Tellus Resources : Renounceable Rights Issue Letter to Eligible Shareholders

Microsoft Word - 20150108 - Rights Issue Covering Letter to be sent to shareholders 8.1.2015.docx

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MR SAM SAMPLE FLAT 123

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SAMPLEVILLE VIC 3030

8 January 2015
Dear Shareholder
RENOUNCEABLE RIGHTS ISSUE
On 19 December 2014 Tellus Resources Limited (TLU or the Company) announced the details of a partially underwritten capital raising by way of a three (3) for two (2) pro-rata renounceable rights issue at a price of 0.2 cents per share.
The Rights Issue seeks to raise up to approximately $897,000. The funds to be raised from the Rights Issue will be used to fund the Company's ongoing working capital requirements, meet expenses associated with the Covenant Mondo joint venture and maintain its various tenements and other assets in good standing.
TLU invites shareholders who were registered as such at 7.00 pm (Sydney time) on 13 January 2015 (Record Date), and who have a registered address in Australia or New Zealand, to participate in the Rights Issue.
Fractional entitlements will be rounded up to the nearest whole number.
New Shares will rank equally with all fully paid ordinary shares in the capital of the Company already on issue.
Assuming the Offer is fully subscribed, following completion of the Offer the Company will have issued approximately 448,272,443 New Shares resulting in total Shares on issue of approximately
747,120,738.
Shareholders are also invited to consider applying for Additional Shares in addition to their rights, particularly if they have small or unmarketable parcels of Company Shares.
Full details of the Rights Issue are contained in the Prospectus which will be mailed to shareholders shortly. A copy of the Prospectus will also be made available on the ASX and Company websites.

Level 7, 28 Grenfell Street, Adelaide, South Australia 5034

Telephone: [phone] Fax: [phone]

Web: www.tellusresources.com.auEmail: [e-mail]

ABN: 35 144 733 595

Actions required of Eligible Shareholders
There are a number of actions Eligible Shareholders may take:

• You may take up all or some of your rights to subscribe for New Shares pursuant to the Prospectus (Entitlements). To take up all or some of your Entitlements you will need to ensure your application money for the Entitlements you wish to take up is received by Computershare Investor Services Pty Ltd (Share Registry) by no later than 5.00pm (Adelaide Time) on 28 January 2015, by either completing and returning your Entitlement and Acceptance Form together with your application money or making a payment by BPAY in accordance with the instructions on your Entitlement and Acceptance Form.

• To apply for additional shortfall Shares you will need to complete the relevant section of your Entitlement and Acceptance Form. There is no guarantee that applicants will receive the number of additional TLU shares applied for, and the Directors reserve the right to allot and issue additional TLU shares at their discretion.

• The Offer is renounceable, meaning that Eligible Shareholders may sell their Entitlement to subscribe for new TLU shares under the Offer (Rights) to third parties if they do not want to take them up. A market will be established on ASX to facilitate trading of these Rights, and trading of Rights on ASX will commence on 9 January 2015 and will cease on 20 January 2015.

• You may do nothing. If you choose to do nothing with your Entitlements, while you will continue to hold the same number of Shares, your interest in the Company will be diluted and you will receive no value for your Entitlement.

Level 7, 28 Grenfell Street, Adelaide, South Australia 5034

Telephone: [phone] Fax: [phone]

Web: www.tellusresources.com.auEmail: [e-mail]

ABN: 35 144 733 595

Key dates which shareholders should note are as follows:

EVENT	DATE
Announcement of Rights Issue	19 December 2014
Prospectus and Appendix 3B lodged with ASIC and ASX	7 January 2015
Ex Date Rights trading commences	9 January 2015
Record Date to identify Shareholders entitled to participate in the Offer	13 January 2015
Prospectus and Entitlement and Acceptance Forms dispatched to Shareholders Opening Date	16 January 2015
Rights trading ends	20 January 2015
Deferred settlement trading of securities begins	21 January 2015
Closing Date for Acceptances (5.00pm Adelaide time)	28 January 2015
Notification to ASX of under subscriptions	2 February 2015
Issue Date - Allotment of New Shares Deferred settlement trading ends	4 February 2015
Expected date for commencement of normal trading of New Shares on ASX	5 February 2015

These dates are subject to change and are indicative only. TLU reserves the right to amend this timetable, including, subject to the

Corporations Act and Listing Rules, to extend the Closing Date.

Yours faithfully

Bob Kennedy
Chairman

Level 7, 28 Grenfell Street, Adelaide, South Australia 5034

Telephone: [phone] Fax: [phone]

Web: www.tellusresources.com.auEmail: [e-mail]

ABN: 35 144 733 595