ATLAS PEARLS LIMITED 
By ABN 32 009 220 053
16 November 2012
Dear Shareholder
As announced on 2 November 2012, Atlas South Sea Pearl Limited (Company) is undertaking a pro-rata non-renounceable entitlement offer to raise up to $2,371,350 before the costs of the issue (Entitlement Offer). The Company has today lodged a prospectus with ASIC and ASX setting out further details of the Entitlement Offer (Prospectus).
Funds raised from the Entitlement Offer will be used primarily to support existing current assets, reduce existing debt in the Essential Oils of Tasmania business being acquired by the Company, fund research and development initiatives, fund increased production of strategic pearl by-product and perfume ingredients and commercialisation of new consumer products through World Senses Pty Ltd, fund expansion of the existing pearl auction strategy and strengthen the balance sheet for general working capital purposes.
• The Entitlement Offer is non-renounceable and is being undertaken on the basis of:
o one (1) new fully paid ordinary share (New Share) for every five (5) ordinary shares held by Eligible Shareholders (defined below) on the record date at $0.05 cents per New Share; and
o one (1) free attaching unlisted option for every one (1) New Share issued in the Entitlement Offer, with an exercise price of $0.05 and an expiry date 12 months after the date the option is granted (New Option).
• The Record Date to determine entitlements for Eligible Shareholders is 4.00pm AWST
• Eligible Shareholders are those persons who:
o are registered as a holder of fully paid ordinary shares in the capital of the Company
(Shares) as at 4.00pm (AWST) on the Record Date;
o have a registered address in Australia, New Zealand or Hong Kong or are, in the opinion of the Company, otherwise eligible under all applicable securities laws to receive an offer of New Shares under the Entitlement Offer; and
o are not in the United States and are subscribing for the New Shares in an 'offshore transaction' (as defined in Rule 902(h) of the United States Securities Act of 1933, as amended).
• Shareholders not satisfying the above criteria will not be eligible to participate in the
Entitlement Offer.
• Eligible Shareholders may apply for more than their entitlements, in accordance with the terms and conditions set out in the Prospectus.
47-49 Bay View Terrace, Claremont, WA 6010 Australia • PO Box 1048, Claremont, WA 6910, Australia
TELEPHONE (61) (8) 9284 4249 • FACSIMILE (61) (8) 9284 3031 • WEBSITE http://www.atlassouthseapearl.com.au • EMAIL atlas@atlassouthseapearl.com.au
ABN 32 009 220 053
• As the Entitlement Offer is non-renounceable, entitlements to take up New Shares and New Options are non-transferable and will not be tradeable on ASX. Shareholders who do not take up their entitlements in full will not receive any value in respect of those entitlements that they do not take up, and their equity interest in the Company will be diluted. Shareholders who are not eligible to receive entitlements will not receive any value in respect of entitlements they would have received, had they been eligible.
• A maximum of 47,427,014 New Shares will be issued under the Entitlement Offer. This number is subject to reconciliation of entitlements and rounding. All entitlements will be rounded up to the nearest whole number of New Shares and New Options.
• As previously announced by the Company, the Company:
o has entered into a conditional agreement to acquire the Essential Oils of Tasmania business for $650,000 to be paid by the Company issuing 10,000,000 Shares (Acquisition);
o has entered into a conditional agreement to place 4,166,667 Shares to raise
$250,000 to investors who are involved in the ownership and operation of the
Essential Oils of Tasmania business (Share Placement); and
o is proposing to issue up to 1,500,000 convertible notes to raise $1,500,000 (Note Placement) and has entered into conditional agreements to issue $850,000 worth of those convertible notes.
• It is the current intention of the Company's board of directors to withdraw the Entitlement Offer if completion of the Acquisition does not occur. The Share Placement and the Note Placement are conditional on completion of the Acquisition occurring.
• On the basis that the Acquisition, Share Placement and Note Placement occur, after the
Entitlement Offer, the Company will have:
o up to 298,728,753 Shares on issue which will be quoted on ASX; and
o up to 47,427,014 New Options and up to 1,500,000 Convertible Notes on issue which will not be quoted on ASX.
• The Entitlement Offer is not underwritten.
• The Directors reserve the right in accordance with the Corporations Act and ASX Listing
Rule 7.2 (exemption 3) to place any Shortfall at their discretion with:
o Eligible Shareholders whose acceptances exceed their entitlement; or
o any other parties selected by them.
• Any New Shares and New Options the subject of the Shortfall will be placed no later than
3 months after the Closing Date and will be issued on the same terms as are offered to
Eligible Shareholders under the Entitlement Offer.
• Dividends are paid as authorised by Directors.
• No shareholder approval is required for the Entitlement Offer.
47-49 Bay View Terrace, Claremont, WA 6010 Australia • PO Box 1048, Claremont, WA 6910, Australia
TELEPHONE (61) (8) 9284 4249 • FACSIMILE (61) (8) 9284 3031 • WEBSITE http://www.atlassouthseapearl.com.au • EMAIL atlas@atlassouthseapearl.com.au
ABN 32 009 220 053
• Each New Share will be issued on the same terms as the Shares already issued by the Company and shares issued on exercise of the New Options will rank equally with Shares from the date of allotment.
Timetable
Important dates for Eligible Shareholders are:
Shares quoted on an "ex" basis 21 November 2012
Prospectus and Entitlement and Acceptance Forms despatched to Eligible Shareholders
30 November 2012
Trading of New Shares commences on a deferred settlement basis
21 January 2013
ASX notified of under-subscriptions 22 January 2013
Issue of New Shares and New Options 24 January 2013
Despatch of holding statements 25 January 2013
New Shares commence trading on ASX 29 January 2013
• Details of the Entitlement Offer are contained in the Prospectus lodged with ASIC and ASX on 16 November 2012, and available at www.asx.com.auand on the Company's website at www.atlassouthseapearl.com.au. Eligible Shareholders are expected to be mailed a copy of the Prospectus together with a personalised Entitlement and Acceptance Form by no later than 30 November 2012.
• It is important that Eligible Shareholders read the Prospectus carefully, and consult their stockbroker, solicitor, accountant or other professional adviser before deciding whether to invest. If Eligible Shareholders wish to participate, they should follow the directions in the Entitlement and Acceptance Form and section 3 of the Prospectus.
• For further information on the Entitlement Offer:
o visit the Company's website at www.atlassouthseapearl.com.au;
o see the Company's Prospectus lodged with ASIC and ASX on 16 November 2012, and available at www.asx.com.auor on the Company's website at www.atlassouthseapearl.com.au; or
47-49 Bay View Terrace, Claremont, WA 6010 Australia • PO Box 1048, Claremont, WA 6910, Australia
TELEPHONE (61) (8) 9284 4249 • FACSIMILE (61) (8) 9284 3031 • WEBSITE http://www.atlassouthseapearl.com.au • EMAIL atlas@atlassouthseapearl.com.au
ABN 32 009 220 053
o contact the Atlas South Sea Pearl Information Line on 1300 850 505 (within Australia) or +61 3 9415 4000 (outside Australia) between 8.30am and 5.00pm (AWST) Monday to Friday.
Yours sincerely,
Stephen Birkbeck
Executive Chairman and CEO
The information provided in this announcement is not investment advice. You should read the entirety of the Company's Prospectus dated 16 November 2012 when you receive it, as well as all other materials lodged with ASX which you consider relevant and consider all of the risk factors that could affect the performance of the Company and the New Shares and New Options in light of your particular investment objectives, financial circumstances and investment needs (including financial and taxation issues) and seek professional advice from your accountant, financial adviser, stock broker, lawyer or other professional adviser before deciding whether to invest in New Shares and New Options. Specifically, shareholders should seek advice on the taxation implications of participating in the Entitlement Offer and have regard to the risks of investing in the Company highlighted in the Company's Prospectus.
47-49 Bay View Terrace, Claremont, WA 6010 Australia • PO Box 1048, Claremont, WA 6910, Australia
TELEPHONE (61) (8) 9284 4249 • FACSIMILE (61) (8) 9284 3031 • WEBSITE http://www.atlassouthseapearl.com.au • EMAIL atlas@atlassouthseapearl.com.au
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