalous zone in saprolite to the west of the main vein. A 26 hole (1,269m) RAB program was drilled testing south of the main vein, identifying a new vein position 200 metres to the west of the main vein. Results from this new vein included 4 metres at 8.6 g/t Au from 48 metres (SFRB163). A follow up 19 hole (2,006m) RC program was drilled to test the new vein and to follow up RAB anomalies to the north of the Second Fortune vein. Several narrow high grade intercepts were returned including 1m at 10.3g/t Au and 1 m at 7.6 g/t Au (SFRC005).

2011 Exterra Resources Ltd

Completed a 5 hole (1,075m) diamond drilling program testing along the strike of the main Second Fortune Vein to validate historic drilling (LNDD001-LNDD005). Drilling return results consistent with historical drilling with several intercepts containing visible gold. Assay results are summarised in Table 4.

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Table 4 Second Fortune Prospect – significant assay results from the Second Fortune Vein (>1 g/t Au)

Drill hole From (m) To (m) Length

(downhole) Grade Au (g/t)

PDH1 38.74 39.36 0.60 7.8 PDH2 43.34 43.91 0.57 10.8 PDH3 35.50 36.01 0.51 2.2 PDH4 47.36 48.30 0.94 15.6 PDH5 44.60 45.98 1.38 8.3 PDH5 52.42 52.39 0.37 29.9 PDH6 36.60 39.70 3.05 3.5 PDH7 42.37 44.80 2.07 15.1

LRD1 61.21 61.71 0.50 37.0 LRD2 76.91 77.18 0.27 4.3 LRD3 75.45 76.50 1.05 18.3 LRD4 103.05 103.28 0.23 12.1 LRD5 78.71 79.06 0.35 2.1 LRD6 63.38 63.78 0.40 10.1 LRD7 93.31 93.93 0.62 6.7 LRD8 61.80 62.00 0.20 9.6

SFH20 119.9 120.35 0.45 21.7 SFH21 204.59 205.07 0.48 23.3 SFH21 227.62 228.21 0.59 22.6 SFH22 144.37 146.37 2.00 9.3 SFH23 128.90 129.43 0.53 8.0 SFH24 187.60 188.0 0.40 9.1 SFDD01 256 257 1.00 1.9

LNDD001 146.70 147.00 0.30 46.9 LNDD001 186.50 187.10 0.60 2.2 LNDD001 199.00 200.00 1.00 2.3 LNDD001 200.00 200.70 0.70 6.8 LNDD001 200.70 201.40 0.70 1.4 LNDD001 204.00 205.00 1.00 3.2 LNDD001 217.00 217.20 0.20 1.3 LNDD001 222.20 222.60 0.40 8.0 LNDD002 179.80 180.40 0.60 24.8 LNDD002 188.00 189.00 1.00 5.3 LNDD003 99.10 99.40 0.30 2.4 LNDD003 106.60 107.30 0.70 44.6 LNDD004 138.40 139.00 0.60 10.0 LNDD004 139.00 140.00 1.00 4.0 LNDD004 140.90 141.10 0.20 9.3 LNDD004 141.90 142.90 1.00 3.1 LNDD004 124.90 125.20 0.30 1.5 LNDD005 213.70 214.20 0.50 11.9 LNDD005 215.00 215.90 0.90 4.8 LNDD005 218.70 219.00 0.30 4.7 LNDD005 140.80 141.10 0.30 1.3

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Table 5 Linden Project: Exploration History


1981-1987 Jacia Natural Resource Consultants (on Behalf of Haoma)

From 1981 to 1983 exploration was focussed on the neighbouring Devon Mine, where a substantial RC and diamond drilling program was completed. A pre-feasibility study on underground mining at Devon concluded that the deposit was not economic at the prevailing gold price, so Jacia changed its focus to assessing the open pit potential of the surrounding tenement area. From 1983 to 1987 a program of costeaning, shallow RAB drilling (5m holes) and a 54 hole RC drill program was completed at Olympic Danube (ex) Hill East and Mt Linden. In 1987 they concluded that there were insufficient resources on which to base a feasibility study. They did consider a number of areas as being prospective and warranting further attention including – OD, Devon, Hill East, Hill West, Mt Linden, Linden Well, and identified a number of other geophysical targets.

1987-1988

Doug Young and Associates (on behalf of Haoma Northwest NL)

Drilled diamond at Devon and RC programs at Olympic Danube, Devon, Hill East, Marloo, Quartz Ridge, Local Lady and Mt Linden (52 RC holes (2,500m) and 165 RAB holes (1,913m)). Drilling identified low tenor but potentially significant mineralisation at Hill East and Mount Linden.

1990-1993 Roger Thompson and Associates(on behalf of Haoma Northwest NL)

Completed a geological mapping, rock chip sampling program throughout the tenement focussing on areas that had no drill testing. RAB (17 holes, 456 m) drilling was completed north of Devon and at Linden Southeast. No significant mineralisation was identified.

1994-1997 Haoma Mining NL Several small RAB programs were drilled testing several geophysical anomalies. A regional soil sampling program was recommended to aid in target definition.

1997-2000 Goldfields Exploration Pty Ltd/Haoma JV

In 1997 Goldfields entered into a JV with Haoma to explore the Linden project area. A detailed aeromagnetic survey was completed along with a soil auger geochemistry program over the entire project area. 557 RAB holes (14,044m), 185 Aircore holes (5,195), 99 RC holes (8,238m) and 2 diamond holes (349m) were drilled throughout the tenement package. Work was carried out at the Mt Linden, Hill East, Linden Star and Sophisticated Lady prospects and a number of new prospects were generated including Catfish, Marloo, Evelyn, Indago and Golden Ridge.

2008 Haoma Mining NL A rock chip sampling and costeaning program was carried out over the Quartz Ridge Fault zone. Two zones of quartz veining with widths ranging from 1 to 8m were identified, an 800m strike zone to the north, and an 1,100m zone striking to the south. Rock chip sampling of the quartz vein mineralisation returned several high-grade gold results (up to 104 g/t Au), molybdenum values up to 1.5%, silver up to 57.5 g/t Au, and elevated rhenium (up to 19.4 ppm). Further work was recommended to follow up these results.

2010 Exterra Resources Exterra completed an extensive shallow RC drilling reconnaissance drill program throughout the Linden Project area drilling 89 holes for a total of 5,418 metres. The program was designed to test around historic workings and outcropping quartz veins as well as testing around known prospects. A total of 29% of the holes intercepted 1m intercepts above 1g/t Au (Table 7).

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Table 6 Significant Historic Assay Results – Linden Project Area (>2 g/t)

Prospect Drill hole From (m) To (m) Length

(downhole)

Grade Au (g/t)

HILL EAST HLP020 20 30 10 2.2 HILL EAST HLP021 14 16 2 3.6 HILL EAST HLP023 8 10 2 2.5 HILL EAST HLP031 12 14 2 2.6 HILL EAST HLP033 0 20 20 4.0 HILL EAST HLP046 16 22 6 3.1 HILL EAST HLP051 22 28 6 2.1 HILL EAST HLP053 6 8 2 3.0 HILL EAST HLP053 28 36 8 3.8

MT LINDEN MLP003 20 22 2 2.4 MT LINDEN MLP007 12 18 6 3.8 MT LINDEN MLP007 24 34 10 2.7 MT LINDEN MLP008 32 42 10 2.4

LOCAL LADY LLP006 10 16 6 2.6

HILL MINE LP001 16 27 11 3.2 HILL MINE HLP036 21 27 6 4.7 HILL MINE HLP038 19 21 2 3.5

BELL MINE 93BP005 37 39 2 3.8

SOPHISTICATED LADY SLRC021 7 10 3 2.5 SOPHISTICATED LADY SLRC023 61 63 2 2.1 SOPHISTICATED LADY SLRC031 8 11 3 3.1 SOPHISTICATED LADY SLRC042 40 46 6 2.8 SOPHISTICATED LADY SLRC065 16 18 2 4.5 SOPHISTICATED LADY SLRC069 50 52 2 2.6

MT LINDEN MLRC010 20 22 2 7.2 MT LINDEN MLRC010 82 92 10 2.1

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Table 7 Significant Assay Results – Linden Project Area – Exterra 2010 RC Drilling (>1g/t Au)

Prospect Drill hole From (m) To (m) Length

(downhole)

Grade Au (g/t)

AILSA LNRC84 51 52 1 1.1 AILSA LNRC89 39 40 1 1.7 AILSA LNRC6 15 19 4 5.3 AILSA LNRC6 25 36 11 7.0

ALAWA LNRC46 32 33 1 2.9 ALAWA LNRC46 41 42 1 1.1 ALAWA LNRC67 32 33 1 1.4 ALAWA LNRC68 36 37 1 1.0

ALAWA EAST LNRC77 27 28 1 4.6

BURGESS LUCK LNRC34 34 35 1 1.2 BURGESS LUCK LNRC35 31 38 7 1.9

CUCKOO HAWK LNRC42 28 36 8 9.5 CUCKOO HAWK LNRC42 38 40 2 11.3

EVELYN LNRC26 11 12 1 1.1

GOLDEN RIDGE LNRC17 7 13 6 1.5 GOLDEN RIDGE LNRC17 24 26 2 1.2

LAKESIDE LNRC29 12 13 1 2.1 LAKESIDE LNRC30 8 9 1 2.1

19 20 1 2.4 LINDEN STAR LNRC50 14 15 1 1.3 LINDEN STAR LNRC50 23 24 1 6.1

LINDEN STAR STH LNRC55 54 55 1 1.0 LINDEN STAR WEST LNRC75 21 22 1 1.3 LINDEN STAR WEST LNRC75 29 30 1 1.5 LINDEN STAR WEST LNRC76 14 16 2 4.1 LINDEN STAR WEST LNRC76 23 24 1 97.4

LOCAL LADY LNRC4 22 24 2 1.4 LOCAL LADY LNRC5 4 5 1 5.8 LOCAL LADY LNRC10 31 32 1 1.1 LOCAL LADY LNRC12 6 7 1 1.2

MAY PRINCE LNRC54 10 11 1 1.7 MAY PRINCE LNRC54 24 25 1 12.4

MT LINDEN EAST LNRC3 14 26 12 1.7 MT LINDEN EAST LNRC3 47 48 1 1.4

MT WILGRESS LNRC21 7 8 1 2.0

WIMMERA LNRC14 4 5 1 37.1 WIMMERA LNRC14 38 39 1 1.3 WIMMERA LNRC14 49 50 1 1.0

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Figure 5 Linden Project – Exterra 2010 RC Drilling Program Significant Results (>10 gram*metres)

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3.7 Resources

Several historic resource estimates were completed for the Second Fortune prospect during the 1980s and early 1990s, none of which conform to current JORC (2004) reporting standards. Exterra completed a five hole diamond drilling program (1,075m) to validate this historic work. Results returned from this program were consistent with historical work. Based on this new

drilling information Ravensgate was engaged to complete a new resource estimate in March 2011.

Table 8 Second Fortune Prospect: Summary of Inferred Resource at varying Au grade cut-offs


2.0 250,000 7.0 56,430

5.0 207,000 7.9 52,270

6.0 127,000 9.6 39,230

Ravensgate estimated a JORC (2004) Inferred Resource of 207,000t at 7.9 g/t Au using a cut-off of 4.0 g/t Au at Second Fortune (52,270 oz Au) (Table 8). Grade estimation was carried out using ordinary kriging with a minimum modelled vein width of one metre. The parameters/assumptions

used in the model are outlined below:

The resource model was based on 47 diamond drill holes for a total of 6,200m of drilling and 60 channel samples from the Second Fortune underground workings. The majority of

the diamond drill holes contained RC precollars.

The bulk of the drilling was completed during the 1980s in several campaigns. Data from these holes has been compiled from historic reports and cross sections. No QAQC data is available for these holes. The collar, geology and assay data was not able to be located for

several holes. This historic data set is considered adequate for the status of the resource.

Exterra completed a 5 hole (1,075m) NQ diamond drilling program in February 2011 designed to test systematically along the strike of the Second Fortune Vein to validate the historic drilling. Assay results and mineralised intercept locations appear generally

consistent with historic results. Exterra completed adequate QAQC on this drilling.

Drilling was carried out along grid east-west oriented fences perpendicular to the main north striking Second Fortune Vein. Drill-hole spacing varies from approximately 30m spacing in the upper parts of the vein to 80m spacing in the deeper parts. Drill-holes were typically inclined at 60 degrees on grid east azimuths, in some places grid west azimuths

were also used for mineralization geometry verification.

The relative position of most diamond drill-hole collars used in the estimate have been surveyed by a hand-held GPS. Drill-hole locations therefore are only considered accurate within 2m horizontally and 5m vertically.

Exterra‟s holes all have down-hole surveys, with surveys generally taken every 30 metres using a single shot digital camera. Most of the historic drill holes do not have down-hole

survey data.

Exterra‟s diamond drilling samples were analysed for gold by 50g fire assay methods with AAS finish at SGS Laboratories, Kalgoorlie, Western Australia. Blind QAQC samples were routinely submitted with assays including Certified Standards. Sufficient QAQC and data validation has been undertaken to verify the integrity of the assay data.

The surface topography of the deposit was generated using drill hole collars. It is considered sufficiently accurate for the status of the resource.

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The resource was depleted for historic mining using shapes generated from historic long sections. This is considered sufficiently accurate for the status of the resource.

Wireframe interpretations of mineralization, construction of solid domains, geostatistics, block modeling and grade estimation was completed by Ravensgate using was completed using MinesightTM software.

Wireframed ore domain boundaries were constructed using cross sectional interpretations based on geology and a nominal 0.3g/t gold edge cut-off grade and a 1 metre minimum width. Wireframes were nominally extrapolated half drill hole spacing along strike (20-40m) and 40m down dip from unbounded intercepts. The model encompasses 400m strike

of the vein down depths ranging from 100 to 250 metres below surface.

All down hole samples have been composited to 0.5m intervals which reflects the average

sampling width and the narrowness of the vein.

Bulk densities are based on 23 bulk density determinations (~1g/t Au) carried out by Exterra on mineralised drill core samples using the Archimedes method (weighing samples dry and immersed in water). Based on this a density of 2.75 was used for the entire model. The regolith profile is understood to be quite shallow over the Second Fortune prospect

(<20m).

A total of 4 ore domains were constructed to model the main Second Fortune Vein and hangingwall/footwall zones. The main vein is narrow, with the average modeled width around 1.0 metre.

For resource estimation block modeling was completed using a primary block size of 2m (X)

by 10m (Y) by 2 m (Z).

Due to the often very narrow nature of mineralization (ie < 1m) a block percentage variable was used to ensure that block volumes corresponded with wireframe modeled

domain volumes.

The resource was estimated using ordinary kriged interpolation with nugget and sill values based on statistical analysis of the various mineralised domains.

Estimation search ellipses were orientated to reflect the geometry of the mineralised domains. Search ellipse dimensions were 100m (major axis) by 100 m (semi-major axis) by 20 m (minor axis).

A high yield limit of 40g/t Au was used, based on natural breaks in cumulative frequency plots, to limit outlier grades. The high yield limit was restricted to within 10m of an outlier

grade.

Based on the JORC (2004) Guidelines Ravensgate considers the model to meet the criteria of an Inferred Resource.

No assumptions have been made about mining or processing methods.

3.8 Exploration Potential

The Second Fortune Vein has potential for short term resource development. The main vein was mined in the late 1980s and much of the surface and underground infrastructure remains in place, including a shaft. The upper portions of the vein (down to 65 metres below surface) have been developed over 300 metres of strike, and drilling indicates the vein extends to 250 metres

below surface and is open at depth (Figure 6).

Recently Ravensgate completed an initial JORC (2004) compliant Resource Estimate at Second Fortune. An Inferred Resource of 207,000 t at 7.9 g/t Au using a cut-off of 4.0 g/t Au was estimated (52,270 oz Au). Given the high-grade „nuggetty‟ nature of mineralisation Ravensgate considers with additional appropriately spaced drilling there is potential to improve this estimate and allow material to be upgraded to higher JORC (2004) resource categories. There is also

potential to increase this resource with extensional drilling along strike and down dip.

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Exterra's recent drilling has identified narrow high grade mineralisation in the hangingwall of the main Second Fortune Vein (0.3 m at 46.9 g/t Au from 146.7m). Additional drilling is warranted to

follow up on this new zone of mineralisation.

In addition RAB and RC drilling south and 200 metres west of the main Second Fortune vein has identified a new vein position. This steeply dipping potentially 200m long striking vein has several narrow high grade intercepts (including 1m at 10.1 g/t Au) and is sparsely drilled and is

interpreted to be open down dip.

Of note is that much of the work by previous explorers has focussed on testing for large-tonnage, low-grade, near surface (<50 metre depth) deposits that would be amenable to open pit mining. Potential remains to identify small high grade gold deposits that can be mined as small open pits particularly as there are numerous small historic high grade workings in the project area. Areas worthy of re-evaluation include the Hill East/Sophisticated Lady area where drilling has identified

a number of broad zones of moderate tenor mineralisation (2-3 g/t Au).

In 2008 surface rock chip sampling and costeaning identified two zones (one zone has 800m of strike, the other 1,100 metres strike length) of quartz veining of up to several metres in width in the Quartz Ridge area that have observed gold grades ranging up to 104 g/t and molybdenum grades up to 1.55%. Further work is required to help assess this priority target. There are several

narrow intercepts observed including 1m at 10.3 g/t Au.

Exterra‟s recently completed shallow reconnaissance RC drilling program throughout the Linden project area (Table 7, Figure 5) intercepted a number of gold mineralised intercepts that highlight the potential of the area including 4m at 5.3 g/t Au and 11m at 6.7 g/t Au (Ailsa prospect), 1m at 37.1 g/t Au (Wimmera prospect), 8m at 9.5 g/t Au and 2m at 11.3 g/t Au (Cuckoo Hawk prospect) and 1m at 97.4 g/t Au (Linden Star West prospect). Additional work and

drilling is warranted to follow up on these results.

The strike extensions of the dolerite and basalt sequence that hosts the neighbouring Devon Mine situated in the northern portion of the project area needs to be investigated with further exploration work. In addition most of the previous exploration drilling outside of the main prospect areas has been relatively shallow (<50 metres) and there is potential to identify new veins at depth with well targeted drilling. Re-evaluation of the prospectivity of the high grade historic workings is also recommended, in particular at the Democrat mine, which has been the largest producer in the Linden goldfield.

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Figure 6 Second Fortune Long Section (* hanging wall vein intersection)

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4. ZELICA PROJECT


The Zelica Project is situated in the Eastern Goldfields of Western Australia near the historic Eucalyptus mining centre, approximately 90km south east of Leonora and 180km north east of Kalgoorlie. The project can be accessed either from the Leonora – Laverton road via unsealed public roads and the Red October Haul Road or via shire roads from the Goldfields highway to the

west (Figure 2).

4.2 Tenure

The project consists of one granted exploration licence (EL39/578) and one exploration licence application (EL39/1627) with an area of 4.05 km2. Tenement details are presented in Table 1 and

in Figure 7.


The Zelica Project is located within the Murrin-Mt Margaret block of the Achaean Norseman-Wiluna greenstone belt which is bounded to the east by the Laverton Tectonic Zone and to the west by the Kilkenny Mobile Zone. The main structural feature in the area is the Eucalyptus

Syncline which plunges to the south southeast.

The geology of the project area is comprised of an east dipping sequence of mafic and ultramafic volcanic, dolerite and interbedded pyritic sediments. Gold mineralisation at Zelica occurs within a metasedimentary horizon comprising highly sheared quartz sericite and chlorite schists. Narrow auriferous quartz veins are noted to parallel this shearing. This unit dips steeply east and has been identified over a strike length of 900m. The project area is deeply weathered and is covered

by widespread alluvial and lateritic material.


Gold was first discovered in the area in the 1890s when the neighbouring town and mining centre of Eucalyptus was established. Small scale prospecting and mining took place in the area in the late 1890s and early 1900s and again during the 1930s. Gold production from the neighbouring Eucalyptus area up until 1985 is estimated to be around 9,000 ounces (Mindex, 2011). There is no

recorded historic production from the Zelica license itself.

More recently in the 1980s following several years of exploration by the Keogh/Jarrahmond Joint Venture a small shallow open pit was excavated at Zelica and 35,000 tonnes of low grade

material stockpiled (1.35 g/t Au).


The project has been explored by a number of explorers in the past, their programs are summarised in Table 16 and significant assay results in Table 17.

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Figure 7 Zelica Project: Geology and License Areas

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Table 9 Zelica Project: Exploration History


1969-1971

Newmont Proprietary Limited/ Narla Minerals NL, WA Explorations NL JV

Completed reconnaissance exploration targeting Nickel and Copper sulphide mineralisation in the ultramafic rocks around the Eucalyptus area. Soil sampling and shallow auger programs were carried out. They did not identify evidence to suggest there was a major copper-nickel sulphide ore body in the area.

1981 Abrolhos Oil NL Completed a surface sampling program over the area identifying high gold values in laterised rocks

1981-2000

Keogh/Jarrahmond JV

Completed drilling and sampling programs which identified a substantial low grade deposit. 45 holes were drilled outlining mineralisation to a maximum depth of 35m over a strike length of 400m. A Mining license was applied for and granted in 1988. Mining and processing facilities were constructed and overburden was stripped and a small pit excavated to 10m depth. Approximately 35,000 tonnes of low grade ore were stockpiled. Metallurgical testwork was carried out on mineralisation indicating that recoveries in excess of 90% could be obtained by vat leaching with crushing and agglomeration, and a recovery of 44% could be achieved from low grade material with no secondary processing.

2003- 2009

Regal Resources Regal drilled several programs of RC and Aircore, RAB and Diamond drilling within and around the open pit to test for strike extensions to mineralisation, confirm down-dip continuity of mineralisation and obtain material for metallurgical testwork. Regal drilled 132 RAB and AC holes (2,854m), 27 RC holes (1,998m) and 2 diamond holes (114m). Metallurgical testwork was carried out which returned favourable results and plans were made to establish a 600,000tpa Vat Leach operation. This was plan was not implemented as the company‟s focus changed to one of its other projects. A program of stockpile and dump sampling was carried out however grades and tonnages were found to be uneconomic to truck to Kalgoorlie for toll treatment.

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Table 10 Significant RC, RAB, AC and Diamond drilling results from historical drilling at the Zelica Project (>2g/t Au)

Drill hole From (m) To (m) Length (m) Grade Au (g/t)

Z08 9 15 6 2.9 Z15 13 16 3 6.7 Z22 14 25 11 3.1 Z24 4 54 1 2.2

8 16 8 2.1 Z37 4 5 1 15.9 Z40 11 18 7 5.2 Z41 5 9 4 5.2 Z72 22 35 13 3.2 Z83 23 26 3 4.6 Z86 15 24 9 2.2 Z95 5 8 3 7.2 Z97 13 17 4 4.6 Z283 51 54 3 5.1 Z285 26 27 1 3.8 Z286 67 70 3 4.0 Z287 29 30 1 3.0

49 52 3 3.7 Z289 60 62 2 2.3 Z292 27 34 7 9.2

35 36 1 7.5 Z296 55 56 1 2.4 Z297 69 71 2 7.3 Z301 74 76 2 2.1 Z302 75 77 2 2.1 Z304 44 45 1 2.5 Z314 1 2 1 3.1 Z316 2 3 1 3.4 Z317 2 4 2 4.7

ZAC327 2 5 3 3.7 ZAC328 2 11 9 3.2 ZAC329 2 4 2 3.0 ZAC330 0 3 3 2.3 ZAC331 10 12 2 3.1 ZAC342 11 14 3 8.8 ZAC344 16 19 3 3.0 ZAC347 14 19 5 3.0 ZAC348 14 20 6 3.5 ZAC351 0 2 2 7.6 ZAC353 6 9 3 2.3 ZAC355 9 10 1 2.8 ZAC356 7 9 2 2.3 ZAC357 0 9 9 3.6 ZAC358 8 10 2 4.6 ZAC360 11 14 3 4.1 ZAC361 10 18 8 2.9 ZAC362 8 10 2 2.8

16 19 3 11.8 ZAC363 10 15 5 4.8 ZAC364 9 11 2 5.6

22 24 2 4.5

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Table 10 Significant RC, RAB, AC and Diamond drilling results from historical drilling at the Zelica Project (>2g/t Au)


ZAC365 15 19 4 2.6 ZAC368 29 32 3 5.1 ZAC369 31 33 2 2.1 ZAC388 28 31 3 2.3 ZAC389 13 16 3 2.2 ZAC393 34 35 1 5.1 ZAC395 33 36 3 3.2 ZAC397 25 27 2 2.1 ZAC398 35 46 11 2.7 ZAC400 23 25 2 5.7 ZAC401 32 36 4 3.1 ZSPAC01 5 8 3 3.1 ZD001 39.5 40 0.5 2.5 ZD002 54 55.5 1.5 2.2

58.5 59 0.5 3.5 63 64 1 3.5


The Zelica project has undergone significant exploration by a number of companies in the past. The main Zelica license (E39/1578) has been extensively explored with shallow RAB, RC and AC drilling and has identified mineralisation over strike length of 900m. The deepest mineralised

intercepts are around 65 metres below surface and the structure appears to be open at depth.

The Zelica deposit has a JORC (2004) reported Measured Resource of 190,000t at 2.31 g/t Au and an Inferred Resource of 997,656 tonnes at 2.26 g/t Au (Table 11). This resource lies on the granted Zelica license (E39/1578). These resources were estimated internally by Regal Resources using polygonal estimation techniques and interpolating grades to half way between drill sections or a maximum of 40 metres (Regal Resources, 2007). Ravensgate recommends updating this resource as significant amounts of drilling appear to have been completed at the project since

this estimate was reported.

Table 11 Zelica Project: Summary of Resources



35,000 1.35 1,519


155,000 2.53 12,609


TOTAL 1,187,656 2.24 85,665

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Metallurgical testwork was carried out on mineralisation by the Keogh/Jarrahmond Joint Venture indicating that recoveries in excess of 90% could be obtained by vat leaching with crushing and agglomeration, and a recovery of 44% could be achieved from low grade material with no secondary processing. Further testwork was carried out by Belminco Pty Ltd in 2006 for Regal Resources which validated this earlier testwork, indicating fast leach times and low reagent consumption. Plans were made to establish a 600,000tpa Vat Leach operation however this was never implemented. In light of the recent strong gold price Ravensgate recommends re-reviewing the potential for establishing a Vat Leach operation at Zelica.

License E39/1627 has had relatively little work completed on it. There is a mapped elongate internal granite which intrudes a sequence of high magnesium basalts (Figure 7). The mafics within the northern and southern margins of the granite may be a favourable site for gold deposition. Ravensgate recommends compiling all historic data for the license and completing RAB/AC drilling over targets identified. The nickel potential should also be reviewed, particularly

given the proximity of the area to several major laterite nickel deposits.

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5. EGERTON PROJECT


The Egerton project is located approximately 200 km NW of Meekatharra and can be accessed via the unsealed Meekatharra-Mt Clere road.

5.2 Tenure

The Egerton Project comprises two granted mining licences and two granted exploration licenses.

Total project area is 179.6 sq km. Tenement details are presented in Table 1 and in Figure 8.

Figure 8 Egerton Location and Geology (after NGM, 2004)


The Egerton Project lies in the Gascoyne region within a Proterozoic sedimentary basin mantling the northern margin of the Yilgarn Craton. Notable deposits in this region include Peak Hill (1 Moz Au, Montezuma, 2007) Fortnum (>1 Moz Au, Glen Eagle Gold, 2005), Labouchere, Horseshoe Lights and Sandfire Resources NL recently discovered Degrussa Cu-Au-Ag deposit (0.4 Moz Au,

370Kt Cu, 3.4 Moz Ag – February 2010 JORC (2004) Resource) (Figure 3).

Gold mineralisation is hosted within the Lower Proterozoic Egerton inlier, which is comprised of greenschist facies metamorphosed siltstones, greywacke, sandstones and shales with minor mafic volcanics and volcaniclastics. The sequence generally dips steeply to the northeast. Mineralisation at the Hibernian and Gafney‟s Find prospects is hosted within a mafic and sedimentary rock package that strikes southwest. The project area is traversed by numerous north and north-northeast striking shears and faults that were probably the fluid conduits during the gold mineralisation event (Elliot and Duerden, 2005). A small granite intrusive is mapped to west of Hibernian. The Egerton Inlier is unconformably overlain by the sediments of the Middle

Proterozoic Bangemall Basin.

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In most of the project area, weathered regolith has been stripped by erosion with fresh rock being at relatively shallow depths (less than 5 metres). The terrain comprises gently rolling hills which have thin cover of poorly developed soils; various valleys and plains are evident which have varying thicknesses of alluvium, colluvium and residual soils.

Most of the mineralisation within the project area occurs as shear hosted mesothermal quartz-pyrite and quartz-pyrite-carbonate veins (Elliot and Duerden, 2005). There are numerous small workings throughout the project area, most of which have exploited near short strike length (tens

of metres) laterally discontinuous narrow (<2 metre width) quartz veins.

The most substantial workings occur at the Hibernian prospect. Mineralisation occurs within discrete quartz veins within a broader zone north to north-northeast striking zone of shearing and deformation within a mafic dominated host rock package, which is also likely to have been a rheologically and chemically favourable host rock for gold mineralisation compared to the surrounding sedimentary rocks. High grade mineralisation has been interpreted by NGM Resources workers as being within small elongate “pencil shaped” shoots that are generally less than ten metres in dip extent, but are continuous along strike from tens of metres up to 170 metres. The shoots often have observed grades in excess of 10 g/t Au (Figure 9). Outside of the high grade

quartz shoots grades are generally less than 0.1 g/t Au.

Significant historic workings also occur at the Gaffney‟s find prospect. Mineralisation is hosted within sheared pyritic siltstone, greywacke and mafics. The prospect is the most deeply weathered in the project area and there potentially has been some supergene enrichment

development.


Gold was first discovered in the Egerton area in the 1890s. The most extensive workings were at the Hibernian deposit, which was mined down to 32 metres depth via several shallow shafts in the early to middle part of the last century. Following several years of exploration drilling in 1997 a shaft was sunk to 48 metres and tribute underground mining was completed over a small area. In 2001 a trial heap leach was carried out on historic tailings dumps at Hibernian, with 72 oz recovered over a three month period. Total gold production from the Egerton field to date is

estimated at around 8,500 troy ounces.


The project has been explored by a number of explorers in the past, their programs are summarised in Table 12 and significant assay results in Table 14 and Table 15.

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Table 12 Egerton Project: Exploration History


1977-1979 Amoco Minerals Completed stream sediment sampling, geological mapping and shallow RAB drilling.

1980-1981

Western Mining Corporation

Completed photogeological studies, geophysical and geochemical surveys around the old Hibernian workings. Four diamond drill holes were drilled, with one hole intercepting 0.3m at 21 g/t Au.

1987-1988 Onshore Resources

Completed mapping, costeaning, soil sampling, ground magnetics and a 2,000m RAB program around Gafney‟s Find (best result 1.2m at 9.6 – channel sample) and around old workings 2 km south of the Hibernian (best result 1.1m at 57.6 g/t - channel sample). Recommended follow up work in both areas.

1992-1993

Blackrange Exploration Pty Ltd

Completed mapping and sampling around old Hibernian and Gaffney‟s find workings and carried out some panning and metal detecting. Concluded that there was potential for a small scale surface mining operation (ie dry blowing), and further work was recommended to assess the hard rock potential.

1994-1998 Egerton Gold NL

Completed geological mapping, stream and soil geochemistry. Drilled 366 RAB holes (8,049m), 254 RC holes (14,469m) and 19 diamond holes (618m). The bulk of the drilling was focused on the Hibernian prospect where a small, structurally complex high grade gold system was delineated, returning a number of high grade intercepts (Table 10). Trial underground mining was undertaken in 1997 by using a small head frame and a 45 metre shaft (Isabella Shaft). In addition small drilling programs were completed at the Gaffney‟s Find prospect, where several high grade narrow intercepts were returned (Table 11), and the Red Back Prospect, where anomalous >0.1 g/t Au results were returned.

1998-2003 North Gascoyne Mining/ Aviva Corporation JV

Work was focussed on compiling and re-interpretation of past geological and geophysical data, and surface soil geochemistry. Heap leach trials were completed on old Hibernian Mine tailings in 2001.

2004-2007 NGM Resources Focused on assessing the potential of the Hibernian deposit. 81 RC holes (3,823m) were drilled testing the north and south shoots. NGM‟s exploration model for the deposit was that high grade gold was within narrow gently west plunging pencil like ore shoots hosted by tensional quartz vein gashes within a broader shear zone. The program returned many high grade intercepts, with results generally supporting this interpretation. Highest grades were noted to occur in areas of strong weathering which they suggested indicated the influence of some supergene enrichment. A JORC 2004 compliant combined Measured, Indicated, and Inferred Resource of 116,400t at 6.4 g/t Au (23,811oz) was estimated by Finore Pty Ltd. Metallurgical testwork indicated favourable recoveries (>95%).

RC drilling was also completed at Western Deeps (7 holes for 379m) where the best result was 6 metres at 3.4 g/t Au from 25 metres, with mineralisation noted as being open down dip and along strike. RC drilling was also completed at the Mako Prospect 2km east of Hibernian (11 holes for 511m) where the best result was 1m at 1.8 g/t Au from 22m. The Egerton project was divested when NGM changed its focus to nickel and uranium.

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The Hibernian deposit has a combined Measured, Indicated and Inferred Resource of 116,400 tonnes at 6.4 g/t Au for 23,811 ounces that has been estimated by Finore Pty (2005) in accordance with the guidelines of the JORC Code (2004) (Table 13). This includes a combined Measured and Indicated Resource of 78,500 tonnes at 7.0 g/t Au for 17,640 ounces. This Resource may be suited to small scale selective underground mining and there is a 48 metre deep shaft that was sunk in the 1990s that could be refurbished for access. In addition, some of the high grade resources lie within 20 metres of surface and there is potential to mine this, in a small open pit. Preliminary metallurgical work on the mineralisation by Bemex suggests that

metallurgical recoveries would be greater than 95%.

Table 13 Hibernian Prospect, Egerton Project: Summary of Resources (2.0 g/t Au cut-off)





TOTAL 116,400 6.4 23,811

The Hibernian deposit has only been shallowly explored to date with drilling testing to

approximately 70 metres below surface. (Figure 8, Figure 9).

The mafic dominated rock package that hosts mineralisation extends for 8km beyond the Hibernian deposit and has been sparsely drilled. There is potential for other Hibernian style vein systems, particularly where the mafics are intersected by north east and north-northeast striking shears. Elsewhere in the project area drilling has been limited in extent and shallow, there is

potential to identify extensions to known systems and identify new prospects.

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Table 14 Significant results (>10 g/t Au) from historical drilling at the Egerton Project – Hibernian Prospect


EHRC001 42 47 5 96.7 EHRC002 46 47 1 22.1 EHRC004 54 57 3 37.3 EHRC013 49 51 2 28.6 EHRC020 22 24 2 10.2 EHRC030 9 12 3 14.0 EHRC037 5 10 5 78.9 EHRC037 13 16 3 23.6 EHRC040 12 13 1 11.4 EHRC051 24 26 2 16.8 EHRC064 44 48 4 36.6 EHRC065 40 42 2 14.0 EHRC068 57 54 7 11.3 EHRC071 47 52 5 12.6 EHRC079 34 37 3 12.1 EHRC080 25 28 3 15.5 EHRC083 35 47 12 20.3 HED1 48 50 2 22.0 HED4 35 39 4 10.6 HED4 67 73 6 10.2 HED6 46.15 49.5 3.35 21.4 HED11 52.5 54.7 2.2 16.3 HED18 36 37 1 16.0 HERC1 19 21 2 11.0 HERC3 43 47 4 11.9 HERC12 46 54 8 124 HERC21 35 36 1 61.7 HERC22 35 39 4 15.9 HERC27 17 18 1 20.2 HERC31 56 59 3 12.7 HERC32 16 18 2 31.3 HERC58 49 60 11 19.9 HERC60 32 34 2 11.8 HERC64 32 36 4 22.0 HERC70 48 52 4 16.9 HERC71 21 26 5 14.9 HERC76 31 33 2 19.2 HERC79 28 29 1 19.3 HERC82 49 50 1 13.7 HERC82 57 58 1 85.0 HERC83 13 20 7 24.0 HERC118 17 20 3 22.1 HERC119 5 7 2 147.0 HERC137 45 46 1 19.9 HERC139 53 54 1 14.8 HERC139 57 58 1 12.1 HERC140 47 52 5 85.0 HERC148 64 69 5 14.2

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Table 15 Significant results (>10 g/t Au) from historical drilling at the Egerton Project – Gafney’s Find Prospect


GFRC13 22 26 4 72.3 GFRC16 49 54 5 15.9 GFRC26 16 17 1 20.3

Figure 9 Hibernian Prospect – Long Section looking north (after NGM, 2004)

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6. GIANT WELL PROJECT


The Giant Well Project is situated in the Eastern Goldfields of Western Australia approximately 45km north east of Leonora. The project can be accessed via the Leonora – Nambi Road and

secondary tracks.

6.2 Tenure

The project consists of one exploration licence with an area of 48km2. Tenement details are presented in Table 1 and in Figure 10.


The Giant Well Project is located within the Murrin greenstone belt between the Keith – Kilkenny Tectonic Zone to the west and the Celia Tectonic Zone to the east. The Murrin greenstone belt is

characterised by a large granitoid area with narrow greenstone belts (Griffin, 1990).

The project is covered by widespread transported material which covers the bedrock and is located within north-south trending basaltic units. To the east, the basalt is in contact with a large granite pluton. In the southern portion of the tenements, a Proterozoic dyke transects the basalt. Areas of quartz float within the vicinity of the granitoid contact are thought to indicate shearing or faulting (GME, 1995). The project area is dominated by mafic volcanics and dolerite intrusions which have been identified through RAB drilling and the limited outcrop. A younger micro-quartz gabbro has also been identified by RAB drilling and by its magnetic signature. A mineralised shear zone has been identified by RAB drilling. This shear incorporates Cow Bell Dig and continues to both the north and south under alluvial and colluvial cover. The shear is mainly

hosted within mafic volcanics and contains numerous quartz veins.


The project has been explored by a number of explorers in the past, their programs are summarised in Table 16 and significant assay results in Table 17.

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Figure 10 Giant Well Project: Location and Geology (after Legendre, 2009)

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Table 16 Giant Well Project: Exploration History


1993 G.R. Dale & Associates

Mullock and rock chip sampling of an area 30m x 10m returned results ranging from 0.23 to 1.40g/t Au.

1994 Cornwall Resource Corporation N.L.

Soil sampling consisting of 100 bulk orientation samples and 280 infill LAG soil samples was completed. Two anomalous areas were identified: one area with a result of 68ppb Au and Cowbell Dig with gold values up to 104ppb Au. A 2km long north-south trending gold anomaly was reported at Giant Well from the follow up infill soil sampling program with gold values up to 430ppb.

1994-1995 GME Resources N.L. GME‟s exploration program consisted of regional geological mapping, gridding, auger drilling, metal detecting and a ground magnetic survey. The metal detecting failed to find any gold. Auger drilling was undertaken to a maximum depth of 1.5m. None of the holes reached the bedrock hence no samples were submitted for assay.

1999-2000 Bruce Legendre and Associates

Soil sampling was undertaken resulting in the identification of an anomaly at Cowbell Dig. This was followed up with a 26 hole RAB drilling program (CD01-26) for a total of 1,442m. The best results from drilling are listed in Table 16.

2004-2007 Independence Group N.L.

Exploration consisted of 11 rock chip samples, 687 auger samples and a total of 106 RAB holes (GWRB01-106) for 5,629m. The maximum result from rock chip sampling was 2.83g/t Au and from auger sampling was 271 ppb Au. This resulted in the identification of four gold anomalies. Drilling intersected several sub-vertical shear zones containing gold. The most significant results from drilling are listed in Table 16. Further drilling was undertaken at Cowbell Dig. The company concluded from RAB drilling that at Cowbell Dig there is a mineralised zone with a

500m strike length (Figure 11).

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Figure 11 Drilling at Cowbell Dig Prospect (after Legendre, 2009)

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Table 17 Significant results from historical drilling at the Giant Well Project


CD01 25 26 1 1.5 CD01 29 34 4 2.2 CD01 45 46 1 1.3 CD14 19 22 3 1.5 CD14 27 30 3 2.5 CD24 4 8 4 1.0 CD24 48 49 1 1.7 CD24 51 52 1 1.1 CD04 39 40 1 1.0 CD04R 45 52 7 3.9 CD21 9 11 2 1.7 CD22 21 24 3 11.4 CD22 30 31 1 1.5 CD22 39 40 1 1.9 CD22 44 45 1 1.8 CD25 45 46 1 1.0 GWRB049 5 10 5 2.0 GWRB050 9 10 1 1.6 GWRB050 19 23 4 10.2 GWRB089 48 49 1 1.2 GWRB089 51 52 1 1.6 GWRB089 59 60 1 1.2 GWRB004 24 27 3 2.5 GWRB005 46 47 1 2.4 GWRB051 16 18 2 2.2 GWRB051 43 46 3 2.6 GWRB051 63 65 2 1.5 GWRB095 45- 46 1 1.1 GWRB101 93 99 6 1.8 GWRB063 23 25 2 1.2 GWRB059 46 56 10 0.9 GWRB099 94 95 1 1.1 GWRB052 5 6 1 1.0 GWRB090 55 56 1 0.8


The Giant Well project has undergone exploration by a number of companies which have been listed above. Soil sampling programs have identified a number of anomalies. Drilling programs have confirmed that the area is anomalous for gold. A noteworthy mineralised zone exceeding 500m has been identified at Cow Bell Dig (Figure 11). Independence Group identified several vertical shear zones with gold mineralisation. The paucity of outcrop and the widespread presence of transported overburden make this a more challenging area for prospecting but one

that, nonetheless, has further potential for shear-hosted gold mineralisation.

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7. EXPLORATION STRATEGY AND BUDGET

Exterra have indicated that their corporate strategy is to focus on the exploration and development of small to medium size high grade, high margin, gold deposits that have the near term potential to be developed and fund future growth of the company. In keeping with this strategy Exterra plan to focus on the Second Fortune prospect in their Linden Project area and the Hibernian prospect at their Egerton Project, as these have the greatest short term potential to be developed as small underground or open pit operations. The Zelica Project will also be a major focus given that there is short term potential to develop a vat leach gold operation at the

project and it is in close proximity to the Linden Project.

In addition Exterra have a number of advanced exploration targets identified elsewhere within their Linden and Egerton Projects, and a number of exploration areas within their Giant Well Project. Many of these areas have received little exploration attention in recent years. They intend to reassess these areas in a systematic fashion, identify and prioritise targets for drilling or

further work, and complete staged exploration programs to evaluate their potential.

Exterra propose to spend $0.9 Million in year one on exploration and resource development, and $1.1 Million in year two (Table 18). Exterra have made allowance for oversubscription of the IPO of up to $3 Million. Should this occur Exterra have indicated they will increase their exploration and evaluation budget pro-rata to the additional amount raised to accelerate advancement of their projects. In the case of the full $7 Million being raised, $1.7 Million will be spent on

exploration and resource development in year one and $1.8 Million in year two (Table 18).

Ravensgate considers the proposed exploration program to be consistent with the status and mineral potential of the projects. The planned exploration expenditure is considered to be sufficient to meet the costs of the exploration program and is adequate to meet the statutory

annual expenditure for the tenements.

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Table 18 Exterra Exploration Budget

Linden Project $AUD 4 Million Raising $AUD 7 Million Raising

Year One Year Two Total (Year 1+2) Year One Year Two Total (Year 1+2)

Drilling $302,500 $302,500 $605,000 $500,500 $577,500 $1,078,000

Geochemistry $22,000 $22,000 $55,000 $36,400 $42,000 $98,000

Geophysics $5,500 $5,500 $11,000 $9,100 $10,500 $19,600

Geology $110,000 $110,000 $220,000 $182,000 $210,000 $392,000

Engineering $55,000 $55,000 $110,000 $91,000 $105,000 $196,000

Administration $55,000 $55,000 $110,000 $91,000 $105,000 $196,000

TOTAL $550,000 $550,000 $1,100,000 $910,000 $1,050,000 $1,960,000

Zelica Project

Drilling $55,000 $165,000 $220,000 $231,000 $231,000 $462,000

Geochemistry $5,000 $15,000 $20,000 $21,000 $21,000 $42,000

Geophysics $0 $0 $0 $0 $0 $0

Geology $20,000 $60,000 $80,000 $84,000 $84,000 $168,000

Engineering $10,000 $30,000 $40,000 $42,000 $42,000 $84,000

Administration $10,000 $30,000 $40,000 $42,000 $42,000 $84,000

TOTAL $100,000 $300,000 $400,000 $420,000 $420,000 $840,000

Egerton Project

Drilling $110,000 $110,000 $220,000 $154,000 $154,000 $308,000

Geochemistry $10,000 $10,000 $20,000 $14,000 $14,000 $28,000

Geophysics $0 $0 $0 $0 $0 $0

Geology $40,000 $40,000 $80,000 $56,000 $56,000 $112,000

Engineering $20,000 $20,000 $40,000 $28,000 $28,000 $56,000

Administration $20,000 $20,000 $40,000 $28,000 $28,000 $56,000

TOTAL $200,000 $200,000 $400,000 $280,000 $280,000 $560,000

Giant Well Project

Drilling $27,500 $27,500 $55,000 $38,500 $38,500 $77,000

Geochemistry $2,500 $2,500 $5,000 $3,500 $3,500 $7,000

Geophysics $5,000 $5,000 $10,000 $7,000 $7,000 $14,000

Geology $10,000 $10,000 $20,000 $14,000 $14,000 $28,000

Engineering $0 $0 $0 $0 $0 $0

Administration $5,000 $5,000 $10,000 $7,000 $7,000 $14,000

TOTAL $50,000 $50,000 $100,000 $70,000 $70,000 $140,000

TOTAL BUDGET $900,000 $1,100,000 $2,000,000 $1,680,000 $1,820,000 $3,500,000

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8. REFERENCES

AngloGold Ashanti, 2009, Annual Report 2009 – Mineral Resource and Ore Reserve Report 2009,

www.anglogold.com

Boyd, D and Holgate, F., 1998, Linden Project E39/379, M39/255, E39/293, E39/428 Annual Report 3/11/1997 to 30/4/1998. Goldfields Exploration Pty Ltd. Item 55156

Boyd, D., 1999, Linden Project E39/379, M39/255, E39/293, E39/428 Annual Report 1/5/1998 to 30/4/1999. Goldfields Exploration Pty Ltd. Item 59636

Cabena, C., 2000, Linden Project E39/379, M39/255, E39/293, E39/428 Annual Report 1/5/1999

to 30/4/2000. Goldfields Exploration Pty Ltd. Item 60712

Clemen and Associates Pty Ltd, 1995, GME Resources N.L., Annual Report, Wildcat Prospect,

E37/349, for period August 1994 to August 1995.

Consulting Geologists Pty Ltd, 1993, Report on Exploration Licence 52/667 (Mt Clere), Western

Australia, Black Range Exploration P/L. Item A40257

Cornwall Resource Corporation N.L., 1994, Annual Report, Giant Well Project, (EL37/265 and

PL37/4386, 37/4746 and 37/4764) Period 8.8.1993 to 7.8.1994.

Davis, GM & Boyd, D, 1997. Summary of Haoma Mining NL‟s Linden Gold Project. Goldfields

Exploration internal company report K97/036r.

Egerton Gold NL., 1998, EL52/790 PL52/764 M52/343 52/567 Egerton Project Report on Exploration for the year ending 31/12/1997, Egerton Gold NL, Item A53867

Elliot, J., 2002, 2001 Annual Report for the period of the 1 January to 31 December 2001 Egerton Project, WA Tenement Group C238/2002. CSA Australia, Item A65131

Elliot, J., 2003, 2003 Annual Report for the period of the 1 Jan to 31 Dec 2003 Egerton Project,

WA Tenement Group C238/1995. NGM Resources Ltd.

Elliot, J & Duerden, P., 2004, 2004 Annual Report for the period of the 1 Jan to 31 Dec 2004

Egerton Project, WA Tenement Group C238/1995. NGM Resources Ltd.

Elliot, J., 2005, 2005 Annual Report for the period of the 1 Jan to 31 Dec 2005 Egerton Project,

WA Tenement Group C238/1995. NGM Resources Ltd.

Foster, M.V. and Associates, 1986, Drilling at the Second Fortune Mine near Linden, West

Australia, April 1986

GlenEagle Gold, 2005, Resources Exceeds 1.0 Million Ounces, ASX market release 10th September

2005

G.R. Dale and Associates, 1993, Annual Report, Giant Well Project (E37/265 and P37/4386) Period 8.8.92 to 7.8.93.

Griffin, T.J., 1990, Eastern Goldfields Province, Geology and Mineral Resources of Western Australia, Geological Survey Western Australia, Memoir 3p 77-119.

Groenewald, P.B., 2002, Outcrop geology in the Leonora-Laverton transect area from the East

Yilgarn Geoscience Database. Geological Survey of Western Australia, Kalgoorlie Regional Office.

Halberg, J., 1985, Geology and Mineral Deposits of the Leonora – Laverton Area, Northeast Yilgarn

Block, Hesperian Press, Perth

Haoma Mining NL, 2008, Activities Report for the Quarter Ended Jun 30, 2008, Haoma Mining ASX

release 31 July 2008.

Hebig R.C and Young, D.I., 1988, Linden Joint Venture Exploration Report March 1987 to March

1988, Haoma Northwest NL. Item A23744

JORC, 2004. Australasian Code for Reporting of Mineral Resources and Ore Reserves (The JORC Code) prepared and jointly published by: The Joint Ore Reserve Committee of the Australasian

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Australia

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Gold Mines media release 3rd July 2003, www.superpit.com.au

Legendre, B., 2009, Bruce Legendre, North Eastern and Murchison Goldfields Western Australia, Project Locations, Summary of the Leonora Project Area.

Legge, P.J., 1971, Eucalyptus South Prospect – Lake Carey Joint Venture – report on exploration MC‟s 524, 525, 526, 527, 594, 595, 596, 2259F – Mount Margaret Mineral Field on behalf of WA

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Longman, M.J, 1988, Annual Report Eucalyptus Gold Project Mt Margaret Goldfield, Western

Australia. Jarrahmont Holdings Pty Ltd. Item A25363

Longman, M.J, 2000, Eucalyptus Gold Project Annual Report for the period 13/5/1999 to

12/5/2000. Jarrahmont Holdings Pty Ltd. Item A60724

Marjoribanks, R.W., 1986, An Assessment of the Geology and Mineralisation of the Mt Linden

Area, Western Australia, Report to Jacia Natural Resource Consultants, April 1986.

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and Petroleum. https://minedexext.doir.wa.gov.au

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Moles, N.R., 1988, Egerton Project – Report on Second Phase Exploration May-June 1988, Onshore

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Montezuma, 2007, Montezuma to acquire Peak Hill Gold Mine, ASX company announcement 1st

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Salier, B. P, Groves, D,I, McNaughton, N.J, and Fletcher, I. R, 2004, The world-class Wallaby gold deposit, Laverton, Western Australia: An orogenic style overprint on a magmatic-hydrothermal magnetite-calcite alteration pipe., Mineralium Deposita Volume 39, Number 4 August 2004 pp

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Thompson, R.L., 1991, Initial Exploration Programme for 1991 – Linden Gold Project, Western

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9. GLOSSARY OF TECHNICAL TERMS

accumulation Width of mineralisation in metres multiplied by grade (g/t)

aeromagnetic A survey undertaken by helicopter or fixed-wing aircraft for the purpose of recording magnetic characteristics of rocks by measuring

deviations of the Earth‟s magnetic field.

airborne geophysical data

Data pertaining to the physical properties of the Earth‟s crust at or near surface and collected from an aircraft.

alluvial Relating to alluvium which is sediment deposited by flowing water, as in a riverbed, flood plain, or delta.

anomalies An area where exploration has revealed results higher than the local background level.

Achaean The oldest rocks of the Precambrian era, older than about 2,500 million years.

assayed The testing and quantification of metals of interest within a sample.

auriferous Containing gold.

base metals A non-precious metal, usually referring to copper, lead and zinc.

bedrock Any solid rock underlying unconsolidated material.

BIF A rock consisting essentially of iron oxides and cherty silica and possessing a marked banded appearance.

boudins Typical features of sheared veins and shear zones where, due to stretching along the shear foliation and compression perpendicular to

this, rigid bodies break up

carbonate Rock of sedimentary or hydrothermal origin, composed primarily of calcium, magnesium or iron and CO3. Essential component of

limestones and marbles.

chlorite A green coloured hydrated aluminium-iron-magnesium silicate mineral common in metamorphic rocks.

clastic Pertaining to a rock made up of fragments or pebbles (clasts).

colluvium A loose, heterogeneous and incoherent mass of soil material deposited by slope processes.

costean Small pit through the superficial deposit to the solid rock.

cymoid A vein, or a vein-shaped structure, shaped like a reverse curve.

eluvial Weathered material which is at or near its point of formation.

fault zone A wide zone of structural dislocation and faulting.

feldspar A group of rock forming minerals.

folding A term applied to the bending of strata or a planar feature about an axis.

foliated Banded rocks, usually due to crystal differentiation as a result of metamorphic processes.

gangue That part of an ore deposit from which a metal or metals is not extracted.

geochemical Pertains to the concentration of an element.

geophysical Pertains to the physical properties of a rock mass.

granite A coarse-grained igneous rock containing mainly quartz and feldspar minerals and subordinate micas.

granulite The granulite facies is part of a metamorphic facies series with the term granulite used to include a group of metamorphic rocks

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http://en.wikipedia.org/wiki/Vein_%28geology%29

http://en.wikipedia.org/wiki/Shear_zone

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recrystallised under a range of high temperature conditions.

greenschist A metamorphosed basic igneous rock which owes its colour and schistosity to abundant chlorite.

greenstone belt A broad term used to describe an elongate belt of rocks that have undergone regional metamorphism to greenschist facies.

horst An upthrown area between two parallel faults.

igneous Rocks that have solidified from a magma or lava.

intrusions A body of igneous rock which has forced itself into pre-existing rocks.

ironstone A rock formed by cemented iron oxides.

lineament A significant linear feature of the Earth‟s crust, usually equating a major fault or shear structure.

lithological contacts The contacts between different rock types.

mg/t Width of mineralisation in metres multiplied by grade (g/t)

magnetite A mineral comprising iron and oxygen which commonly exhibits

magnetic properties.

metamorphic A rock that has been altered by physical and chemical processes involving heat, pressure and derived fluids.

orogeny The process of mountain formation, especially by a folding and faulting of the earth's crust.

outcrops Surface expression of underlying rocks.

porphyry Rock containing relatively large conspicuous crystals, especially feldspar, in a fine-grained igneous matrix.

Proterozoic An era of geological time spanning the period from 2,500 million years

to 570 million years before present.

pyroclastic Composed primarily of rock fragments of volcanic origin.

RAB drilling A relatively inexpensive and less accurate drilling technique involving the collection of sample returned by compressed air from outside the drill rods.

RC drilling A drilling method in which the fragmented sample is brought to the

surface inside the drill rods, thereby reducing contamination.

regolith The layer of unconsolidated material which overlies or covers in situ basement rock.

resources In situ mineral occurrence from which valuable or useful minerals may be recovered.

rock chip sampling The collection of rock specimens for mineral analysis.

schist A crystalline metamorphic rock having a foliated or parallel structure due to the recrystallisation of the constituent minerals.

sedimentary A term describing a rock formed from sediment.

shale A fine grained, laminated sedimentary rock formed from clay, mud and silt.

silica Dioxide of silicon, SiO2, usually found as the various forms of quartz.

soil sampling The collection of soil specimens for mineral analysis.

strata Sedimentary rock layers.

stratigraphic Composition, sequence and correlation of stratified rocks.

syncline A fold in rocks in which the strata dip inward from both sides towards the axis.

ultramafic Igneous rocks consisting essentially of ferromagnesian minerals with trace quartz and feldspar.

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INDEPENDENT ACCOUNTANT'S REPORT

APPENDIX 1 CONDENSED STATEMENTS OF FINANCIAL POSITION

Note

Audited 28 Feb 2011

Pro-forma 28 Feb 2011

Pro-forma including over sub-scriptions

28 Feb 2011 $ $ $ Current Assets Cash Assets 3 745,521 3,487,016 6,304,616Trade and other receivables 30,085 30,085 30,085Total Current Assets 775,606 3,517,101 6,334,701 Non-Current Assets Plant and equipment 358,972 358,972 358,972Capitalised tenement acquisition costs 4 1,860,000 5,011,875 5,011,875Total Non-Current Assets 2,218,972 5,370,847 5,370,847

Total Assets 2,994,578 8,887,948 11,705,548 Current Liabilities Trade and other payables 5 460,354 300,149 300,149Borrowings 6 956,756 956,756 956,756Total Current Liabilities 1,417,110 1,256,905 1,256,905

Total Liabilities 1,417,110 1,256,905 1,256,905

Net Assets 1,577,468 7,631,043 10,448,643 Equity Contributed equity 7 3,408,829 9,261,279 12,078,879Share based payments reserve 8 - 201,125 201,125Accumulated losses (1,831,361) (1,831,361) (1,831,361)

Total Equity 1,577,468 7,631,043 10,448,643

To be read in conjunction with Appendix 2

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INDEPENDENT ACCOUNTANT'S REPORT

APPENDIX 2 NOTES TO THE STATEMENTS OF FINANCIAL POSITION

1. Statement of Significant Accounting Policies

(a) Statement of Compliance The financial information has been prepared in accordance with the measurement

requirements, but not the disclosure requirements, of the Australian Accounting Standards (AASBs) of the Australian Accounting Standards Board (AASB), Australian Accounting Interpretations and the Corporations Act 2001.

(b) Basis of Accounting The financial information has been prepared on an accruals basis and is based on historical

costs in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board.

(c) Revenue Recognition Interest revenue is recognised on a time proportionate basis that takes into account the

effective yield on the financial assets. (d) Income Tax The income tax expense or revenue for the year is the tax payable on the current year’s

taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or

substantively enacted at the end of the reporting period in the countries where the Company’s subsidiaries and associated operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is provided in full, using the liability method, on temporary differences

arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the reporting date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised for deductible temporary differences and unused tax

losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax liabilities and assets are not recognised for temporary differences between the

carrying amount and tax bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

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Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to

items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

(e) Impairment of Assets Goodwill and intangible assets that have an indefinite useful life are not subject to

amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.

(f) Investments and Other Financial Assets The Company classifies its investments in the following categories: financial assets at fair

value through profit or loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and, in the case of assets classified as held-to-maturity, re-evaluates this designation at each reporting date.

Loans and receivables are non-derivative financial assets with fixed or determinable

payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after the reporting date which are classified as non-current assets. Loans and receivables are included in trade and other receivables in the statement of financial position. Loans and receivables are carried at amortised cost using the effective interest method.

(g) Plant and Equipment All plant and equipment is stated at historical cost less depreciation. Historical cost includes

expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognised as a separate

asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to the statement of comprehensive income during the reporting period in which they are incurred.

Depreciation of plant and equipment is calculated using the reducing balance method to

allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives or, in the case of leasehold improvements and certain leased plant and equipment, the shorter lease term. The rates vary between 20% and 40% per annum.

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The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.

An asset’s carrying amount is written down immediately to its recoverable amount if the

asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with carrying

amount. These are included in the statement of comprehensive income. When revalued assets are sold, it is Company policy to transfer the amounts included in other reserves in respect of those assets to retained earnings.

(h) Exploration and Evaluation Costs Exploration and evaluation costs are written off in the year they are incurred apart from

acquisition costs which are carried forward where right of tenure of the area of interest is current and they are expected to be recouped through the sale or successful development and exploitation of the area of interest or, where exploration and evaluation activities in the area of interest have not reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. Where an area of interest is abandoned or the directors decide that it is not commercial, any accumulated acquisition costs in respect of that area are written off in the financial period the decision is made. Each area of interest is reviewed at the end of each accounting period and accumulated costs are written off to the extent that they will not be recoverable in the future.

(i) Trade and Other Payables These amounts represent liabilities for goods and services provided to the Company prior to

the end of the financial period which are unpaid. The amounts are unsecured, non-interest bearing and are paid on normal commercial terms.

(j) Borrowings Borrowings are initially recognised at fair value, net of transaction costs incurred.

Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the statement of comprehensive income over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

The fair value of the liability portion of a convertible bond is determined using a market

interest rate for an equivalent non-convertible bond. This amount is recorded as a liability on an amortised cost basis until extinguishment on conversion or maturity of the bonds. The remainder of the proceeds is allocated to the conversion option. This is recognised and included in shareholders’ equity.

Borrowings are removed from the statement of financial position when the obligation

specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in other income or finance cost.

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for atleast 12 months after the reporting date.

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(k) Employee Benefits Liabilities for wages and salaries, including non-monetary benefits, and annual leave

expected to be settled within 12 months of the reporting date are recognised in other payables in respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled.

(l) Contributed Equity Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in

equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration.

(m) Goods and services Tax Revenues, expenses and assets are recognised net of the amount of associated GST,

unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable.

The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the statement of financial position.

Cash flows are presented on a gross basis. The GST components of cash flows arising

from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.

2. Actual and Proposed Transactions to Arrive at Proforma Statement of Financial Position

Actual and proposed transactions adjusting the 28 February 2011 Audited Statement of Financial Position in the pro-forma Statement of Financial Position are as follows:

Note

Audited 28 Feb 2011



28 Feb 2011 $ $ $

3. Cash and Cash Equivalents At 28 February 2011 745,521 745,521 745,521Issue of Shares pursuant to Prospectus (a) - 4,000,000 7,000,000Payment of fundraising costs (b) - (398,300) (580,700)Payment of tenement acquisition costs (c) - (700,000) (700,000)Payment of accrued interest on convertible note (d) - (160,205) (160,205) 745,521 3,487,016 6,304,616

4. Capitalised Tenement Acquisition Costs At 28 February 2011 1,860,000 1,860,000 1,860,000Cash payment to vendors (c) - 700,000 700,000Shares issued to vendors (e) - 2,300,000 2,300,000Options issued to vendors (f) - 151,875 151,875 1,860,000 5,011,875 5,011,875

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Note

Audited 28 Feb 2011



28 Feb 2011

5. Trade and Other Payables At 28 February 2011 460,354 460,354 460,354Payment of accrued interest on convertible note (d) - (160,105) (160,105) 460,354 300,149 300,149

6. Borrowings – Converting Note

Exterra has issued to Haoma Mining NL a converting note in the sum of $1,000,000 (Note). The Note bears interest at the NAB prime lending rate for amounts in excess of $100,000 plus 4% and is convertible to 10,000,000 Shares.

Haoma may at its sole and absolute discretion elect to convert, in whole or in part, the outstanding loan amount into Shares by exercising its rights to convert under the Conditions of Issue of the Converting Note any time during the term of the Note. Interest must be paid in cash monthly once Exterra has been admitted to the official list of ASX. The Note expires on 31 December 2011.

Note

Audited 28 Feb 2011



28 Feb 2011

7. Contributed Equity At 28 February 2011 3,408,829 3,408,829 3,408,829Issue of Shares pursuant to Prospectus (a) - 4,000,000 7,000,000Payment of fundraising costs (b) - (398,300) (580,700)Shares issued to vendors (e) - 2,300,000 2,300,000Options issued to broker (g) - (49,250) (49,250) 3,408,829 9,261,279 12,078,879

8. Share Based Payments Reserve At 28 February 2011 - - -Options issued to vendors (f) - 151,875 151,875Options issued to broker (g) - 49,250 49,250 - 201,125 201,125

a) The issue of 20,000,000 ordinary shares at 20 cents each pursuant to this Prospectus to raise $4,000,000. The Company may accept oversubscriptions of up to a further 15,000,000 shares to be issued at 20 cents per share to raise up to a further $3,000,000;

b) The payment of fundraising costs estimated at $398,300 on 20,000,000 shares, and $580,700 on 35,000,000 shares;

c) Cash payments of $700,000 to vendors for tenement acquisitions;

d) Cash payment of accrued interest on convertible note of $160,205;

e) The issue of 11,500,000 ordinary shares to vendors, at a deemed cost of 20 cents per share, for a total cost of $2,300,000, as consideration for tenement acquisitions;

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f) The issue of 2,250,000 options with an exercise price of 20 cents, expiring on or before 30 September 2013, to vendors as consideration for tenement acquisitions. The options have a total deemed fair value of $151,875; and

g) The issue of 500,000 options with an exercise price of 20 cents, expiring 5 years after the date of issue, to the broker as consideration for capital raising services. The options have a total deemed fair value of $49,250.

9. Contingent Liabilities

Based on discussions with the Directors and legal advisors, to our knowledge, the Company has contingent liabilities as noted by proforma adjustments (c) to (f) upon Listing. These payments of cash and issues of shares and options relate to tenement acquisition and capital raising agreements entered into by the Company.

10. Commitments

Based on discussions with the Directors the Company has exploration commitments of $509,300 in the first year to maintain its exploration permits in good standing. Additional exploration expenditure is likely to occur on a discretionary basis.

The Company has additional commitments pursuant to a consulting agreement for the services of Mr Davis to be paid a daily rate of $1,200 per 8 hour day or pro rata per part day. This agreement will be superseded by a service agreement for Mr Davis to act as Managing Director with an annual salary of $250,000 once the Company has been admitted to the Official List of ASX.

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7. SOLICITOR’S REPORT ON TENEMENTS 25 March 2011 The Directors Exterra Resources Ltd 23 Altona Street West Perth WA 6005 Dear Sirs Solicitor's Report This report is prepared for inclusion in a prospectus (Prospectus) to be dated on or about 4 April 2011 for issue by Exterra Resources Limited ACN 138 222 705 (Company) of 20,000,000 Shares (with oversubscritions of a further 15,000,000 Shares) shares at an issue price of 20 cents ($0.20) per Share. This Report relates to various mining tenements in Western Australia (Tenements) held by the Company. The Tenements are set out in full in the Tenements Schedule (Schedule) at the end of this Report. 1 Searches We have conducted the following searches and enquiries: (a) searches (dated 22 March 2011) of the Tenements in the register maintained by

the Department of Mines and Petroleum of Western Australia (DMP) pursuant to the Mining Act 1978 (WA) (Mining Act (WA)); and

(b) quick appraisal searches (dated 22 March 2011) of the Tenements obtained on-

line from the Tengraph system maintained by the DMP. Based on our searches and enquiries and subject to the statements set out below, we confirm at the date of the searches: (a) the details of the Tenements referred to in the Schedule are accurate as to the

status and registered holders of those Tenements; (b) all applicable rents due in respect of the Tenements under the Mining Act (WA)

have been paid; and (c) none of the Tenements are subject to any unusual conditions of a material nature

other than as disclosed in the Schedule.

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SECTION 7: Solicitors Report on Tenements

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2 Tenements The Tenements comprise applications for and granted exploration licences (prefixed “E”), applications for and granted mining leases (prefixed “M”), applications and granted prospecting licences (prefixed “P”) and granted miscellaneous licences (prefixed “L”). Each granted Tenement is subject to standard conditions including conditions requiring the holder to pay rent and, with the exception of the miscellaneous licences, to meet certain annual expenditure requirements and lodge annual technical reports. Each Tenement carries a condition requiring the consent of an officer of the DMP prior to undertaking any ground disturbing work. If ground disturbing work is carried out, all disturbed areas must be properly rehabilitated. Conditions designed to protect existing infrastructure such as roads, powerlines, pipelines and survey points apply to all mining tenements. Additional specific conditions are set out in the Schedule. Tenement holders must pay Government royalties on minerals mined from a mining tenement, and may become liable to pay a safety levy based on the number of hours that are spent working on a group of tenements. Significant amendments to the Mining Act (WA) (Amendments) came into operation on 10 and 11 February 2006. The Amendments fundamentally affect the administration of mining tenements in Western Australia. The exploration licences were all applied for and granted after the Amendments. All were granted with 5 year terms which may be extended for a further period of 5 years, and thereafter for further periods of 2 years. The exploration licences are subject to a requirement that the holder must relinquish 40% of the area of the exploration licence at the end of the 5th year of the term of the exploration licence. This relinquishment requirement may be deferred for one year but not avoided. Ministerial consent is required under the Mining Act (WA) before any legal or equitable interest in an exploration licence can be created or dealt with during the first year of the term of the licence. An agreement to sell an interest may be entered into provided that it is subject to a condition requiring the consent of the Minister. The prospecting licences were applied for and granted both before and after the Amendments. Those applied for prior to the amendments were granted for periods of 4 years and are not renewable. Those prospecting licences applied for after the Amendments will, if granted, be granted for a period of 4 years and may be extended for one further period of 4 years. The Mining Act (WA) gives the holder of an exploration licence or a prospecting licence the right to apply for a mining lease (or mining leases) over the area the subject of the exploration or prospecting licence. A mining lease may only be applied for over land

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where, at minimum, a mineral resource (not to a JORC standard) exists or if a mining proposal has been lodged with the application. Mining leases are granted for a period of 21 years, renewable for a further 21 years. Ministerial consent is required under the Mining Act (WA) prior to assigning an interest in a mining lease. The Tenements also include three miscellaneous licences. Miscellaneous licences permit the holder to construct or install facilities ancillary to a mining operation such as roads or pipelines. The Schedule sets out a brief description of the Tenements and a summary of any encumbrances. In relation to the Schedule, we make the following comments: (a) references to the areas of the Tenements are taken from the details shown on

the tenement searches, it is not possible to verify those areas without conducting a survey which has not been undertaken;

(b) exploration licences are measured by graticular blocks which, depending on where the licence is located, range in area from approximately 2.8 km2 to 3.3km2;

(c) the area of a tenement as shown in the schedule might be reduced by the

existence of pre-existing tenements situated within the boundaries of the relevant tenement and a subsequent requirement that the area of the earlier tenement is excised from the grant of the later tenement; and

(d) the rights of a holder of a Tenement is subject to compliance by that holder with

the terms and conditions under the Mining Act (WA) and regulations made thereunder and the conditions specifically set out in the grant of the relevant Tenement.

3 Native Title In Mabo v Queensland (No 2) (1992 175 CLR 1) the Australian common law recognised a form of native title giving Aboriginal people certain rights to their traditional lands. The rights recognised in native title may vary from place to place and from people to people but in each case will originate in customary rights and the Aboriginal group claiming the rights must have maintained a traditional connection with the land. Native title rights may be extinguished voluntarily or by legislative or executive action inconsistent with the native title such as the grant of a freehold interest in land. Native title may also be partially extinguished by the grant of rights over native title land not wholly inconsistent with native title rights. Where native title has been partially extinguished, it will co-exist with other rights to the land. The Native Title Act 1993 (Cth) (Native Title Act) was enacted in response to the common law recognition of native title. Among other things, the Native Title Act:

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(a) provides a procedure for the recognition of native title claims in the Federal

Court; (b) confirms the validity of titles granted by the Federal Government prior to the

commencement of the Native Title Act and provides for the States and Territories to validate such titles; and

(c) specifies the procedure for the grant of mining tenements which may affect native

title rights. The Native Title Act was amended in 1998 by the Native Title Amendment Act 1998. The Western Australian Parliament has enacted the Titles (Validation) and Native Title (Effect of Past Acts) Act 1995 which adopts the Native Title Act in Western Australia. 4 Native Title Claims A person claiming to hold native title may lodge an application for determination of native title with the Federal Court. If the claim satisfies the registration test set out in the Native Title Act (Registration Test) it will be entered on the Register of Native Title Claims maintained by the NNTT. Registered claimants are afforded certain procedural rights, including the "right to negotiate". Claims which fail the Registration Test are, nevertheless heard by the Federal Court. Native Title Claims affecting the Tenements have been noted in the Schedule. The fact a claim has been lodged does not necessarily mean that native title exists over the area claimed, nor does the absence of a claim necessarily indicate that no native title exists over that area. The existence of native title will be established in due course as the claims are determined by the Federal Court. 5 Validity of titles Under the Native Title Act, and subject to certain exceptions, the grant of a mining tenement on or after 1 January 1994 that affects native title is a “future act”. Mining tenements granted after 23 December 1996 that affect native title will be valid only if the applicable processes of the Native Title Act have been complied with. We understand that the DMP has complied with such processes but have not undertaken independent enquiries to confirm this is the case. 6 Aboriginal Heritage (a) Commonwealth Legislation

The Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth) (Commonwealth Heritage Act) is aimed at the preservation and protection of any Aboriginal areas and objects that may be located on the Tenements.

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Under the Commonwealth Heritage Act, the Minister for Aboriginal Affairs may make interim or permanent declarations of preservation in relation to significant Aboriginal areas or objects, which have the potential to halt exploration activities. Compensation is payable by the Minister to a person who is, or is likely to be, affected by a permanent declaration of preservation. It is an offence to contravene a declaration made under the Commonwealth Heritage Act.

(b) Western Australia

Sites that may be of spiritual, cultural or heritage significance to Aboriginal persons may be protected by the Aboriginal Heritage Act 1972 (Heritage Act). The Heritage Act makes it an offence to alter or damage a site of significance to Aboriginal people. The Heritage Act provides for but does not compel the registration of such sites. It is an obligation of a party disturbing any area of the state to ensure it does not disturb such a site. We have not undertaken any searches or investigations as to whether there are or may be any sites protected by the Heritage Act within the area of the Tenements. It is common practice for an explorer to undertake surveys of any area that may host such sites prior to carrying out any ground disturbing activity.

7 Assumptions and qualifications In preparing this Report: (a) we have relied on the information provided as a result of the searches which we

have made or caused to be made of the register and the Tengraph system maintained by DMP being accurate and complete;

(b) where compliance with requirements necessary to maintain a Tenement in good

standing or a possible claim in respect of a Tenement is not disclosed on the face of the searches referred to above, we express no opinion on that compliance or claim;

(c) where any agreement, dealing or act (including disturbing the land for exploration

or mining) in a Tenement requires an authorisation, approval, permission or consent (Authorisation) under the Mining Act (WA), any regulations made thereunder or any other relevant legislation, we have assumed that Authorisation has been or will be granted in due course;

(d) where any dealing in a Tenement has been lodged for registration but is not yet

registered, we express no opinion as to whether the registration will be effected, or the consequences of non-registration;

(e) we have assumed that the Company has complied with all applicable provisions

of the Mining Act (WA) and all other legislation relating to the Tenements;

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(f) we have not researched the underlying land tenure in respect of the Tenements

to determine if native title rights have or have not been extinguished, or the extent of any extinguishment;

(g) we have not undertaken the extensive research necessary to establish if native

title claims may be made in the future over the area of the Tenements; and (h) we have not researched the area of the Tenements to determine if there are any

registered or unregistered sites of significance to aboriginal people within the area.

8 Consent This report is given on the date set out at the commencement and unless specified to the contrary, speaks only to the laws in force on that date. House Legal has consented to the inclusion of this Report in the Prospectus in the form and context in which it is included and have not withdrawn that consent before the lodgement of the Prospectus with ASIC. Yours faithfully

House Legal

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Tenements Schedule Tenement Holder Status Area Application

Date Grant Date Expiry Date Required

Expenditure Notes

Linden Project E39/1232 HMNL Live 6 blocks 15/5/2006 8/12/2009 7/12/2014 $20,000 1, 2, 15, 26 L39/12 HMNL Live 30 ha 11/12/1987 26/5/1988 25/5/2013 N/A 3, 15, 26 L39/13 HMNL Live 1 ha 8/4/1988 26/5/1988 25/5/2013 N/A 4, 15, 26 L39/14 HMNL Live 0.24 ha 8/4/1988 26/5/1988 25/5/2013 N/A 4, 15, 26 M39/255 HMNL Live 19.4 ha 11/1/1991 8/5/1991 7/5/2012 $10,000 5, 15, 26 M39/385 HMNL Live 152.8 ha 31/8/1995 24/8/2010 23/8/2031 $15,300 15, 26 M39/386 HMNL Live 0.76 ha 31/8/1995 24/8/2010 23/8/2031 $5,000 15, 26 M39/387 HMNL Live 178.2 ha 31/8/1995 24/8/2010 23/8/2031 $17,900 15, 26 M39/500 HMNL Pending 454 ha 7/5/1997 N/A N/A N/A 6, 7, 15, 26 M39/629 HMNL Pending 68.2 ha 3/12/1997 N/A N/A N/A 8, 15, 26 M39/649 HMNL Live 755 ha 12/2/1998 8/7/2008 7/7/2029 $75,500 9, 15, 26 M39/650 HMNL Live 855.7 ha 12/2/1998 8/7/2008 7/7/2029 $85,600 15, 26 M39/780 HMNL Live 6.79 ha 5/5/2000 24/8/2010 23/8/2031 $10,000 15, 26 M39/781 HMNL Live 9.68 ha 8/5/2000 24/8/2010 23/8/2031 $10,000 15, 26 M39/794 HMNL Live 419 ha 20/7/2000 8/7/2008 7/7/2029 $41,900 10, 15, 26 M39/795 HMNL Live 580 ha 20/7/2000 8/7/2008 7/7/2029 $58,000 11, 15, 26 F

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P39/2974 HMNL Live 144.2 ha 17/3/1993 12/5/1993 11/5/1995 $5,800 12, 13, 15, 26 P39/2975 HMNL Live 165.4 ha 17/3/1993 12/5/1993 11/5/1995 $6,640 12, 13, 15, 26 P39/2976 HMNL Live 108.2 ha 17/3/1993 12/5/1993 11/5/1995 $4,360 12, 13, 15, 26 Tenement Holder Status Area Application


Expenditure Notes

P39/4525 HMNL Pending 143.9 ha 15/5/2006 N/A N/A N/A 14, 15, 26 P39/4526 HMNL Pending 167.8 ha 15/5/2006 N/A N/A N/A 14, 15, 26 P39/4527 HMNL Pending 108.6 ha 15/5/2006 N/A N/A N/A 14, 15, 26

Giant Well Project

E37/1022-I BRL LRPL Live 16 bl 24/8/2009 18/5/2010 17/5/2015 $20,000 16, 17, 18

Egerton Project

E52/2117 MZM Live 34 blocks 3/4/2007 20/11/2008 19/11/2013 $34,000 21, 22 E52/2515 Exterra Live 24 blocks 5/11/2009 11/2/2010 10/2/2015 $24,000 21, 23 M52/343 XPL Live 120.3 ha 24/8/1992 11/11/1992 10/11/2013 $12,100 20, 21, 24, 25 M52/567 XPL Live 38.8 ha 2/6/1995 2/8/1995 1/8/2016 $10,000 21, 24 Eucalyptus Project

M39/292 EGM Live 5.56ha 16/4/1993 1/9/1993 31/8/2014 $7,906 19, 26 M39/480 Longman Live 200ha 9/12/1996 27/11/2008 26/11/2029 $20,000 19, 26 M39/914 Dixon Live 278ha 14/10/2004 27/6/2008 26/6/2029 $27,800 19, 26 F

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M39/966 Dixon Live 203ha 16/8/2005 27/6/2008 26/6/2029 $20,300 19, 26 M39/969 Dixon Live 87ha 16/8/2005 27/6/2008 26/6/2029 $10,000 19, 26 M39/991 Dixon Live 213ha 10/1/2006 27/6/2008 26/6/2029 $21,300 19, 26 M39/1064 Dixon Live 565ha 9/2/2006 27/6/2008 26/6/2029 $56,600 19, 26 P39/4317 Crew Live 8ha 24/11/2003 13/12/2007 12/12/2011 $2,000 19, 26 Tenement Holder Status Area Application


Expenditure Notes

P39/4556 RRL Live 75.9ha 11/8/2006 1/7/2008 30/6/2012 $3,040 19, 26 P39/4622 Dixon Live 122ha 25/1/2007 9/12/2008 8/12/2012 $4,880 19, 26 P39/4623 Dixon Live 114ha 25/1/2007 9/12/2008 8/12/2012 $4,560 19, 26 P39/4624 McKnight Live 121.3ha 25/1/2007 9/12/2008 8/12/2012 $4,880 19, 26 P39/4625 McKnight Live 181.3ha 25/1/2007 9/12/2008 8/12/2012 $7,280 19, 26 P39/4626 McKnight Live 126.1ha 25/1/2007 9/12/2008 8/12/2012 $5,080 19, 26 P39/4627 McKnight Live 159ha 25/1/2007 9/12/2008 8/12/2012 $6,400 19, 26 P39/4628 McKnight Live 186.8ha 25/1/2007 9/12/2008 8/12/2012 $7,480 19, 26 P39/4629 McKnight Live 152.3ha 25/1/2007 9/12/2008 8/12/2012 $6,120 19, 26 P39/4630 McKnight Live 106.9ha 25/1/2007 9/12/2008 8/12/2012 $4,280 19, 26 P39/4631 McKnight Live 192.8ha 25/1/2007 9/12/2008 8/12/2012 $7,720 19, 26 P39/4632 McKnight Live 150.8ha 25/1/2007 9/12/2008 8/12/2012 $6,040 19, 26 P39/4633 McKnight Live 182.4ha 25/1/2007 9/12/2008 8/12/2012 $7,320 19, 26 P39/4634 McKnight Live 117.1ha 25/1/2007 9/12/2008 8/12/2012 $4,720 19, 26 P39/4635 McKnight Live 158ha 25/1/2007 9/12/2008 8/12/2012 $6,360 19, 26 P39/4636 Dixon Live 160ha 25/1/2007 9/12/2008 8/12/2012 $6,400 19, 26 F

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Zelica Project

E39/1578 Gianni Live 2 blocks 11/6/2010 15/12/2010 14/12/2015 $15,000 26, 27 E39/1627 Gianni Pending 1 block 7/12/2010 N/A N/A N/A 26, 27

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Key to Holders: BRL Bruce Robert Legendre Crew Ross Frederick Crew Dixon Trevor John Dixon EGM Eucalyptus Gold Mines Pty Ltd ACN 008 944 83 Exterra Exterra Resources Ltd ACN 138 222 705 Gianni Peter Romeo Gianni HMNL Haoma Mining NL ACN 008 676 177 LIR Liberty Resources NL ACN 103 348 947 (Formerly Liberty Gold NL) Longman Murray James and Noreen Joan Longman LRPL Legend Resources Pty Ltd ACN 119 100 784 McKnight Russell Geoffrey McKnight MZM Montezuma Mining Company Ltd ACN 119 711 929 RRL Regal Resources Ltd ACN 106 294 106 XPL Xplor Pty Ltd ACN 107 358 341 Notes Each granted tenement is subject to standard conditions including conditions requiring the holder to obtain the consent of the relevant officer of the Department of Mines and Petroleum (DMP) prior to conducting any ground disturbing work, basic environmental and rehabilitation conditions (such as the removal of all waste, capping of drill holes etc) and prohibitions or restrictions on disturbing existing infrastructure such as roads, powerlines, airstrips, geodetic stations etc. In addition to these conditions, the following applies.

1. No mining on Cemetery Reserve 4683 and mining within a distance of 140 metres laterally from the Reserve being confined to below a depth of 50 metres from the lowest part of the surface of the land with rights of ingress to and egress from the said Reserve being at all times preserved to the Public.

2. The prior written consent of the Minister responsible for the Mining Act 1978 being obtained before commencing mining on Water Reserve 11543 and Linden Townsite.

3. This tenement has been granted for the purpose of a water pipeline. Special conditions related to the use of, and eventual removal of, the water pipeline apply.

4. This tenement has been granted for the purpose of water extraction. Special conditions related to the fencing and rehabilitation of wells apply.

5. Consent has been obtained to mine on Water Reserve 5584 subject to special conditions to protect the area generally and bores and other water sources specifically.

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6. This tenement is a conversion of Prospecting Licences 39/2974 to 39/2976 and is subject to a reversion to Prospecting Licences 39/4525 to 39/4527. Each of Prospecting Licences 39/2974 to 39/2976 are the subject of plaints for forfeiture and if those plaints are successful and those Prospecting Licences are forfeited, this tenement will be refused. See note 13 below for more details on Prospecting Licences 39/2974 to 39/1976.

7. This tenement was recommended for grant on 4 July 1997.

8. This tenement was recommended for grant on 19 January 1998.

9. No mining is permitted on Water Reserve 5584 without the prior written consent of the Minister.

10. The prior written consent of the Minister is required prior to any mining activity being carried out on Crown Reserve 7212 Trigonometrical Station and 12217 Water Act 57 Vic No 20.

11. The prior written consent of the Minister is required before any mining activity being carried out on Mineral Processing Reserve 11295.

12. This tenement remains in force beyond its expiry date as it is subject of a conversion to Mining Lease 39/500.

13. This tenement is subject to a caveat lodged on 14 May 1993 by Enterprise Gold Mines NL, a caveat lodged on 24 November 1994 by Geoffrey Simmonds, a plaint for forfeiture lodged on 21 July 1995 by Tunza Holdings Pty Ltd, an objection to an application for exemption from expenditure conditions lodged on 21 July 1995 by Tunza Holdings Pty Ltd and caveats lodged on 30 October 1997 and 26 June 1998 by GME Resources NL. The tenement is at risk of forfeiture and, if it is not forfeited and is retained, it may be subject to claims from the caveators that may prevent the Exterra obtaining title or result in undisclosed royalties being paid. In the event that Exterra does obtain title, it will only be entitle to a 90% interest in the tenement.

14. This tenement is a reversion of application for Mining Lease 39/500 which in turn is a conversion of Prospecting Licences 39/2974 to 39/2976 which are subject to plaints for forfeiture. If those plaints are successful and those Prospecting Licences are forfeited, this tenement might be refused. See note 13 for more details on Prospecting Licences 39/2974 to 39/1976. In the event that Exterra does obtain title, it will only be entitle to a 90% interest in the tenement.

15. Exterra has a right to purchase all of the registered tenement holders interest in this tenement on the terms described in section 8.2 of this prospectus under the heading “Material Contract Summary”, 8.2(a) Linden Project. Exterra holds an original executed instrument of transfer for this tenement which will, upon its lodgement and registration at the DMP, transfer Haoma’s interest in the tenement to Exterra.

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16. The Minister has granted permission to explore for iron on this tenement.

17. The prior written consent of the Minister is required prior to any exploration being carried out on Trigonometrical Staton Reserve 7186.

18. Exterra has a right to purchase 90% of the registered tenement holder’s interest on the terms described in section 8.2 of this prospectus under the heading “Material Contract Summary”, 8.2(b) Giant Well Project. Exterra holds an original executed instrument of transfer for this tenement which will, upon its lodgement and registration at the DMP, will transfer legal title to a 90% interest in the Tenement to Exterra.

19. This tenement is subject to an application for forfeiture lodged by Landtec Pty Ltd and an objection by Landtec Pty Ltd to an application for exemption from expenditure commitments. If those actions are successful, the tenement might be forfeited. Exterra is not managing the defence of those legal actions and will not take any interest in the tenement until those actions are resolved in the current tenement holders favour. If the legal actions are resolved in the tenement holder’s favour, Exterra has a right to purchase an interest in the tenement as described in section 8.2 of this prospectus under the heading “Material Contract Summary”, 8.2(e) Eucalyptus Project. Exterra does not expect that the legal actions will be resolved whilst this prospectus is open, and will lodge a supplementary prospectus describing the tenement and its rights to the tenement in more detail should the legal actions be resolved and its rights to the tenement crystallise during that time.

20. A low impact mining operation application has been approved on this tenement and carries special conditions to protect the environment.

21. This tenement is within the area defined by the Nharnuwanagga Wajarri and Ngarlawangga Indiginous Land Use Agreement.

22. Exterra has a right to purchase all of the registered tenement holder’s interest on the terms described in section 8.2(c) of this prospectus under the heading “Material Contract Summary”, Egerton Project (Montezuma).

23. The prior written consent of the Minister is required prior to any mining activity being carried out on Water Reserves 13186 and 14690.

24. Exterra has a right to purchase all of the registered tenement holder’s interest on the terms described in section 8.2(d) of this prospectus under the heading “Material Contract Summary”, Egerton Project (Xplor).

25. A bond in the sum of $10,000 is required to be lodged against this tenement to guarantee the rehabilitation of the tenement following completion of activities.

26. This tenement is the subject of the Kurrku (WC10/18, WAD385/10) registered native title claim.

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27. Exterra has a right to purchase all of the registered tenement holder’s interest on the terms described in section 8.2(f) of this prospectus under the heading “Material Contract Summary”, Zelica Project.

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8. ADDITIONAL INFORMATION

8.1 Rights Attaching to Shares There is only one class of shares in the Company being fully paid ordinary shares. The rights attaching to shares in the Company are:

a) set out in the constitution of the Company, a copy of which is available for inspection at the registered office of the Company during normal business hours; and

b) in certain circumstances, regulated by the Corporations Act, the Listing Rules of ASX, the SCH Business Rules and the general law.

The following is a broad summary of the rights, privileges and restrictions attaching to all Shares. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders.

All Shares issued pursuant to this Prospectus will from the time they are issued, rank pari passu with all the Company’s existing Shares.

(a) Voting Rights Subject to any rights or restrictions for the time being attached to any class or classes of Shares (at present there are none), at meetings of Shareholders of Exterra:

(i) each Shareholder entitled to vote may vote in person or by proxy, attorney or representative;

(ii) on a show of hands, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder has one vote; and

(iii) on a poll, every holder of Shares who is present in person or by proxy, attorney or representative has one vote for every fully paid Share held by him or her, and a proportionate vote for every partly paid Share, registered in such Shareholder's name on the Company's share register.

(b) Rights on Winding Up Subject to the rights of holders of shares with special rights in a winding up (at present there are none), on a winding up of the Company all assets that may be legally distributed among members will be distributed in proportion to the number of fully paid Shares held by them (and a partly paid share is counted as a fraction of a fully paid share equal to the amount paid on it, divided by the total issue price of the share).

(c) Meetings and Notice Each Shareholder is entitled to receive notice of and to attend general meetings for the Company and to receive all notices, accounts and other documents required to be sent to Shareholders under the constitution of the Company or the Corporations Act.

(d) Transfer of Shares Subject to the Constitution of the Company, the Corporations Act, and any other laws and ASTC Settlement Rules and ASX Listing Rules, Shares are freely transferable.

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(e) Future Increases in Capital The allotment and issue of any Shares is under the control of the Directors. Subject to restrictions on the allotment of Shares to Directors or their associates, the ASX Listing Rules, the Constitution of the Company and the Corporations Act, the Directors may allot or otherwise dispose of Shares on such terms and conditions as they see fit.

(f) Variation of Rights Under the Corporations Act, the Company may, with the sanction of a special resolution passed at a meeting of Shareholders vary or abrogate the rights attaching to shares. If at any time the share capital is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms of the issue of the shares of that class), whether or not the Company is being wound up may be varied or abrogated with the consent in writing of the holders of three quarters of the issued shares of that class, or if authorised by a special resolution passed at a separate meeting of the holders of the shares of that class.

(g) Dividend Rights Dividends are payable out of the Company's profits and are declared by the Directors. Subject to the rights of holders of shares issued with special, preferential or qualified rights (at present there are none), dividends declared will be paid according to the amounts paid or credited as paid on the shares for which the dividends are paid.

(h) Shareholder Liability As the shares under the Prospectus are fully paid shares, they are not subject to any calls for money by the Directors and will therefore not become liable for forfeiture.

(i) Alteration to the Constitution The Constitution can only be amended by a special resolution passed by at least three quarters of Shareholders present and voting at the general meeting. At least 28 days written notice specifying the intention to propose the resolution as a special resolution must be given.

(j) Liquidation Rights The Company has only issued one class of shares, which all rank equally in the event of liquidation. Once all the liabilities of the Company are satisfied, a liquidator may, with the authority of a special resolution of Shareholders divide the whole or any part of the remaining assets of the Company. The liquidator can with the sanction of a special resolution of the Company’s Shareholders vest the whole or any part of the assets in trust for the benefit of Shareholders as the liquidator thinks fit, but no Shareholder of the Company can be compelled to accept any shares or other securities in respect of which there is any liability.

8.2 Summary of Material Contracts The summary of the contracts to which the Company is a party which may be material in terms of the Offer or the operation of the business of the Company are:

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(a) Linden Project On 27 October 2009, Exterra and Haoma Mining NL (Haoma) entered into a letter agreement for the purchase of a 100% interest in the Linden Project.

The mining tenements contained within the Linden Project are listed in full in the Tenement Schedule to the Solicitor’s Report in section 7 of this Prospectus and are referred to as the “Linden Tenements”. The Linden Project comprises a 100% interest in all of the Linden Tenements, other than P39/2974 to P39/2976 and applications for P39/4525 to P39/4527 and M39/500 (Tunza Tenements).

Exterra’s rights to the Tunza Tenements are limited to a right to acquire a 90% interest only and may be further compromised as described below. The remaining 10% interest in the Tunza Tenements, held by a third party and is free carried by Exterra.

The Linden Project also contains various items of infrastructure located on the Linden Tenements including 8 x 5 person transportable accommodation units, male and female transportable ablution blocks, a transportable kitchen / mess building including coolroom / freezer, a transportable office, a 25Kva generator, 12,000l fuel tank, a potable water bore pump and genset, satellite free to air television system, some small sheds and a sea container.

Completion of the sale of the Linden Project occurred on 9 December 2009. Consideration for the sale is $2,600,000 ($1,100,000 has been paid and $1,000,000 has been funded via a converting note). A final payment of $500,000 is required to be paid to Haoma within 5 days of Exterra being admitted to the Official List.

The Note, issued as part of the consideration bears interest at the NAB prime lending rate for amounts in excess of $100,000 plus 4%. Haoma may require Exterra to convert the whole or any part of the outstanding loan amount into Shares. Exterra may elect to repay the whole or any part of the outstanding loan amount before the Notes expiry date (being 31 December 2011), however upon receipt of such election, Haoma will have 30 days in which it may elect to convert such repayment into Shares. Interest must be paid in cash.

The Tunza Tenements form part of the Linden Gold Project. P39/2974 to P39/2976 are subject to plaints for forfeiture by Tunza Holdings Pty Ltd. Applications for P39/4525 to P39/4527 and M39/500 have been made over the same area as P39/2974 to P39/2976 and in the event that P39/2974 to P39/2976 are forfeited, those applications will likely be refused. Haoma is required to use its best endeavours to defend the plaints, however, as the Tunza Tenements are at risk and could be subject to forfeiture, Exterra has not attributed any value, or committed any exploration funds, to them in this Prospectus.

(b) Giant Well Project On 5 November 2009, Exterra entered into an agreement with Bruce Robert Legendre (Legendre), AM-Australian Minerals Exploration Pty Ltd (AME) and Legend Resources Pty Ltd (Legend) (collectively, the “Sellers”) for the purchase by Exterra of a 90% interest in the Giant Well tenement (E37/1022) (Giant Well Project

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As consideration for the sale of the purchase of the 90% interest in the Giant Well Project, Exterra issued to the Sellers a total of 1,000,000 Shares at an issue price of $0.001 per Share. The Shares were issued to the sellers in the following proportions: 850,000 to Legendre; 50,000 to AME, and 100,000 to Legend.

Completion of the sale occurred on 5 November 2009.

In the event that Exterra does not receive conditional approval to be admitted to the Official List by 31 August 2011, the Sellers have a right to repurchase the Giant Well Project for consideration of $1.00.

Exterra is responsible for sole funding all exploration on the Giant Well Project tenement up to the date that it completes a feasibility study into the carrying on of a mining operation on a Giant Well Project. Upon the completion of a feasibility study, the Sellers must

(a) elect to either establish a joint venture, with each party contributing to expenditure in accordance with its percentage interest; or

(b) convert their interest to a royalty of 1% of the net smelter return from mining on the Leonora Projects.

A joint venture, if formed, will be on terms usual in such arrangements with Exterra as the manager.

Legendre continues to have a right to prospect on the tenement forming the Giant Well Project to a maximum depth of 1m from the surface.

The Sellers have a right to reacquire the tenement forming the Giant Well Project if Exterra elects to surrender or otherwise relinquish it other than by way of sale.

(c) Egerton Project (Montezuma) On 2 December 2009, Exterra entered into a letter agreement with Montezuma Mining Company Ltd (Montezuma). Under the agreement, Exterra has paid to Montezuma a non-refundable option fee of $20,000 for an option to purchase Exploration Licence 52/2117 at any time until 2 June 2010. On 4 June 2010, the option period was extended to 2 December 2010 by Exterra paying to Montezuma a further $20,000 and allotting to Montezuma 500,000 Options to acquire Shares exercisable at $0.20 per Share expiring on 30 September 2013. The option period was extended again on 30 September 2010 and again on 28 February 2011 and now expires on 30 June 2011.

Exterra will manage E52/2117 during the term of the option including keeping it in good standing and meeting all rents and rates due.

Upon Exterra being admitted to the Official List, it will purchase a 100% interest in E52/2117 for consideration of the issue to Montezuma of 2,000,000 Shares and 1,000,000 Options to acquire Shares exercisable at $0.20 per Share expiring on 30 September 2013.

Exterra will pay to Montezuma a 2% net smelter return royalty capped at $500,000 on gold that may be produced from E52/2117.

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(d) Egerton Project (Xplor) By a letter agreement dated 21 October 2009, Exterra agreed to purchase a 100% interest in each of Mining Leases 52/343 and 52/567 (Xplor Tenements) from Xplor Ltd (Xplor), a wholly owned subsidiary of Mining Projects Group Ltd (MPG). Under the agreement, Exterra has paid to MPG a non-refundable option fee of $20,000 for an option to purchase the Xplor Tenements at any time until 21 April 2010. On 10 May 2010, the option period was extended to 21 October 2010 by Exterra paying to Xplor a further $20,000 and allotting to MPG 500,000 Options to acquire Shares exercisable at $0.20 per Share expiring on 30 September 2013. The option period was further extended on 22 September 2010 to 21 April 2011 by Exterra paying to MPG a further $20,000 and issuing to MPG a further 350,000 Options to acquire Shares exercisable at $0.20 per Share expiring on 30 September 2013. The option period was extended again and now expires on 30 June 2011.

Upon Exterra being admitted to the Official List, it will purchase a 100% interest in the Xplor Tenements for consideration of the issue to MPG (or its nominee) of 2,500,000 Shares and 1,250,000 Options to acquire Shares exercisable at $0.20 per Share expiring on 30 September 2013.

Exterra will manage the Xplor Tenements during the term of the option including keeping them in good standing and meeting all rents and rates due.

Exterra will pay to MPG a 2% net smelter return royalty capped at $500,000 on gold that may be produced from the Xplor Tenements.

(e) Eucalyptus Project Regal Resources Ltd (Regal) and Ozmay Pty Ltd (Ozmay) are parties to a Farmin Agreement dated 11 June 2010 (Ozmay Farmin Agreement) whereby Ozmay was entitled to farmin to several tenements set out under the heading Eucalyptus Project in the Solicitors Report forming part 7 of this Prospects (Eucalyptus Tenements).

On 23 March 2011, Exterra, Regal and Ozmay entered into a Binding Terms Sheet whereby Ozmay assigned its farmin rights under the Ozmay Farmin Agreement to Exterra (Eucalyptus Purchase Agreement). The Eucalyptus Tenements (with the exception of M37/1164) are subject to applications for forfeiture by Landtec Pty Ltd. The tenements are, therefore, at risk of forfeiture. Exterra is not managing the legal action to defend the forfeiture of the Eucalyptus Tenements and cannot make any comment about the likelihood of that action being successful. Consequently, Exterra has not attributed any value, or committed any exploration funds, to the Eucalyptus Tenements in this Prospectus.

The Eucalyptus Purchase Agreement is conditional upon certain things, including the legal actions against the Eucalyptus Tenements being terminated or successfully defended. If that occurs whilst this Prospectus remains open, a supplementary prospectus will be issued describing the Eucalyptus Tenements in more detail and allocating funds to their exploration.

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(f) Zelica Project On 4 March 2011, Exterra entered into the Zelica Purchase Agreement to purchase all of the legal and beneficial interest in E39/1578 and E39/1627 from Peter Romeo Gianni. Completion of the agreement is conditional upon the Minister for Mines and Petroleum giving his consent to that transfer. On completion of the sale and purchase, Exterra will pay to Gianni $200,000 and issue Gianni 7,000,000 Shares.

Gianni will remain entitled to receive a royalty equal to $20 per ounce of gold produced from the tenements.

(g) Consulting Services letter agreement and Executive Service Agreement – Managing Director John Davis On 1 June 2010 the Company entered into a Consultancy Services letter agreement with Sammy Pty Ltd (Consulting Agreement). Under the Consulting Agreement, Sammy Pty Ltd is engaged by the Company to provide John Davis to provide consulting services to the Company. Sammy Pty Ltd is to be paid a daily rate of $1,200 per 8 hour day or pro rata per part day.

The Consulting Agreement is effective from 17 May 2010 and continues until terminated by either Sammy Pty Ltd or the Company or under the Service Agreement as set out below. Sammy Pty Ltd is entitled to a minimum notice period of 1 month from the Company and the Company is entitled to a minimum notice period of 1 month from Sammy Pty Ltd.

On 7 October 2010 the Company entered into an Executive Services Agreement (Service Agreement) with John Davis.

Under the Service Agreement, John Davis is engaged by the Company to act as Managing Director. Mr Davis is to be paid a salary of $250,000 per annum.

The Service Agreement is effective from the date Exterra is admitted to the Official List of ASX and continues until terminated by either Mr Davis or the Company. Mr Davis is entitled to a notice period of six months from the Company (with shorter periods for reasons such as negligence or long term illness) and the Company is entitled to a notice period of three months from the Company (with a shorter period for reasons such as insolvency). The Service Agreement entitles Mr Davis to be issued 3,000,000 Options, which were issued on 24 March 2011 (shareholder approval received 18 March 2011). The exercise price of the Options is 30 cents and expiry date is 31 December 2014. The Options are exercisable 6 months after Exterra has been admitted to the Official List of ASX.

(h) Engagement Letters – Non-executive Directors

Pursuant to letters between the Company and each Messrs Brown, Cunningham, Morgan and Cole, appointments to the Board as non-executive directors were confirmed. In consideration for the services provided by Mr Cunningham, the Company will pay him $50,000 per annum (inclusive of superannuation entitlement) from the date Exterra is admitted to the Official List of ASX.

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In consideration for the services provided by Messrs Brown, Cole & Morgan the Company will pay them each $30,000 per annum (inclusive of superannuation entitlement) from the date Exterra is admitted to the Official List of ASX. The non-executive Directors are also entitled to fees or other amounts as the Board determines where they perform special duties or otherwise perform services outside the scope of the ordinary duties of a director. They may also be reimbursed for out of pocket expenses incurred as a result of their directorship or any special duties

(i) DWCorporate Pty Ltd Letter of Engagement By letter dated 22 June 2009, Exterra engaged DWCorporate Pty Ltd to provide IPO co-ordination and Company Secretarial Services. DWCorporate will be paid fees for services rendered at normal commercial rates.

(j) Pursuit Capital Pty Ltd Letter of Engagement Pursuit has been engaged as lead manager to the Offer by letter dated 29 March 2011. Pursuit will be paid fees as outlined in section 8.5 of this Prospectus.

8.3 Interests of Directors of the Company Justin Brown is the managing director of Montezuma Mining Company Limited – the Company has entered into an agreement with Montezuma to acquire a tenement (see section 8.2 Summary of Material Contracts above). Gary Morgan is the Chairman of Haoma Mining NL and Peter Cole is the general manager of Haoma Mining NL. The Company has entered into an agreement with Haoma to acquire tenements (see section 8.2 Summary of Material Contracts above).

Except as disclosed in this Prospectus, no director holds, or during the last two years has held any interest in:

(a) the formation or promotion of Exterra Resources Limited;

(b) property acquired or proposed to be acquired by Exterra in connection with its formation or promotion of the Offer; or

(c) the Offer,

and no amounts of any kind (whether in cash, Shares or otherwise) have been paid or agreed to be paid to any Director to induce him to become or to qualify as a Director or otherwise for services rendered by him in connection with the formation or promotion of Exterra or the Offer.

Directors’ Shareholdings The Directors are not required to hold any Shares in Exterra under the constitution of Exterra.

At the date of this Prospectus the relevant interests of each of the Directors in the Shares of the Company are as follows:

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1 Mr Brown is a director and shareholder of Montezuma Mining Company Limited which will receive, on Listing, 2,000,000 shares in Exterra in consideration for the acquisition of the Egerton Project (see Section 8.2(c)). 2 Mr Morgan is a director and major shareholder of Haoma Mining NL which has issued a $1million converting note to Exterra. Under the terms of the note, Haoma may be issued 10,000,000 shares in Exterra upon conversion (see Section 8.2(a))

Nothing in this Prospectus precludes Directors, officers or employees of Exterra from applying for Shares under this Prospectus.

Directors’ Remuneration Pursuant to the Consulting Agreement, which terminates the day before the date Exterra is admitted to the Official List of ASX, the Company pays John Davis to provide services to the Company at a daily rate of $1,200 per 8 hour day or pro rata per part day. Pursuant to the Service Agreement, which commences on the date Exterra is admitted to the Official List of ASX, the Directors have arranged for John Davis to provide his services as Managing Director of Exterra. Exterra will pay John Davis an annual salary of $250,000 from the date Exterra is admitted to the Official List of ASX.

Peter Cunningham will receive director’s fees of $50,000 per annum (inclusive of superannuation guarantee) from the date Exterra is admitted to the Official List of ASX.

Mr Brown, Mr Cole and Mr Morgan will receive director’s fees of $30,000 per annum (inclusive of superannuation guarantee) from the date Exterra is admitted to the Official List of ASX.

8.4 Other Interests The Company has entered into Deeds of Insurance, Indemnity and Access with each of the Directors and the Company Secretary under which the Company agrees to indemnify the officers against certain liabilities incurred by the officers while acting as an officer of the Company, to insure the officers against certain risks to which the officers are exposed to as an officer of the Company and to grant to the officers a right of access to certain records of the Company for a period up to 7 years after the officer ceases to be an officer.

DWCorporate Pty Ltd has been engaged to provide financial management, secretarial and administration services to the Company as well as provide a Company Secretary. DWCorporate will be paid fees based on time spent by

Director No of Shares

Held Directly

No of Shares

Held Indirectly

No of 20 cent

Options held

Indirectly

No of 25 cent

Options held

Directly

No of 25 cent

Options held

Indirectly

No of 30 cent

Options held

Directly

No of 30 cent

Options held

Indirectly Peter Cunningham

1,550,000 1,000,000 Nil 1,750,000 Nil 1,750,000 Nil

John Davis - - - - - - 3,000,000 Justin Brown1

Nil 2,250,001 500,000 Nil 1,750,000 Nil 1,750,000

Gary Morgan2

Nil 100,000 Nil Nil Nil Nil Nil

Peter Cole Nil 1,000,000 Nil Nil Nil Nil Nil TOTAL 1,550,000 4,350,001 500,000 1,750,000 1,750,000 1,750,000 4,750,000

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DWCorporate Pty Ltd employees providing the services. The hourly charge out rates are based on normal commercial terms for the services. DWCorporate Pty Ltd holds 600,000 Shares and 500,000 Options (exercisable at 25 cents each, expiring on 31 December 2014).

Pursuit Capital Pty Ltd has been engaged to provide lead manager services to the Company in relation to the Offer. Pursuit will be paid fees as set out in section 8.5 of this Prospectus and will be issued 500,000 Options (exercisable at 20 cents each, expiring 5 years after issue).

8.5 Interests of Persons Named in this Prospectus Other than as set out below or elsewhere in this Prospectus, no person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Prospectus has, or has had within the two years before lodgement of this Prospectus with ASIC, any interest in:

(a) the formation or promotion of Exterra;

(b) any property acquired or proposed to be acquired by Exterra in connection with its formation or promotion or in connection with the Offer; or

(c) the Offer,

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to any of those persons for services rendered by them in connection with the formation or promotion of the Company or the Offer.

Rothsay Consulting Services Pty Ltd will receive professional fees of approximately $10,000 for accounting services in connection with this Prospectus including the provision of the Investigating Accountant's Report.

Rothsay Chartered Accountants will act as auditors of the Company for which they will be paid at their usual commercial rates. Rothsay have not provided any other services to the Company since incorporation..

Ravensgate Minerals Industry Consultants will receive professional fees of approximately $35,000 for the provision of the Independent Geologist’s Report.

House Legal will receive professional fees of approximately $15,000 for the provision of the Solicitor’s report included in Section 7 of this Prospectus.

DWCorporate Pty Ltd will receive professional fees of approximately $50,000 for corporate advisory services in connection with this Prospectus.

Security Transfer Registrars Pty Ltd has been appointed as the Company’s share registry and will be paid for these services on normal commercial terms.

Pursuit Capital Pty Ltd has been engaged as lead manager to the Offer. In respect of this work Pursuit will receive a capital raising fee of 6% on the total amount raised pursuant to this Prospectus, being an amount between $240,000 and $420,000. Pursuit will also be issued 500,000 Options with a term of 5 years, exercisable at $0.20. Pursuit, its directors and employees intend to (but without any obligation to do so) subscribe for shares in this prospectus. During the 24 months preceding the lodgement of this Prospectus with ASIC, Pursuit has not received any other fees from the Company.

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8.6 Consents The following persons have each consented to being named in the Prospectus and to the inclusion of the following statements and statements identified in this Prospectus as being based on statements made by those persons, in the form and context in which they are included, and have not withdrawn that consent before lodgement of this Prospectus with ASIC:

• Ravensgate Minerals Industry Consultants – Independent Geologist’s Report;

• Don Maclean for himself and on behalf of Ravensgate Minerals Industry Consultants - The Independent Geologist’s Report of Ravensgate Minerals Industry Consultants (being a report based on statements made in a report of Ravensgate Minerals Industry Consultants under the signature of Don Maclean);

• Rothsay Consulting Services Pty Ltd – Investigating Accountant’s Report; and

• House Legal – Solicitor’s Report on Title and Section 8.2(a)-8.2(f).

To the maximum extent permitted by law, each of the persons referred to above expressly disclaims and takes no responsibility for any part of this Prospectus other than the statements referred to above and the statements identified in this Prospectus as being based on statements made by those persons.

The following persons have consented to being named in this Prospectus but, except as noted above, have not made any statements that are included in this Prospectus or statements identified in this Prospectus as being based on any statements made by those persons, and have not withdrawn their consent before lodgement of this Prospectus with ASIC:

• DWCorporate Pty Ltd – as corporate adviser;

• House Legal – as legal adviser;

• Rothsay Chartered Accountants - as auditor;

• Ravensgate Minerals Industry Consultants – as Independent Geologist;

• Rothsay Consulting Services Pty Ltd – as Independent Accountants;

• Pursuit Capital Pty Ltd – as lead manager; and

• Security Transfer Registrars Pty Ltd has given, and, as at the date of lodging this Prospectus, has not withdrawn, its written consent to be named as the share registry for the Company in the form and context in which it is named. Security Transfer Registrars Pty Ltd has had no involvement in the preparation of any part of this Prospectus other than being named as the share registry of the Company.

Security Transfer Registrars Pty Ltd:

• does not make this Offer; • has not authorised or caused the issue of this Prospectus; • does not make, or purport to make, any statement in this

Prospectus, nor is any statement based upon a statement made by it, other than the respective references to their names

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To the maximum extent permitted by law, each of the persons referred to above expressly disclaims and takes no responsibility for any part of this Prospectus other than the references to their name.

8.7 Expenses of the Offer It is estimated that Exterra will pay the following costs in connection with the preparation and issue of this Prospectus:

Expense Minimum funds

$

Maximum funds

$ IPO & Secretarial Services $15,000 $15,000 Corporate Advisory fee $15,000 $15,000 Legal services $15,000 $15,000 Accounting services $10,000 $10,000 Independent Geologist’s services $35,000 $35,000 Printing & graphic design costs $13,000 $13,000 ASIC and ASX fees $50,200 $52,700 Disbursement and contingencies $5,000 $5,000 Broker fees (6%) $240,000 $420,000 Total $398,200 $580,700

8.8 Taxation The Directors do not consider that it is appropriate to give persons advice regarding the taxation consequences of subscribing for Shares under this Prospectus.

The Company, its advisers and its officers do not accept any responsibility or liability for any such taxation consequences to persons. As a result, persons should consult their professional tax adviser in connection with subscribing for Shares under this Prospectus.

8.9 Exposure Period This Prospectus will be circulated during the Exposure Period. The purpose of the Exposure Period is to enable this Prospectus to be examined by market participants prior to the raising of funds. Potential investors should be aware that this examination may result in the identification of deficiencies in the Prospectus and, in those circumstances any Application that has been received may need to be dealt with in accordance with section 724 of the Corporations Act. Applications for Shares under this Prospectus will not be accepted by the Company until after the expiry of the Exposure Period. No preference will be conferred on persons who lodge Applications prior to the expiry of the Exposure Period.

8.10 Litigation The Company is not involved in any material litigation or arbitration proceedings, nor, so far as the Directors are aware, are any such proceedings pending or threatened against the Company. A plaint for forfeiture has been lodged against P39/2974 to P39/2976 which may also affect the validity of applications for P39/4525 to P39/4527 and M39/500, however, the inclusion of these tenements is not considered material. Each of the Directors has completed a questionnaire confirming that they are not involved in any material litigation. Mr Cunningham, the managing director of Auvex Resources Limited

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(Auvex), has noted that the Takeovers Panel made a declaration of unacceptable circumstances in relation to the acquisition of shares by Auvex in Mesa Minerals Limited at a time he was a director of Auvex.

8.11 Electronic Prospectus Pursuant to Class Order 00/044 ASIC has exempted compliance with certain provisions of the Corporations Act to allow distribution of an electronic prospectus and electronic application form on the basis of a paper prospectus lodged with ASIC, and the publication of notices referring to an electronic prospectus or electronic application form, subject to compliance with certain conditions.

If you have received this Prospectus as an electronic Prospectus, please ensure that you have received the entire Prospectus accompanied by the Application Form.

If you have not, please email the Company at [email protected] and the Company will send you, free charge, either a hard copy or a further electronic copy of the Prospectus or both.

Alternatively, you may obtain an electronic copy of the Prospectus from the Company’s website at: www.exterraresources.com.au

The Company reserves the right not to accept an Application Form from a person if it has reason to believe that when that person was given access to the electronic Application Form, it was not provided together with the electronic Prospectus and any relevant supplementary or replacement prospectus or any of those documents were incomplete or altered.

8.12 Terms and Conditions of Options Options have or will be granted on the following terms and conditions:

(a) Exercise Price 8,500,000 Options have an exercise price of each Option of 25 cents;

8,000,000 Options have an exercise price of each Option of 30 cents;

1,350,000 Options have an exercise price of each Option of 20 cents;

3,000,000 Managing Director Options have an exercise price of each Option of 30 cents;

2,250,000 Options will have an exercise price of each Option of 20 cents (on the date Exterra is admitted to the Official List); and

500,000 Options will have an exercise price of each Option of 20 cents (due to be issued on the date Exterra is admitted to the Official List).

(b) Entitlement Each Option shall entitle the holder the right to subscribe (in cash) for one share in the capital of the Company.

(c) Option Period Subject to the Company’s shares being admitted to the Official List of ASX, the 25 cent and 30 cent Options are exercisable at any time on or prior to 5.00pm (WST) on 31 December 2014 by completing an Option exercise form and delivering it together with the payment for the number

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of shares in respect of which the Options are exercised to the registered office of the Company.

Subject to the Company’s shares being admitted to the Official List of ASX, the 20 cent Options are exercisable at any time on or prior to 5.00pm (WST) on 30 September 2013 by completing an Option exercise form and delivering it together with the payment for the number of shares in respect of which the Options are exercised to the registered office of the Company.

The 30 cent Managing Director Options are exercisable at any time 6 months after the date Exterra is admitted to the Official List and prior to 5.00pm (WST) on 31 December 2014 by completing an Option exercise form and delivering it together with the payment for the number of shares in respect of which the Options are exercised to the registered office of the Company.

The 20 cent Options to be issued as vendor consideration after Exterra is admitted to the Official List will be exercisable at any time on or prior to 5.00pm (WST) on 30 September 2013 by completing an Option exercise form and delivering it together with the payment for the number of shares in respect of which the Options are exercised to the registered office of the Company.

The 20 cent Options to be issued as consideration to Pursuit after Exterra is admitted to the Official List will be exercisable at any time on or prior to 5.00pm (WST) on the date that is 5 years from the date of issue by completing an Option exercise form and delivering it together with the payment for the number of shares in respect of which the Options are exercised to the registered office of the Company.

(d) Ranking of Share Allotted on Exercise of Option Each Share allotted as a result of the exercise of any Option will, subject to the Constitution of the Company, rank in all respects pari passu with the existing Shares of the Company on issue at the date of allotment.

(e) Voting A registered owner of an Option (Option Holder) will not be entitled to attend or vote at any meeting of the members of the Company unless they are, in addition to being an Option Holder, a member of the Company.

(f) Transfer of an Option Options are transferable at any time prior to the expiry date. This right is subject to any restrictions on the transfer of Options that may be imposed by ASX in circumstances where the Company is listed on ASX.

(g) Participation in New Share Issues There are no participating rights or entitlements inherent in the Options to participate in any new issues of capital which may be made or offered by the Company to its Shareholders from time to time prior to the expiry date unless and until the Options are exercised. The Company will ensure that during the exercise period, the record date for the purposes of determining entitlements to any new such issue, will be at least nine business days after such new issues are announced (or such other date if required under any applicable rules or regulations) in order to afford the

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Option Holder an opportunity to exercise the Options held by the Option Holder.

(h) Change of Options' Exercise Price or Number of Underlying Shares If there is a bonus issue to shareholders, the number of shares over which the Option is exercisable may be increased by the number of shares which the holder of the Option would have received if the Option had been exercised before the record date for the bonus issue. In the event that a pro rata issue (except a bonus issue) is made to the holders of the underlying securities in the Company, the exercise price of the Options may be reduced in accordance with Listing Rule 6.22.

(i) Capital Reconstruction In the event of any reconstruction (including consolidation, subdivision, reduction or return) of the issued capital of the Company, all rights of the Option holder will be changed to the extent necessary to comply with the Listing Rules applying to the reconstruction of capital, at the time of the reconstruction.

8.13 Employee Share Option Plan As an incentive to employees of Exterra, the Company has adopted a scheme called the Employees Share Option Plan of Exterra Resources Limited (ESOP). At the date of this Prospectus, no Options have been granted under this ESOP.

The purpose of the ESOP is to give employees, directors and executive officers of the Company an opportunity, in the form of Options, to subscribe for ordinary shares in the Company. The Directors consider the ESOP will enable the Company to retain and attract skilled and experienced employees, board members and executive officers and provide them with the motivation to make the Company more successful.

A summary of the terms and conditions of the ESOP is set out below:

(a) Participants in the ESOP The Board may offer free Options to persons (Eligible Persons) who are:

• full-time or part-time employees of the Company; or

• directors, alternate directors or company secretary of the Company.

Upon receipt of such an Offer, the Eligible Person may nominate an associate acceptable to the Board to be issued with the Options.

(b) Terms of Options There is no issue price for the Options. The exercise price for the Options will be determined by the Board at the time of the grant. Shares issued on exercise of Options will rank equally with other ordinary shares of the Company. Options may not be transferred other than to an associate of the Option holder. Quotation of Options on the Australian Securities Exchange (ASX) will not be sought. However, in the event that the Company is listed on ASX, it will apply to ASX for official quotation of shares issued on the exercise of Options.

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(c) Restrictions on Issues and Exercise of Options The Board may not offer Options under the ESOP if the total number of shares which would be issued were each Option accepted, together with the number of shares in the same class or Options to acquire such shares issued pursuant to all employee or executive share ESOPs during the previous five years, exceeds 5% of the total number of issued shares in that class as at the date of the offer. Options may only be issued or exercised within the limitations imposed by the Corporations Law and the ASX Listing Rules.

(d) Exercise of Options The expiry date of the Options will be determined by the Board at the time of grant. If an Eligible Person leaves the employment of the group the Options may be exercised within one calendar month. If not exercised in that time, the Options lapse.

(e) Participation in Future Issues If there is a bonus issue to shareholders, the number of shares over which the Option is exercisable may be increased by the number of shares which the holder of the Option would have received if the Option had been exercised before the record date for the bonus issue. In the event that a pro rata issue (except a bonus issue) is made to the holders of the underlying securities in the Company, the exercise price of the Options may be reduced in accordance with Listing Rule 6.22.

(f) Capital Reconstruction In the event of any reconstruction (including consolidation, subdivision, reduction or return) of the issued capital of the Company, all rights of the Option holder will be changed to the extent necessary to comply with the Listing Rules applying to the reconstruction of capital, at the time of the reconstruction.

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SECTION 9: Glossary of Names and Terms

143

9. GLOSSARY OF NAMES AND TERMS Applicant a person who submits an Application. Application a valid application to subscribe for Shares. Application Form the application form attached to and forming part of

this Prospectus. Application Monies monies received by Exterra from Applicants. ASIC Australian Securities and Investments Commission. ASTC ASX Settlement and Transfer Corporation Pty Ltd

ACN 008 504 532. ASX ASX Limited ACN 008 624 691 or the Australian

Securities Exchange, as the context requires. Auditors Rothsay Chartered Accountants. Board the board of Directors unless the context indicates

otherwise. Business Day a day other than a Saturday or Sunday on which

banks are open for business in Perth, Western Australia.

CHESS ASX Clearing House Electronic Subregistry System. Closing Date 5.00pm WST on 13 May 2011. Company or Exterra Exterra Resources Limited ACN 138 222 705 Corporations Act the Corporations Act 2001 (Cth) of Australia. Directors the directors of the Company from time to time. Dollars or $ Australian dollars unless otherwise stated. DWCorporate DWCorporate Pty Ltd (ACN 094 777 974). Exposure Period the period of seven days after the date of lodgement

of this Prospectus, which period may be extended by ASIC by not more than seven days pursuant to section 727(3) of the Corporations Act.

Haoma Haoma Mining NL ACN 008 676 177

Independent Accountant Rothsay Consulting Services Pty Ltd Independent Accountant’s Report

the report contained in Section 6 of this Prospectus.

Independent Geologist Ravensgate Minerals Industry Consultants Independent Geologist’s Report


Issue funds raised in accordance with this Prospectus. JORC Code Australasian Code for Reporting of Mineral Resources

and Ore Reserves – 2004 edition.

Listing Rules Listing Rules of the ASX. Offer the offer of Shares pursuant to this Prospectus.

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SECTION 9: Glossary of Names and Terms

144

Offer Period the period commencing on the Opening Date and ending on the Closing Date.

Official List the official list of the ASX. Opening Date the date on which the Offer opens. Option an option to acquire 1 Share Prospectus this prospectus dated 5 April 2011 for the issue of

20,000,000 Shares at 20 cents (together with the right to accept oversubscriptions or 15,000,000 Shares), including any electronic or online version.

Pursuit Pursuit Capital Pty Ltd ABN 96 136 717 283 AFSL 339211

Quotation quotation of the Shares on ASX. Share or Shares Fully paid ordinary shares in Exterra. Shareholder a holder of Shares. Share Registrar Security Transfer Registrars Pty Ltd (ACN 008 894

488) Solicitor’s Report on the Tenements


WST Western Standard Time, Western Australia

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I/We apply for (minimum 10,000 and then multiples of 2,000 Shares)

Shares in Exterra Resources Limited at 20 cents per Share or such lesser number of Shares which may be allocated to me/us by the Directors. I/We lodge full application monies of

$

First Name (PLEASE PRINT) Surname (PLEASE PRINT)

Joint Applicant #2 or <designated account>

Joint Applicant #3 or <designated account>

Postal Address (PLEASE PRINT) Street Number Street

Suburb/Town State Post code

Contact Name Telephone number – Business hours

( )

Telephone number – After hours

( )

CHESS HIN (where applicable) E-mail address

Tax File Number or Exemption Applicant #2 Applicant #3

CHEQUE DETAILS

Drawer Bank BSB Amount of cheque

Cheques should be marked ‘Not Negotiable’ and make payable “Exterra Resources Limited – Trust Account”.

Broker/Dealer Stamp Share Registrar Use Oxy

APPLIC ATION FORM

Before completing this Application Form, you should read the Prospectus dated 5 April 2011 and the instructions overleaf. No Shares will be issued pursuant to the Prospectus later than 13 months after the date of the Prospectus.

PLEASE READ CAREFULLY ALL INSTRUCTIONS ON THE REVERSE OF THIS FORM.

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Declaration and Statements: By lodging this Application Form: I/We declare that all details and statements made by me/us are complete and accurate; I/We agree to be bound by the terms and conditions set out in the Prospectus and by the Constitution of the Company; I/We acknowledge that the Company will send me/us a paper copy of the Prospectus free of charge if I/we request so during the currency of the Prospectus; I/We authorise the Company to complete and execute any documentation necessary to effect the issue of Shares to me/us; and I/We acknowledge that returning the Application Form with the application monies will constitute my/our offer to subscribe for Shares in Exterra and that no notice of acceptance of the application will be provided.

TO MEET THE REQUIREMENTS OF THE CORPORATIONS ACT 2001, THIS FORM MUST NOT BE HANDED TO ANY PERSON UNLESS IT IS ATTACHED TO OR ACCOMPANIED BY THE PROSPECTUS DATED 5 APRIL 2011.

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HOW TO COMPLETE THE APPLICATION FORM Applications must be made on the Application Form attached to this Prospectus. Please complete all relevant parts of the Application Form using BLOCK LETTERS.

A) Enter the NUMBER OF SHARES you wish to apply for. The application must be for a minimum of 10,000 Shares and thereafter in multiples of 2,000 Shares.

B) Enter the TOTAL AMOUNT of application money payable. To calculate the amount, multiply the number of Shares applied for by $0.20.

C) Enter the FULL NAME(S) of all legal entities that are to be recorded as the registered holder(s). Use correct forms of registrable name (see below). Applications using the wrong form of name may be rejected.

D) Enter the POSTAL ADDRESS for all communications from the Company. Only one address can be recorded.

E) Enter a CONTACT NAME and TELEPHONE NUMBER(S) of a person the share registry can speak to regarding any queries they may have on the Application.

F) The Company will become an Issuer Sponsored participant in the ASX CHESS System. This enables a holder to receive a statement of their shareholdings from the Company’s Share Registrar. If you are already a Broker Sponsored participant in this system, enter your Holder Identification Number (HIN). Otherwise, leave this box blank and your Shares will automatically be issued sponsored on allotment.

G) Enter the TAX FILE NUMBER(S) of the Applicant(s). Collection of Tax File Numbers is authorised by taxation laws. Quotation of Tax File Number(s) is not compulsory and will not affect the Application.

H) Enter the details of cheque(s) accompanying the Application Form in payment of application monies. DECLARATION AND STATEMENTS Before completing the Application Form the Applicant(s) should read the Prospectus dated 5 April 2011. The Applicant(s) agree(s), upon and subject to the terms of the Prospectus, to take any number of Shares equal to or less than the number of Shares indicated on the Application Form that may be allotted to the Applicants pursuant to the Prospectus and declare(s) that all details of statements made are complete and accurate. No notice of acceptance of the Application will be provided by the Company prior to the allotment of Shares. Applicants agree to be bound upon acceptance by the Company of the Application. If your Application Form is not completed correctly, it may still be treated as valid. The Company’s decision as to whether to treat your Application as valid, and how to construe, amend or complete it, shall be final. There is no requirement to sign the Application Form. PAYMENT Applications for Shares must be accompanied by the application money of $0.20 per Share (in Australian currency). Cheques should be made payable to “Exterra Resources Limited – Trust Account” and crossed ‘Not Negotiable’. LODGING OF APPLICATIONS Completed Application Forms and accompanying application monies must be:

Posted to: Exterra Resources Limited c/- Security Transfer Registrars Pty Ltd PO Box 535 Applecross WA 6953

Delivered to: Exterra Resources Limited c/- Security Transfer Registrars Pty Ltd 770 Canning Highway Applecross WA 6153

Applications must be received by no later than 5.00pm on the Closing Date, currently 13 May 2011 (unless varied by the Company). CORRECT FORM OF REGISTRABLE TITLE Note that only legal entities are allowed to hold Shares. Applications must be in the name(s) of a natural person(s), companies or other legal entities acceptable to Exterra. At least one full given name and the surname is required for each natural person. The name of the beneficiary or any other non-registrable name may be included by way of an account designation if completed exactly as described in the example of the correct forms of registrable names below:

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TYPE OF INVESTOR

CORRECT FORM OF REGISTRABLE TITLE

INCORRECT FORM OF REGISTRABLE

TITLE Individual Use given names, not initials

Peter David Jones PD Jones

Company Use Company title, not abbreviations

AAA Pty Ltd AAA P/L AAA Co

Trusts Use trustee(s) personal name(s), Do not use the name of the trust

Michelle Jones <Michelle Jones Family A/C>

Michelle Jones Family Trust

Deceased Estates Use executor(s) personal name(s)

James Jones <Est James Jones A/C>

Estate of late James Jones

Partnerships Use partners’ personal names, do not use the name of the partnership

James Jones and Peter Jones <James Jones and Son A/C>

James Jones and Son

Clubs/Incorporated Bodies/Business Names Use office bearer(s) personal name(s), Do not use the names of the clubs etc.

Michael Jones <BBB Cricket Association A/C>

BBB Cricket Association

Superannuation Funds Use of name of trustee of fund, do not use the name of the fund.

Lisa Jones Pty Ltd <Super Fund A/C>

Lisa Jones Pty Ltd Superannuation Fund

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