Sirius Minerals Regulatory News (SXX)

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, ANY EXCLUDED TERRITORY OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

This announcement is not a prospectus and not an offer of securities for sale in any jurisdiction, including in the United States, Australia, Canada, Japan and South Africa.

Neither this announcement nor anything contained herein shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in any jurisdiction. Any offer to acquire shares pursuant to the proposed Firm Placing and Placing and Open Offer will be made, and any investor should make his investment decision, solely on the basis of the information that is contained in the Prospectus to be published by the Company in due course in connection with the Firm Placing and Placing and Open Offer.

2 November 2016

Sirius Minerals Plc

Launch of Comprehensive Stage 1 Financing Solution

Sirius Minerals Plc (the "Company" and, together with its subsidiaries, the "Group") today announces the launch of a comprehensive financing plan for its Stage 1 financing requirements to begin the construction of its North Yorkshire polyhalite project (the "Project"), aiming to raise gross proceeds of approximately US$1.2 billion including:

(i) a Royalty Financing Agreement for a total of US$300 million with a subsidiary of Hancock Prospecting Pty Ltd as announced on 25 October 2016;

(ii) an underwritten Firm Placing and Placing and Open Offer to raise approximately £330 - 400 million1; and

(iii) an underwritten Convertible Bond Offering to raise approximately US$400 - 450 million.

1 Represents approximately US$400 - 490 million at an exchange rate of 1.22 (GBP:USD exchange rate as of 1 November 2016 close) and approximately US$448 - 544 million at an exchange rate of 1.36, based on 6m historic average exchange rate as of 14 October 2016

The underwritten Firm Placing and conditional Placing of the Open Offer Shares (subject to clawback by existing shareholders by way of an Open Offer) are being conducted through an accelerated bookbuilding process (the "Bookbuild") which will be launched immediately following this announcement and which is expected to close on or around 3 November 2016, subject to acceleration.

J.P. Morgan Cazenove has agreed to fully underwrite the Firm Placing and Placing and Open Offer and Convertible Bond Offering. Further, J.P. Morgan Cazenove and Liberum have agreed to underwrite the settlement of the Firm Placed Shares and conditionally placed Open Offer Shares placed with Placees procured through the institutional Bookbuild, on the terms and subject to the conditions in the Placing and Open Offer Agreement. J.P. Morgan Cazenove and Liberum Capital Limited are acting as Joint Bookrunners and Shore Capital and WH Ireland are acting as Co-Lead Managers in connection with the Firm Placing and Placing and Open Offer. J.P. Morgan Cazenove is acting as Sole Bookrunner in relation to the Convertible Bond Offering.

Capitalised terms not otherwise defined in the text of this announcement are defined in Part 15 ("Definitions") of this announcement.

1. Key Highlights

· Underwritten Firm Placing and Placing and Open Offer at a price between 20 and 30 pence per New Ordinary Share (the "Issue Price") to be determined by the Bookbuild.

· The Issue Price represents a discount of between approximately 18.9 and 45.9 per cent to the closing price on 1 November 2016 (being the last Business Day prior to this announcement).

· The Company intends to raise approximately 90 per cent of the gross proceeds of the Firm Placing and Placing and Open Offer through the underwritten Firm Placing at the Issue Price to certain institutional investors.

· Approximately 10 per cent of the underwritten Firm Placing and Placing and Open Offer will be subject to clawback by existing shareholders by way of an Open Offer. The Joint Bookrunners and the Co-Lead Managers intend to conditionally place the Open Offer Shares with certain institutional investors at the Issue Price, subject to clawback to satisfy valid applications by Qualifying Shareholders under the Open Offer.

· Concurrently with the underwritten Firm Placing and Placing and Open Offer, the Company has also launched an underwritten offering of Convertible Bonds. Subject to certain limited exceptions, the Convertible Bonds are being offered outside the United States to non-US persons, pursuant to Regulation S under the U.S. Securities Act of 1933, as amended.

· As previously announced on 25 October 2016, the Company has entered into a royalty financing agreement (the "Royalty Financing Agreement") with Hancock British Holdings Ltd ("Hancock") a subsidiary of Hancock Prospecting Pty Ltd, under which Hancock has agreed to purchase a royalty of up to 5 per cent of gross revenue generated by the first 13 mtpa of sales, and 1 per cent of sales above 13 mtpa in each calendar year, over the longer of the life of the Project or 70 years in return for US$250 million. In addition, Hancock agreed to subscribe for new Ordinary Shares at the same price as the Issue Price in an amount of US$50 million (the "Royalty Financing Ordinary Shares"). Drawdown of the royalty purchase amount and subscription of the Royalty Financing Ordinary Shares, comprising a total investment of US$300 million (the "Royalty Financing"), is conditional on (among other things) the Company having obtained financial commitments for a minimum of US$1.088 billion (broadly approximating the amount necessary to fund construction on Stage 1 of the Project, including the proceeds of the Royalty Financing) and all necessary corporate, shareholder and regulatory approvals having been granted in connection with the subscription of the Royalty Financing Ordinary Shares. In its announcement of 25 October 2016, the Company stated that the Royalty Financing Agreement was also conditional on two confirmatory due diligence items, which have now been satisfied.

· The Company intends to use the expected aggregate net proceeds of the underwritten Firm Placing and Placing and Open Offer, the underwritten Convertible Bond Offering and the Royalty Financing as part of the first stage of the financing of the Project, of approximately US$1.2 billion (the "Stage 1 Financing").

· A General Meeting is to be held at the offices of Allen & Overy LLP at One Bishops Square, London E1 6AD at 11.00 a.m. on 25 November 2016 for the purpose of passing certain Resolutions in relation to the proposed Firm Placing and Placing and Open Offer, the Convertible Bond Offering and the Royalty Financing Ordinary Shares. Further details of the General Meeting will be contained in the Circular expected to be posted to Shareholders on or around 4 November 2016.

· The underwritten Firm Placing and Placing and Open Offer are conditional upon:

· the Resolutions being passed by the Shareholders at the General Meeting (or an adjournment thereof); and

· the Placing and Open Offer Agreement otherwise becoming unconditional in all respects and not having been terminated in accordance with its terms prior to Admission.

· The conditions contained in the Placing and Open Offer Agreement include, inter alia, (i) the Royalty Financing Agreement not having been terminated prior to Admission, (ii) the subscription agreement in connection with the Convertible Bond Offering having been entered into and not having been terminated prior to Admission and (iii) Admission becoming effective by not later than 8.00 a.m. on 29 November 2016 (or such later time and/or date as the Company and the Joint Bookrunners may agree).

· Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. It is expected that Admission will become effective, and that dealings in the New Ordinary Shares will commence on AIM, at 8.00 a.m. on 29 November 2016.

2. Overview of the Project

· The Company is focused on the development of what the Company believes to be the world's largest high-grade known polyhalite deposit, located in North Yorkshire, United Kingdom.

· The Company's polyhalite product, which it markets under the trade marked name POLY4, is a multi-nutrient fertilizer that can be used to achieve balanced fertilization, which is critical to obtain optimal crop yields and quality.

· The Company expects to progress the Project in two phases: the initial construction phase (the "Initial Construction Phase") and the expansion phase (the "Expansion Phase"). The Initial Construction Phase is intended to achieve first production from the mine by the end of 2021 and production capacity of 10 mtpa by mid-2024. The Expansion Phase, to be funded from operational cash flows, is intended to eventually increase production capacity to 20 mtpa, subject to receipt of additional planning permissions and the completion of additional infrastructure.

· For the period from commencement of construction to the end of the quarter prior to which the Project generates positive net cash flow, which is currently expected to be six years after commencement of construction (the "Capital Funding Period"), the Project has a Capital Funding Requirement that is currently estimated to be US$2.9 billion. This estimate is based on the DFS and subsequent detailed work with the Company's preferred contractors.

· After the Capital Funding Period, the remainder of the capital required during the Initial Construction Phase, which is currently estimated to be US$0.2 billion to reach production capacity of 10 mtpa, is expected to be funded with operating cash flow from revenues earned from production.

· The Expansion Phase of the Project has a total capital cost that is currently estimated to be US$1.5 billion for expansion to 20 mtpa production capacity, which is expected to be funded with operating cash flow from revenues earned from production.

· The Company believes this capital investment during the Capital Funding Period of US$2.9 billion will enable the installation of long-life infrastructure with the capacity to produce bulk volumes of polyhalite at operating costs amongst the lowest in the industry. This initial US$2.9 billion investment, plus the additional investment expected to be funded with operating cash flow from revenues earned from production results in an estimated Project net present value of US$15.4 billion and internal rate of return of 28 per cent at production of 20 mtpa, based on the Company's assumptions.

3. Overview of the Funding Plan

· The Company intends to undertake a staged financing to fund the Initial Construction Phase of the Project.

· The Stage 1 Financing is currently expected to generate net proceeds of approximately US$1.1 billion, plus an additional US$0.1 billion in financing costs, for a total of approximately US$1.2 billion in Stage 1 Financing, and is intended to fund the direct costs of all site preparation, mine shaft excavations, tunnel caverns and a proportion of the indirect costs, project management and owner costs as well as provide certain contingency funds for the Project. The funds from the Stage 1 Financing are expected to be spent within approximately the first three years after commencement of construction.

· The Stage 2 Financing is intended to fund the remainder of the Capital Funding Requirement to achieve first production by the end of 2021.

· The Stage 2 Financing, expected to be supplemented by operating cash flows from initial production from the Project, is expected to fund capital costs which are anticipated to include costs relating to tunnelling, MTS, mine fit out, the MHF and outsourcing charges relating to the harbour facilities.

· According to the DFS as updated by the Company's further estimates, the Capital Funding Requirement to be funded by the Stage 2 Financing is currently expected to amount to approximately US$1.8 billion.

· The Stage 2 Financing is currently expected to be funded by senior debt facilities intended to both fund the remainder of the Capital Funding Requirement and provide the Company with the capacity to pay associated financing costs (comprising interest expenses, principal repayment amounts as well as administrative costs, fees and other charges associated with the financing) of up to US$0.8 billion, resulting in a total Stage 2 Financing of up to US$2.6 billion. The Stage 2 Financing is currently expected to be committed approximately two years after commencement of construction, prior to commencement of tunnelling works, and drawn down after the Stage 1 Financing has been utilised.

· The Company has entered into a mandate letter with six financial institutions, Export Development Canada, ING, J.P. Morgan, Lloyds Bank plc, Société Générale Corporate & Investment Banking and The Royal Bank of Scotland Plc (the "Mandated Lead Arrangers") in connection with this potential senior debt financing.

· The Company has engaged the services of:

· J.P. Morgan Cazenove as Joint Bookrunner, Liberum Capital Limited as Joint Bookrunner and NOMAD, and WH Ireland and Shore Capital as Co-Lead Managers in relation to the Firm Placing and Placing and Open Offer;

· J.P. Morgan Cazenove as Sole Bookrunner in relation to the Convertible Bond Offering;

· Moelis & Company LLC and EAS Advisors LLC (acting through Odeon Capital Group LLC - Member of FINRA/SIPC/MSRB) as financial advisers in relation to the structured capital component of the Stage 1 Financing; and

· Société Générale as financial advisers in relation to the anticipated Stage 2 Financing.

4. Bookbuild

The Bookbuild will open with immediate effect following this announcement. The Issue Price and the number of Firm Placed Shares and Open Offer Shares that are the subject of the conditional Placing will be determined following the close of the Bookbuild. The Firm Placed Shares and Open Offer Shares, when issued, will be fully paid and will rank pari passu in all respects with the Existing Ordinary Shares.

The timing of the closing of the Bookbuild and allocations are at the discretion of Joint Bookrunners and the Company. The Issue Price and details of the results of the Firm Placing and the conditional Placing will be announced as soon as practicable after the close of the Bookbuild.

Your attention is drawn to the detailed terms and conditions of the Firm Placing and Placing described in the Appendix to this announcement (which forms part of this announcement).

By choosing to participate in the Firm Placing and the Placing and by making an oral and legally binding offer to acquire Firm Placed Shares and (subject to clawback) the conditionally placed Open Offer Shares, investors will be deemed to have read and understood this announcement in its entirety (including the Appendix) and to be making such offer on the terms and subject to the conditions in it, and to be providing the representations, warranties and acknowledgements contained in the Appendix.

Chris Fraser, Managing Director and Chief Executive Officer, said:

"I am delighted to announce this proposed fully underwritten financing package which - together with our new strategic investor, Hancock, announced last week - provides the comprehensive Stage 1 financing required to start construction of our North Yorkshire polyhalite project.

"We thank existing shareholders for their continued support as well as the new institutional investors who recognise this unique opportunity to help develop what we believe to be the world's largest high-grade known polyhalite deposit into a major low cost multi-nutrient fertilizer business.

"We are also pleased to provide an opportunity for our existing shareholders to participate via the Open Offer which is designed to reduce the dilution of this proposed fundraising via subscribing for new shares. In order for today's proposed financing to be implemented, we will be holding a General Meeting on 25 November 2016, at which point the Company will be seeking shareholder approval.

"This project will create jobs in North Yorkshire and Teesside, and represents a significant business investment in the UK. It's been a long journey to this point, and we still have some way to go, but I want to thank everyone who has supported the Company in its efforts to reach this major milestone. Once we have received shareholder approval, we want to get on with the job of delivering this compelling value proposition, not only for our shareholders but also for the North Yorkshire community."

Northern Powerhouse Minister Andrew Percy MP said:

"Today's launch of Stage 1 financing for Sirius Minerals' North Yorkshire polyhalite mining project is a very welcome sign of progress. This project has the potential to create over 1,000 jobs, boost growth and generate billions of pounds of exports for the Northern Powerhouse.

"We support their efforts to help make the north a world leader in the multi-nutrient fertiliser industry.

"Already foreign direct investment projects are up nearly a quarter on the previous year and today's announcement is another vote of confidence in the Northern Powerhouse."

Conference call and webcast

Sirius Minerals' Chief Executive Officer, Chris Fraser, will host a conference call and webcast presentation for analysts at 9.30 a.m. today. Any analysts wishing to access the call and presentation should email sirius@tavistock.co.uk to register before 9.00 a.m.

A replay of the conference call and presentation will be available on the Company's website from 2.00 p.m.

This announcement is released by Sirius Minerals Plc and contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 ("MAR"), encompassing information relating to the Firm Placing and Placing and Open Offer and the Stage 1 Financing described above, and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of the Company by Tristan Pottas, Investor Relations Manager.

For further information, please contact:

About Sirius Minerals Plc

Sirius Minerals Plc is a fertilizer development company focused on the development of its North Yorkshire polyhalite project, located in North Yorkshire, United Kingdom. It believes the Project represents the world's largest high-grade known deposit of polyhalite, a multi-nutrient form of potash containing potassium, sulphur, magnesium and calcium. Incorporated in 2003, Sirius Minerals Plc's shares are traded on the London Stock Exchange's AIM market. Further information on the Company can be found at: www.siriusminerals.com.

Important notice

Forward-looking statements

This announcement, including its Appendix, contains forward-looking statements, including but not limited to statements about the costs of, and the Company's ability to successfully construct, commission and execute, the Project. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and therefore are based on current beliefs and expectations about future events. Forward-looking statements are not guarantees of future performance and the Group's actual operating results and financial condition, and the development of the industry in which it operates may differ materially from those made in or suggested by the forward-looking statements contained in this announcement. In addition, even if the Group's operating results, financial condition and liquidity, and the development of the industry in which the Group operates are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods. Accordingly, prospective investors should not rely on these forward-looking statements. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. None of the Company, the Directors, the Joint Bookrunners or the Co-Lead Managers undertake any obligation nor do they intend to revise or update any document unless required to do so by applicable law, the Prospectus Rules, the Disclosure Requirements or the Transparency Rules.

This announcement and the information contained in it is restricted and is not for release, publication or distribution, directly or indirectly, in whole or in part, in, into or from the United States (including its territories and possessions, any state of the United States and the District of Columbia, collectively the "United States") or any Excluded Territory or any other jurisdiction where to do so might constitute a violation of local securities laws or regulations. The information in this announcement may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction, or disclosure of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of the Securities Act or the applicable laws of other jurisdictions.

This announcement is for information purposes only and does not constitute an offer or invitation to sell or issue or the solicitation of an offer to buy, acquire or subscribe for New Ordinary Shares to or by anyone in any Excluded Territory or to any person to whom it is unlawful to make such offer or invitation or undertake such solicitation. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions. Subject to certain exceptions, the securities referred to herein may not be offered or sold in any Excluded Territory or to, or for the account or benefit of any national resident or citizen of any Excluded Territory. This announcement does not constitute an extension into the United States of the offer mentioned in this announcement, nor does it constitute nor form part of an offer to sell securities or the solicitation of an offer to buy securities in the United States. The New Ordinary Shares have not been and will not be registered under the Securities Act or under any securities laws or with any securities regulatory authority of any state or other jurisdiction of the United States. The New Ordinary Shares may not be offered, sold, resold, taken up, transferred, delivered or distributed, directly or indirectly, into or within the United States absent registration under the Securities Act or an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. There will be no public offer of the New Ordinary Shares in the United States. The New Ordinary Shares may not be offered or sold to, or for the account or benefit of, any ADR Holder. Subject to certain exceptions, no action has been taken by the Company or by the Joint Bookrunners that would permit an offer of the New Ordinary Shares or possession or distribution of this announcement in the Excluded Territories or any other jurisdiction where action for that purpose is required, other than the United Kingdom. No public offering of the shares referred to in this announcement is being made in any Excluded Territory or elsewhere.

This announcement has been issued by, and is the sole responsibility of, the Company. 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 Joint Bookrunners or the Co-Lead Managers or by any of their respective 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 interested party or its advisers, and any liability therefore is expressly disclaimed.

J.P. Morgan Cazenove, which is authorised by the Prudential Regulation Authority (the "PRA") and regulated in the United Kingdom by the FCA, and the PRA, and Liberum, Shore Capital and W.H. Ireland, each of which is authorised and regulated in the United Kingdom by the FCA, are each acting exclusively for the Company and no one else in connection with the proposed Firm Placing and Placing and Open Offer and Admission, and will not regard any other person (whether or not a recipient of this document) as a client in relation to the proposed Firm Placing and Placing and Open Offer or Admission, and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, nor for providing advice, in relation to the proposed Firm Placing and Placing and Open Offer or Admission or any other matter referred to in this announcement.

Apart from the responsibilities and liabilities, if any, which may be imposed on the Joint Bookrunners and the Co-Lead Managers by the Financial Service and Markets Act 2000, as amended, or the regulatory regime established thereunder, or by the London Stock Exchange or the AIM Rules, or under the regulatory regime of any jurisdiction where exclusion of liability under the relevant regulatory regime would be illegal, void or unenforceable, none of the Joint Bookrunners and Co-Lead Managers, nor any of their respective affiliates, directors, officers, employees or advisers accepts any responsibility whatsoever for, or makes any representation or warranty, express or implied, as to the contents of this announcement, including its accuracy or completeness, or for any other statement made or purported to be made by it, or on behalf of it, the Company, the Directors or any other person, in connection with the Company, the New Ordinary Shares, the Firm Placing and Placing and Open Offer or Admission, and nothing in this document should be relied upon as a promise or representation in this respect, whether or not to the past or future. Each of the Joint Bookrunners and Co-Lead Managers and their respective affiliates, directors, officers, employees and advisers accordingly disclaims to the fullest extent permitted by law all and any responsibility or liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above), which it might otherwise have in respect of this announcement or any such statement.

The distribution of this announcement and the offering of the New Ordinary Shares in certain jurisdictions other than the United Kingdom may be restricted by law. Subject to certain exceptions, no action has been taken by the Company, the Joint Bookrunners or the Co-Lead Managers that would permit an offering of the New Ordinary Shares or possession or distribution of this announcement or any other offering or publicity material relating to such shares or the Application Form in the Excluded Territories or in any other jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required by the Company, the Joint Bookrunners and the Co-Lead Managers to inform themselves about, and to observe, any such restrictions.

Statements contained in this announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future.

No statement in this announcement is or is intended to be a profit forecast or profit estimate or to imply that the earnings of the Company for the current or future financial years will necessarily match or exceed the historical or published earnings of the Company. The price of shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the shares.

The New Ordinary Shares to be issued pursuant to the Firm Placing and Placing and Open Offer will not be admitted to trading on any stock exchange other than on AIM, a market operated by the London Stock Exchange.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this announcement.

PROPOSED UNDERWRITTEN FIRM PLACING AND PLACING AND OPEN OFFER AT A PRICE OF BETWEEN 20 AND 30 PENCE PER NEW ORDINARY SHARE

1. Introduction

The Company is pleased to announce that it proposes to raise gross proceeds of approximately £330 - 400 million at between 20 and 30 pence per New Ordinary Share by way of the underwritten Firm Placing and Placing and Open Offer. Such proceeds would be used by the Company to part fund the continuing development of its North Yorkshire polyhalite project in the United Kingdom.

The Issue Price represents a discount of between approximately 18.9 and 45.9 per cent to the closing price per Ordinary Share of 37.00 pence on 1 November 2016 (being the last Business Day prior to the date of this announcement).

The Firm Placing and Placing and Open Offer are conditional upon the Resolutions being passed by the Shareholders at the General Meeting (or an adjournment thereof) and the Placing and Open Offer Agreement otherwise becoming unconditional in all respects and not having been terminated prior to Admission. The conditions contained in the Placing and Open Offer Agreement include, inter alia, (i) the Royalty Financing Agreement not having been terminated prior to Admission, (ii) the subscription agreement in connection with the Convertible Bond Offering having been entered into and not having been terminated prior to Admission and (iii) Admission becoming effective by not later than 8.00 a.m. on 29 November 2016 (or such later time and/or date as the Company and the Joint Bookrunners may agree).

2. Background to and Reasons for the Firm Placing and Placing and Open Offer

The Company is focused on the development of what the Company believes to be the world's largest high-grade known polyhalite deposit located in North Yorkshire, United Kingdom - the Project. The Company's polyhalite product, which it markets under the trade marked name POLY4, is a multi-nutrient fertilizer that can be used to achieve balanced fertilisation, which is critical to obtain optimal crop yields and quality.

Bringing the Project to an initial production capacity of 10 million tonnes per annum ("mtpa") will involve the construction of an underground mine to enable the extraction of polyhalite, along with the necessary infrastructure both above and below ground that will be required for transportation, processing and distribution. Construction comprises the sinking of two vertical mine shafts to access the polyhalite deposit and building a 37 kilometre long underground conveyor (Mineral Transport System, or "MTS"), a processing facility for granulating or sizing the mined material into the final physical form (Materials Handling Facility, or "MHF") and harbour facilities comprising an approximately 3.5-kilometre overland conveyor, a ship berth and a ship loader located adjacent to the harbour on the River Tees.

The Company expects to progress the Project in two phases: the initial construction phase (the "Initial Construction Phase") and the expansion phase (the "Expansion Phase"). The Initial Construction Phase is intended to achieve first production from the mine by the end of 2021, and production capacity of 10 mtpa by mid-2024. With the infrastructure existing at that point in time, there is the potential for production capacity to reach 13 mtpa (under existing planning permissions) by mid-2024 by incremental addition of mining, granulation and harbour capacities. The Expansion Phase is intended to eventually increase production capacity to 20 mtpa, subject to receipt of additional planning permissions and the completion of additional infrastructure, and is expected to be funded from operational cash flows. Capital costs of the Initial Construction Phase are expected to be externally financed in two stages during the Capital Funding Period (expected to fund the Project to the end of the quarter prior to which the Project generates positive net cash flow, which is currently expected to be six years after commencement of construction). The Stage 1 Financing, which is intended to fund the direct costs of all site preparation, mine shaft excavations, tunnel caverns and a proportion of the indirect costs, project management and owner costs as well as provide contingency funds for the Project, consists of three elements: this Firm Placing and Placing and Open Offer, the Convertible Bond Offering and the Royalty Financing. The Firm Placing and Placing and Open Offer are conditional on (i) the Resolutions being passed at the General Meeting and (ii) the Placing and Open Offer Agreement otherwise becoming unconditional in all respects and not having been terminated in accordance with its terms prior to Admission. The conditions contained in the Placing and Open Offer Agreement include, inter alia, (i) the Royalty Financing Agreement not having been terminated prior to Admission, (ii) the subscription agreement in connection with the Convertible Bond Offering having been entered into and not having been terminated prior to Admission, and (iii) Admission becoming effective by not later than 8.00 a.m. on 29 November 2016 (or such later time and/or date as the Company and the Joint Bookrunners may agree). Settlement of the Convertible Bond Offering is conditional on, inter alia, (i) the Resolutions being passed at the General Meeting, and (ii) Admission. The Royalty Financing is conditional upon, inter alia, (i) the Company having obtained financial commitments for a minimum of US$1.088 billion (including the proceeds of the royalty financing arrangements) and (ii) all necessary corporate, shareholder and regulatory approvals having been granted in connection with the subscription of the Royalty Financing Ordinary Shares. Drawdown of the Royalty Financing will take place only once the Group has expended US$630 million of the other Stage 1 Financing funds received. The Stage 2 Financing, which is intended to fully fund the remainder of the Capital Funding Requirement, is currently expected to consist of senior debt facilities. Capital costs of the Initial Construction Phase after the Capital Funding Period and capital costs during the Expansion Phase are expected to be financed by operating cash flow from revenues earned from production.

The Board considers the Firm Placing and Placing and Open Offer to be a suitable fundraising structure as it will allow access to new investors to broaden the Company's shareholder base, whilst providing Qualifying Shareholders with the opportunity to participate in the fundraising through the Open Offer.

The Board believes that the Firm Placing and Placing and Open Offer represent an attractive opportunity for the Company to secure additional equity funding to pursue the Project.

3. Implementation of the Project

The Project will consist of the following facilities and processes: (1) site preparation at Dove's Nest Farm; (2) mine site development, including shafts; (3) the MTS; (4) the MHF; (5) harbour facilities; (6) mining; and (7) other consented shafts along the MTS (Lady Cross and Tockett's Lythe).

The schedule for the Initial Construction Phase can be broken down into four key stages: (i) site preparation and pre-sink activities; (ii) main shaft sinking activity and tunnelling; (iii) construction and development of the MHF and harbour facilities; and (iv) first production, shaft bottom fit-out and ramp-up of production, initially to 10 mtpa. The design of the facilities enables an increase in production capacity to 13 mtpa by incremental addition of mining, granulation and harbour capacities. A further increase in production capacity to 20 mtpa would be achieved during the Expansion Phase through the addition of another shaft and expansion of mining, hoisting, MHF and harbour facilities, which would require additional planning permissions.

The Project will adopt conventional bulk mining methods (a combination of continuous mining machines and drill and blast methods) to enable efficient extraction at relatively low cost. Two deep shafts, the production shaft (reaching a depth of 1,594 metres) and the service shaft (reaching a depth of 1,565 metres), will access the polyhalite shelf seam. All mining will take place within the polyhalite horizon, with the product then hoisted to 360 metres below surface level where it will be transported to the MHF for processing via the MTS. Finished products will be transported approximately 3.5 kilometres from the MHF on a covered conveyor system to the riverside and new quay harbour facilities, which will be built at the northern end of the Project's Bran Sands river frontage.

4. Project Economics

For the period from commencement of construction to the end of the quarter prior to which the Project generates positive net cash flow, which is currently expected to be six years after commencement of construction, the Project has a total Capital Funding Requirement that is currently estimated to be US$2.9 billion. This estimate is based on the DFS and subsequent detailed work with the Company's preferred contractors. After the Capital Funding Period, the remainder of the capital required during the Initial Construction Phase, which is currently estimated to be US$0.2 billion to reach production capacity of 10 mtpa, is expected to be funded with operating cash flow from revenues earned from production. Further capital costs for the expansion to 20 mtpa are currently estimated to be US$1.5 billion, which is expected to be funded with operating cash flow from revenues earned from production.

The Company believes this capital investment during the Capital Funding Period of US$2.9 billion will fund a substantial part of the Initial Construction Phase of the Project to enable the installation of long-life infrastructure with the capacity to produce bulk volumes of polyhalite at operating costs amongst the lowest in the industry. This initial US$2.9 billion investment, plus the additional investment expected to be funded with operating cash flow from revenues earned from production (estimated as US$0.2 billion that will be required to reach production capacity of 10 mtpa and a further US$1.5 billion expected to be required post-Capital Funding Period, to achieve production capacity of 20 mtpa) results in an estimated project NPV of US$15.4 billion and IRR of 28 per cent at production of 20 mtpa.

The following table outlines the Capital Funding Requirement by major category, split between the Stage 1 Capital Funding Requirement and the Stage 2 Capital Funding Requirement and covering the period to end of the quarter prior to which the Project generates positive net cash flow which is currently expected to be six years after commencement of construction.

Notes:

(1) The Stage 1 Capital Funding Requirement will be funded by the Stage 1 Financing, which includes the Firm Placing and Placing and Open Offer, the Convertible Bond Offering and the Royalty Financing and is currently intended to fund the direct costs of all site preparation, mine shaft excavations, tunnel caverns and a proportion of the indirect costs, project management and owner costs as well as provide contingency funds for the Project.

(2) The Stage 2 Capital Funding Requirement will be funded by the Stage 2 Financing, which is currently expected to be fully funded by senior debt financing and is intended to fully fund the remainder of the Capital Funding Requirement, largely including costs relating to tunnelling, MTS and mine fit out, the MHF and outsourcing charges relating to the harbour facilities.

(3) Owner costs include project overheads, geotechnical site investigation costs, operational readiness costs (which includes activities required to prepare the mine to be operational), project insurances and costs relating to permitting.

(4) Contingency represents a provision to cover uncertainties associated with the Project capital costs as defined by the DFS. It does not include allowance for scope changes or catastrophic events. It includes but is not limited to estimate errors and omissions, design development, pricing variations, delays for equipment and material deliveries, contractor claims and variation in labour productivity and related indirect costs. The impact of any foreign currency variation and financing costs are excluded from the contingency analysis.

(5) Working capital and other is presented on a net basis, representing outflows relating to expenditure relating to Section 106 security arrangements (security arrangements associated with agreements pursuant to Section 106 of the Town and Country Planning Act 1990 entered into between the Company and the planning permission authorities), net of expected inflows from operating cash flow as initial production comes online.

In the CPR, SRK presents total capital costs of US$3.5 billion to reach production capacity of 10 mtpa. The following table shows a reconciliation of the total capital costs presented by SRK in the CPR, which reflect the Company's capital cost estimates but are presented on a different basis and therefore exclude certain items, to the Company's estimate of the Capital Funding Requirement.

Notes:

(1) Reflects items which the Company expects to be outsourced to third party providers of capital.

(2) All prices and costs provided in SRK's analysis are presented in real (actual) 2016 terms, without any inflation adjustments. This escalation amount therefore represents the Company's estimate of annual inflation of 2 per cent on prices and costs with initial construction capital cost escalation as per the DFS estimates for the initial 10 mtpa level of production.

(3) Reflects capital costs incurred after the Capital Funding Period and until completion of all construction activities relating to reaching production capacity of 10 mtpa, which are expected to be funded by operating cash flow from revenues earned from production.

(4) Reflects outflows incurred during the Capital Funding Period relating to expenditure relating to S106 security arrangements, net of inflows from operating cash flow as initial production comes online.

The following table shows the Company's expected capital requirements after the end of the Capital Funding Period, which is currently expected to end six years after commencement of construction, until the end of the Expansion Phase, which is currently expected to end ten years after commencement of construction, when it is expected that the Company will achieve production capacity of 20 mtpa. These capital requirements are expected to be funded from operating cash flow.

Notes:

(1) Values in this table are presented on a real (actual) 2016 basis.

In addition to the above, sustaining capital costs over the life of the Project, assuming eventual expansion to production capacity of 20 mtpa, have been estimated on a real (actual) 2016 basis by the Company to be US$1.3 billion from 2024, varying between US$5 million and US$69 million per annum but averaging US$26 million per annum over the life of the mine.

5. Use of Proceeds

The Directors expect the net proceeds of the Firm Placing and Placing and Open Offer, totalling approximately £330 - 400 million, to be used as part of the Stage 1 Financing.

The Stage 1 Financing is currently expected to amount to approximately US$1.1 billion, plus an additional US$0.1 billion in financing costs, for a total of US$1.2 billion, and is intended to fund the direct costs of all site preparation, mine shaft excavations, tunnel caverns and a proportion of the indirect costs, project management and owner costs as well as provide contingency funds for the Project. The funds from the Stage 1 Financing are expected to be spent within approximately the first three years after commencement of construction.

6. Current Trading and Prospects

The Group announced its interim results on 16 August 2016 for the six month period ended 30 June 2016, reporting a net loss after tax of £4.1 million compared to a loss of £4.7 million for the six month period ended 30 September 2015. The Company is in a development stage, investing in the DFS, procurement activities, and marketing activities relating to the Project. Recently the Company has been focused on fundraising activities. As at 30 June 2016, the Group had net assets of £161.7 million including cash equivalents and investments of £16.9 million.

On 20 July 2016, the Company announced that it has received government approval for the harbour facilities. As a result, all major approvals for the Project have now been granted.

During July and August 2016, the Company received an exercise notice in respect of 5,975,000 share options with an exercise price of 19.5 pence each granted under a convertible security financing, which was announced on 12 August 2013.

On 1 September 2016 the Company announced the appointment of the Mandated Lead Arrangers for the Stage 2 Financing.

On 25 October 2016 the Company announced that it had entered into the Royalty Financing Agreement. The Royalty Financing Agreement was conditional upon, inter alia, two confirmatory due diligence items, which have now been satisfied.

Following completion of the Stage 1 Financing the Company expects to commence construction of the Project and to incur significant additional capital expenditures and further operating losses as it continues to invest in the development of the Project.

7. Dividend Policy

The Company has never declared or paid any cash dividends on its shares. The Company intends to retain future earnings, if any, to finance the operation of its business and does not anticipate paying any cash dividends in the foreseeable future until the Project is operational and generating cash, when the dividend policy will be reviewed in line with then-existing financing commitments. Any future determination related to the Company's dividend policy will be made at the discretion of the directors of the Company after considering its financial condition, results of operations, capital requirements, business prospects and other factors the directors of the Company deem relevant, and subject to the restrictions contained in any future financing instruments.

8. Principal terms of the underwritten Firm Placing and Placing and Open Offer

8.1. General

The Company intends to raise aggregate gross proceeds of approximately £330 - 400 million at the Issue Price of between 20 and 30 pence per New Ordinary Share by way of the Firm Placing and Placing and Open Offer. The Firm Placing and Placing and Open Offer are conditional, among other things, on the passing of the Resolutions, which will be sought at the General Meeting.

J.P. Morgan Cazenove has undertaken to fully underwrite the Firm Placing and Placing and Open Offer and Convertible Bond Offering up to an aggregate amount of approximately US$850 million, based on a sterling to US dollar exchange rate of 1.22. This equates to approximately US$900 million at a sterling to US dollar exchange rate of 1.36.

The Issue Price represents a discount of between approximately 18.9 and 45.9 per cent to the closing price per Ordinary Share of 37.00 pence on 1 November 2016 (being the last Business Day prior to the date of this announcement). The Directors believe that it is necessary to offer the New Ordinary Shares at a discount to complete the Firm Placing and Placing and Open Offer, and accordingly believe that such discount is in the best interests of the Shareholders, and that the Issue Price is appropriate for the Firm Placing and Placing and Open Offer.

The Firm Placing and Placing and Open Offer are conditional upon:

· the Resolutions being passed by the Shareholders at the General Meeting (or any adjournment thereof); and

· the Placing and Open Offer Agreement otherwise becoming unconditional in all respects and not having been terminated in accordance with its terms prior to Admission.

The conditions contained in the Placing and Open Offer Agreement include, inter alia, (i) the Royalty Financing Agreement not having been terminated prior to Admission, (ii) the subscription agreement in connection with the Convertible Bond Offering having been entered into and not having been terminated prior to Admission and (iii) Admission becoming effective by not later than 8.00 a.m. on 29 November 2016 (or such later time and/or date as the Company and the Joint Bookrunners may agree).

Accordingly, if any such conditions are not satisfied or, if applicable, waived, the Firm Placing and Placing and Open Offer will not proceed, any Open Offer Entitlements admitted to CREST will thereafter be disabled and application monies under the Open Offer will be refunded to the applicants, by cheque (at the applicant's risk) in the case of Qualifying Non-CREST Shareholders and by way of a CREST payment in the case of Qualifying CREST Shareholders, without interest, as soon as practicable thereafter. In these circumstances, the Firm Placing to the Firm Placees and the Placing to the Conditional Placees will not proceed.

The New Ordinary Shares to be issued pursuant to the Firm Placing and Placing and Open Offer will, following Admission, rank pari passu in all respects with the Existing Ordinary Shares and will carry the right to receive all dividends and distributions declared, made or paid on or in respect of the Ordinary Shares after Admission.

Application will be made to the London Stock Exchange for the New Ordinary Shares proposed to be issued in connection with the Firm Placing and Placing and Open Offer to be admitted to trading on AIM. It is expected that Admission will become effective, and that dealings in the New Ordinary Shares will commence on AIM, at 8.00 a.m. on 29 November 2016.

8.2. Firm Placing

Approximately 90 per cent of the Firm Placing and Placing and Open Offer will be placed pursuant to the Firm Placing. Firm Placees will agree to subscribe for the Firm Placed Shares at the Issue Price. The Firm Placing is not subject to clawback in respect of valid applications for Open Offer Shares by Qualifying Shareholders pursuant to the Open Offer. The Firm Placing is subject to the same conditions and termination rights which apply to the Placing and Open Offer.

Subject to waiver or satisfaction of the conditions relating to Admission and the Firm Placing not being terminated, the Firm Placed Shares will be issued to the Firm Placees procured by the Joint Bookrunners and the Co-Lead Managers. J.P. Morgan Cazenove has agreed, pursuant to the Placing and Open Offer Agreement and the Subscription Agreement, to fully underwrite the Firm Placing and Placing and Open Offer and the Convertible Bond Offering up to an aggregate of $850 million at the sterling to US dollar exchange rate of 1.22. This underwriting obligation shall cease to apply with respect to such Firm Placed Shares and Conditionally Placed Shares that are placed with Placees at or above the Floor Price through the institutional Bookbuild. With effect from the completion of the institutional Bookbuild and subject to the execution by the Company and the Joint Bookrunners of the Pricing Supplement, to the extent that any Placee fails to take up any or all of the Firm Placed Shares which have been allocated to it or which it has agreed to take up at the Issue Price, the Joint Bookrunners have agreed, on the terms and subject to the conditions in the Placing and Open Offer Agreement, to take up such Firm Placed Shares at the Issue Price in their agreed proportions. This underwriting commitment is conditional on the Placing and Open Offer Agreement becoming fully unconditional and not having been terminated in accordance with its terms.

Application will be made for the Firm Placed Shares to be admitted to trading on AIM. Subject to the conditions summarised above, it is expected that Admission will become effective on 29 November 2016 and that dealings for normal settlement in the Firm Placed Shares will commence on AIM at 8.00 a.m. on the same day.

The Issue Price represents a discount of between 7.00 and 17.00 pence (approximately 18.9 - 45.9 per cent) to the closing price of 37.00 pence on 1 November 2016, being the last Business Day before this announcement.

The Firm Placed Shares, when issued and fully paid, will be identical to, and rank pari passu with, the Existing Ordinary Shares in respect of all dividends or other distributions declared, made or paid after Admission. Firm Placees will not be able to participate in the Open Offer with respect to the Firm Placed Shares.

8.3. The Placing and Open Offer

Approximately 10 per cent of the Firm Placing and Placing and Open Offer will be subject to clawback by existing shareholders by way of an Open Offer.

The Joint Bookrunners and the Co-Lead Managers intend, pursuant to the Placing and Open Offer Agreement, to conditionally place all of the Open Offer Shares at the Issue Price with institutional investors. The commitments of the Conditional Placees are subject to clawback in respect of valid applications for Open Offer Shares by Qualifying Shareholders pursuant to the Open Offer. Subject to waiver or satisfaction of the conditions relating to Admission and the Placing and Open Offer not being terminated, any Open Offer Shares which are not applied for in respect of the Open Offer through valid applications received from Qualifying Shareholders will be issued to the Conditional Placees procured by the Joint Bookrunners and the Co-Lead Managers. J.P. Morgan Cazenove has agreed, pursuant to the Placing and Open Offer Agreement and the Subscription Agreement, to fully underwrite the Firm Placing and Placing and Open Offer and the Convertible Bond Offering up to an aggregate of $850 million at the sterling to US dollar exchange rate of 1.22. This underwriting obligation shall cease to apply with respect to such Firm Placed Shares and Conditionally Placed Shares that are placed with Placees at or above the Floor Price through the institutional Bookbuild. With effect from the completion of the institutional Bookbuild and subject to the execution by the Company and the Joint Bookrunners of the Pricing Supplement, to the extent that any Conditional Placee fails to take up any or all of the Open Offer Shares which have been allocated to it or which it has agreed to take up at the Issue Price, the Joint Bookrunners have agreed, on the terms and subject to the conditions in the Placing and Open Offer Agreement, to take up such Open Offer Shares at the Issue Price in their agreed proportions. This underwriting commitment is conditional on the Placing and Open Offer Agreement becoming fully unconditional and not having been terminated in accordance with its terms.

Subject to the fulfilment of the conditions set out below, Qualifying Shareholders will be given the opportunity, subject to the terms and conditions of the Open Offer, to subscribe for New Ordinary Shares pro rata to their existing shareholdings at the Issue Price on the basis of a ratio determined at the close of the Bookbuild.

Fractions of Ordinary Shares will not be allotted and each Qualifying Shareholder's entitlement under the Open Offer will be rounded down to the nearest whole number.

Shareholders who have sold or otherwise transferred all of their Existing Ordinary Shares before the ex-entitlement date will not be entitled to participate in the Open Offer.

The New Ordinary Shares will not be made available in whole or in part to the public except under the terms of the Open Offer. The Open Offer will not be made to Shareholders in the United States or in Excluded Territories (subject to certain exceptions) or to ADR Holders. Accordingly, Application Forms will not be sent to and Open Offer Entitlements will not be credited to the accounts of Shareholders in the United States or in Excluded Territories (subject to certain exceptions) or to ADR Holders.

Shareholders should note that the Open Offer is not a rights issue. Qualifying Shareholders should be aware that in the Open Offer, unlike in a rights issue, any Open Offer Shares not applied for will not be sold in the market on behalf of or placed for the benefit of Qualifying Shareholders who do not apply under the Open Offer, but will be subscribed for under the Placing for the benefit of the Company.

The full terms and conditions of the Open Offer will be contained in the Prospectus which is expected to be published by the Company on or around 4 November 2016 following approval by the FCA in accordance with the Prospectus Rules and, in respect of Qualifying Shareholders who hold their Existing Ordinary Shares in certificated form, in the Application Form.

9. Underwritten Convertible Bond Offering

As part of the Stage 1 Financing, Sirius Minerals Finance Limited, a wholly-owned subsidiary of the Company incorporated in Jersey, intends to issue US$400 - 450 million of convertible bonds due 2023 (the "Convertible Bonds") to be guaranteed by the Company. The Convertible Bonds will be issued at par and are expected to carry a coupon in the range of 8.0 - 8.5 per cent per annum payable quarterly in arrears in equal instalments. The Convertible Bonds will be convertible into fully paid ordinary shares of the Company (the "Ordinary Shares") with the initial conversion price expected to be set at a premium in the range of 25.0 - 30.0 per cent above the Issue Price of the Placing and Open Offer.

On the Closing Date, the Issuer will transfer to an escrow account (which is to be secured for the benefit of the bond trustee for itself and the bondholders) a sum equal to the full amount of the first twelve interest payments on the Convertible Bonds, which can be released in certain circumstances specified in the Terms and Conditions of the Convertible Bonds.

The Issuer will have the option to redeem all, but not some only, of the outstanding Convertible Bonds:

- At any time on or after 19 December 2018 at par plus accrued interest if the Call Value of the Ordinary Shares underlying a Bond shall have been at least US$350,000;

- At any time on or after 19 December 2021 at par plus accrued interest if the Call Value of the Ordinary Shares underlying a Bond shall have been at least US$300,000; and

- At any time, if 85 per cent or more of the aggregate Principal Amount of the Convertible Bonds originally issued shall have been previously converted or repurchased and cancelled (the "Clean-up Call"),

where the "Call Value" means the value of the Ordinary Shares (converted into U.S. dollars at the prevailing rate) underlying each Bond of US$200,000 in principal amount as calculated on each of at least 20 dealing days in any period of 30 consecutive dealing days ending not more than 7 days prior to the giving of the notice of redemption.

The final terms of the Convertible Bonds are expected to be announced on 3 November 2016, subject to acceleration.

It is intended that an application will be made for the Convertible Bonds to be listed on both the Channel Islands Securities Exchange and the Open Market (Freiverkehr) of the Frankfurt Stock Exchange prior to the first interest payment date of the Convertible Bonds.

10. Admission to Trading and Dealing Arrangements for the New Ordinary Shares

Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. It is expected that Admission will become effective, and that dealings in the New Ordinary Shares will commence on AIM, at 8.00 a.m. on 29 November 2016.

No application is currently intended to be made for the Existing Ordinary Shares or the New Ordinary Shares to be admitted to listing or dealt in on any other exchange.

Subject to the satisfaction of the conditions of the Firm Placing and Placing and Open Offer, the New Ordinary Shares to be issued under the Firm Placing and Placing and Open Offer will be registered in the names of the person to whom they are issued, either:

· in certificated form, with the relevant share certificate expected to be despatched by post, at the applicant's risk, by 6 December 2016; or

· in CREST, with delivery (to the designated CREST account) of the New Ordinary Shares applied for expected to take place on 29 November 2016 (unless the Company exercises its right to issue New Ordinary Shares in certificated form).

The results of the Firm Placing and Placing and Open Offer will be announced on a Regulatory Information Service.

11. Financing plans

11.1. Stage 1 Financing

The Company intends to undertake a staged financing to fund the Initial Construction Phase of the Project. The Stage 1 Financing, which includes the Firm Placing and Placing and Open Offer, the Convertible Bond Offering and the Royalty Financing, is intended to fund the direct costs of all site preparation, mine shaft excavations, tunnel caverns and a proportion of the indirect costs, project management and owner costs as well as provide contingency funds for the Project. According to the DFS as updated by the Company's further estimates, the portion of the Capital Funding Requirement to be funded by the Stage 1 Financing is currently expected to amount to approximately US$1.1 billion, plus an additional US$0.1 billion in financing costs, for a total of US$1.2 billion.

The Stage 1 Financing is comprised of three component parts.

· The first is the Firm Placing and Placing and Open Offer.

· The second is the Convertible Bond Offering by Sirius Minerals Finance Limited, a direct wholly-owned subsidiary of the Company incorporated in Jersey. The Convertible Bonds will be guaranteed by the Company and will be convertible into redeemable preference shares of Sirius Minerals Finance Limited, which will be automatically exchanged into fully paid Ordinary Shares.

· The third is the Royalty Financing with Hancock pursuant to which Hancock has agreed to purchase a royalty of up to 5 per cent of gross revenue generated by the first 13 mtpa of sales produced in each calendar year, and 1 per cent of each incremental tonne of sales produced in each calendar year, over the life of the mine in return for US$250 million. In addition, Hancock has agreed to subscribe for the Royalty Financing Ordinary Shares at the same price as the Issue Price in an amount of US$50 million.

The elements of the Stage 1 Financing are subject to multiple inter-dependent components and conditions precedent. The Firm Placing and Placing and Open Offer are conditional on (i) the Resolutions being passed at the General Meeting and (ii) the Placing and Open Offer Agreement otherwise becoming unconditional in all respects and not having been terminated in accordance with its terms prior to Admission. The conditions contained in the Placing and Open Offer Agreement include, inter alia, (i) the Royalty Financing Agreement having been entered into and not having been terminated prior to Admission, (ii) the subscription agreement in connection with the Convertible Bond Offering having been entered into and not having been terminated prior to Admission, and (iii) Admission becoming effective by not later than 8.00 a.m. on 29 November 2016 (or such later time and/or date as the Company and the Joint Bookrunners may agree). Settlement of the Convertible Bond Offering is conditional on, inter alia, (i) the Resolutions being passed at the General Meeting, and (ii) Admission. The Royalty Financing is conditional upon, inter alia, (i) the Company having obtained financial commitments for a minimum of US$1.088 billion (including the proceeds of the royalty financing arrangements) and (ii) all necessary corporate, shareholder and regulatory approvals having been granted in connection with the subscription of the Royalty Financing Ordinary Shares. Drawdown of the Royalty Financing will take place only once the Group has expended US$630 million of the other Stage 1 Financing.

As a result of these financing arrangements and upon successful completion of the Firm Placing and Placing and Open Offer, the Company expects to have secured US$1.2 billion in aggregate of Stage 1 Financing with final settlement of US$0.9 billion of this total expected to be on 29 November 2016 and final settlement of the remaining US$0.3 billion expected to be on drawdown of the Royalty Financing.

11.2. Stage 2 Financing

The Stage 2 Financing is intended to fully fund the remainder of the Capital Funding Requirement, which largely include costs relating to tunnelling, MTS and mine fit-out, the MHF and outsourcing charges relating to the harbour facilities. According to the DFS as updated by the Company's further estimates, the Stage 2 Capital Funding Requirement to be funded by the Stage 2 Financing is currently expected to amount to approximately US$1.8 billion. The Stage 2 Financing will also include commitments from lenders intended to provide the Company with the capacity to pay financing costs (comprising interest expenses, principal repayment amounts as well as administrative costs, fees and other charges associated with the financing) of up to US$0.8 billion for a total of up to US$2.6 billion. The Stage 2 Financing is currently expected to be funded by senior debt facilities, which are currently expected to be committed approximately two years after commencement of construction, prior to commencement of tunnelling works, and drawn down after the Stage 1 Financing has been largely utilised.

The Company has entered into a mandate letter (the "Mandate Letter") with six financial institutions, Export Development Canada, ING, J.P. Morgan, Lloyds Bank plc, Société Générale Corporate & Investment Banking and The Royal Bank of Scotland Plc (the "Mandated Lead Arrangers"), in connection with a potential senior debt financing which would constitute the Stage 2 Financing for the Project. The Mandate Letter establishes the terms under which the Mandated Lead Arrangers have been appointed to arrange senior debt facilities of up to US$2.6 billion on the basis of a common term sheet.

The term sheet anticipates that the Stage 2 Financing plan will comprise of the following:

· project finance facilities for an aggregate amount of US$2.2 billion being made up of commercial bank facilities (including amounts to be committed by the Mandated Lead Arrangers and amounts to be committed by other commercial banks or financial institutions through a syndication process), IPA guaranteed facilities, and potentially Export Credit Agency guaranteed facilities; and

· a contingent funding facility of US$0.4 billion should that be required.

The aggregate amount of the senior debt facilities of US$2.6 billion (comprising the Stage 2 Financing amount of approximately US$1.8 billion together with financing costs of up to US$0.8 billion) has been determined by assuming a constant debt service coverage ratio, given the Company's projected production and sales levels, and that a certain target level of offtake agreements are in place to support the senior debt facilities prior to first utilisation, with offtake agreements assumed to be signed after the Prospectus date on substantially similar terms to the existing offtake agreements, including those terms relating to pricing.

The terms of the senior debt facilities will be fully defined once the Mandated Lead Arrangers' due diligence process has been completed.

The Mandate Letter does not constitute a binding commitment to underwrite, provide or secure financing, which remains subject to ongoing due diligence, the completion of definitive facility documentation, credit and other approvals, among other things. The Mandated Lead Arrangers will progress structuring and due diligence in relation to the senior debt facilities in parallel with the initial construction activities.

The Company expects to receive the benefit of a HMT guarantee under the UKGS for a component of the Stage 2 Financing. The UKGS was established in order to provide projects with access to a sovereign backed guarantee to help projects access financing. The Company received a letter of prequalification of the Project for the UKGS from the IPA in September 2015 and a subsequent letter in August 2016, following discussions with the Company about the Stage 2 Financing plan as outlined above, with the IPA confirming their interest in supporting the Stage 2 Financing. The prequalification process is a review process which takes into account considerations such as financial credibility, stage of development, need for a guarantee, significance and value for money for the taxpayer. Once a project has been prequalified, the IPA commences a due diligence process similar to that of a commercial lender. At the conclusion of this due diligence process, the Project will be presented to the HMT Risk Committee before being submitted to the Chancellor for approval. It is anticipated that the IPA due diligence and credit process will run in parallel with the credit processes carried out by the Mandated Lead Arrangers. This two-stage external financing strategy is designed to align appropriate sources of financing to the Project risks as anticipated during the development.

12. Admission to the Premium Segment of the Official List

The Company intends to seek a listing on the premium listing segment of the Official List of the Financial Conduct Authority and admission to trading on the London Stock Exchange's main market for listed securities within the next 12 months, subject to meeting the eligibility criteria contained in Chapter 6 of the Listing Rules. However, as at the date of this announcement, the Company has not yet entered into any discussions with the UK Listing Authority in connection with such a premium listing. There can be no assurance that the Company will meet the eligibility criteria for a premium listing or that a premium listing will be achieved.

13. Unaudited Financial Projections

On 17 March 2016, the Company announced the material findings from its definitive feasibility study conducted in respect of the Project. This announcement also contained certain unaudited EBITDA projections for a number of future financial periods which were subsequently subject to non-material updates in June 2016. The Company now considers that these unaudited financial projections are no longer valid. The Company does not, as a matter of course, publicly disclose long-range prospective financial information, projected financial information or forecasted financial information given, among other reasons, the unpredictability of the underlying assumptions and estimates inherent in preparing financial projections and forecasts.

The unaudited financial projections were made available solely to assist investors in their understanding of the Project. The unaudited financial projections were not intended to be a forecast of the Company's EBITDA given the uncertainty surrounding the expected capital structure of the Company at that time. As a result, the unaudited financial projections were not made on the basis of the Company's existing accounting policies and were based on unaudited financial projections for certain financial years.

The unaudited financial projections have not been and will not be updated, do not take into account any circumstances or events that have occurred or that may occur after the date they were prepared, and are subject to significant business, economic and competitive risks and uncertainties beyond the control of the Company. These include risks and uncertainties due to general business, economic, regulatory, market and financial conditions, as well as changes in the Company's business strategies, businesses, financial condition or results of operations, and other risks and uncertainties. As a result, the unaudited financial projections are subject to a variety of factors that could cause actual results to differ materially from the results forecasted and Shareholders should not place any reliance on them.

14. Expected Timetable of Principal Events and Offer Statistics

14.1. Expected Timetable of Principal Events

The times and dates set out in the expected timetable of key events below, and mentioned throughout this announcement, are subject to change, and may be adjusted by the Company in consultation with the Joint Bookrunners. The timetable below also assumes that the Resolutions are all passed at the General Meeting without adjournment. In the event of any significant changes from the below expected timetable, details of the new times and dates will be notified to the London Stock Exchange and, where appropriate, Qualifying Shareholders.

Notes:

(1) The ability to participate in the Open Offer will be subject to certain restrictions relating to Shareholders with registered addresses outside the UK.

(2) Different deadlines and procedures for applications may apply in certain cases. For example, if a Qualify Shareholder holds Existing Ordinary Shares through a CREST Member or other nominee, that person may set an earlier date for application and payment than the dates noted above.

(3) References to times in this announcement are to London time unless otherwise stated.

(4) Temporary documents of title will not be issued.

14.2. Firm Placing and Placing and Open Offer Statistics

Notes:

(1) The closing price on AIM on 1 November 2016, being the last Business Day prior to this announcement.

(2) Fractions of New Ordinary Shares will not be allotted to Shareholders in the Open Offer and fractional entitlements under the Open Offer will be rounded down to the nearest whole number of New Ordinary Shares.

15. Definitions In this announcement, the following defined terms have the following meaning:

Appendix

TERMS AND CONDITIONSOF THE FIRM PLACING AND PLACING

IMPORTANT INFORMATION ON THE FIRM PLACING AND PLACING FOR INVITED PLACEES ONLY.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE FIRM PLACING OR THE PLACING. THE TERMS AND CONDITIONS SET OUT HEREIN ARE FOR INFORMATION PURPOSES ONLY AND ARE ONLY DIRECTED AT, AND BEING DISTRIBUTED TO, PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE: (A) IF IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA ("EEA"), PERSONS WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE EU PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC, AS AMENDED FROM TIME TO TIME, AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE OF THE EEA TO THE EXTENT IMPLEMENTED IN THE RELEVANT MEMBER STATE OF THE EEA) (THE "PROSPECTUS DIRECTIVE") ("QUALIFIED INVESTORS"); (B) IF IN THE UNITED KINGDOM, PERSONS WHO FALL WITHIN THE DEFINITION OF "INVESTMENT PROFESSIONALS" IN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED ("THE ORDER") OR ARE PERSONS FALLING WITHIN ARTICLE 49(2) OF THE ORDER AND ARE "QUALIFIED INVESTORS" AS DEFINED IN SECTION 86(7) OF THE FSMA; (C) IF IN THE UNITED STATES, PERSONS REASONABLY BELIEVED TO BE QIBS AS DEFINED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"); (D) ANY OTHER PERSON TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED; AND, IN EACH CASE, WHO HAVE BEEN INVITED TO PARTICIPATE IN THE FIRM PLACING AND THE PLACING BY THE JOINT BOOKRUNNERS AND THE CO-LEAD MANAGERS (TOGETHER THE "BANKS") (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").

THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY PERSON WHO HAS RECEIVED OR IS DISTRIBUTING THESE TERMS AND CONDITIONS MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THESE TERMS AND CONDITIONS RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THESE TERMS AND CONDITIONS DO NOT THEMSELVES CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THE SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND THE SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED OR DELIVERED, DIRECTLY OR INDIRECTLY IN, INTO OR WITHIN THE UNITED STATES, EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. THERE WILL BE NO PUBLIC OFFERING OF THE SECURITIES IN THE UNITED STATES.

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN ACQUISITION OF PLACING SHARES (AS SUCH TERM IS DEFINED BELOW).

Unless otherwise defined in these terms and conditions, capitalised terms used in these terms and conditions shall have the meaning given to them in this announcement.

If a person indicates to the Banks that it wishes to participate in the Firm Placing or the Placing (together, the "Equity Placings") by making an oral offer to acquire Firm Placed Shares pursuant to the Firm Placing and Open Offer Shares pursuant to the terms of the Placing (together, the "Placing Shares") (each such person, a "Placee") it will be deemed to have read and understood these terms and conditions and the announcement of which it forms part and the draft prospectus dated 2 November 2016 prepared by, and relating to, the Company (the "Placing Proof") in their entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, indemnities, agreements and acknowledgements, contained in these terms and conditions. In particular, each such Placee represents, warrants and acknowledges that it is a Relevant Person and undertakes that it will acquire, hold, manage and dispose of any of the Placing Shares that are allocated to it for the purposes of its business only. Further, each such Placee represents, warrants and agrees that: (a) if it is a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, that the Placing Shares acquired by and/or subscribed for by it in the Equity Placings 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 circumstances which may give rise to an offer of securities to the public other than an offer or resale in a member state of the EEA which has implemented the Prospectus Directive to Qualified Investors, or in circumstances in which the prior consent of the Joint Bookrunners has been given to each such proposed offer or resale; and (b) it is and, at the time the Placing Shares are acquired, will be either (i) outside the United States, and acquiring the Placing Shares in an offshore transaction in accordance with Rule 903 and Rule 904 of Regulation S for its own account or purchasing the Placing Shares for an account with respect to which it exercises sole investment discretion; or (ii) a QIB. These terms and conditions do not constitute an offer to sell or issue or the invitation or solicitation of an offer to buy or acquire Placing Shares in the United States or any other jurisdiction where to do so may be unlawful, including, without limitation, Australia, Canada, Japan, the Republic of South Africa or any other Excluded Territory.

These terms and conditions and the information contained herein are not for release, publication or distribution, directly or indirectly, in whole or in part, to persons in the United States, subject to certain exceptions, or Australia, Canada, Japan, the Republic of South Africa or any other Excluded Territory.

In particular, the Placing Shares referred to in these terms and conditions have not been and will not be registered under the Securities Act or the securities laws of any state or other jurisdiction of the United States and the Placing Shares may not be offered or sold directly or indirectly in, into or within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. There will be no public offering of the Placing Shares in the United States. Subject to certain exceptions, no offering of the Placing Shares will be made in the United States. The Placing Shares have not been approved or disapproved by the U.S. Securities and Exchange Commission, any state securities commission in the United States or any other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Equity Placings or the accuracy or adequacy of these terms and conditions. Any representation to the contrary is a criminal offence in the United States.

The distribution of these terms and conditions and the offer and/or placing of Placing Shares in certain other jurisdictions may be restricted by law. No action has been taken by the Banks or the Company that would permit an offer of the Placing Shares or possession or distribution of these terms and conditions or any other offering or publicity material relating to the Placing Shares in any jurisdiction where action for that purpose is required, save as mentioned above. Persons into whose possession these terms and conditions come are required by the Banks and the Company to inform themselves about and to observe any such restrictions.

Each Placee's commitments will be made solely on the basis of the information set out in this announcement, the Placing Proof and the pricing information expected to be dated on or around 4 November 2016 (the "Pricing Information") which will be provided to each Placee. Each Placee, by participating in the Equity Placings, agrees that it has neither received nor relied on any other information, representation, warranty or statement made by or on behalf of any of the Banks or the Company and none of the Banks, the Company, or any person acting on such person's behalf nor any of their respective affiliates has or shall have liability for any Placee's decision to accept this invitation to participate in the Equity Placings 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 accepting a participation in the Equity Placings. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

No undertaking, representation, warranty or any other assurance, express or implied, is made or given by or on behalf of any of the Banks or any of their respective affiliates, their respective directors, officers, employees, agents, advisers, or any other person, as to the accuracy, completeness, correctness or fairness of the information or opinions contained in the Placing Proof, this announcement or the Pricing Information or for any other statement made or purported to be made by any of them, or on behalf of them, in connection with the Company or the Equity Placings and no such person shall have any responsibility or liability for any such information or opinions or for any errors or omissions. Accordingly, save to the extent permitted by law, no liability whatsoever is accepted by any of the Banks or any of their respective directors, officers, employees or affiliates or any other person for any loss howsoever arising, directly or indirectly, from any use of this announcement or such information or opinions contained herein or otherwise arising in connection with the Placing Proof or the Pricing Information.

These terms and conditions do not constitute or form part of, and should not be construed as, any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any Placing Shares or any other securities or an inducement to enter into investment activity, nor shall these terms and conditions (or any part of them), nor the fact of their distribution, form the basis of, or be relied on in connection with, any investment activity. No statement in these terms and conditions is intended to be nor may be construed as a profit forecast and no statement made herein should be interpreted to mean that the Company's profits or earnings per share for any future period will necessarily match or exceed historical published profits or earnings per share of the Company.

Proposed Firm Placing of Firm Placed Shares and Placing of Open Offer Shares subject to clawback in respect of valid applications by Qualifying Shareholders pursuant to the Open Offer

Placees are referred to these terms and conditions, this announcement, the Placing Proof and the Pricing Information containing details of, inter alia, the Equity Placings. These terms and conditions, this announcement, the Placing Proof and the Pricing Information have been prepared and issued by the Company, and each of these documents is the sole responsibility of the Company.

Firm Placing

The Firm Placed Shares are not subject to clawback and do not form part of the Placing and Open Offer. The Firm Placing is subject to the same conditions and termination rights which apply to the Placing and Open Offer.

The Banks have agreed, pursuant to the Placing and Open Offer Agreement, to use reasonable endeavours to place, as agent for the Company, the Firm Placed Shares at a purchase price per New Ordinary Share of not less than 20 pence (the "Floor Price") with Placees. J.P. Morgan Cazenove has agreed, pursuant to the Placing and Open Offer Agreement and the Subscription Agreement, to fully underwrite the Firm Placing and Placing and Open Offer and the Convertible Bond Offering up to an aggregate of $850 million at the sterling to US dollar exchange rate of 1.22. This underwriting obligation shall cease to apply with respect to such Firm Placed Shares and Conditionally Placed Shares that are placed with Placees at or above the Floor Price through the institutional Bookbuild. With effect from the completion of the institutional Bookbuild and subject to the execution by the Company and the Joint Bookrunners of a supplement setting out the Issue Price and the number of Firm Placed Shares and Open Offer Shares to be issued (the "Pricing Supplement"), to the extent that any Placee (other than J.P. Morgan Cazenove in accordance with its underwriting obligations) fails to take up any or all of the Firm Placed Shares which have been allocated to it or which it has agreed to take up at the Issue Price, the Joint Bookrunners have agreed, on the terms and subject to the conditions in the Placing and Open Offer Agreement, to take up such Firm Placed Shares at the Issue Price.

Application will be made to the London Stock Exchange for the Firm Placed Shares to be issued pursuant to the Firm Placing to be admitted to trading on AIM. Subject to the conditions below being satisfied, it is expected that Admission will become effective on 29 November 2016 and that dealings for normal settlement in the Firm Placed Shares will commence at 8.00 a.m. on the same day. The Firm Placed Shares, when issued and fully paid, will be identical to, and rank pari passu with, the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid on the Existing Ordinary Shares by reference to a record date on or after Admission.

The Firm Placees will not be entitled to participate in the Open Offer in respect of Firm Placed Shares.

The Firm Placing is conditional, inter alia, upon:

(i) Admission becoming effective by not later than 8.00 a.m. on 29 November 2016 (or such later time and/or date as the Company and the Joint Bookrunners may agree); and

(ii) the Placing and Open Offer Agreement having become unconditional in all respects and not having been terminated in accordance with its terms.

Conditional Placing and Open Offer

The Banks have agreed, pursuant to the Placing and Open Offer Agreement, to use reasonable endeavours to conditionally place, as agent for the Company, all the Open Offer Shares at a price not less than the Floor Price with placees. The commitments of placees in the Placing (the "Conditional Placees") are subject to clawback in respect of valid applications for Open Offer Shares by Qualifying Shareholders pursuant to the Open Offer. J.P. Morgan Cazenove has agreed, pursuant to the Placing and Open Offer Agreement and the Subscription Agreement, to fully underwrite the Firm Placing and Placing and Open Offer and the Convertible Bond Offering up to an aggregate of $850 million at the sterling to US dollar exchange rate of 1.22. This underwriting obligation shall cease to apply with respect to such Firm Placed Shares and Conditionally Placed Shares that are placed with Placees at or above the Floor Price through the institutional Bookbuild. With effect from the completion of the institutional Bookbuild and subject to the execution by the Company and the Joint Bookrunners of the Pricing Supplement, to the extent that any Conditional Placee (other than J.P. Morgan Cazenove in accordance with its underwriting obligations) fails to take up any or all of the Open Offer Shares which are not applied for in respect of the Open Offer and which have been allocated to it, the Joint Bookrunners have agreed, on the terms and subject to the conditions in the Placing and Open Offer Agreement, to take up such Open Offer Shares at the Issue Price.

Qualifying Shareholders are being given the opportunity to apply for the Open Offer Shares at the Issue Price on and subject to the terms and conditions of the Open Offer, pro rata to their holdings of Existing Ordinary Shares on the Record Date. Open Offer Shares will also be made available to Qualifying Shareholders under the Excess Application Facility. Fractions of Open Offer Shares will be rounded down to the nearest whole number.

The New Ordinary Shares issued under the Placing and Open Offer, when issued and fully paid, will be identical to, and rank pari passu with, the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid on the Existing Ordinary Shares after Admission.

Application will be made to the London Stock Exchange for the Open Offer Shares to be issued under the Placing and Open Offer to be admitted to trading on AIM. Subject to the conditions below being satisfied, it is expected that Admission will become effective on 29 November 2016 and that dealings for normal settlement in the New Ordinary Shares will commence at 8.00 a.m. on the same day.

The Placing and Open Offer are conditional, inter alia, upon:

(i) Admission becoming effective by not later than 8.00 a.m. on 29 November 2016 (or such later time and/or date as the Company and the Joint Bookrunners may agree); and

(ii) the Placing and Open Offer Agreement having become unconditional in all respects and not having been terminated in accordance with its terms.

The full terms and conditions of the Open Offer will be contained in the Prospectus to be issued by the Company in connection with the Open Offer and Admission. The Prospectus to be issued by the Company will be approved by the FCA under section 87A of the FSMA and made available to the public in accordance with Rule 3.2 of the Prospectus Rules made under Part VI of the FSMA.

Bookbuild of the Equity Placings

Commencing today, the Banks will be conducting the Bookbuild to determine demand for participation in the Equity Placings. The Banks will seek to procure Placees as agent for the Company as part of this Bookbuild. These terms and conditions give details of the terms and conditions of, and the mechanics of participation in, the Equity Placings.

Principal terms of the Bookbuild

a) By participating in the Equity Placings, Placees will be deemed to have read and understood this announcement, these terms and conditions, the Placing Proof and the Pricing Information in their entirety and to be participating and making an offer for any Placing Shares on these terms and conditions, and to be providing the representations, warranties, indemnities, acknowledgements and undertakings, contained in these terms and conditions.

b) The Banks are arranging the Equity Placings severally, and not jointly, nor jointly and severally, as agents of the Company.

c) Participation in the Equity Placings will only be available to persons who are Relevant Persons and who may lawfully be and are invited to participate by any of the Banks. The Banks and their respective affiliates are entitled to offer to subscribe for Placing Shares as principal in the Bookbuild.

d) Any offer to subscribe for Placing Shares should state the aggregate number of Firm Placed Shares and Open Offer Shares which the Placee wishes to acquire or the total monetary amount which it wishes to commit to acquire Placing Shares at the Issue Price which is ultimately established by the Company and the Joint Bookrunners, or at a price up to a price limit specified in its bid. Allocations of Placing Shares will be made in a combination that reflects an approximately 90:10 ratio of Firm Placed Shares to Open Offer Shares. The Bookbuild is expected to establish a single price for the Firm Placed Shares and the Open Offer Shares. Other than in circumstances where J.P. Morgan Cazenove is required to underwrite the Capital Raising at the Floor Price, the Issue Price will be jointly agreed between the Joint Bookrunners and the Company following completion of the Bookbuild and will be payable by the Placees in respect of the Placing Shares allocated to them.

e) The Bookbuild is expected to close on or around 3 November 2016 but may close earlier or later, at the discretion of the Joint Bookrunners and the Company. The timing of the closing of the books and allocations will be agreed between the Joint Bookrunners and the Company following completion of the Bookbuild (the "Allocation Policy"). The Banks may, in agreement with the Company, accept offers to subscribe for Placing Shares that are received after the Bookbuild has closed.

f) An offer to subscribe for Placing Shares in the Bookbuild will be made on the basis of these terms and conditions and the Placing Proof and will be legally binding on the Placee by which, or on behalf of which, it is made and will not be capable of variation or revocation after the close of the Bookbuild.

g) Subject to paragraph (e) above, the Joint Bookrunners reserve the right not to accept an offer to subscribe for Placing Shares, either in whole or in part, on the basis of the Allocation Policy and may scale down any offer to subscribe for Placing Shares for this purpose.

h) If successful, each Placee's allocation will be confirmed to it by the Joint Bookrunners following the close of the Bookbuild. Oral or written confirmation (at the Joint Bookrunners' discretion) from the Joint Bookrunners to such Placee confirming its allocation will constitute a legally binding commitment upon such Placee, in favour of the Banks and the Company to acquire the number of Placing Shares allocated to it (and in the respective numbers of Firm Placed Shares and Open Offer Shares (subject to clawback) so allocated) on the terms and conditions set out herein. Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to the Banks, to pay to the Banks (or as the Banks may direct) as agent for the Company in cleared funds an amount equal to the product of the Issue Price and the sum of the number of Firm Placed Shares and, once apportioned after clawback (in accordance with the procedure described in the paragraph entitled 'Placing Procedure' below), the Open Offer Shares, which such Placee has agreed to acquire.

i) The Company will make a further announcement following the close of the Bookbuild detailing the Issue Price and the number of Placing Shares to be issued (the "Placing Results Announcement"). It is expected that such Placing Results Announcement will be made as soon as practicable after the close of the Bookbuild.

j) Subject to paragraphs (g) and (h) above, the Joint Bookrunners reserve the right not to accept bids or to accept bids, either in whole or in part, on the basis of allocations determined at the Joint Bookrunners' discretion and may scale down any bids as the Joint Bookrunners may determine, subject to agreement with the Company. The acceptance of bids shall be at the Joint Bookrunners' absolute discretion, subject to agreement with the Company.

k) Irrespective of the time at which a Placee's allocation(s) pursuant to the Equity Placings is/are confirmed, settlement for all Placing Shares to be acquired pursuant to the Firm Placing will be required to be made at the time specified and all Placing Shares to be acquired pursuant to the Placing will be required to be made at the later time specified, on the basis explained below under the paragraph entitled "Registration and Settlement".

l) No commissions are payable to Placees in respect of the Firm Placing or the Placing.

m) By participating in the Bookbuild, each Placee agrees that its rights and obligations in respect of the Firm Placing and/or the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee. All obligations under the Equity Placings will be subject to the fulfilment of the conditions referred to below under the paragraph entitled "Conditions of the Equity Placings and Termination of the Placing and Open Offer Agreement".

Conditions of the Equity Placings and Termination of the Placing and Open Offer Agreement

Placees will only be called on to acquire Placing Shares if the obligations of the Banks under the Placing and Open Offer Agreement have become unconditional in all respects and the Joint Bookrunners have not terminated the Placing and Open Offer Agreement prior to Admission.

The Banks' obligations under the Placing and Open Offer Agreement in respect of the Firm Placing and the Placing and Open Offer are conditional upon, inter alia:

(a) the Prospectus being approved pursuant to the Prospectus Rules by the FCA not later than 6.00 p.m. on the Business Day following the completion of the accelerated bookbuilding process (or such later time and/or date as the Company and the Joint Bookrunners may agree);

(b) Admission occurring not later than 8.00 a.m. on 29 November 2016 (or such later time and/or date as the Company and the Joint Bookrunners may agree);

(c) the passing of the Resolutions (without amendment) at the General Meeting on 25 November 2016 (or, with the Joint Bookrunners' written consent (such consent not to be unreasonably withheld or delayed), at any adjournment thereof);

(d) the warranties given by the Company to the Banks as contained in the Placing and Open Offer Agreement being true, accurate and not misleading on and as of the date of the Placing and Open Offer Agreement and at all times between the date of the Placing and Open Offer Agreement and Admission, by references to the facts and circumstances from time to time subsisting;

(e) there not having occurred, in the opinion of either of the Joint Bookrunners (acting in good faith), a material adverse change affecting the condition of, or in the earnings, management, business affairs, solvency or prospects of, (i) the Company or (ii) the Group taken as a whole, in each case whether or not arising in the ordinary course of business at any time prior to Admission;

(f) there not having occurred any (i) event referred to in section 87G of the FSMA arising between the time of publication of the Prospectus and Admission which either of the Joint Bookrunners (in their bona fide opinion, acting in good faith) consider to be material and adverse in the context of the Equity Placings or Admission; or (ii) event which requires, pursuant to the Guidance Notes to Rule 3 of the AIM Rules, a supplementary admission document to be delivered to the London Stock Exchange and published in accordance with the AIM Rules, or (iii) a supplementary prospectus being published by or on behalf of the Company prior to Admission;

(g) the Placing Price and the number of New Ordinary Shares to be issued having been determined and the Pricing Supplement having been executed by the Company and the Joint Bookrunners on the date the accelerated bookbuilding process is completed (or such later time and/or date as the Company and the Joint Bookrunners may agree);

(h) the Mandate Letter and the subscription agreement in connection with the Convertible Bond Offering having been executed, remaining in full force and effect at all times, and not having been terminated at any time, prior to Admission; and

(i) the Royalty Finance Agreement remaining in full force and effect at all times, and not having been terminated at any time, prior to Admission,

(all such conditions included in the Placing and Open Offer Agreement being together the "Conditions"), provided that J.P. Morgan's underwriting obligations are not subject to the Condition set out in (g) above.

The Placing and Open Offer Agreement can be terminated at any time before Admission by the Joint Bookrunners giving notice to the Company in certain circumstances, including (but not limited to) where (a) any of the relevant conditions in the Placing and Open Offer Agreement are not satisfied in all material respects at the required times (unless waived); and (b) there has been a breach by the Company of any of the warranties, undertakings or covenants in the Placing and Open Offer Agreement or any of the warranties has ceased to be true, accurate and not misleading, and in each case, the effect, in the good faith opinion of either of the Joint Bookrunners, is singly or in the aggregate material in the context of the Equity Placings and/or is such as to make it impracticable or inadvisable to proceed with the Equity Placings, Admission or to market or enforce contracts for the sale of, any New Ordinary Shares.

If any Condition has not been satisfied, has not been waived by the Joint Bookrunners or has become incapable of being satisfied (and is not waived by the Joint Bookrunners as described below) or if the Placing and Open Offer Agreement is terminated, all obligations under these terms and conditions will automatically terminate. By participating in the Equity Placings, each Placee agrees that its rights and obligations hereunder are conditional upon the Placing and Open Offer Agreement becoming unconditional in all respects in respect of the Firm Placing (in respect of Firm Placed Shares subscribed for) and/or in respect of the Placing (in respect of Open Offer Shares subscribed for under the Placing) and that its rights and obligations will terminate only in the circumstances described above and will not be capable of rescission or termination by it after oral or written confirmation by the Banks (at the Joint Bookrunners' discretion) following the close of the Bookbuild.

The Joint Bookrunners may in their absolute discretion in writing waive fulfilment of certain of the Conditions in the Placing and Open Offer Agreement or extend the time provided for fulfilment of such Conditions. Any such extension or waiver will not affect Placees' commitments as set out in these terms and conditions. None of the Banks, nor the Company, shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision made by the Joint Bookrunners as to whether or not to waive or to extend the time and/or date for the fulfilment of any condition in the Placing and Open Offer Agreement.

By participating in the Equity Placings each Placee agrees that the exercise by the Company or any of the Banks of any right or other discretion under the Placing and Open Offer Agreement shall be within the absolute discretion of the Company and each of the Banks (as the case may be) and that neither the Company nor any of the Banks need make any reference to such Placee and that neither the Company nor any of the Banks shall have any liability to such Placee (or to any other person whether acting on behalf of a Placee or otherwise) whatsoever in connection with any such exercise.

Withdrawal Rights

Placees acknowledge that their acceptance of any of the Placing Shares is not by way of acceptance of the public offer made in the Prospectus and (if applicable) the Application Form but is by way of a collateral contract and as such section 87Q of the FSMA does not entitle Placees to withdraw in the event that the Company publishes a supplementary prospectus in connection with the Open Offer or Admission. If, however, a Placee is entitled to withdraw, by accepting the offer of a placing participation, the Placee agrees to confirm their acceptance of the offer on the same terms immediately after such right of withdrawal arises.

Placing Procedure

Placees shall acquire the Firm Placed Shares and Open Offer Shares to be issued pursuant to the Equity Placings (after clawback) and any allocation of the Firm Placed Shares and Open Offer Shares (subject to clawback) to be issued pursuant to the Equity Placings will be notified to them on or around 4 November 2016 (or such other time and/or date as the Company and the Joint Bookrunners may agree).

Placees will be called upon to subscribe for, and shall subscribe for, the Open Offer Shares only to the extent that valid applications by Qualifying Shareholders under the Open Offer are not received by 11.00 a.m. on 24 November 2016 (or by such later time and/or date as the Company may agree with the Joint Bookrunners) or if applications have otherwise not been deemed to be valid in accordance with the Prospectus and the Application Form.

Payment in full for any Firm Placed Shares and Open Offer Shares so allocated in respect of the Equity Placings at the Issue Price must be made by no later than 29 November 2016 (or such other date as shall be notified to each Placee by the relevant Bank) on the closing date for the Firm Placing and the closing date for the Open Offer, respectively (or such other time and/or date as the Company and the Joint Bookrunners may agree). The Banks will notify Placees if any of the dates in these terms and conditions should change, including as a result of delay in the posting of the Prospectus, the Application Forms or the crediting of the Open Offer Entitlements in CREST or the production of a supplementary prospectus or otherwise.

Registration and Settlement

Settlement of transactions in the Placing Shares following Admission will take place within the CREST system, subject to certain exceptions. The Joint Bookrunners and the Company reserve the right to require settlement for, and delivery of, the Placing Shares to Placees by such other means that they deem necessary if delivery or settlement is not possible within the CREST system within the timetable set out in the Placing Proof and/or Prospectus or would not be consistent with the regulatory requirements in the Placee's jurisdiction. Each Placee will be deemed to agree that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the standing CREST or certificated settlement instructions which they have in place with the relevant Bank.

Settlement for the Equity Placings will be on a T+2 and delivery versus payment basis and settlement is expected to take place on 29 November 2016. Interest is chargeable daily on payments to the extent that value is received after the due date from Placees at the rate of 2 percentage points above prevailing LIBOR. Each Placee is deemed to agree that if it does not comply with these obligations, the Banks may sell any or all of the Placing Shares allocated to it on its behalf and retain from the proceeds, for its own account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due. By communicating a bid for Placing Shares, each Placee confers on the Banks all such authorities and powers necessary to carry out any such sale and agrees to ratify and confirm all actions which the Banks lawfully take in pursuance of such sale. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon any transaction in the Placing Shares on such Placee's behalf.

Acceptance

By participating in the Equity Placings, a Placee (and any person acting on such Placee's behalf) irrevocably acknowledges, confirms, undertakes, represents, warrants and agrees (as the case may be) with the Banks and the Company, the following:

1. in consideration of its allocation of a placing participation, to subscribe at the Issue Price for any Placing Shares comprised in its allocation for which it is required to subscribe pursuant to these terms and conditions, subject to clawback of the Open Offer Shares in respect of valid applications from Qualifying Shareholders in the Open Offer;

2. it has read and understood this announcement (including these terms and conditions), the Placing Proof and the Pricing Information in their entirety and that it has neither received nor relied on any information given or any investigations, representations, warranties or statements made at any time by any person in connection with Admission, the Equity Placings, the Company, the New Ordinary Shares, or otherwise, other than the information contained in this announcement (including these terms and conditions), the Placing Proof and the Pricing Information that in accepting the offer of its placing participation it will be relying solely on the information contained in this announcement (including these terms and conditions), the Placing Proof and the Pricing Information, receipt of which is hereby acknowledged, and undertakes not to redistribute or duplicate such documents;

3. its oral commitment will be made solely on the basis of the information set out in this announcement, the Placing Proof, the Pricing Information and the information publicly announced to a Regulatory Information Service by or on behalf of the Company on the date of this announcement, such information being all that such Placee deems necessary or appropriate and sufficient to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given, or representations or warranties or statements made, by any of the Banks or the Company nor any of their respective affiliates and none of the Banks or the Company will be liable for any Placee's decision to participate in the Firm Placing and/or the Placing based on any other information, representation, warranty or statement;

4. the content of this announcement, these terms and conditions, the Placing Proof and the Pricing Information are exclusively the responsibility of the Company and agrees that none of the Banks nor any of their respective affiliates nor any person acting on behalf of any of such persons will be responsible for or shall have liability for any information, representation or statements contained therein or any information previously published by or on behalf of the Company, and none of the Banks or the Company, or any of their respective affiliates or any person acting on behalf of any such person will be responsible or liable for a Placee's decision to accept its placing participation;

5. (i) it has not relied on, and will not rely on, any information relating to the Company contained or which may be contained in any research report or investor presentation prepared or which may be prepared by any of the Banks or any of their affiliates; (ii) none of the Banks, their affiliates or any person acting on behalf of any of such persons has or shall have any responsibility or liability for public information relating to the Company; (iii) none of the Banks, their affiliates or any person acting on behalf of any of such persons has or shall have any responsibility or liability for any additional information that has otherwise been made available to it, whether at the date of publication of such information, the date of these terms and conditions or otherwise; and that (iv) none of the Banks, their affiliates or any person acting on behalf of any of such persons makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of any such information referred to in (i) to (iii) above, whether at the date of publication of such information, the date of this announcement or otherwise;

6. it has made its own assessment of the Company and has relied on its own investigation of the business, financial or other position of the Company in deciding to participate in the Equity Placings, and has satisfied itself concerning the relevant tax, legal, currency and other economic considerations relevant to its decision to participate in the Firm Placing and/or the Placing;

7. it is acting as principal only in respect of the Equity Placings or, if it is acting for any other person (i) it is duly authorised to do so and has full power to make the acknowledgments, representations and agreements herein on behalf of each such person, (ii) it is and will remain liable to the Company and the Banks for the performance of all its obligations as a Placee in respect of the Equity Placings (regardless of the fact that it is acting for another person), (iii) if it is in the United Kingdom, it is a person (a) who has professional experience in matters relating to investments and who falls within the definition of "investment professionals" in Article 19(5) of the Order or who falls within Article 49(2) of the Order, and (b) is a "qualified investor" as defined in section 86 of the FSMA, (iv) if it is in a member state of the EEA, it is a "qualified investor" within the meaning of Article 2(1)(e) of the Prospectus Directive, and (v) if it is a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, the Placing Shares subscribed by it in the Equity Placings are not being acquired on a non-discretionary basis for, or on behalf of, nor will they be acquired with a view to their offer or resale to persons in a member state of the EEA in circumstances which may give rise to an offer of shares to the public, other than their offer or resale to qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive in a member state of the EEA which has implemented the Prospectus Directive;

8. if it has received any confidential price sensitive information about the Company in advance of the Equity Placings, it has not (i) dealt in the securities of the Company; (ii) encouraged or required another person to deal in the securities of the Company; or (iii) disclosed such information to any person, prior to the information being made generally available;

9. it has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Terrorism Act 2006 and the Money Laundering Regulations 2007 and the Criminal Justice (Money Laundering and Terrorism Financing) Act 2010 and any related or similar rules, regulations or guidelines, issued, administered or enforced by any government agency having jurisdiction in respect thereof (the "Regulations") and, if it is making payment on behalf of a third party, it has obtained and recorded satisfactory evidence to verify the identity of the third party as may be required by the Regulations;

10. it has 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;

11. it is not acting in concert (within the meaning given in the City Code on Takeovers and Mergers) with any other Placee or any other person in relation to the Company;

12. it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving the United Kingdom;

13. it and any person acting on its behalf is entitled to acquire the Placing Shares under the laws of all relevant jurisdictions and that it has all necessary capacity and has obtained all necessary consents and authorities to enable it to commit to this participation in the Equity Placings and to perform its obligations in relation thereto (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in these terms and conditions);

14. unless otherwise agreed by the Company (after agreement with the Joint Bookrunners), it is not, and at the time the Placing Shares are subscribed for and purchased will not be, subscribing for and on behalf of a resident of Australia, Canada, Japan, the Republic of South Africa or any other Excluded Territory and further acknowledges that the Placing Shares have not been and will not be registered under the securities legislation of any Excluded Territory and, subject to certain exceptions, may not be offered, sold, transferred, delivered or distributed, directly or indirectly, in or into those jurisdictions;

15. it does not expect the Banks to have any duties or responsibilities towards it for providing protections afforded to clients under the rules of the FCA Handbook (the "Rules") or advising it with regard to the Placing Shares and that it is not, and will not be, a client of any of the Banks as defined by the Rules. Likewise, any payment by it will not be treated as client money governed by the Rules;

16. any exercise by the Joint Bookrunners of any right to terminate the Placing and Open Offer Agreement or of other rights or discretions under the Placing and Open Offer Agreement or the Equity Placings shall be within the Joint Bookrunners' absolute discretion and neither the Joint Bookrunners nor the Co-Lead Managers shall have any liability to it whatsoever in relation to any decision to exercise or not to exercise any such right or the timing thereof;

17. neither it, nor the person specified by it for registration as a holder of Placing Shares is, or is acting as nominee(s) or agent(s) for, and that the Placing Shares will not be allotted to, a person/person(s) whose business either is or includes issuing depository receipts or the provision of clearance services and therefore that the issue to the Placee, or the person specified by the Placee for registration as holder, of the Placing Shares will not give rise to a liability under any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depositary receipts and clearance services) and that the Placing Shares are not being acquired in connection with arrangements to issue depository receipts or to issue or transfer Placing Shares into a clearance system;

18. the person who it specifies for registration as holder of the Placing Shares will be (i) itself or (ii) its nominee, as the case may be, and acknowledges that the Banks and the Company will not be responsible for any liability to pay stamp duty or stamp duty reserve tax (together with interest and penalties) resulting from a failure to observe this requirement; and each Placee and any person acting on behalf of such Placee agrees to participate in the Equity Placings on the basis that the Placing Shares will be allotted to a CREST stock account of one of the Banks who will hold them as nominee on behalf of the Placee until settlement in accordance with its standing settlement instructions with it;

19. where it is acquiring Placing Shares for one or more managed accounts, it is authorised in writing by each managed account to acquire Placing Shares for that managed account;

20. if it is a pension fund or investment company, its acquisition of any Placing Shares is in full compliance with applicable laws and regulations;

21. it has not offered or sold and will not offer or sell any New Ordinary Shares to persons in the United Kingdom, except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of the FSMA;

22. it has not offered or sold and will not offer or sell any New Ordinary Shares to persons in any member state of the EEA prior to Admission except to persons whose ordinary activities involve them acquiring, holding, managing or disposing of investments (as principal or agent) for the purpose of their business or otherwise in circumstances which have not resulted and will not result in an offer to the public in any member state of the EEA within the meaning of the Prospectus Directive;

23. participation in the Equity Placings is on the basis that, for the purposes of the Equity Placings, it is not and will not be a client of J.P. Morgan Securities plc, Liberum Capital Limited, Shore Capital Stockbrokers Limited and WH Ireland Limited and that none of J.P. Morgan Securities plc, Liberum Capital Limited, Shore Capital Stockbrokers Limited or WH Ireland Limited have any duties or responsibilities to it for providing the protections afforded to their clients nor for providing advice in relation to the Equity Placings nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing and Open Offer Agreement or the contents of these terms and conditions;

24. to provide the Banks with such relevant documents as they may reasonably request to comply with requests or requirements that either they or the Company may receive from relevant regulators in relation to the Equity Placings, subject to its legal, regulatory and compliance requirements and restrictions;

25. any agreements entered into by it pursuant to these terms and conditions shall be governed by and construed in accordance with the laws of England and Wales and it submits (on its behalf and on behalf of any Placee on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except 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 Banks 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;

26. to fully and effectively indemnify and hold harmless the Company and the Banks and each of their respective affiliates (as defined in Rule 501(b) under the Securities Act) and each person, if any, who controls any Bank within the meaning of Section 15 of the Securities Act or Section 20 of the US Exchange Act of 1934, as amended, and any such person's respective affiliates, subsidiaries, branches, associates and holding companies, and in each case their respective directors, employees, officers and agents from and against any and all losses, claims, damages and liabilities (i) arising from any breach by such Placee of any of the provisions of these terms and conditions and (ii) incurred by the Banks and/or the Company arising from the performance of the Placee's obligations as set out in these terms and conditions;

27. to indemnify on an after-tax basis and hold the Company and the Banks and any of their affiliates and any person acting on their behalf harmless from any and all losses, claims, damages, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgments, agreements and undertakings in these terms and conditions and further agrees that the provisions of these terms and conditions shall survive after completion of the Issue;

28. in making any decision to subscribe for the Placing Shares, (i) it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of acquiring the Placing Shares; (ii) it is experienced in investing in securities of this nature and is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain a complete loss in connection with, the Placing; (iii) it has relied on its own examination, due diligence and analysis of the Company and its affiliates taken as a whole, including the markets in which the Group operates, and the terms of the Equity Placings, including the merits and risks involved; (iv) it has had sufficient time to consider and conduct its own investigation with respect to the offer and purchase of the Placing Shares, including the legal, regulatory, tax, business, currency and other economic and financial considerations relevant to such investment and (v) will not look to the Banks, any of their respective affiliates or any person acting on their behalf for all or part of any such loss or losses it or they may suffer;

29. the Banks and the Company and their respective affiliates and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgments and undertakings which are irrevocable; and

30. its commitment to acquire Placing Shares will continue notwithstanding any amendment that may in future be made to the terms and conditions of the Firm Placing and/or the Placing, and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's or the Banks' conduct of the Firm Placing and/or the Placing.

Please also note that the agreement to allot and issue Placing Shares to Placees (or the persons for whom Placees are contracting as agent) free of stamp duty and stamp duty reserve tax in the UK relates only to their allotment and issue to Placees, or such persons as they nominate as their agents, direct from the Company for the Placing Shares in question. Such agreement assumes that such Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer such Placing Shares into a clearance service. If there were any such arrangements, or the settlement related to other dealing in such Placing Shares, stamp duty or stamp duty reserve tax may be payable, for which neither the Company nor the Banks would be responsible and Placees shall indemnify the Company and the Banks on an after-tax basis for any stamp duty or stamp duty reserve tax paid by them in respect of any such arrangements or dealings. Furthermore, each Placee agrees to indemnify on an after-tax basis and hold each of the Banks and/or the Company and their respective affiliates harmless from any and all interest, fines or penalties in relation to stamp duty, stamp duty reserve tax and all other similar duties or taxes to the extent that such interest, fines or penalties arise from the unreasonable default or delay of that Placee or its agent. If this is the case, it would be sensible for Placees to take their own advice and they should notify the relevant Bank accordingly. In addition, Placees should note that they will be liable for any capital duty, stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the UK by them or any other person on the acquisition by them of any Placing Shares or the agreement by them to acquire any Placing Shares.

Selling Restrictions

By participating in the Equity Placings, a Placee (and any person acting on such Placee's behalf) irrevocably acknowledges, confirms, undertakes, represents, warrants and agrees (as the case may be) with the Banks and the Company, the following:

1. it is not a person who has a registered address in, or is a resident, citizen or national of, a country or countries, in which it is unlawful to make or accept an offer to subscribe for Placing Shares;

2. it has fully observed and will fully observe the applicable laws of any relevant territory, including complying with the selling restrictions set out herein and obtaining any requisite governmental or other consents and it has fully observed and will fully observe any other requisite formalities and pay any issue, transfer or other taxes due in such territories;

3. if it is in the United Kingdom, it is a person (i) who has professional experience in matters relating to investments and who falls within the definition of "investment professionals" in Article 19(5) of the Order or who falls within Article 49(2) of the Order, and (ii) is a "qualified investor" as defined in section 86 of the FSMA;

4. if it is in a member state of the EEA, it is a "qualified investor" within the meaning of Article 2(1)(e) of the Prospectus Directive;

5. it is a person whose ordinary activities involve it (as principal or agent) in acquiring, holding, managing or disposing of investments for the purpose of its business and it undertakes that it will (as principal or agent) acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;

6. it is and, at the time the Placing Shares are purchased, will be either (i) outside the United States, purchasing in an offshore transaction pursuant to Regulation S or (ii) a QIB that makes each of the representations, warranties, acknowledgments and agreements set out in paragraph 9 below;

7. none of the Placing Shares have been or will be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States;

8. none of the Placing Shares may be offered, sold, taken up or delivered directly or indirectly, in whole or in part, into or within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States;

9. if it is in the United States, (i) it is a QIB and is acquiring the Placing Shares for its own account or for the account of one or more QIBs with respect to whom it has the authority to make, and does make, the representations and warranties set forth herein, for investment purposes and not with a view to further distribution of such Placing Shares; (ii) it is aware, and each beneficial owner of the Placing Shares has been advised, that the sale of Placing Shares to it is in reliance on Rule 144A or another exemption from the registration requirements of the Securities Act; (ii) it will only offer, resell, pledge or otherwise transfer the Placing Shares (a) to a person that the seller and any person acting on its behalf reasonably believes is a QIB purchasing for its own account or for the account of a QIB in a transaction meeting the requirements of Rule 144A, (b) outside the United States in accordance with Regulation S under the Securities Act, (c) pursuant to an exemption from registration under the Securities Act provided by Rule 144 thereunder (if available), or (d) pursuant to an effective registration statement under the Securities Act, in each case in accordance with any applicable securities laws of any state or other jurisdiction of the United States; and (iii) notwithstanding anything to the contrary, it understands that 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

10. it (on its behalf and on behalf of any Placee on whose behalf it is acting) has (a) fully observed the laws of all relevant jurisdictions which apply to it; (b) obtained all governmental and other consents which may be required; (c) fully observed any other requisite formalities; (d) paid or will pay any issue, transfer or other taxes; (e) not taken any action which will or may result in the Company or the Banks (or any of them) being in breach of a legal or regulatory requirement of any territory in connection with the Equity Placings: (f) obtained all other necessary consents and authorities required to enable it to give its commitment to subscribe for the relevant Placing Shares and (g) the power and capacity to, and will, perform its obligations under the terms contained in these terms and conditions.

Set-off and Miscellaneous

If a Placee is entitled to participate in the Open Offer by virtue of being a Qualifying Shareholder it will be able to apply to subscribe for Open Offer Shares under the terms and conditions of the Open Offer. Any participation by a Placee as a Qualifying Shareholder in the Open Offer will not reduce such Placee's commitment in respect of its placing participation.

The Company reserves the right to treat as invalid any application or purported application for Placing Shares that appears to the Company or its agents to have been executed, effected or dispatched from the United States or an Excluded Territory or in a manner that may involve a breach of the laws or regulations of any jurisdiction or if the Company or its agents believe that the same may violate applicable legal or regulatory requirements or if it provides an address for delivery of the share certificates of Placing Shares in an Excluded Territory or the United States, or any other jurisdiction outside the United Kingdom in which it would be unlawful to deliver such share certificates.

When a Placee or person acting on behalf of the Placee is dealing with any of the Banks, any money held in an account with any of the Banks on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FCA made under the FSMA. The Placee acknowledges 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 the Banks' money in accordance with the client money rules and will be used by each of the Banks in the course of its own business; and the Placee will rank only as a general creditor of the relevant Bank.

Times

Unless the context otherwise requires, all references to time are to London time. All times and dates in these terms and conditions may be subject to amendment. The Banks will notify Placees and any persons acting on behalf of the Placees of any changes.