AuKing Mining Limited Prospectus

Topic Summary For more information If these conditions are not satisfied or waived by the relevant due date, the KP Transaction may not proceed, in which case the Company will need to evaluate its future strategy. (b) Re-quotation of shares on ASX The KP Transaction constitutes a significant change in the nature and scale of the Company’s activities and the Company needs to comply with Chapters 1 and 2 of the Listing Rules as if it were seeking admission to the Official List. There is a risk that the Company may not be able to meet the requirements of the ASX for re-quotation of its Shares and the Offer Options on the ASX, which would result in the investors’ funds being returned, and the KP Transaction not completing. Should this occur, the Shares will not be able to be traded on the ASX until such time as those requirements can be met, if at all. It is a risk for Existing Shareholders who may be prevented from trading their existing Shares should the Company be suspended until such time as it does re-comply with the Listing Rules. (c) Liquidity Risk Subject to the Approval Resolutions being passed, the Company proposes to issue Shares to convert existing loans and convertible notes. The Directors expect that ASX will treat some of these Shares as Restricted Securities in accordance with Chapter 9 of the ASX Listing Rules. However, submissions will be made to the ASX to apply for cash formula relief in respect of some these shares. Further details in this regard are set out in section 13.7. In addition, the Company proposes to issue Shares to Existing Directors and employees of AKN and to JCHX to repay moneys owed by the Company. The Directors and JCHX have agreed to enter voluntary escrow arrangements with the Company pursuant to which these Shares will be restricted from trading for a period of 24 months from their issue. If a large number of the Company’s Shares are classified as Restricted Securities, this would give rise to an increased liquidity risk as a large portion of issued capital may not be able to be traded freely for a period of time. (d) Earn-in Risk Under the terms of the Koongie Park Earn-In, the Company will have the right to acquire up to a 75% interest in the Koongie Park Project. The Company’s ability to achieve its objectives is dependent on it and other parties complying with their obligations under the Koongie Park Earn-In. Any failure to comply with these obligations may result in the Company not obtaining its interests in the Koongie Park Project and being unable to achieve its commercial objectives, which may have a material adverse effect on the Company’s operations and the performance and value of the Shares and Offer Options. Further, as is the case with all joint venture agreements, there is a risk that joint venture partners may default in their joint venture obligations or not act in the best interests of the joint venture, which in either case would likely have an adverse effect on the interests and prospects of the Company. While the Company will earn an initial 25% interest in the Koongie Park Exploration Tenements, if the Company does not comply with its expenditure commitments under the Koongie Park Earn-in, this interest will be relinquished. AuKing Mining Limited | PROSPECTUS 15