Cash Placing

30th May 2008 07:13



30 May 2008

THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND OR JAPAN.

Neither this announcement nor any part of it constitutes an offer to sell or issue or the solicitation of an offer to buy, subscribe or acquire any new Ordinary Shares in any jurisdiction in which any such offer or solicitation would be unlawful and the information contained herein is not for publication or distribution, directly or indirectly, in or into the United States, Canada, Australia, the Republic of South Africa, the Republic of Ireland, Japan or any jurisdiction in which such publication or distribution would be unlawful.

Members of the general public are not eligible to take part in the Placing referred to below. Invitations to participate in the Placing will be limited to 'Relevant Persons' (as defined below).

POLO RESOURCES LIMITED

("Polo" or the "Company")

Cash Placing of up to 620,000,000 new Ordinary Shares at 13 pence per share to raise funds to implement its investment and acquisition strategy 

(the "Placing")

Highlights

Polo continues its strategy to seek to become a major international coal mining and exploration group and announces that it is launching a proposed cash placing to raise up to £80.6 million (approximately $150,000,000 after expenses) to provide proceeds to finance potential acquisitions or general working capital purposes.

Placing

 

 

General Meeting

The Company has sent out a notice to shareholders convening the General Meeting for 3 June 2008 to consider one resolution to amend the Articles of Association of the Company. The Conditional Placing is conditional on, inter alia, shareholders voting in favour of this resolution at the General Meeting. The purpose of this resolution is to empower the Directors to allot additional shares either for cash to raise additional funds for the Company or as consideration for the acquisition of non-cash assets by the Company. It is intended that a certain number of these new Ordinary Shares will be issued in connection with the placing of the Conditional Placing Shares. At the time of posting the GM Notice, the Directors were interested in approximately 9.0 per cent. of the then issued Ordinary Shares and confirmed they will vote in favour of the resolution at the General Meeting.

Contacts

Polo Resources Limited Paul Ingram, CEO	Tel: +61 418 77 3510 www.poloresources.com
BMO Nesbitt Burns Inc. Egizio Bianchini	Tel: +416-359-4001
Canaccord Adams (NOMAD and Broker)  Ryan Gaffney	Tel: +44 (0) 207 050 6500
Financial Dynamics  Ben Brewerton / Edward Westropp	Tel: +44 (0) 20 7831 3113

This summary should be read in conjunction with the full text of the following announcement (including the Appendices to this announcement).

This information is provided by RNS

The company news service from the London Stock Exchange

BMO Nesbitt Burns Inc. ("BMO") and Canaccord Adams Limited ("Canaccord") are acting as co-lead managers to the Placing. The books will open with immediate effect. Potential participants will be invited to tender for Firm Placing Shares and Conditional Placing Shares on a pro rata basis, such that each person offering to subscribe for Placing Shares would, in the event of such offer being accepted in full, be entitled to subscribe for Placing Shares split between Firm Placing Shares and Conditional Placing Shares in the same proportion as other successful applicants. It is expected that the books will close on or around 10.00pm on 30 May 2008 and allocations are expected to be set and announced on or around 8.00a.m. on 4 June 2008. BMO, Canaccord and the Company reserve the right to amend the timing and close the bookbuilding process and announce allocations at any earlier or later time. The Placing will take place in accordance with the terms and conditions set out in Appendix A to this announcement. Whether or not the Placing proceeds, the number of Placing Shares will be decided at the close of the bookbuilding process. The Placing Shares will be credited as fully paid and will rank pari passu in all respects with existing Ordinary Shares in Polo, including the right to receive all dividends and other distributions declared, made or paid after the date of issue, and the Company confirms that no such dividend or declaration will be made prior to the date of admission of the Conditional Placing Shares (or termination of the Placing Agreement, if earlier). Application will be made for the Placing Shares to be admitted to trading on AIM.

Settlement of any Firm Placing Shares issued pursuant to the Placing as well as Admission of the Firm Placing Shares is expected to take place on 4 June 2008. In respect of the Conditional Placing, settlement will be conditional, inter alia, on shareholder approval of the necessary resolution at the General Meeting and it is currently expected that such settlement as well as Admission of the Conditional Placing Shares will take place on 4 June 2008 following approval of the resolution at the General Meeting.

This announcement (including the Appendices to this announcement) includes "forward-looking statements". All statements other than statements of historical facts included in this announcement (including the Appendices to this announcement) including, without limitation, those regarding the Company's business strategy and plans and objectives of management for future operations and acquisition opportunities, are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors which could cause the actual results, performance or achievements of the Company or the markets and economies in which the Company operates to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements, including, without limitation, political, regulatory and economic factors. Neither the Company nor BMO and Canaccord (together, the "Managers") assume any responsibility to update any of such forward-looking statements.

This announcement does not constitute an invitation to underwrite, subscribe for or otherwise acquire or dispose of any Ordinary Shares. Past performance is no guide to future performance and any investment decision to buy Ordinary Shares must be made solely on the basis of Publicly Available Information (as defined in the Appendix to this announcement). Persons needing advice should consult an independent financial adviser who specialises in advising in connection with shares and other securities.

This announcement is not for publication or distribution, directly or indirectly, in or into the United States. This announcement is for information only and does not constitute an offer or invitation to acquire or dispose of Ordinary Shares in the United States. The Ordinary Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended, (the "Securities Act") or with any securities regulatory authority of any State or other jurisdiction of the United States (as such term is defined in Regulation S under the Securities Act), and accordingly, may not be offered or sold in the United States unless (i) they are registered pursuant to the Securities Act; (ii) pursuant to an exemption from the registration requirements of the Securities Act; or (iii) in a transaction not subject to the registration requirements of the Securities Act. There will be no public offer of Ordinary Shares in the United States, the United Kingdom or elsewhere. Any offering to be made in the United States will be made to "qualified institutional buyers" pursuant to Rule 144A under the Securities Act who are "qualified purchasers" as that term is defined in the Rules underlying the US Investment Company Act of 1940, as amended and a limited number of "accredited investors", as that term is defined in Rule 501(a) of Regulation D under the Securities Act. Outside of the United States the Placing Shares are being offered and sold outside the United States in accordance with Regulation S under the Securities Act.

The distribution of this announcement and the offering or sale of the Ordinary Shares in certain jurisdictions may be restricted by law. Further details in relation to the securities laws in certain jurisdictions are set out in Appendix A to this announcement. No action has been taken by the Company or the Managers that would permit an offering of such securities or possession or distribution of this announcement or any other offering or publicity material relating to such securities in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required by the Company, and the Managers to inform themselves about and to observe any such restrictions.

No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by the Managers or by any of their affiliates or agents as to or in relation to, the accuracy or completeness of this announcement, or any other written or oral information made available to or publicly available to any prospective investor or its advisers and any liability therefore is hereby expressly disclaimed.

BMO and Canaccord, which are each authorised and regulated by the FSA, are each acting for Polo in connection with the Placing and no one else and will not be responsible to anyone other than Polo for providing the protections afforded to their respective clients nor for providing advice in relation to the Placing, or any other transaction, arrangement or matter referred to herein.

Except where the context otherwise requires, capitalised terms used in this announcement (including the Appendices to this announcement) have the meanings given in Appendix B to this announcement. Except as otherwise stated, references to times in this announcement (including the Appendices to this announcement) are to the time in London, UK.

POLO RESOURCES LIMITED

Polo Resources Limited ("Polo" or the "Company") announces a cash placing to raise funds to implement its investment and acquisition strategy.

1. Introduction

Polo today announces its intention to raise up to £80.6 million (approximately $150,000,000 after expenses) by way of a placing of new Ordinary Shares (the "Placing Shares") with institutional investors. Under the Placing, up to 248,000,000 new Ordinary Shares are available to be placed firm (the "Firm Placing Shares") and an additional number of new Ordinary Shares (the "Conditional Placing Shares") are available to be placed subject to shareholder approval at the General Meeting convened for 3 June 2008. The precise number of Conditional Placing Shares will be determined such that the net proceeds arising from the Placing amount to up to £80.6 million. Based on the value weighted average share price for the 10 day period ended 29 May 2008 of 13.8 pence, the Placing Price would represent a discount of approximately 5.7 per cent. 

2. Background

The Company was incorporated and registered in the BVI on 23 May 2007 and its shares were admitted to AIM on 4 September 2007 as an investing company (the "IPO Admission"). The stated investment strategy of the Company on the IPO Admission was to make investments and/or acquisitions in the natural resources sector, which might include exploration, development or production projects in minerals, base metals, precious metals or hydrocarbons, with the main areas of focus being Australia, Africa, North America, South America, Asia (including the Indian sub continent), Eastern and Western Europe.

Since the IPO Admission, the Directors have been reviewing various opportunities in line with the Company's investment and acquisition strategy. The Company has been seeking to acquire interests in natural resources projects such as (without limit) exploration permits and licences, renewable energy processing plants, coal mines or oil and gas fields. As an "investing company" under the AIM Rules, the Company was required to make a substantial acquisition within 18 months from IPO Admission. The Company has fulfilled this requirement by the completion of the Mongolian Acquisition and the acquisition of a 20.5 per cent strategic interest in GCM on 4 March 2008. Following recent acquisitions Polo now holds approximately 29.72 per cent. of the issued share capital of GCM.

The Mongolian Acquisition comprised an acquisition of three special purpose vehicles, namely MUC Resources LLC ("MUC Mongolia"), Polo Resources LLC ("Polo Mongolia) and World Coal Works Corporation ("WCW"). These three companies collectively hold a portfolio of fourteen coal licences (of which eight licences are held in the name of Polo Mongolia, one licence is held in the name of Kimko LLC, a wholly owned subsidiary of Polo Mongolia, and five licences are in the process of being transferred to Polo Mongolia), eighteen uranium licences (of which sixteen licences are held in the name of MUC Mongolia and two licenses are in the process of being transferred to MUC Mongolia), one tungsten licence and seven applications for additional uranium licences which have been lodged with the Minerals and Petroleum Resources Authority of Mongolia. In addition, Polo Mongolia has entered into an option agreement with a third party with regards to another coal licence. 

As notified by Caledon Resources plc, Polo has also acquired interests in shares representing approximately 12 per cent. of the total issued share capital of Caledon Resources plc. Caledon Resources is a coal producer which acquired the Cook Colliery and related mining operations in Australia, from Xstrata Coal Pty Ltd. and the adjacent Minyango project, both of which are situated in a region of strategic importance within the Bowen Basin, surrounded by some of Queensland's premier coking and thermal coal mining operations.

3. Reasons for the Placing

The Company intends to use the net proceeds of the Placing to take advantage of the current strong pipeline of available new investment opportunities in the coal sector and against the backdrop of healthy global coal markets. Pending their use as described, the Company intends to invest the net proceeds in short-term investments with internationally recognised financial institutions.

The Board of Polo is focused on several attractive potential acquisition opportunities, consistent with its previously stated vision of rapidly building a significant global coal company, and with its strategy of acquiring coking and thermal coal assets at all stages of development. These opportunities may include acquisitions which due to their size and/or nature will be treated as Reverse Takeovers under the AIM Rules resulting in further potential suspensions of the Company's shares from trading. Where appropriate, the Company may seek to move rapidly and aggressively in pursuit of such acquisitions/opportunities.

The Company's key criteria in identifying potential acquisitions and joint ventures are:

for producing assets, those which offer the scope for management to utilise its experience to increase performance and profitability; and

for development and exploration projects, licences that are in areas the Company deems prospective for coal exploration or which are regions of known existing production.

The Directors believe additional capital will provide the Company with flexibility in the timing of discussions with potential targets and interested parties.

4. The Placing

4.1 Details of the Placing 

It is proposed that the Placing will be undertaken by the placing of new Ordinary Shares with institutional investors. Under the Placing, up to 248,000,000 new Ordinary Shares are available to be placed firm and an additional number of new Ordinary Shares are being placed subject to shareholder approval at the General Meeting convened for 3 June 2008. The precise number of Conditional Placing Shares will be determined such that the net proceeds arising from the Placing amount of up to approximately £80.6 million. The Firm Placing Shares will be placed with the same institutional investors as the Conditional Placing Shares and the allocation of Placing Shares between Firm Placing Shares and Conditional Placing Shares will be on a pro rata basis, such that each Placee offering to subscribe would, in the event of such offer being accepted in full, be entitled to subscribe Placing Shares split between Firm Placing Shares and Conditional Placing Shares in the same proportion as other successful applicants. If approved by shareholders and the Conditional Placing Shares are admitted to trading on AIM, the Conditional Placing Shares will have identical rights to the Firm Placing Shares and those of existing Ordinary Shares from their date of issue. Based on the volume weighted average share price for the 10 day period ended 29 May 2008 of 13.8 pence, the Placing Price would represent a discount of approximately 5.7 per cent.

Subject to and conditional upon the publication of the Placing Results Announcement, BMO and Canaccord have agreed severally (and not jointly or jointly and severally) that, to the extent that BMO and Canaccord fail to procure Placees to subscribe for all Unplaced Placing Shares, they shall subscribe (or procure subscription by one or more nominated subscribers), at the Placing Price, for that percentage of the Unplaced Placing Shares set out opposite their respective names below:

BMO 70 per cent.

Canaccord 30 per cent.

Polo has agreed to grant broker warrants to BMO and Canaccord equal to 3.0 per cent of the number of Placing Shares, which will enable BMO and Canaccord to purchase such number of shares in aggregate at the Placing Price.

Bookbuild

To enter a bid into the Bookbuilding Process, institutional investors will be required to communicate their bid to BMO or Canaccord, specifying the number of Placing Shares which they wish to offer to subscribe and any price limit to which their offer to participate is subject. Institutions participating in the Placing will receive both the Firm Placing Shares and Conditional Placing Shares in each case subject to the satisfaction of the conditions contained in, and the non-termination of, the Placing Agreement. The Placing Shares will be allocated to Placees, pro rata, between the Firm Placing and the Conditional Placing. The Conditional Placing will be subject to shareholder approval of a resolution to be passed at the General Meeting but the Firm Placing will not. It is expected that the books will close on or around 10.00p.m. on 30 May 2008 but may be closed earlier or later at the discretion of the Company and BMO.

Settlement

Application will be made for the Placing Shares to be admitted to trading on AIM and, upon Admission, the Placing Shares will be credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of their issue.

It is currently expected that settlement for any Firm Placing Shares acquired and their Admission will take place on 4 June 2008. In respect of the Conditional Placing, settlement will be conditional, inter alia, on shareholders approving the necessary resolution at the General Meeting and it is currently expected that such settlement and their Admission will take place on 4 June 2008.

Full details of the terms and conditions of the Placing are set out in Appendix A to this announcement. Placees participating in the Placing will be deemed to have read and understood the full terms and conditions relating to the Placing set out in this announcement (including the Appendices to this announcement) and to be participating on the basis that they accept these terms and conditions in full. 

4.2 Placing Agreement

The Company has entered into an agreement with BMO and Canaccord under which BMO and Canaccord have severally (and not jointly and severally), on the terms and subject to the conditions set out therein, undertaken as agents of the Company to use all reasonable endeavours to procure Placees to take up the Placing Shares at the Placing Price. 

The obligations of the Managers under the Placing Agreement are conditional upon, inter alia, (i) the Company complying with its obligations under the Placing Agreement and the Depositary Agreement to the extent that the same fall to be performed prior to Admission of the Firm Placing Shares and/or Admission of the Conditional Placing Shares; (ii) the representations, warranties and undertakings given by the Company under the Placing Agreement being true and accurate and not misleading at all times before, in relation to the obligations relating to the Firm Placing Shares, Admission thereof, and in relation to the obligations relating to the Conditional Placing Shares, Admission thereof; and (iii) Admission of the Firm Placing Shares occurring no later than 8.00 a.m. on 4 June 2008 or such other date as may be agreed by BMO and Canaccord and the Company, not being later than 20 June 2008 and (iii) in relation to their obligations in relation to the Conditional Placing Shares only, the passing of the resolution at the General Meeting approving the non pre-emptive allotment of the Conditional Placing Shares and their Admission occurring no later than 8.00a.m. on 4 June 2008.

Further, BMO and Canaccord may, at any time before Admission of the Firm Placing Shares or the Conditional Placing Shares (as the case may be), terminate the Placing Agreement, inter alia, for breach of warranty by the Company or if there has been a material adverse change in or affecting the operations, properties, condition (financial or other), or prospects or results of operations or general affairs of the Company's group taken as a whole.

4.3 Placing Authority

As at 6 March 2008, Polo had issued 1,171,739,816 Ordinary Shares of no par value.

The Articles of Association of the Company permit the directors to issue shares or securities, grant options over or otherwise dispose of the same to such persons and on such terms as they think fit at any time subject to a maximum limit of not more than 823,572,825 new shares before the first anniversary of the IPO Admission. The Company proposes to issue 248,000,000 Ordinary Shares being the Firm Placing Shares on a non pre-emptive basis, which represent approximately 21.2 per cent. of the existing issued ordinary share capital of the Company. In addition the Company proposes to issue up to 372,000,000 Ordinary Shares being the Conditional Placing Shares, subject to the passing of a resolution of shareholders as referred to below to authorise the allotment of these shares free of pre-emption rights which represents approximately 31.7 per cent. of the existing issued ordinary share capital of the Company.

The Placing Shares will be credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares in the share capital of Polo, including the right to receive all dividends and other distributions declared, made or paid after the date of the their date of issue.

5. Meeting of Shareholders

The Company sent out a notice to shareholders convening the General Meeting to consider a resolution to amend the Articles of Association of the Company. The resolution to be proposed at the General Meeting will be to amend the Articles of Association of the Company to authorise the Directors to issue, on a non pre-emptive basis, up to 3,000,000,000 additional Ordinary Shares. The purpose of the resolution is to empower the Directors to allot such additional shares either for cash to raise additional funds for the Company or as consideration for the acquisition of non-cash assets by the Company. The Conditional Placing is conditional, inter alia, on shareholders voting in favour of this resolution at the General Meeting. The Directors, who held approximately 9.0 per cent. of the issued Ordinary Shares at the time of posting the GM Notice, have confirmed they will vote in favour of the resolutions at the General Meeting.

6. Current Trading and Prospects

On 15 May 2008, the Company announced that it has entered an option agreement (the "Option Agreement") with Baradine Bay Pty Limited ("BBL"), a private limited company registered and incorporated in Australia, giving the Company the option to acquire an 80 per cent. Interest in 'Exploration Permits for Coal' 1097 and 1098 (the "Coal Permits") owned by BBL. The Company has paid BBL $150,000 in cash and agreed to issue £250,000 worth of Polo shares to BBL which were issued on 21 May 2008.

On 16 May 2008, the Company acquired 100per cent. of the share capital of CM Logistics Ltd, a company incorporated in the British Virgin Islands, for par value.

On 19 May 2008, the Company announced it had made an approach to the board of GCM which may or may not lead to an offer being made by the Company for GCM. The Company currently owns 29.72% of the issued shares of GCM. The approach to GCM is a pre-conditional cash offer for all the issued and to be issued share capital of GCM at 175p per share (which represents an approximately 50.7% premium to the volume weighted average price for the 20 trading days ending on 16 May 2008) and is subject to financing. Such an offer would be consistent with the Company's strategy of building a significant and diversified portfolio of coal producing, development and exploration assets. The Company intends to work with the management of GCM and, if a formal offer is made, intends to seek shareholder approval to change its name to GCM Resources Limited. The Company's approach is subject to the arrangement of necessary funding and does not amount to a firm intention to make an offer and, accordingly, there can be no certainty that any offer will be made even if the necessary funding is arranged.

On 23 May 2008 the Company announced its interim results for the period to 31 March 2008.

On 29 May 2008, the Company announced that it has continued to consolidate its Mongolian Interests, increasing the number of exploration licences it holds to 59 of which 26 are based on coal (with another 2 in the process of being transferred to the Company) and another 33 are based on uranium. These coal licence areas include 57,004 hectares of exploration licences in the strategically located South Gobi district close to China as well as projects in the east and west of the country. The South Gobi in particular is known for its Permian coal basins with both coking and good quality thermal coal.

In addition, the Directors continue to review further potential investments and acquisition opportunities which may meet the Company's investment criteria.

7. Lock-in and Orderly Market Arrangements

At IPO Admission, the Directors of Polo at the time (Guy Elliott, Suresh Hiremath and Harald van Hoeken) and persons connected with them owned 165,000,000 Ordinary Shares and options to acquire a further 6,000,000 Ordinary Shares at the price of 5 pence per Ordinary Share. These persons undertook to the Company that they would not sell or dispose of, except in certain circumstances, any of their respective interests in Ordinary Shares at any time before the first anniversary of IPO Admission or, if later, the date on which the Company makes its first investment or acquisition.

At IPO Admission, the Directors and persons connected with them owned 100,000,000 Ordinary Shares representing 12.37 per cent. of the then issued Ordinary Shares and options to acquire a further 6,000,000 Ordinary Shares at the price of 5 pence per Ordinary Share and options to acquire a further 30,000,000 Ordinary Shares at the price of 9 pence per Ordinary Share. The Directors and persons connected with them have undertaken to the Company and Canaccord that they will not sell or dispose of, except in certain circumstances, any of their respective interests in Ordinary Shares at any time for a period of 12 months from the date of IPO Admission and will be subject to orderly market arrangements during the following 12 months after the initial one-year lock-in period.

On 4 March 2008, Polo issued 25,000,000 Ordinary Shares in respect of the acquisition of MUC Resources LLC, World Coal Works Corporation and Polo Resources LLC. These 25,000,000 Ordinary Shares are subject to a one-year lock-in period from the date of issue and subject to orderly market arrangements during the following twelve months after the initial one-year lock-in period.

Further details of the lock-ins referred to above were included in paragraph 9.6 of Part VI of the circular and Admission Document dated 20 February 2008.

Important Notice

This announcement (including the Appendices to this announcement) has been issued by and is the sole responsibility of Polo.

Members of the general public are not eligible to take part in the Placing. This announcement, in so far as it constitutes an invitation or inducement to participate in the Placing, is directed exclusively at persons who have professional experience in matters relating to investments who are:

persons in member states of the European Economic Area who are "qualified investors" within the meaning of Article 2(1)(e) of Directive 2003/71/EC and any relevant implementing measures (the "Prospectus Directive") ("Qualified Investors"); 

ii. in the United Kingdom, Qualified Investors (1) who have professional experience in matters relating to investments who fall within article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the "Order") or (2) falling within article 49(2)(a) to (d) (high net worth companies, unincorporated associations etc) of the Order and section 86(7) (Qualified Investors) of Financial Services and Markets Act 2000; and

 

iii. other persons to whom it may otherwise lawfully be communicated, (all such persons together being referred to as 'Relevant Persons').

This announcement, in so far as it constitutes an invitation or inducement to participate in the Placing, must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this announcement or the Placing relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. As regards all persons other than Relevant Persons, the details of the Placing and the Bookbuilding Process set out in this announcement are for information purposes only.

BMO and Canaccord are each acting for the Company and no one else in connection with the Placing and will not be responsible to any other person for providing the protections afforded to its clients, or for providing advice in relation to the Placing and/or any other matter referred to in this announcement (including the Appendices to this announcement), or any other transaction, arrangement or matter referred to herein.

The securities referred to herein have not been, and will not be, registered under the Securities Act or with any securities regulatory authority of any State or other jurisdiction of the United States (as such term is defined in Regulation S under the Securities Act), and accordingly, may not be offered or sold in the United States unless: (i) they are registered pursuant to the Securities Act; (ii) pursuant to an exemption from the registration requirements of the Securities Act; or (iii) in a transaction not subject to the registration requirements of the Securities Act. No public offering of the securities referred to herein will be made in the United States. Any offering to be made in the United States will be made to "qualified institutional buyers" pursuant to Rule 144A under the Securities Act who are "qualified purchasers" as that term is defined in the Rules underlying the US Investment Company Act of 1940, as amended and a limited number of "accredited investors", as that term is defined in Rule 501(a) of Regulation D under the Securities Act. Outside of the United States the Placing Shares are being offered and sold outside the United States in accordance with Regulation S under the Securities Act.

Neither this announcement nor any part of it constitutes an offer to sell or issue or the solicitation of an offer to buy, subscribe or acquire any new Ordinary Shares in any jurisdiction in which any such offer or solicitation would be unlawful and the information contained herein is not for publication or distribution, directly or indirectly, in or into the United States, Canada, Australia, the Republic of South Africa, the Republic of Ireland, Japan or any jurisdiction in which such publication or distribution would be unlawful. No public offering of securities of the Company is being made in the United Kingdom, the United States or elsewhere.

This announcement (including the Appendices to this announcement) includes "forward-looking statements". All statements other than statements of historical facts included in this announcement (including the Appendices to this announcement), including, without limitation, those regarding the Company's business strategy and plans and objectives of management for future operations and acquisition opportunities, are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors which could cause the actual results, performance or achievements of the Company or the markets and economies in which the Company operates to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements, including, without limitation, political, regulatory and economic factors. Neither the Company nor the Managers assume any responsibility to update any of such forward-looking statements.

APPENDIX A

TERMS & CONDITIONS

IMPORTANT INFORMATION FOR INVITED PLACEES ONLY ON THE PLACING

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THE ANNOUNCEMENT AND THIS APPENDIX (WHICH FORMS PART OF THE ANNOUNCEMENT) AND THE TERMS AND CONDITIONS SET OUT IN THE ANNOUNCEMENT AND THIS APPENDIX ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS; (B) IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO ARE PERSONS (1) WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) (INVESTMENT PROFESSIONALS) OF THE ORDER OR (2) FALLING WITHIN ARTICLE 49(2)(A) TO (D) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC) OF THE ORDER; AND (C) OTHER PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED (SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. NEITHER THIS APPENDIX NOR THE ANNOUNCEMENT OF WHICH IT FORMS PART CONSTITUTES AN OFFER OR AN INVITATION TO ACQUIRE OR DISPOSE OF ANY SECURITIES IN POLO RESOURCES LIMITED.

If you have been invited and choose to participate in the Placing by making an offer (oral or written) to acquire Placing Shares you will be deemed to have read and understood this Appendix and the announcement of which it forms part in their entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties and acknowledgements, contained in this Appendix. In particular you represent, warrant and acknowledge that you are a Relevant Person. Further, you represent and agree that you are one of (a) a qualified institutional buyer (as defined in Rule 144A under the Securities Act) who is a qualified purchaser (as that term is defined in the Rules under the Investment Company Act of 1940, as amended); (b) an accredited investor (as defined in Rule 501(a) of Regulation D of the Securities Act, or (c) you are outside the United States and are subscribing for Placing Shares in an "offshore transaction" (within the meaning of Regulation S). See "Representations and Warranties" below in this Appendix for further representations and warranties you (and any person acting on your behalf) will be deemed to make by participating in the Bookbuilding.

Neither this announcement nor any part of it constitutes an offer to sell or issue or the solicitation of an offer to buy, subscribe or acquire any new Ordinary Shares in any jurisdiction in which any such offer or solicitation would be unlawful and the information contained herein is not for publication or distribution, directly or indirectly, in or into the United States, Canada, Australia, Japan, the Republic of Ireland or the Republic of South Africa any jurisdiction in which such publication or distribution would be unlawful. No public offering of securities of the Company is being made in the United Kingdom, the United States, the Republic of Ireland or the Republic of South Africa or elsewhere. 

In particular, this Appendix and the announcement of which it forms part are not an offer for sale of the securities in the United States, and the securities may not be sold in the United States absent registration or an exemption from registration under the Securities Act. No prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance or any securities commission in Canada, Japan, the Republic of Ireland or the Republic of South Africa; and the Placing Shares have not been, and nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Australia, Japan, the Republic of Ireland or the Republic of South Africa. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into the United States, Canada, Australia, Japan, the Republic of Ireland or the Republic of South Africa or any other jurisdiction outside the United Kingdom. Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Appendix or the announcement of which it forms part should seek appropriate advice before taking any action.

The distribution of this announcement and the placing of the Placing Shares in certain other jurisdictions may be restricted by law. No action has been taken by the Managers or the Company that would permit such an offer of Ordinary Shares or possession or distribution of this announcement or any other offering or publicity material relating to the Ordinary Shares in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required by the Managers and the Company to inform themselves about and to observe any such restrictions. 

Details of the Placing Agreement and the Placing Shares

The Managers have entered into the Placing Agreement with the Company under which the Managers have severally (and not jointly and severally), on the terms and subject to the conditions set out therein, undertaken as agents of the Company to use all reasonable endeavours to procure Placees to take up the Placing Shares at 13p. Under the Placing up to 248,000,000 of the Placing Shares are available to be placed firm (the "Firm Placing Shares") and an additional number of new Ordinary Shares (subject to the maximum amount of Ordinary Shares that the Directors will be able to issue on a non preߛemptive basis if the amendments to the Company's articles of association as set out in the Shareholder Resolutions are made) are available to be placed subject to shareholder approval at the General Meeting (the "Conditional Placing Shares").

Subject to and conditional upon the publication of the Placing Results Announcement, BMO and Canaccord have agreed severally (and not jointly or jointly and severally) that, to the extent that BMO and Canaccord fail to procure Placees to subscribe for all Unplaced Placing Shares, they shall subscribe (or procure subscription by one or more nominated subscribers), at the Placing Price, for that percentage of the Unplaced Placing Shares set out opposite their respective names below:

BMO 70 per cent.

Canaccord 30 per cent.

The Firm Placing Shares and the Conditional Placing Shares are to be placed on a pro rata basis such that each Placee offering to subscribe for Placing Shares would, in the event of such offer being accepted in full, be entitled to subscribe for Placing Shares split between Firm Placing Shares and Conditional Placing Shares in the same proportion as other successful applicants.

The Placing Shares will, as from the date when they are issued, be credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares in the share capital of the Company, including the right to receive all dividends and other distributions declared, made or paid after the date of their issue. The Company has undertaken in the Placing Agreement not to make or declare any dividends in respect of Ordinary Shares before the date of Admission to trading on AIM of the Conditional Placing Shares (or if earlier the date of termination of the Placing Agreement).

Admission

Application for all the Placing Shares to be admitted to trading on AIM will be made. Settlement for any Firm Placing Shares issued and allotted pursuant to the Placing will take place on Admission of such shares which is expected to be 4 June 2008. Settlement for any Conditional Placing Shares issued and allotted pursuant to the Placing will, subject to the passing of the Shareholder Resolutions, take place on the date of Admission of such shares which is expected to be 4 June 2008.

In this Appendix, unless the context otherwise requires, "Placee" or "you" means a Relevant Person (including individuals, funds or others) on whose behalf an offer to subscribe for Placing Shares has been, or is proposed to be, given and "Placees" and "your" shall be construed accordingly.

Bookbuild

Commencing today, the Managers will be conducting an accelerated bookbuilding process (the "Bookbuilding Process") to determine demand for the Placing Shares. This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Bookbuilding Process. No commissions will be paid to Placees or be payable by Placees in respect of any Placing Shares.

Participation in the Bookbuilding Process

Only Relevant Persons who are invited to do so may participate in the Bookbuilding Process. Invitations to participate will be made by telephone through usual sales contacts at BMO and Canaccord. If you are invited to participate, your allocation (if any) of Firm Placing Shares and Conditional Placing Shares will be confirmed to you orally following the close of the Bookbuilding Process and contract notes confirming your agreement to subscribe for Firm Placing Shares and your agreement to subscribe for Conditional Placing Shares will be dispatched as soon as possible thereafter. A Manager's oral confirmation to you will constitute acceptance of your offer to acquire both Firm Placing Shares and, subject to the passing of the Shareholder Resolution, Conditional Placing Shares, and create a legally binding commitment upon you (and you will at that point become a Placee) to subscribe for the number of Firm Placing Shares and Conditional Placing Shares allocated to you on the terms and conditions set out in this Appendix and in accordance with the Company's constitutional documents.

The Company will make a further announcement following the close of the Bookbuilding Process detailing the number of Firm Placing Shares and Conditional Placing Shares (if any) to be sold (the "Placing Results Announcement").

Principal terms of the Bookbuilding Process.

 

 

 

 

Conditions of the Placing

The obligations of the Managers under the Placing Agreement in relation to the Placing of the Firm Placing Shares and the Conditional Placing Shares are conditional (inter alia) on:

(a) in relation to the obligations relating to both the Firm Placing Shares and the Conditional Placing Shares, Admission of the Firm Placing Shares occurring not later than 8.00 a.m. on 4 June 2008 or such other date as may be agreed between the Company and Canaccord and BMO, not being later than 20 June 2008; 

(b) in relation to the obligations relating to the Conditional Placing Shares:

(i) the passing without amendment of the Shareholder Resolution at the GM; and

(ii) Admission of the Conditional Placing Shares occurring not later than 8.00 a.m. on 4 June or such other date as may be agreed between the Company and Canaccord and BMO, not being later than 20 June 2008;

(c) the Company complying with its obligations under the Placing Agreement and the Depositary Agreement, to the extent that the same fall to be performed prior to Admission of the Firm Placing Shares (in respect of obligations relating to the Firm Placing Shares and the Conditional Placing Shares) and/or Admission of the Conditional Placing Shares (in respect of obligations relating to the Conditional Placing Shares);

(d) the Company allotting, subject only to Admission becoming effective (and, in the case of the Conditional Placing Shares, subject also to the passing of the Shareholder Resolution), the Placing Shares to the Depositary or, in respect of Placing Shares to be held in certificated form, to Placees;

(e) publication of the Placing Results Announcement no later than 8.00 a.m. on 4 June 2008 or such other time and/or date as may be agreed between the Company and BMO and Canaccord; and

(f) the representations, warranties and undertakings given by the Company in the Placing Agreement (the "Warranties") being true and accurate and not misleading on and as of the date of the Placing Agreement and at all times before:

(i) in relation to obligations relating to the Firm Placing Shares, Admission thereof; and

(ii) in relation to obligations relating to the Conditional Placing Shares, Admission thereof.

If (a) the conditions in the Placing Agreement relating to the placing of the Firm Placing Shares are not satisfied or waived by BMO within the stated time period (or such later time and/or date as BMO may decide) or (b) the Placing Agreement is terminated in the circumstances specified below prior to Admission of the Firm Placing Shares, the Placing (both firm and conditional) will not take place and your rights and obligations hereunder in respect hereof shall cease and determine at such time and no claim can be made in respect thereof. The Firm Placing is not conditional on the Conditional Placing in any way.

If (a) the conditions in the Placing Agreement relating to the placing of the Conditional Placing Shares are not satisfied or (where applicable) waived by BMO within the stated time period (or such later time and/or date as BMO may decide) or (b) the Placing Agreement is terminated in the circumstances specified below prior to Admission of the Conditional Placing Shares, the placing of the Conditional Placing Shares will not take place and your rights and obligations hereunder in respect thereof shall cease and determine at such time and no claim can be made in respect thereof.

By participating in the Bookbuilding Process you agree that your rights and obligations hereunder in relation to the placing of the Firm Placing Shares and the placing of the Conditional Placing Shares are conditional upon the Placing Agreement becoming unconditional in all respects in relation to each of them and not being terminated and will terminate only in the circumstances described in this Appendix (or otherwise in circumstances in which BMO is entitled to terminate them) and will not be capable of rescission or termination by you.

BMO reserves the right to waive or to extend the time and/or date for fulfilment of any of the conditions in the Placing Agreement (except that they may not waive the conditions described in (a) and (d) above). BMO shall have no liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to invoke, waive or to extend the time and/or date for the satisfaction of any condition in the Placing Agreement, and by participating in the Bookbuilding Process you agree that any such decision is within the absolute discretion of BMO.

Right to terminate under the Placing Agreement

BMO are entitled, at any time before Admission of the Firm Placing Shares or the Conditional Placing Shares (as the case may be), to terminate the Placing Agreement and the Managers' obligations under the Placing Agreement if inter alia:

(a) the Warranties or any of them are not true and accurate or have become misleading (or would not be true and accurate or would be misleading if they were repeated at any time before Admission) in respect of a matter which, in the opinion of BMO (acting in good faith), is material in the context of the Placing by reference to the facts subsisting at the time when the termination notice referred to below is given; or

(b) any statement in any announcement made by the Company prior to Admission of the relevant Placing Shares is untrue, incorrect or misleading when made or becomes untrue, inaccurate or misleading at any time prior to Admission of the relevant Placing Shares by reference to the facts or circumstances from time to time subsisting or any matter arises which would, had it arisen prior to the date of the relevant announcement, have constituted an omission from such announcement; or

(c) the Company fails, in any respect which is material in the opinion of BMO (acting in good faith), to comply with any of its obligations under the Placing Agreement; or

(d)  in the opinion of BMO (acting in good faith), there has been a material adverse change in or affecting the operations, properties, condition (financial or other), or prospects or results of operations or general affairs of the Group taken as a whole; or

(e) in the opinion of BMO (acting in good faith), there has been:

(i) a change in national or international financial, political, economic or stock market conditions (primary or secondary);

(ii) an incident of terrorism, outbreak or escalation of hostilities, war, declaration of martial law or any other calamity or crisis;

(iii) a suspension or material limitation In trading of securities generally or the securities of the Company on any stock exchange; or

(iv) any change in currency exchange rates or exchange controls or a disruption of settlement systems or a material disruption or general moratorium in commercial banking,

as would, in the opinion of BMO (acting in good faith) be likely to prejudice the success of the Placing,

in each of which cases BMO shall, if practicable, in the circumstances, promptly give notice thereof to the Company and then consult with the Company in respect of such matters and the Placing Agreement (other than certain specified provisions) may be terminated by BMO following such consultation, if any, by the giving of a termination notice and the Placing Agreement (other than certain specified provisions) will thereupon have no further effect.

Notwithstanding Admission of the Firm Placing Shares, BMO retains its rights under the Placing Agreement to terminate the placing of the Conditional Placing Shares in accordance with the terms thereof. Any such termination after completion of the placing of the Firm Placing Shares will not, for the avoidance of doubt, affect the completed placing of the Firm Placing Shares.

By participating in the Bookbuilding Process you agree that the exercise by BMO of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of BMO and that they need not make any reference to you and that none of them shall have any liability to you whatsoever in connection with any such exercise.

No Prospectus

The Placing Shares are being offered to a limited number of specifically invited persons only and will not be offered in such a way as to require a prospectus in the United Kingdom or in any other jurisdiction. No prospectus or AIM admission document has been or will be submitted to be approved by London Stock Exchange or the FSA in relation to the Placing and the Placees' commitments will be made solely on the basis of the information contained in this announcement and the Placing Results Announcement. Each Placee, by participating in the Placing, agrees that the content of this announcement and the Placing Results Announcement is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information, representation, warranty or statement made by or on behalf of BMO, Canaccord or the Company and none of BMO, Canaccord or the Company will be liable for any Placee's decision to accept this invitation to participate in the Placing based on any other information, representation, warranty or statement. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing. Nothing in this announcement shall exclude the liability of any person for fraudulent misrepresentation.

Passive Foreign Investment Company

There is a risk that Polo may be treated as a "passive foreign investment company" ("PFIC") for U.S. federal income tax purposes. Polo will be treated as a PFIC if 75 percent of its gross income in a taxable year, including its pro rata share of the gross income of any corporation in which it is considered to own 25 percent or more of the shares by value, is passive income (as defined for U.S. federal income tax purposes). Alternatively, it will be treated as a PFIC if at least 50 percent of its assets in a taxable year, averaged over the year, including its pro rata share of the assets of any corporation in which it is considered to own 25 percent or more of the shares by value, are held for the production of, or produce, passive income (as defined for U.S. federal income tax purposes). If Polo is a PFIC, U.S. holders of the Shares may be subject to a number of detrimental U.S. federal tax consequences, including but not limited to accelerated recognition of income regardless of the timing of distributions, interest charges on deferred income, recharacterization of gain on the disposition of the Shares as ordinary income, the denial of any step-up in basis of the Shares upon the death of a U.S. holder, and the ineligibility of distributions for taxation at the long-term capital gains rate as "qualified dividend income." Polo has not undertaken any analysis as to whether it is a PFIC for U.S. federal income tax purposes. PFIC status is determined annually after the close of the year in question. Polo makes no assurance that it is not currently a PFIC, that it will not become a PFIC in the future, that if it becomes a PFIC it will have timely knowledge or notify U.S. holders of such, or that it will provide U.S. holders with information necessary for such holders to make filings or elections in response to its PFIC status. The U.S. federal income tax provisions regarding PFICs are very complex and are affected by various factors in addition to those described above. U.S. holders of Shares are strongly encouraged to consult with their own tax advisors about the PFIC rules in connection with purchasing, holding, or disposing of Shares.

Registration and Settlement

Subject as provided below, settlement for all Placing Shares (represented by Depositary Interests) will be made through CREST. Settlement for any Firm Placing Shares issued and allotted pursuant to the Placing will take place on the date of Admission of such shares which is expected to be 4 June 2008. Settlement for any Conditional Placing Shares issued and allotted pursuant to the Placing will, subject to the approval of the Shareholder Resolutions take place on the date of Admission of such shares which is expected to be 4 June 2008.

BMO and Canaccord reserve the right to require settlement for and delivery of the Placing Shares to Placees by such other means as it deems necessary if delivery or settlement is not possible as described above within the timetable set out in this announcement or would not be consistent with the regulatory requirements in the Placee's jurisdiction.

If you are allocated any Placing Shares in the Bookbuilding Process you will be sent two contract notes, one which will confirm the number of Firm Placing Shares to be subscribed for by you and a second which will confirm the number of Conditional Placing Shares to be subscribed for by you, in each case also confirming the Placing Price and the aggregate amount owed by you to BMO or Canaccord, as the case may be, as agent for the Company in relation to the settlement of such Firm Placing Shares and Conditional Placing Shares. By participating in the Placing, you agree that you will do all things necessary to ensure that delivery and payment is completed in accordance with the standing settlement instructions which you have in place with BMO or Canaccord, as the case may be.

If Placing Shares are to be delivered to a custodian or settlement agent, please ensure that the contract note is copied and delivered immediately to the relevant person within that organisation.

Interest is chargeable daily on payments to the extent that value is received after the due date at the rate of 5 percentage points above prevailing LIBOR. If you do not comply with your obligations, BMO or Canaccord may sell your Placing Shares on your behalf and retain from the proceeds, for its own account and benefit, an amount equal to the Placing Price plus any interest due (in settlement of your liability in respect of BMO's or Canaccord's payment to the Company on your behalf of the Placing Price of the relevant Placing Shares under the Placing Agreement). You will, however, remain liable on the same basis for any shortfall below the Placing Price and you may be required to bear any interest or losses which may arise upon the sale of your Placing Shares on your behalf.

You will not be entitled to receive any fee or commission in connection with the Placing.

Representations and Warranties

By participating in the Bookbuilding Process you (and any person acting on your behalf):

1. represent and warrant that you have read this Appendix and the announcement of which it forms part in their entirety and have not redistributed them or any part of them;

2. acknowledge that you have been invited to participate in the Bookbuilding Process solely on the basis of this announcement and that no offering document, prospectus, AIM admission document or any other document has been prepared in connection with the Placing or formed the basis of the placing of the Placing Shares with you;

3. acknowledge that the content of this Appendix and the announcement of which it forms part are exclusively the responsibility of the Company and that none of the Managers, nor any of their respective Affiliates nor any person acting on any of such Bank's or Affiliate's behalf has or shall have any liability for any information, representation or statement contained in this Appendix and/or the announcement of which it forms part or any information previously published by or on behalf of the Company;

4. acknowledge that the Ordinary Shares are admitted to trading on AIM, and the Company is therefore required to publish certain business and financial information in accordance with the AIM Rules (collectively, the "Exchange Information"), which includes a description of the nature of the Company's business and the Company's most recent AIM admission document and financial statements, and that you are able to obtain or access the Exchange Information without undue difficulty;

5. represent and warrant that you have neither received nor relied on any information, representation, warranty or statement made by or on behalf of BMO, Canaccord or the Company other than the information contained in this announcement and that none of BMO, Canaccord or the Company will be liable for any Placee's decision to accept an invitation to participate in the Placing (and any resulting investment) based on any other information, representation, warranty or statement;

6. acknowledge and agree that you have relied on your own investigation of the business, financial and/or other position of the Company in deciding to participate in the Placing (and in making any resulting investment) and acknowledge and agree that none of the Managers, nor any of their respective Affiliates nor any person acting on such Bank's or Affiliate's behalf, has provided, and will not provide you with any other material regarding the Placing Shares or the Company; nor have you requested the Managers, any of their respective Affiliates or any person acting on such Bank's or Affiliate's behalf to provide you with any such information;

7. represent and warrant that you (and/or any beneficial owner on whose behalf you are making a subscription) are entitled to subscribe for Placing Shares under the laws of all relevant jurisdictions which apply to you (and/or such beneficial owner) and that you (and/or such beneficial owner) have fully observed such laws and obtained all such governmental and other guarantees and other consents which may be required thereunder and complied with all necessary formalities;

8. represent and warrant that you are, or at the time the Placing Shares are acquired that you will be, the beneficial owner of such Placing Shares, or that the beneficial owner of such Placing Shares is not a resident of Australia, Japan, the Republic of Ireland or the Republic of South Africa;

9. acknowledge that the Placing Shares have not been and will not be registered under the securities legislation of the United States, Canada, Australia, Japan, the Republic of Ireland or the Republic of South Africa and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within those jurisdictions;

10. acknowledge that where you are subscribing for Placing Shares for one or more managed accounts, you represent and warrant that you are authorised in writing by each managed account (a) to subscribe for the Placing Shares for each managed account; (b) to make on its behalf the representations, warranties and agreements in this Appendix and the announcement of which it forms part; and (c) to receive on its behalf any investment letter relating to the Placing in the form provided to you by BMO or Canaccord, as the case may be. You agree to indemnify and hold the Company, BMO, Canaccord and their respective Affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations and warranties in this paragraph 10. You agree that the provisions of this paragraph 10 shall survive the resale of the Placing Shares by or on behalf of the managed accounts;

11. undertake to pay any capital duty, stamp duty or stamp duty reserve tax and all other stamp, issue, securities, transfer, registration, documentary or other similar duties or taxes payable or otherwise required to be paid in respect of the allotment, issue, delivery or transfer of the Placing Shares or any interest therein to or by you, or the acquisition or disposal of, or in connection with any agreement to subscribe or for the allotment, issue, delivery or transfer of, the Placing Shares or any interest therein to you or by you pursuant to or as a result of the arrangements contemplated by the Placing Agreement or this Appendix or the announcement of which it forms part or in connection with the issue, execution or delivery of the Placing Agreement or this Appendix or the announcement of which it forms part and any interest or penalties payable in respect thereof and to indemnify (on an after tax basis) and hold harmless BMO, Canaccord, the Company and their respective agents to the extent that BMO, Canaccord and/or the Company pay or are or become liable to pay any amount in respect of such duties and taxes. References in this paragraph 11 to Placing Shares include any interest in, or rights to allotment of, or rights to subscribe for or options to subscribe, Placing Shares. None of BMO and Canaccord shall be liable to pay any amount pursuant to this paragraph 11;

12. represent and warrant that the issue to you, or the person specified by you for registration as holder, of Placing Shares will not give rise to a liability under any of sections 67 to 72 inclusive and 93 to 97 inclusive of the Finance Act 1986 (depositary receipts and clearance services); 

13. represent and warrant that:

(i) you are aware of and have complied with your obligations in connection with money laundering under the Proceeds of Crime Act 2002, the Terrorism Act 2003 and the Money Laundering Regulations 2003 (the "Regulations") and, if you are making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by you to verify the identity of the third party as required by the Regulations; and

(ii) you and any person acting on your behalf have complied and will comply with, and have not breached and will not breach, any and all applicable provisions of FSMA with respect to anything done by you or such person in relation to the Placing Shares in, from or otherwise involving the United Kingdom;

14. represent and warrant that if you are in a member state of the European Economic Area you are a Qualified Investor within the meaning of the Prospectus Directive;

15. represent and warrant that if you are in the United Kingdom you are a Qualified Investor within the meaning of the Prospectus Directive and a person (1) who has professional experience in matters relating to investments and fall within article 19(5) (investment professionals) of the Order, or (2) who falls within article 49(2)(a) to (d) (high net worth companies, unincorporated associations etc) of the Order, and you undertake that you will acquire, hold, manage or dispose of any Placing Shares that are allocated to you for the purposes of your business;

16. represent and warrant that you have not offered or sold and as part of the distribution of the Placing shares, will not offer or sell any Placing Shares to persons in the United Kingdom except to Qualified Investors or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within section 85(1) of FSMA;

17. represent and warrant that you have only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;

18. represent and warrant that as far as you are aware you are not acting in concert (within the meaning given in The City Code on Takeovers and Mergers) with any other person in relation to the Company;

19. represent and warrant that you and any person acting on your behalf is entitled to subscribe for Placing Shares under the laws of all relevant jurisdictions and have all necessary capacity and have obtained all necessary consents and authorities to enable you and such person to commit to this participation in the Placing and to perform your and such person's obligations in relation thereto (including, without limitation, in the case of any person on whose behalf you are acting, all necessary consents and authorities to agree to the terms set out or referred to in this announcement) and will honour such obligations;

20. undertake that you and any person acting on your behalf will pay for the Placing Shares allocated to you in accordance with this announcement on the due time and date set out herein, failing which the relevant Placing Shares (or any part of them) may be placed with other subscribers or sold as BMO or Canaccord, as the case may be, may in their absolute discretion determine and without liability to such Placee;

21. acknowledge that participation in the Placing is on the basis that you are not and will not be a client of BMO or Canaccord and none of BMO and Canaccord has any duties or responsibilities to you for providing the protections afforded to their respective clients or customers or for providing advice in relation to the Placing or in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement;

22. undertake that the person whom you specify for registration as holder of the Placing Shares will be (a) you, or (b) your nominee, as the case may be. None of the Managers nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. You and any person acting on your behalf agrees to subscribe on the basis that the Placing Shares will be registered in the name of the Depositary which will issue Depositary Interests representing those Placing Shares to a stock account of BMO who will hold them as nominee on behalf of the Placee until settlement in accordance with its standing settlement instructions;

23. acknowledge that any agreements entered into by you pursuant to these terms and conditions shall be governed by and construed in all respects in accordance with the laws of England and you submit (on behalf of yourself and on behalf of any person on whose behalf you are acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, provided that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company, BMO or Canaccord in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange; 

24. acknowledge that time shall be of the essence as regards obligations pursuant to this Appendix to the announcement;

25. if a financial intermediary, as that term is used in Article 3(2) of the EU Prospectus Directive 2003/71/EC, represent and warrant that the Placing Shares purchased by you in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a Member State of the European Economic Area which has implemented the Prospectus Directive other than qualified investors, or in circumstances in which the prior consent of BMO and Canaccord has been given to the offer or resale; and

26. will be deemed to acknowledge, represent and agree with the Company, BMO and Canaccord as follows (a) you are aware that the Placing Shares have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States; (b) unless you are making the representations set for the in (a) through (f) below, you are acquiring Placing Shares in an offshore transaction meeting the requirements of Regulation S; and (c) you will not offer, sell, pledge or transfer any Placing Shares, except in accordance with the Securities Act and any applicable laws of any state of the United States and any other jurisdiction.

Each subscriber of Placing Shares in the United States will be deemed to have acknowledged, represented to and agreed with the Company, BMO and Canaccord as follows:

(a) the subscriber (1) is acquiring the Placing Shares in a transaction that meets the requirements of Regulation S or (2) (w) is a QIB that is also a qualified purchaser, as that term is defined in the Rules underlying the Investment Company Act of 1940, as amended; (x) is acquiring the Placing Shares for its own account or the account of a QIB; (y) is aware, and each beneficial owner of such Placing Shares has been advised, that the issue or sale to it is being made in reliance on Rule 144A or another available exemption from registration; and (z) is an accredited investor; as that term is defined in Rule 501(a) of Regulation D under the Securities Act;

(b) it shall not resell or otherwise transfer any of the Placing Shares within one year after the original issuance of the Placing Shares except (1) to the Company or any of its affiliates; (2) in accordance with Rule 144A to a person that it and any person acting on its behalf reasonably believe is a QIB purchasing for its own account or for the account of a QIB; or (3) in an offshore transaction in accordance with Rule 904 of Regulation S;

(c) it agrees that it will give to each person to whom it transfers the Placing Shares notice of any restrictions on transfer of the Placing Shares;

(d) it understands that its certificated Placing Shares (if any) will bear a legend substantially to the following effect, until the expiration of the applicable holding period with respect to the Placing Shares set forth in Rule 144 under the Securities Act (if available) or until another circumstance exists permitting US legend removal, as more completely described in the US investor letter:

"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "US SECURITIES ACT") OR ANY STATE SECURITIES LAWS. THE HOLDER HEREBY, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF POLO RESOURCES LIMITED THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO POLO RESOURCES LIMITED, (B) INSIDE THE UNITED STATES IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE US SECURITIES ACT PROVIDED BY RULE 144 OR 144A THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, (C) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE US SECURITIES ACT AND APPLICABLE FOREIGN LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE US SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, AND THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO POLO RESOURCES LIMITED, AN OPINION OF COUNSEL OR OTHER EVIDENCE OF EXEMPTION IN EITHER CASE REASONABLY SATISFACTORY TO POLO RESOURCES LIMITED, OR (E) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT THAT COVERS RESALES OF SECURITIES.

DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN LONDON OR ELSEWHERE. AT ANY TIME THAT POLO RESOURCES LIMITED IS A "FOREIGN ISSUER" AS DEFINED IN RULE 902 UNDER THE US SECURITIES ACT, A NEW CERTIFICATE BEARING NO LEGEND, THE DELIVERY OF WHICH WILL CONSTITUTE "GOOD DELIVERY" MAY BE OBTAINED FROM THE TRANSFER AGENT FOR POLO RESOURCES LIMITED UPON DELIVERY OF THIS CERTIFICATE AND A DULY EXECUTED DECLARATION IN A FORM SATISFACTORY TO THE TRANSFER AGENT FOR POLO RESOURCES LIMITED AND POLO RESOURCES LIMITED TO THE EFFECT THAT THE SALE OF THE SECURITIES REPRESENTED HEREBY IS BEING MADE IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE US SECURITIES ACT."

(e) it acknowledges that the Placing Shares (whether in physical, certificated form or in uncertificated form held in CREST) are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act, are being offered and sold in a transaction not involving any public offering in the United States within the meaning of the Securities Act and that no representation is made as to the availability of the exemption provided by Rule 144 for resales of Placing Shares. The acquirer understands that the Placing Shares may not be deposited into any unrestricted depositary receipt facility in respect of Placing Shares established or maintained by a depositary bank, unless and until such time as such Placing Shares are no longer restricted securities within the meaning of Rule 144(a)(3) under the Securities Act; and

(f) it understands that any offer, sale, pledge or other transfer of the Placing Shares made other than in compliance with above-mentioned restrictions may not be recognised by the Company.

Each subscriber of Placing Shares will be deemed to acknowledge that the Company, BMO and Canaccord and their Affiliates and others will rely upon the truth and accuracy of the foregoing representations and agreements and agrees that if any of the representations or agreements deemed to have been made by its subscription of the Placing Shares are no longer accurate, it shall promptly notify BMO and Canaccord and the initial subscribers. If it is acquiring Placing Shares as a fiduciary or agent for one or more investor account, it represents that it has sole investment decision with respect to each account and it has full power to make the foregoing representations and agreements on behalf of each account.

You agree to indemnify and hold harmless the Company, BMO and Canaccord from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach by you (or any person on whose behalf you are acting) of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agree that the provisions of this Appendix shall survive after completion of the Placing.

General

This Appendix and the announcement of which it forms part have been issued by the Company and are the sole responsibility of the Company.

BMO and Canaccord are each acting for Polo Resources Limited and no one else in connection with the Placing and will not be responsible to any other person for providing the protections afforded to their respective clients, or for providing advice in relation to the Placing and/or any other matter referred to in this announcement (including the Appendices to this announcement).

You and any person acting on your behalf acknowledge that none of the Managers owe any fiduciary or other duties to you in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement. 

You and any person acting on your behalf acknowledge and agree that any of the Managers or any of their respective affiliates may (at their absolute discretion) agree to become a Placee in respect of some (or all) of the Placing Shares.

When you or any person acting on your behalf is dealing with BMO and Canaccord, any money held in an account with BMO and Canaccord on your behalf will not be treated as client money within the meaning of the rules and regulations of the FSA made under FSMA. You acknowledge that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from BMO's and Canaccord's money in accordance with the client money rules and will be used by BMO and Canaccord in the course of its own business; and you will rank only as a general creditor of BMO and Canaccord.

Appendix B - Definitions

In addition to those terms otherwise defined in this Announcement:

"Admission" means admission by the London Stock Exchange of the relevant Conditional Placing Shares and/or Firm Placing Shares as the context requires to trading on AIM becoming effective in accordance with the AIM Rules;

"Affiliate" shall have the meaning given to that term in Rule 405 under the Securities Act;

"AIM" means the AIM Market operated by the London Stock Exchange;

"AIM Rules" means the current rules published by the London Stock Exchange applicable to companies with a class of listed securities admitted to trading on AIM;

"Bookbuilding Process" or "Bookbuild" means the accelerated bookbuilding process to be conducted by Canaccord and BMO to arrange participation by Placees In the Placing;

"BMO" means BMO Nesbitt Burns Inc;

"Canaccord" means Canaccord Adams Limited;

"Companies Act" means the BVI Business Companies Act, 2004;

"Depositary" means Computershare Investor Services Plc;

"Depositary Agreement" means the depositary services and custody services agreement dated 24 August 2007 between the Company and the Depositary;

"Depositary Interests" means the dematerialised depositary interests in respect of Ordinary Shares issued and to be issued by the Depositary;

"Director" means a director of the Company;

"FSA" means the Financial Services Authority;

"FSMA" means the Financial Services and Markets Act 2000 (as amended);

"GM" or "General Meeting" means a general meeting of the shareholders of the Company convened to be held on 3 June 2008 in order to consider, and if thought fit pass, the Shareholder Resolution; 

"GM Notice" means the notice convening the GM;

"Group" means the Company and its subsidiary undertakings including, where the context requires, any one or more of such companies;

"IPO Admission" means admission of the Ordinary Shares to trading on AIM which occurred on 4 September 2007;

"London Stock Exchange" means London Stock Exchange plc;

"Managers" means BMO and Canaccord;

"Mongolian Acquisition" means the acquisition by Polo of MUC Mongolia, Polo Mongolia and WCW which completed on 4 March 2008; 

"MUC Mongolia" means MUC Resources LLC; 

"Order" means the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended);

"Ordinary Shares" means ordinary shares of no par value in the share capital of the Company;

"Placees" means the placees procured by the Managers pursuant to the Placing Agreement which may include QIBs and a limited number of "accredited investors" as that term is defined in Rule 501(a) of Regulation D under the Securities Act, in the United States;

"Placing" means the placing of the Placing Shares with Placees to be effected by the Managers on the terms and subject to the conditions set out in the Placing Agreement;

"Placing Agreement" means the agreement entered into on the date of this announcement by BMO, Canaccord and the Company in relation to the Placing;

"Placing Price" means 13 pence per Placing Share being the price at which any Placing Shares are to be subscribed by Placees;

"Placing Results Announcement" means the press announcement giving details of the results of the Placing;

"Placing Shares" means the aggregate of the Firm Placing Shares and the Conditional Placing Shares or any of them as the context requires;

"Polo" or the "Company" means Polo Resources Limited;

"Polo Mongolia" means Polo Resources LLC; 

"Prospectus Directive" means Directive 2003/71/EC and any relevant implementing measures;

"Publicly Available Information" means the Admission Document of Polo dated 20 February 2008 and information released through a regulatory information service (as defined in the AIM Rules) since that date;

"QIBs" means "qualified institutional buyers" as defined in Rule 144A under the Securities Act;

"Qualified Investors" means "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive; 

"Securities Act" means the United States Securities Act of 1933, as amended; 

"Shareholder Resolution" means the resolution of the shareholders of the Company set out in the GM Notice, which relate to certain amendments proposed to be made to the Articles of Association; 

"Unplaced Placing Shares" means those Placing Shares referred to in the Placing Results Announcement which are not subscribed for by Placees; and

"WCW" means World Coal Works Corporation.

ENDIOEAMMATMMIJMFP

---

Related Shares:

POL.L