Prospectus - Kingsrose Mining

Section 10
Solicitor’s Report
MATERIAL TENEMENT AGREEMENTS SCHEDULE
(Schedule 2 to Solicitor’s Report)
1. Asset Sale Agreement
In October 2007 the Company entered into the Asset Sale Agreement with the Kingsrose Unit Trust under
which the Company agreed to acquire various assets and assume various liabilities from the Kingsrose Unit
Trust.
The assets acquired by the Company will be the interest of Kingsrose Unit Trust in the Joint Venture
Agreement, various plant and equipment, the benefit of mining expenditure and cash and term deposits. The
Kingsrose Unit Trust and the Company have also separately agreed that the Company will receive the benefit
of gold ore present upon the Comet Vale Joint Venture area including the recent sale of development gold ore
resulting in net revenue to the Company of $611,602.
The liabilities to be assumed by the Company total $3,382,630. Of this sum, $2,250,000, will be satisfied
by the issue of 6,250,000 Shares at 20 cents per Share (satisfying $1,250,000 of liability) and the issue of
5,000,000 Convertible Notes at an issue price of 20 cents each (satisfying $1,000,000 of liability). These
Shares and Convertible Notes are to be issued by agreement to Airedale (Asia) Limited, a company associated
with JW Phillips, a director of Kingsrose Mining. The Company has also separately agreed with JW Phillips
to issue him with 6,000,000 Convertible Notes at an issue price of 20 cents each to satisfy and discharge
$1,200,000 of liability owed by the Company. The terms of the Convertible Notes are detailed in section 12.5.
The Company will issue 20,000,000 Shares in the capital of the Company to the Kingsrose Unit Trust as
consideration for acquisition of the sale interests.
Completion of the transaction will occur within 3 business days of the satisfaction of the conditions precedent.
The agreement is conditional upon the Company completing a capital raising constituted by this Prospectus
and receiving conditional approval to be admitted to the official list of the ASX on conditions acceptable to the
Company and receiving consent from Reed Resources Ltd to the sale of the interests under the Joint Venture
Agreement. The consent of Reed Resources Ltd has been received in terms of the deed of consent, assumption
and variation as summarised below.
KRM provides various warranties as to the sale interests including that the assets are not subject to any
encumbrances and that it has complied with all its obligations under the Joint Venture Agreement.
The agreement is governed by the laws of Western Australia.
2. Joint Venture Agreement and Deed of Consent, Assumption and Variation
In conjunction with the Asset Sale Agreement, the Company entered into a deed of consent, assumption and
variation by which, amongst other things, it will be treated as a party to the Joint Venture Agreement.
By reason of the Joint Venture Agreement and the deed of consent, assumption and variation, the Company
and Reed Resources Ltd are bound by the Joint Venture Agreement.
By the Joint Venture Agreement as amended, Reed Resources Ltd and the Company will be treated as parties
to an unincorporated joint venture to mine for gold and other minerals in respect of the area covering mining
leases M 29/52 and M 29/321 and miscellaneous licence L 29/67 (“Tenement Area”). The Tenement Area
includes the area of the Sand George mine.
Reed Resources Ltd is the registered holder of the joint venture tenements. Kingsrose, upon receiving an
assignment of an interest from KRM, will have a 50% participating interest in the joint venture.
The Company will be the operator of the joint venture and will be solely responsible for all mining and
development expenditure in connection with the mining of ore including funding approved work programs.
The Company’s expenditure responsibility includes the employment or engagement of any personnel and
the maintaining of relevant insurances concerning the operations and the joint venture. Reed Resources Ltd
will be solely responsible for all expenditure in connection with the transport and treatment of ore produced
from the Tenement Area together with all surface exploration conducted on the Tenement Area. All other
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