Cape Range Prospectus

2011

Prospectus

Cape Range LTD ABN 43 009 289 481

For an offer of 25,000,000 Shares at an issue price of $0.20 per Share to raise up to $5,000,000 with a minimum subscription of 20,000,000 Shares to raise $4,000,000.

Oversubscriptions of up to a further 5,000,000 Shares at an issue price of $0.20 per Share to raise up to a further $1,000,000 may be accepted.

This is a recompliance prospectus for the purposes of satisfying Chapters 1 and 2 of the ASX Listing Rules and to satisfy ASX requirements for re-listing following a change to the nature and scale of the Company’s activities.

MDS Financial Services Pty Ltd has been appointed by the Company as lead manager and sponsoring broker to the Offer. Please refer to Section 11.8 for further details.

IMPORTANT INFORMATION This is an important document that should be read in its entirety. If you do not understand it you should consult your professional advisers without delay. The Shares the subject of this Prospectus should be considered speculative.

Cape Range LTD IMPORTANT NOTICE

This Prospectus is dated 1 July 2011 and was lodged with ASIC on that date. ASIC and its officers take no responsibility for the contents of this Prospectus or the merits of the investment to which the Prospectus relates.

The expiry date of this Prospectus is 5.00pm WST on that date which is 13 months after the date this Prospectus was lodged with ASIC (Expiry Date). No shares may be issued on the basis of this Prospectus after the Expiry Date.

Application for Official Quotation by the ASX of the Shares offered pursuant to this Prospectus will be made within 7 days after the date of this Prospectus.

The distribution of this Prospectus in jurisdictions outside Australia and New Zealand may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any of these restrictions. Failure to comply with these restrictions may violate securities laws. Applicants who are resident in countries other than Australia or New Zealand should consult their professional advisers as to whether any governmental or other consents are required or whether any other formalities need to be considered and followed.

This Prospectus does not constitute an offer in any place in which, or to any person to whom, it would not be lawful to make such an offer.

It is important that investors read this Prospectus in its entirety and seek professional advice where necessary.

The Shares that are the subject of this Prospectus should be considered speculative.

A copy of this Prospectus can be downloaded from the website of the Company at www.caperange.com.au. Any person accessing the electronic version of this Prospectus for the purpose of making an investment in the Company must be an Australian resident and must only access the Prospectus from within Australia or New Zealand.

This Prospectus will be circulated during the Exposure Period. The purpose of the Exposure Period is to enable this Prospectus to be examined by market participants prior to the raising of funds. Potential investors should be aware that this examination may result in the identification of deficiencies in the Prospectus and, in those circumstances, any application that has been received may need to be dealt with in accordance with Section 724 of the Corporations Act. Applications for securities under this Prospectus will not be processed by the Company until after the expiry of the Exposure Period. No preference will be conferred on persons who lodge applications prior to the expiry of the Exposure Period.

The Corporations Act prohibits any person passing onto another person an application form unless it is attached to a hard copy of this Prospectus or it accompanies the complete and unaltered version of this Prospectus. Any person may obtain a hard copy of this Prospectus free of charge by contacting the Company on +61 8 9479 6044.

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Investment Highlights This information is a selective overview only. Investors should read the Prospectus in full, including the experts’ reports in Sections 7, 8 and 9 before deciding whether to invest in Shares.

•

The Company has entered into a conditional Share Sale Agreement to acquire all of the issued share capital of Camarines Mining Pty Ltd (CMPL) which has rights to the Camarines Norte Gold Project located in in the Camarines Norte province of the Philippines.

•

The Company intends to use part of the funds raised from the Offer to meet the consideration payment required for settlement of the acquisition of CMPL. Refer to details of the Share Sale Agreement in Section 11.1.

•

•

4

•

Within the project area there has been recorded historical gold production from the Paracale Nacionale and the Tumbaga mines.

•

The Paracale Nacionale produced 21,998 tonnes, at an average grade of 11.2 g/t gold (approximately 8,000 ounces), during 1938 to 1940. The Tumbaga mine produced 13,655 tonnes at 11.89g/t gold (approximately 5,222 ounces) in 1938. Neither of these mines have been operational since the Second World War.

•

As at the date of this Prospectus, the gold price is currently at close to record highs. As at 29 June 2011, gold was trading at US$1,504 per ounce.

The Company has entered into Memoranda of Understanding in relation to the possible acquisition of two exploration projects in Zimbabwe, which are currently subject to due diligence.

•

At a general meeting of Shareholders held on 28 June 2011, the Company obtained approval to change the nature and scale of the Company’s activities to a mining and exploration company as a result of the acquisition of 100% of the issued share capital of CMPL.

•

The Camarines Norte Gold Project consists of a number of gold prospects, totalling in area 2,227ha within the renowned Paracale Goldfield area. During 1938 to 1941, the Paracale Goldfield area produced 1,890,000 tonnes of ore at an average grade of 12 g/t gold (approximately 740,000 ounces).

The Company has entered into a mandate with MDS Financial Services Pty Ltd pursuant to which MDS Financial Services Pty Ltd will act as corporate advisor, lead manager and sponsoring broker to the Offer. Refer to Section 11.8 for further details of the mandate.

•

The Company has an experienced Board and management team with experience in exploration and mining projects both in Australia and overseas.

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Cape Range LTD

Investment Risks Subscribing for Shares that are the subject of this Prospectus involves a number of risks. Before deciding whether to invest in the Company, any intending investor

is urged to consider the risk factors set out in Section 10 of this Prospectus, which include but are not limited to the risks summarised below:

FURTHER DETAILS

Risk area

Risks

Operating in Philippines and Zimbabwe

The Company’s projects are located in the Philippines and Zimbabwe and the Company will be subject to the risks associated with operating in those countries. Such risks can include economic, social or political instability or change, or instability and changes of law affecting foreign ownership, government participation, taxation, working conditions, rates of exchange, exchange control, export duties, repatriation of income or return of capital, environmental protection, mine safety, labour relations as well as government control over mineral properties .

10.1 10.2 10.3 10.16

Changes to the Philippines and Zimbabwean mining or investment policies and legislation, taxation legislation, regulations or policy, or a shift in political attitude may adversely affect the Company’s operations and ability to operate profitability.

Exploration risks

Exploration is inherently associated with risk. Notwithstanding the experience, knowledge and careful evaluation a company brings to an exploration project there is no assurance that recoverable mineral resources will be identified.

Exploration and operating costs

The proposed exploration expenditure of the Company is based on certain assumptions with respect to the method and timing of exploration and feasibility work. By their nature, these estimates and assumptions are subject to significant uncertainties and, accordingly, the actual costs may materially differ from these estimates and assumptions. Accordingly, no assurance can be given that the cost estimates and the underlying assumptions will be realised in practice.

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10.5

10.6

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Investment Risks

6

FURTHER DETAILS

Risk area

Risks

Title risk

The claims in which the Company will, or may, in the future, acquire a direct or indirect interest, are subject to the applicable local laws and regulations of the Philippines and Zimbabwe. There is a risk that in the future the Company or CMPL may not be able to comply with claim conditions and retain its full tenure.

10.7

Contractual risk

The Company and CMPL has entered into a number of agreements, as detailed in this Prospectus. The ability of the Company to achieve its objectives will depend on the performance by the counterparties to these agreements of their obligations. If any counterparty defaults in the performance of their obligations, it may be necessary for the Company to approach a court to seek a legal remedy. Legal action can be costly.

Furthermore, certain contracts to which either the Company or CMPL is a party are with parties resident outside Australia and/or are governed by laws of jurisdictions outside Australia. There is a risk that the Company or CMPL may not be able to seek legal redress as would normally be expected under Australian law; and generally there can be no guarantee that a legal remedy will ultimately be granted on the appropriate terms.

10.8

Commodity price volatility and exchange rate risk

If the Company or CMPL achieves success leading to mineral production, the revenue it will derive through the sale of commodities exposes the potential income of the Company to commodity price and exchange rate risks. Commodity prices fluctuate and are affected by many factors beyond the control of the Company. Furthermore, international prices of various commodities (including gold) are denominated in United States dollars, whereas the expenditure of the Company is and will be taken into account in Australian currency, exposing the Company to the fluctuations and volatility of the rate of exchange between the United States dollar and the Australian dollar as determined in international markets.

10.9, 10.10, 10.17

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Investment Risks Risk area Additional requirements for capital

FURTHER DETAILS

Risks The Company’s continued operations are dependent on its ability to obtain debt and equity funding or generating sufficient cash flows from future activities.

Investors should be aware that an investment in the Company involves risks that may be higher than risks associated with an investment in some other companies.

Careful consideration should be given to all matters raised in this Prospectus and the relative risk factors prior to applying for Shares offered for subscription under this Prospectus. Some of these risks can be mitigated by the

10.21

use of appropriate safeguards and actions, but some are outside the Company’s control and cannot be mitigated.

Before deciding whether to apply for Shares, investors should consider the risk factors described above, and outlined in more detail in Section 10, together with the information contained elsewhere in this Prospectus.

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Contents Section 1. CORPORATE DIRECTORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Section 2. CHAIRMAN’S LETTER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Section 3. INVESTMENT OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Section 4.

DETAILS OF THE OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Section 5. COMPANY AND PROJECT OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Section 6.

DIRECTORS AND CORPORATE GOVERNANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Section 7. INDEPENDENT GEOLOGIST’S REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Section 8. INDEPENDENT ACCOUNTANT’S REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Section 9. SOLICITOR’S REPORT ON CLAIMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 Section 10.

RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

Section 11. MATERIAL CONTRACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 Section 12. INCORPORATION OF DOCUMENTS BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 Section 13. ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 Section 14.

DIRECTORS’ AUTHORISATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106

Section 15. GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107

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1 Corporate Directory DIRECTORS Wayne Johnson - Non-Executive Chairman Joe Cornelius- Managing Director Wayne Waterworth - Non Executive Director COMPANY SECRETARY Michael Higginson PRINCIPAL Office Unit 5, 324 Great Eastern Highway ASCOT Western Australia 6104 Telephone: (08) 9479 6044 Facsimile: (08) 9479 4044

SHARE REGISTRY* Advanced Share Registry Services Ltd 150 Stirling Highway NEDLANDS Western Australia 6009 Telephone: Facsimile:

(08) 9389 8033 (08) 9389 7871

Australian Solicitors to the Company Bennett + Co Level 10, BGC Centre 28 The Esplanade PERTH Western Australia 6000

INDEPENDENT GEOLOGIST BMGS Perth Pty Ltd Unit 9, 123A Colin Street WEST PERTH Western Australia 6005

Phillipine Solicitors to the Company – Solicitors Report on Claims Restituto M Mendoza Attorney at Law, Notary Public 16G Tower 1 Olympic Heights Condominium Orchard Road, Eastwood City Libis, Quezon City 1110 Philippines

Corporate Advisor, Lead Manager and Sponsoring Broker * MDS Financial Services Pty Ltd Level 37, Rialto Tower 525 Collins Street MELBOURNE Victoria 3000

InDEPENDENT Accountants Pro Count Pty Ltd 37 Colin Street WEST PERTH Western Australia 6005

Auditors* Hall Chadwick Level 29, St Martins Tower 31 Market Street SYDNEY New South Wales 2000

ASX CODES CAG CAGO

*These entities are included for information purposes only. They have not been involved in the preparation of this Prospectus.

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2 Chairman's Letter Dear Investors On behalf of both the Directors and management of Cape Range Limited, I am delighted to invite you to subscribe to shares in the Company, or to increase your existing shareholding.

Through this Prospectus, the Company is offering for subscription 25,000,000 Shares at an issue price of $0.20 each to raise $5,000,000 (plus oversubscriptions of up to a further $1,000,000). Among other things, the issue of this Prospectus is to assist the Company in meeting the requirements of the ASX and satisfying Chapters 1 and 2 of the ASX Listing Rules.

While the Company has historically focused on investments in information technology and telecommunications, the Company has entered into a Share Sale Agreement to acquire 100% of the issued share capital of CMPL, a gold explorer in the Philippines.

CMPL has rights to the Camarines Norte Gold Project located in the Camarines Norte province of the Philippines.

The proposed acquisition of CMPL represents an exciting opportunity and a significant change of direction for the Company. It is your Board’s view that this acquisition will give Shareholders the opportunity to participate in a potentially significant gold exploration opportunity. At a general meeting of Shareholders held on 28 June 2011, the Company obtained approval to change the nature and scale of the Company’s activities as a result of the acquisition of CMPL.

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The funds raised from the Offer will be used to satisfy the requirements to acquire CMPL and assist in the development of CMPL’s gold assets.

The Company will be required to re-comply with Chapters 1 and 2 of the ASX Listing Rules to be reinstated to the Official List of the ASX. As above, the purpose of this Prospectus is to assist with the re-compliance process.

On behalf of the Board of the Company, I welcome your consideration to be a part of this opportunity in an exciting new direction for the Company.

Yours sincerely

Wayne Johnson Chairman

Cape Range LTD

3 Investment Overview 3.1 Important Notice This Section is not intended to provide full information for existing investors or intending investors to subscribe for Shares offered pursuant to this Prospectus. This Prospectus should be read and considered in its entirety.

3.2 Indicative Timetable The indicative timetable for the Offer is as follows: Event

Date

General Meeting to approve the transactions contemplated by the Share Sale Agreement and change in nature and scale of activities

28 June 2011

Lodgement of Prospectus with ASIC

1 July 2011

Opening of Offer for capital raising under the Prospectus

11 July 2011

Closing Date of Offer for capital raising under the Prospectus

5 August 2011

Despatch of holding statements

19 August 2011

Anticipated date the suspension of trading is lifted and the Company’s securities commence trading on ASX

24 August 2011

This timetable is subject to change and the Directors reserve the right to amend the timetable at any time.

3.3 Objectives Introduction The Company entered into the Share Sale Agreement pursuant to which it has the opportunity to acquire 100% of CMPL. A summary of the material terms and conditions of the Share Sale Agreement is set out in Section 11.1 of this Prospectus.

The Directors intend to focus the Company’s future operations primarily on the exploration of and, if warranted, production of gold from the Camarines Norte Gold Project. As the Company has no prior recent involvement in this industry, this acquisition constitutes a significant change in the nature and scale of the Company’s activities. The Company, therefore, needs to re-comply with Chapters 1 and 2 of the ASX Listing Rules as if it were seeking admission to the Official List of ASX.

The Company’s acquisition of CMPL and associated transactions, including the change of nature and scale of the Company’s activities, were subject to Shareholder approval. A general meeting of Shareholders was held on 28 June 2011 and Shareholder approval was obtained for the Company to change the nature and scale of its activities and for the issue of Shares and Options on the acquisition of CMPL. Re-compliance with Chapter 1 of the ASX Listing Rules requires the Company to lodge a prospectus with ASIC and this Prospectus has been prepared, in part, for the purpose of satisfying that requirement.

Trading in the Company’s Shares is currently suspended and will remain suspended until the Company has satisfied all of its obligations under the ASX Listing Rules, including complying with Chapters 1 and 2 of the ASX Listing Rules.

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Investment Overview Purpose of this Prospectus The purpose of this Prospectus is to: (a)

(a) assist the Company to meet the requirements of ASX and satisfy Chapters 1 and 2 of the ASX Listing Rules; and

(b)

to raise at least $4,000,000 pursuant to the Offer and satisfy the condition precedent in the Share Sale Agreement that requires the Company to raise the minimum subscription amount. A summary of the material terms and conditions of the Share Sale Agreement are set out in Section 11.1 of this Prospectus.

The Company is aiming to apply the funds raised from the Offer towards: (a) (a) paying the cash payment required for the acquisition of CMPL;

(b)

further evaluation and exploration of CMPL’s gold projects in the Camarines Norte province in the Philippines and evaluation of potential new projects including the projects in Zimbabwe in relation to which the Company has entered into Memoranda of Understanding with the owners;

(c)

working capital and administration expenses; and

(d)

expenses of the Offer.

The Board believes that funds raised from the Offer will provide the Company with sufficient working capital to achieve the Company’s objectives set out above.

3.4 Use of Proceeds It is intended that the funds raised from the Offer together with the Company’s existing cash at bank of approximately $200,000 (as at the date of this Prospectus) will be applied as follows:

Item Subscription Subscription $4 million $5 million Cash payment as per Share Sale Agreement Cash payment as per Domboshawa Hill Option (US$50,000) Exploration

expenditure1

$1,000,000

$47,600 $47,600 $47,600 $2,700,000

$3,490,000

Two year working capital and administration

$827,400

$1,107,400

$1,267,400

Expenses of the Offer

$295,000

$345,000

$395,000

$4,200,000 $5,200,000 $6,200,000

Refer to Section 5.3 for further details.

Actual expenditure may differ from the above estimates due to a change in market conditions, the development of new opportunities, the results obtained from exploration and other factors (including the risk factors outlined in Section 0). The consideration of new opportunities may result in the Company expending funds on due diligence

12

$1,000,000

$2,030,000

Total 1.

$1,000,000

Subscription $6 million

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or other acquisition costs which may not be recouped through the ultimate acquisition and/or development of the project under consideration.

In addition, to capitalise on other opportunities, depending on the success of its activities, the Company may require debt or further equity fundraisings.

Cape Range LTD

Investment Overview 3.5 CAPITAL STRUCTURE On the basis that the Company completes the Offer on the terms set out in this Prospectus and the minimum subscription amount is received but no oversubscriptions, the Company’s capital structure will be as set out below.

SHARES Shares currently on issue

45,393,158

Shares to be issued to the Vendors pursuant to the acquisition of CMPL (refer Section 11.1)

20,000,000

Shares to be issued to Willaway Enterprises (Private) Limited pursuant to the Snakes Head Option (refer Section 11.7)

500,000

Shares to be issued under Offer

25,000,000

TOTAL SHARES

90,893,158

OPTIONS Options exercisable at $0.20 on or before 1 February 2013

20,165,000

Options exercisable at $0.50 on or before 31 January 2013

2,480,000

Options exercisable at $0.25 on or before 31 December 2011

4,000,000

Vendor Options to be issued pursuant of the acquisition of CMPL (refer Section 11.1)

10,000,000

Options to be issued to MDS Financial Services Pty Ltd (refer Section 11.8)

2,000,000

TOTAL OPTIONS

28,445,000

If a JORC inferred resource of 500,000 ounces of gold is delineated at the Camarines Norte Gold Project, then it is intended that an additional 12,500,000 Shares and 6,250,000 Vendor Options will be issued to the Vendors (refer Section 11.1).

If an aggregate JORC inferred resource of 1,000,000 ounces of gold is delineated at the Camarines Norte Gold Project, then it is intended that a further 12,500,000 Shares and 6,250,000 Vendor Options will be issued to the Vendors (refer Section 11.1).

Subject to the Company completing a bankable feasibility study in relation to the Camarines Norte Gold Project, then it is intended that a further 30,000,000 Shares and 15,000,000 Milestone Options will be issued to the Vendors (refer Section 11.1).

3.6 Restricted Shares Subject to the Company’s securities being re-instated by ASX to Official Quotation, certain of the securities to be issued to the Vendors and DJ Carmichael are likely to be classified by ASX as restricted securities and will be required to be held in escrow.

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4 Details of the Offer 4.1 The Offer By this Prospectus, the Company offers 25,000,000 Shares at an issue price of $0.20 per Share to raise up to $5,000,000 with a minimum subscription of 20,000,000 Shares to raise $4,000,000.

Oversubscriptions of up to a further 5,000,000 Shares at an issue price of $0.20 per Share to raise $1,000,000 may be accepted.

The Shares offered under this Prospectus will rank equally with the existing Shares on issue.

In the event that the Company does not receive approval for re-quotation on ASX within 3 months after the date of this Prospectus (or such longer period as is permitted by any modification of the Corporations Act that may be granted by ASIC), it will not proceed with the Offer, it will not acquire CMPL and it will repay all application monies received. Should this occur, then the change to the nature and scale of the Company’s activities will not eventuate and the Company’s securities may remain suspended from quotation on ASX.

The purpose of the Offer and the use of funds raised are set out in Sections 3.3 and 3.4 of this Prospectus respectively.

4.4 Oversubscriptions The Company may, at its discretion, accept oversubscriptions under the Offer of up to a further $1,000,000 through the issue of up to a further 5,000,000 Shares at an issue price of $0.20.

4.2 Minimum Subscription The minimum subscription for the Offer is $4,000,000.

The maximum amount which may be raised pursuant to this Prospectus is, therefore, $6,000,000.

If the minimum subscription has not been raised within four (4) months after the date of this Prospectus (or such longer period as is permitted by any modification of the Corporations Act that may be granted by ASIC), the Company will not proceed with the Offer and it will repay all application monies received (without interest).

4.5 Underwriting The Offer is not underwritten.

4.3 Re-compliance with Chapters 1 and 2 of the ASX Listing Rules The Company has been suspended from quotation on the ASX since the 12 November 2010. The Company will not be reinstated to Official Quotation until ASX approves the Company’s re-compliance with Chapters 1 and 2 of the ASX Listing Rules.

The Company will apply to ASX within seven (7) days after the date of this Prospectus for Official Quotation of the Shares offered under this Prospectus.

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4.6 Corporate Advisor, Lead Manager and Sponsoring Broker MDS Financial Services Pty Ltd has been engaged by the Company as a corporate advisor, lead manager and sponsoring broker to the Offer. Please refer to Section 11.8 for details of the terms of engagement at MDS Financial Services Pty Ltd. 4.7 How to apply for Shares If you wish to invest in the Company complete the Application Form provided with or attached to this Prospectus. Alternatively, complete a paper copy of the electronic Application Form that accompanies the electronic version of the Prospectus which can be found and downloaded from www.caperange.com.au.

Cape Range LTD

Details of the Offer Completed Application Forms and application monies in full should be returned prior to 5.00pm (WST) on the Closing Date to the Company as follows:

the allotment of Shares takes place, will retain any interest earned on the application monies.

Cape Range Ltd PO Box 401 BELMONT WA 6984

4.9 Loyalty Options The Company proposes to make a non–renounceable entitlement offer of Loyalty Options not less than 3 months after the Company’s Shares are requoted on ASX.

Refer to the instructions on the back of the Application Form when completing your application. Cheques must be made payable to “Cape Range Limited - Subscription Account” and crossed “Not Negotiable”. All cheques must be in Australian currency.

It is expected that the entitlement offer will be undertaken on the basis of an offer of 1 Loyalty Option for every 2 Shares held on the relevant record date. The Company reserves the right not to proceed with the entitlement offer or to change the terms of the entitlement offer.

An original completed and lodged Application Form, together with a cheque for the application monies, constitutes a binding and irrevocable offer to subscribe for the number of Shares specified in the Application Form. The Application Form does not have to be signed to be a valid application.

An application will be deemed to have been accepted by the Company upon allotment of the Shares. The Directors reserve the right to accept or reject any application at their sole and absolute discretion.

The subscription price, exercise price and expiry date of the Loyalty Options will be determined by the Company after its Shares have been reinstated to trading on ASX. 4.10 CHESS The Company will apply to participate in the Clearing House Electronic Subregister System (CHESS). CHESS is operated by ASX Settlement Pty Ltd (ASXS), a wholly owned subsidiary of ASX, in accordance with the Listing Rules and the ASX Settlement Operating Rules.

The Offer may be closed at an earlier date, and time, at the discretion of the Directors, without prior notice.

Applicants are therefore encouraged to submit their Application Forms as early as possible. The Company reserves the right to extend the Offer or accept late applications.

Under CHESS, the Company will not issue certificates to investors. Instead, Share and Option holders will receive a statement of their holdings in the Company. If an investor is broker sponsored, ASXS will send a CHESS statement.

4.8 Allotment Subject to ASX granting approval for the Company’s securities to be reinstated to trade on ASX, allotment of the Shares offered by this Prospectus will take place as soon as practicable after the Closing Date. Prior to allotment, all application monies shall be held by the Company on trust. The Company, irrespective of whether

4.11 Risk Factors Subscribing for Shares the subject of this Prospectus involves a number of risks. These risks are set out in Section 10 of this Prospectus and any intending investor is urged to consider those risks carefully (and if necessary, consult a professional adviser) before deciding whether to invest in the Company.

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Details of the Offer The risk factors set out in Section 10, and other general risks applicable to all investments in listed Shares not specifically referred to, may in the future affect the value of the Shares. Accordingly, an investment in the Company should be considered speculative.

4.12 Privacy Statement If you complete an application for Shares, you will be providing personal information to the Company. The Company collects, holds and will use that information to assess your application, service your needs as a

4.13 Overseas Applicants No action has been taken to register or qualify the Shares, or the Offer, or otherwise to permit the public offering of the Shares, in any jurisdiction outside Australia and New Zealand.

The distribution of this Prospectus within jurisdictions outside Australia and New Zealand may be restricted by law and persons into whose possession this Prospectus comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of those laws.

Shareholder and to facilitate distribution payments and corporate communications to you as a Shareholder.

The information may also be used from time to time and disclosed to persons inspecting the register, including

This Prospectus does not constitute an offer of securities in any jurisdiction where, or to any person to whom, it would be unlawful to issue this Prospectus.

houses and the Share Registry.

It is the responsibility of any overseas applicant to ensure compliance with all laws of any country relevant to his or her application. The return of a duly completed Application Form will be taken by the Company to constitute a representation and warranty that there

You can access, correct and update the personal

has been no breach of such law and that all necessary approvals and consents have been obtained.

bidders for your Shares in the context of takeovers; regulatory bodies, including the Australian Taxation Office; authorised share brokers; print service providers; mail

information that the Company hold about you. If you wish to do so, please contact the Share Registry at the relevant contact number set out in this Prospectus.

Collection, maintenance and disclosure of certain personal information are governed by legislation, including the Privacy Act 1988 (as amended), the Corporations Act and certain rules such as the ASTC Settlement Rules.

You should note that if you do not provide the information required on the application for Shares, the Company may not be able to accept or process your application.

16

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4.14 Withdrawal The Directors may at any time decide to withdraw this Prospectus and the Offer, in which case the Company will return all application monies without interest within 28 days of giving notice of their withdrawal.

4.15 Enquiries Enquiries relating to this Prospectus or requests for additional copies of this Prospectus should be directed to the Company Secretary of the Company by telephoning (08) 9479 6044.

Cape Range LTD

5 Company and Project Overview 5.1 Background Cape Range Limited is an Australian public company listed on the Official List of ASX. As announced to ASX on 6 July 2010, the Company intends to change the focus of its activities. This change of focus is as a consequence of a review of the Company’s telecommunications business, which resulted in the Board forming the view that it was desirable to re-engage the exploration and mining sectors.

The Company has entered into the Share Sale Agreement with the Vendors, pursuant to which the Company is to acquire 100% of the issued share capital of CMPL. Please refer to Section 11.1 for further details regarding the terms and conditions of the Share Sale Agreement.

CMPL has rights to the Camarines Norte Gold Project located in the Camarines Norte province of the Philippines. The Camarines Norte Gold Project consists of a number of gold prospects, totalling 2,227ha within the renowned Paracale Goldfield area. Please refer to Sections 5.2, 7, 8 and 9 for further details about CMPL and its assets.

The Company has also entered into Memoranda of Understanding with the owners of two Zimbabwe exploration projects. Please refer to Section 5.4 for further details.

The Board has considerable expertise and experience in the exploration and mining sectors. It is hoped by the Board that these skills will deliver positive returns from the Camarines Norte Gold Project.

The Board’s primary aim is to become a successful and profitable exploration and mining company, advancing the Shareholder’s interests and asset values.

The Company aims to achieve this goal through: (a)

utilising the collective experience of the Board members to advance the Camarines Norte Gold Project;

(b)

active exploration programmes being undertaken on the Camarines Norte Gold Project portfolio;

(c)

development of claim holdings in the Camarines Norte Gold Project area; and

(d)

utilisation of the Board’s resource and mining project acquisition skills to give the Company exposure to other exploration projects at attractive entry prices.

5.2 Camarines Norte Gold Project The Camarines Norte Gold Project (the “Project”) is within the Bicol Region of the island of Luzon in the Philippines.

The Project is located approximately 300km east of the Philippine capital of Manila, and straddles the border of the two municipalities (barangays) of Paracale and Jose Panganiban.

The Project comprises a range of granted mineral concessions covering areas of historical mine production from underground and alluvial excavation of narrow gold bearing vein systems, together with less advanced mineralised zones typically exploited by artisanal miners.

The project is situated off the northern part of the major Philippine Rift Fault Leyte, which hosts a number of major projects to the south such as: •

Medusa Mining’s Co-O Gold project;

•

Red 5’s Siana Gold project;

•

Mindoro’s Nickel-Cobalt project; and

•

Philex’s Silangan Copper-Gold project (formerly Boyongan project)

Within the Project area, geological reports have indicated there are up to 39 gold bearing quartz veins. Resources have been quoted by previous explorers in their geological reports, however, the Company needs to carry out due diligence on the method of resource calculations to determine if the resources reported are JORC compliant for reporting within Australian standards.

Access to the Project is via concrete roads that have been constructed through most major towns and hence on to small dirt or gravel roads to access the individual tenement areas within the Project.

Topographically, the region is undulating and is characterised by rolling hills and mountains. Elevation is generally less than 250 metres above sea level (ASL) but ranges in the mountainous regions up to 775 metres. Access to the Project is more difficult during the wet season from July to November.

Cape Range 2011

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17

Cape Range LTD

Company and Project Overview

of the trondhjemite. The faults are assumed to have been reactivated during later tectonic activity associated with mineralisation. The regional Panganiban - Malaguit shear zone likely acted as an efficient conduit that dispersed mineralising fluids into the NNE trending fracture system.

Geology and Mineralisation The Project area consists essentially of a large trondhjemite intrusive complex, known as the Paracale Trondhjemite, hosted within an ultramafic basement. The metamorphic basement comprises ophiolitic lithologies, consistent with the basement of volcanic arc complexes that have experienced tectonic and magmatic extension through several back arc basin processes.

The regional NNW trending Panganiban - Malaguit shear zone separates the metamorphic basement and Paracale Trondhjemite complex to the north from the Cretaceous and Miocene sediments and volcanics to the south. A large network of orthogonal NNE trending fracture systems occur to the north and south of the shear zone, with a few crosscutting (and perhaps offsetting) it towards the centre. The fractures are filled with gold bearing quartzcalcite minerals and associated sulphides. It is likely that the fractures developed during compressive stresses occurring both synchronous with, and post emplacement

18

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The mineralisation at Camarines Norte is likely related to large Miocene Diorite Cu-Au porphyries, an intrusive type that is characteristic of the Philippines. Epithermal veins located in the Paracale Gold District are characterised by a pinch and swell geometry. Quartz veins are banded, crustiform or open vugs and filled with base metal sulphides.

The distribution of gold in the vein systems is highly irregular, although economic concentrations occur in steeply plunging ore shoots.

If the narrow vein systems observed in the Paracale Gold District are consistent with those found in Eastern Mindanao (the Pacific Cordillera), which have a similar geological setting, timing and style of mineralisation and are also located proximal to the Philippine Fault Zone (PFZ), then good mineralised zones are yet to be discovered within the Paracale Gold District.

Exploration History There are numerous small mines distributed within and adjacent to the various Project tenements, the most significant

Cape Range LTD

Company and Project Overview of which being the Paracale Nacional and Tumbaga Consolidated operations situated in Lot 4 of the NIBDC tenure. The Paracale Nacional operation is reported to have shipped a total of 22,500 tons at 13.4 g/t Au for milling at North Camarines Mining Customs Mill during the period 1939 to 1940.

The Project areas have been variously worked by artisanal miners from local villages who have developed a range of shallow shafts, test pits, and small scale workings during exploitation and treatment of the numerous vein structures. A number of generations of surface mapping, rock chip sampling, surface mapping and geophysics have been conducted across a range of tenements with results generally only available as hard copy plans. These plans are sometimes available as professional drafted maps; however are generally hand sketched and annotated records providing indications of key features.

Operator

Northern Island Builders and Development Corporation (NIBDC) Guidance Management Corporation (GMC)

Tenement Group

APSA-000322-V

Project Tenements The tenements which make up the Project cover an area of 2,227 hectares and are comprised of two separate sets of claims, being; •

Mineral Production Sharing Agreement Application (APSA) 000322-V – Currently held by Northern Island Builders and Development Corporation (NIBDC); and

•

Exploration Permit Application (EXPA) 000061-V Currently held by Guidance Management Corporation (GMC).

Details of the individual tenements comprising these applications are listed in Table 1 below.

Tenement REFERENCE

AREA (Ha)

DISTRICT/S

Lot 1

332

Pinagbirayan

Lot 2

62

Malacbang

Lot 3

161

San Isidro/San Rafael

Lot 4

580

San Rafael

Lot 5

634

Santa Rosa Sur

Lot 6

9

Tawig

GMC1 374 Mangkasay/Tabas EXPA-000061-V

GMC2 64 Maybato/Dalnac GMC3 11 Tabas

Table 1 – Tenement Details Exploration Potential Of the NIBDC tenements comprising the Project, Lots 3, 4 and 5 offer the greatest prospectivity. These tenements contain either historical mines or extensive exploration history including trial mining and diamond drilling, and would be described as “advanced exploration areas” as defined by The Valmin Code.

The Lot 3 area contains two extensive veins; Virginia South and Pasacao South. Some historical details of drilling conducted in the area suggest intercepts in the northern part of up to 10g/t Au; however it is difficult to verify the spatial accuracy of this data.

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19

Cape Range LTD

Company and Project Overview Within Lot 4 the Manila and Vallejo veins in the Paracale Nacional area show exploration and resource potential in this tenure, while the Tumbaga and San Rafael veins in the north west of the tenement have hosted historical operations. The company intends to investigate the potential to acquire the strip of land

between Lots 3

and 4, as it is likely that the mineralisation seem in the Tumbaga and San Rafael veins within Lot 4 extend into this strip.

The lithostratigraphic associations and structural elements present in the Lot 5 tenement suggest this area could be a significant exploration target. The geological environment is particularly amenable to mineralisation considering that historically, the north east trending vein systems within the Trondhjemite are the dominant gold mineralisation host in the region.

The most prospective of the GMC tenement group is GMC 1, with four separate veins identified on the tenement, and historical mines nearby. Previous work appears to have targeted an unidentified structure, with the trend of samples taken appearing to run parallel to Tabas 1 and Tabas 3 veins, possibly representing a repetition of these veins. The presence of the large regional shear is also promising as a source for fluid interaction. Based on the sampling conducted across this area, and the identification of what could potentially be a previously unmapped mineralised structure, the area could be described as an “advanced exploration area”.

The remainder of the tenements across both parcels have far less historical work completed across them and would be considered “exploration areas” under The Valmin Code. Preliminary geological investigation in the form of mapping and basic sampling of identifiable structures will be conducted to assess the potential of these relatively unexplored areas, although in some instances the s mall size of the tenement will negate the potential somewhat.

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Conclusions/Summary The Paracale Goldfield commenced production prior to World War II in 1935 and produced a total of 583,971 tonnes at an average grade of 11.83g/t gold (approximately 240,000 ounces). Historical production records indicate that during the period of 1938 to 1941, the Paracale group of mines produced another 1,890,000 tonnes at an average grade of 12g/t gold (approximately 800,000 ounces). Records do not show of any further production since post World War II over the Project area, apart from small scale alluvial miners.

Within the project area, there are numerous gold bearing quartz veins that require further geological test works. For example, according to previous exploration reports, at the Tumbaga Vein, 62 rock chip samples were tested for gold mineralisation. Of the 62 samples, 23 assayed above 3g/t gold and they averaged 7.4g/t gold. The samples were taken from a quartz vein which had an average width of 1.34m. These sorts of grades and widths are quite normal in this part of the world, as most of these sorts of veins are typically less than 3 metres wide.

A detailed and systematic exploration program has been planned for the Project with the aim of establishing a JORC resource. This program includes accurate surface mapping and targeted surface sampling, supported by strategic drilling and sampling. The collection of bulk samples in order to gain increased confidence in gold grade estimates given the highly variable distribution of gold within this style of mineralisation will be undertaken.

Given the previous gold production and the existence of a number of quartz vein reefs within the Project area, the Project demonstrates potential to define economic concentrations of mineralisation. The use of modern, systematic exploration techniques should allow the generation of such exploration targets.

Please refer to Section 7 for further details.

Proposed expenditure for the Project is set out in Section 5.3.

Cape Range LTD

Company and Project Overview 5.3 Exploration Expenditure Summary The Company proposes to fund its intended exploration

Exploration involves an ongoing assessment of each of

programmes in relation to the Project from the proceeds

the project areas and may lead to increased or decreased

of the Offer.

levels of expenditure on certain areas reflecting a change in emphasis. This is certainly true of the year two

It should be noted that the budgets will be subject to

expenditures, which are dependent on the outcomes

modification on an ongoing basis, depending on the results

from the year one programmes. The following expenditure

obtained from completed exploration programmes.

summary is proposed:

Expenses

Year 1 Year 1 Year 1 Year 2 Year 2 Year 2 Minimum Target Maximum Minimum Target Maximum Subscription Subscription Subscription Subscription Subscription Subscription ($4 million) ($5 million) ($6 million) ($4 million) ($5 million) ($6 million)

Geochemical surveys $100,000 $150,000 $200,000

-

-

-

Geophysical surveys $200,000 $250,000 $300,000

-

-

-

Geological mapping $35,000 $75,000 $80,000 $50,000 $120,000 $150,000 RC Sampling

$80,000 $80,000 $120,000 $30,000 $60,000 $80,000

RC/Diamond drilling Analytical/assays

$200,000 $250,000 $750,000 $650,000 $1,000,000

$125,000 $150,000 $180,000 $180,000 $260,000 $300,000

Consultants/wages $145,000 $200,000 $250,000 $195,000 $270,000 $300,000 Project admin costs

$65,000

$95,000

TOTAL

$750,000 $1,200,000 $1,490,000 $1,280,000 $1,500,000 $2,000,000

5.4 Other Projects Shareholders and potential investors will note that: (a)

(b)

on 7 October 2010, the Company announced it had entered into a memorandum of understanding to acquire up to a 75% interest in the Domboshawa Hill Lithium Project with Willaway Enterprises (Private) Limited (Domboshawa Hill Option). Details of the Domboshawa Hill Option can be found in Section 11.6 of this Prospectus and the Company’s announcements; and on 10 November 2010, the Company announced it had entered into a memorandum of understanding to acquire up to a 100% interest in the Snakes Head Platinum Project with Willaway Enterprises (Private)

$110,000

$75,000

$140,000

$170,000

Limited (Snakes Head Option). Details of the Snakes Head Option can be found in Section 11.7 of this Prospectus and the Company’s announcements.

As at the date of this Prospectus, the Company confirms that it is still undertaking due diligence in relation to the Domboshawa Hill Option and Snakes Head Option and does not expect to complete the due diligence before completion of the re-compliance process (that is, prior to being reinstated to trading on the ASX).

To that end, in the event that the Company decides to pursue its rights to acquire an interest in either project the funds raised from the Offer will not be used to fund the acquisitions themselves (as opposed to the exclusivity fee and the due diligence costs).

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Cape Range LTD

Company and Project Overview The Directors give no assurance that either the

In the past, the Great Dyke has been explored for platinum

Domboshawa Hill Option or Snakes Head Options will

by resource majors such as Union Carbide Ltd (Wedza-

be exercised and accordingly the rights to the assets

Mimosa, Selous, Snakes Head projects), Anglo-American

underlying those options may or may not be acquired.

Ltd (Unki project) and Rio Tinto Ltd(Zinca project).

Set out as follows is technical information regarding the Domboshawa Hill Lithium Project and the Snakes Hill Platinum Project.

The project comprises 79 prospect licences, covering approximately 2,000 hectares. The Project area is located along strike from the well known Zimplats’ Hartley Platinum

5.4.1 Domboshawa Hill Lithium Project

project (formerly held by the Delta Gold BHP Joint Venture).

The Domboshawa Hill Lithium Project area is located just north of a well known lithium mining province, within

During 1991 - 1992 Cluff Resources (Pvt) Ltd carried out

the Harare-Bindura-Shawa Greenstone Belt. The project

exploratory work over the area including diamond drill

comprises the prospect EPO 13/10 (EPO), covering

holes. The exploration work by Cluff Resources delineated

19,995 hectares in area.

a reasonable geological continuity that outlined two steep to flat dipping platinum-palladium bearing sulphide zones

Within the EPO there are some outcrops for pegmatites

over a 7km strike, with a 4km maximum width.

and old claims for monazite, a rare earth mineral which is usually associated with lithium. Some of the past old

5.5 Competent Person

workings have been worked for pegmatite minerals in the

The information in this Prospectus that relates to exploration

area. For example, the Casa Ventura mine between 1957

results, mineral resources or ore reserves of the Projects

and 1981 produced 606t of lepidolite (lithium bearing

owned by CMPL is based on information compiled by

mica) and the Mistress Mine produced 1,677t of lepidolite

Mr Joe Cornelius, who is a member of the Australasian

and 80t of spodumene (lithium silicate).

The EPO area is covered mainly by granitic and gneissic rocks. These granite-gneissic rocks are intruded by pegmatites which host mineralisation of the lithium minerals and other minerals.

Institute of Mining and Metallurgy and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and

5.4.2 Snakes Head Platinum Project

Ore Reserves’. Mr Cornelius has consented to the inclusion

The Snakes Head Project area is located 150km north of

in this Prospectus of the matters based on this information

Harare, at the north end of the Great Dyke in Zimbabwe.

in the form and context in which it appears.

22

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Cape Range LTD

6 Directors and Corporate Governance 6.1 Directors Mr Wayne Johnson - Non-Executive Chairman Mr Johnson has over 25 years business and financial experience gained in Australia, New Zealand, Asia and North America. He has founded and managed a range of businesses from start-ups through to public listed companies in a variety of industries ranging from Mining to Telecommunication and Financial services. He was the principal of licensed Cube Financial Group, a diversified stock broking and corporate advisory business now ASX listed as MDS Financial Group.

Mr Johnson provides a wealth of experience in merger and acquisitions, corporate advisory, compliance, capital raisings and general business development. Mr Johnson is the Chairman of Noblemen Ventures, his privately owned corporate advisory boutique firm in Australia. He also provides services as a professional director to select public companies in both New Zealand and Australia.

Specialising in turnaround and growth opportunities, he is a non-executive Chairman of Smartpay NZ Limited, non-executive director of Greater Bendigo Mines Limited, executive director and deputy chairman of MDS Financial Group and holds a non-executive director position with Growth Equities Corporation Limited a licensed ASIC fund management company located in Sydney.

Mr Joseph Cornelius - Managing Director Mr Cornelius has been involved in the mineral exploration industry for nearly 20 years, working primarily for listed companies on the Australian Securities Exchange and private consulting groups. Mr Cornelius was the founding director of Great Australian Resources Limited and subsequently became the Managing Director. He has also been on the board of several other exploration and information and technology companies. Mr Cornelius

has significant experience in capital raisings, company mergers and acquisitions and corporate consultancy to the equities markets.

Mr Cornelius graduated from Curtin University of Technology Western Australia in geology and is a member of the Australian Institute of Mining & Metallurgy, Member of the Australian Institute of Geoscientist and an Affiliate Member of the Securities Institute of Australia. He has also completed his Finance and Investment qualification with the Securities Institute of Australia. He has worked on various projects within Australia, South-East Asia, South America and African countries.

Mr Michael Higginson – Non Executive Director & Company Secretary Mr Higginson holds a Bachelor of Business degree with majors in finance and corporate administration. Mr Higginson was formerly an executive officer with the Australian Securities Exchange. He has over 20 years expertise in public company administration, corporate finance and law, corporate governance, capital raisings, ASX Listing Rules and company secretarial duties.

Mr Higginson has held board, company secretarial and senior management positions with a number of resource exploration companies. In particular, he was an integral part of the team involved in the exploration, feasibility study and early development of the $3 billion Ravensthorpe Nickel project.

6.2 Corporate Governance The Directors monitor the business affairs of the Company on behalf of Shareholders and have formally adopted a corporate governance policy which is designed

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23

Cape Range LTD

Directors and Corporate Governance to encourage Directors to focus their attention on accountability, risk management and ethical conduct.

The Board and management are committed to corporate governance and, to the extent that they are applicable to the Company, have followed the “Corporate Governance Principles and Recommendations” issued by the ASX Corporate Governance Council.

Details of the composition of the Board are set out in Section 6.1.

Consistent with these goals, the Board assumes the following responsibilities: (a)

developing initiatives for profit and asset growth;

(b)

reviewing the corporate, commercial and financial performance of the Company on a regular basis;

(c)

acting on behalf of, and being accountable to, the Shareholders; and

(d)

identifying business risks and implementing actions to manage those risks and corporate systems to assure quality.

The Board recognises the need for the Company to operate with the highest standards of behaviour and accountability.

The non executive Directors are considered independent in terms of the ASX Corporate Governance Council’s definition of independent director.

As the Company’s activities increase in size, scope and/or nature, the Company’s corporate governance principles will be reviewed by the Board and amended as appropriate.

6.3 The Board of Directors The Company’s Board of Directors is responsible for the corporate governance of the Company. The Board develops strategies for the Company, reviews strategic objectives and monitors performance against those objectives. The goals of the corporate governance processes are to: (a)

24

6.4 Composition of the Board Election of Board members is substantially the province of the Shareholders in general meeting. However, subject thereto, the Company is committed to the following principles: (a)

the Board is to comprise Directors with a blend of skills, experience and attributes appropriate for the Company and its business; and

(b) the principal criterion for the appointment of new Directors is their ability to add value to the Company and its business.

maintain and increase shareholder value;

(b) ensure a prudential and ethical basis for the Company’s conduct and activities; and (c)

The Company is committed to the circulation of relevant materials to Directors in a timely manner to facilitate Directors’ participation in the Board discussions on a fully-informed basis.

ensure compliance with the Company’s legal and regulatory objectives.

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SECTION 6

No formal nomination committee or procedures have been adopted for the identification, appointment and review of the Board membership, but an informal assessment process, facilitated by the Chairman in consultation with the Company’s professional advisors, has been committed to by the Board.

Cape Range LTD

Directors and Corporate Governance 6.5 Independent professional advice Subject to the Chairman’s approval (not to be unreasonably withheld), the Directors, at the Company’s expense, may obtain independent professional advice on issues arising in the course of their duties.

6.7 External audit The Company in general meetings is responsible for the appointment of the external auditors of the Company, and the Board from time to time will review the scope, performance and fees of those external auditors.

6.6 Remuneration arrangements The remuneration of an executive director will be decided by the Board.

6.8 Audit committee The Company does not have a separately constituted audit committee. All matters capable of delegation to such a committee are presently dealt with by the full Board.

The total maximum remuneration of non-executive Directors is the subject of a Shareholder resolution in accordance with the Company’s Constitution, the Corporations Act and the ASX Listing Rules, as applicable. The determination of non-executive Directors’ remuneration within that maximum will be made by the Board having regard to the inputs and value to the Company of the respective contributions by each non-executive Director.

The Board may award additional remuneration to nonexecutive Directors called upon to perform extra services or make special exertions on behalf of the Company.

6.9 Identification and management of risk The Board’s collective experience will enable accurate identification of the principal risks that may affect the Company’s business. Key operational risks and their management will be recurring items for deliberation at Board Meetings.

6.10 Ethical standards The Board is committed to the establishment and maintenance of appropriate ethical standards.

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25

Cape Range LTD

7 Independent Geologist's Report BMGS Perth pty ltd UNIT 9, 123A COLIN STREET, WEST PERTH WA P.O. BOX 1434, WEST PERTH, WA, 6872 Ph: (08) 6365 4303

Fax: (08) 9091 7539

Independent Geologist’s Report on the Mineral Exploration Properties of Cape Range Ltd 10 June 2011

BMGS has based its review of the Project on information provided by CRL, along with information obtained from

Joe Cornelius

government agencies, previous owners, and other

Managing Director

relevant published and unpublished data. A site visit was

Cape Range Ltd

not conducted to the Project by the author, Mr Daniel

Unit 5, 324 Great Eastern Highway

Saunders as Mr Darryl Mapleson, a current employee

Ascot WA 6104

of BMGS, had visited the project area in February 2009.

Dear Joe,

The Project comprises a range of granted mineral

BM Geological Services Perth Pty Ltd (“BMGS”) has

concessions covering areas of historical mine production

been commissioned by Cape Range Limited (“CRL”)

from underground and alluvial excavation of narrow

to provide an Independent Geologist’s Report (“IGR”)

gold bearing vein systems, together with less advanced

on the Camarines Norte Project (the “Project”) in the

mineralised zones typically exploited by artisanal miners.

Bicol Region of the island of Luzon in the Philippines.

The Project is located approximately 300km east of the Philippine capital of Manila, and straddles the border of the two municipalities (barangays) of Paracale and

BMGS understands from CRL that the legal status of the assets in which CRL are acquiring an interest, and the mining and minerals processing legislation applicable

Jose Panganiban. The report is to be included in a

has been assessed separately during legal due diligence

Prospectus to be lodged with the Australian Securities

investigations and consideration of these items has not

and Investments Commission (“ASIC”), offering for

been included in this report. The present status of the

subscription 25,000,000 shares at an issue price of 20c

tenements, agreements and legislation described in this

per Share (the “Prospectus”), to raise up to $5,000,000

report is based on information provided by CRL. BMGS is

(plus oversubscriptions of up to a further $1,000,000).

not qualified to comment on the nature of the transaction

The minimum amount to be raised has been set at

between the current Owners and CRL and is therefore not

$4,000,000 for this Prospectus.

considered in this IGR.

26

Cape Range 2011

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Cape Range LTD

Independent Geologist's Report The Independent Geologists Report has been prepared on

The principal sources of information used to compile this

information available up to 29 April 2011.

report comprise technical records along with technical reports and data variously compiled by CRL, previous

This IGR has been compiled by Mr Daniel Saunders, BSc

project operators, its consultants, government agencies,

(Mineral Exploration and Mining Geology), GradCert (Mine

and from discussions with CRL management. A listing of

Planning and Design). Mr Saunders is a geologist with 13

the principal sources of information is included Section VIII

years experience in the resources industry having held

of this report.

roles with various mining companies exposed to precious and base metals and industrial minerals. Mr Saunders

All reasonable enquiries have been made to confirm the

currently holds the role of Senior Consulting Geologist with

authenticity and completeness of the technical data upon

BMGS Perth, and is a Member of the Australasian Institute

which this report is based. A final draft of this report was

of Mining and Metallurgy, and has the appropriate relevant

provided to CRL, along with a written request to identify

qualifications, experience, competence and independence

any material errors or omissions.

to be considered an “Expert” under the definitions provided in the Valmin Code and a “Competent Person” as defined

Yours faithfully

in the JORC Code.

Neither BMGS, nor the author of this report, has or has had previously, any material interest in CRL or the mineral properties in which CRL has an interest. Our relationship

Daniel Saunders

with CRL is solely one of professional association between

BMGS Perth Pty Ltd

client and independent consultant. This report is prepared in return for professional fees based upon agreed commercial rates and the payment of these fees is in no way contingent on the results of this report.

Cape Range 2011

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27

Cape Range LTD

Independent Geologist's Report CONTENTS I. EXECUTIVE SUMMARY.....................................................................................................................................30

A. Introduction.............................................................................................................................................30 B. Geology and Mineralisation.......................................................................................................................30 C. Exploration History...................................................................................................................................31 D. Mineral Resources...................................................................................................................................31 E. Exploration Potential.................................................................................................................................31 F. Conclusions.............................................................................................................................................32 II. BACKGROUND.................................................................................................................................................33 A. Project Location.......................................................................................................................................33

B. Project Tenements...................................................................................................................................34

C. Geography and Vegetation........................................................................................................................34

D. Climate .................................................................................................................................................34 III. REGIONAL GEOLOGY AND MINERALISATION......................................................................................................36

A. Regional Geology.....................................................................................................................................36

B. Mineralisation..........................................................................................................................................38

IV. NIBDC TENEMENT GROUP................................................................................................................................39

.................................................................................................................................................39 1. Geology and Mineralisation............................................................................................................................39 2. Mining and Exploration History.......................................................................................................................39 3. Exploration Potential......................................................................................................................................40 A. Lot 1

.................................................................................................................................................40 1. Geology and Mineralisation............................................................................................................................40 A. Lot 2

2. Mining and Exploration History.......................................................................................................................40 3. Exploration Potential......................................................................................................................................40 .................................................................................................................................................42 1. Geology and Mineralisation............................................................................................................................42 B. Lot 3

2. Mining and Exploration History.......................................................................................................................42 3. Exploration Potential......................................................................................................................................42 .................................................................................................................................................42 1. Geology and Mineralisation............................................................................................................................42 2. Mining and Exploration History.......................................................................................................................43 3. Exploration Potential......................................................................................................................................43 C. Lot 4

.................................................................................................................................................45 1. Geology and Mineralisation............................................................................................................................45 D. Lot 5

2. Mining and Exploration History.......................................................................................................................45 3. Exploration Potential......................................................................................................................................45

28

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Cape Range LTD

Independent Geologist's Report .................................................................................................................................................47 1. Geology and Mineralisation............................................................................................................................47 2. Mining and Exploration History.......................................................................................................................47 3. Exploration Potential......................................................................................................................................47 E. Lot 6

V. GMC TENEMENT GROUP...................................................................................................................................48

.................................................................................................................................................48 1. Geology and Mineralisation............................................................................................................................48 A. GMC1

2. Mining and Exploration History.......................................................................................................................48 3. Exploration Potential......................................................................................................................................48 B. GMC2 .................................................................................................................................................49 1. Geology and Mineralisation............................................................................................................................49

2. Mining and Exploration History.......................................................................................................................49 3. Exploration Potential......................................................................................................................................49 .................................................................................................................................................50 1. Geology and Mineralisation.............................................................................................................................50 C. GMC3

2. Mining and Exploration History........................................................................................................................50 3. Exploration Potential.......................................................................................................................................50 VI. SUMMARY AND CONCLUSIONS.......................................................................................................................52 A. NIBDC Tenement Group.................................................................................................................................52 B. GMC Tenement Group....................................................................................................................................53 VII. PRINCIPAL SOURCES OF INFORMATION...........................................................................................................53 VIII. GLOSSARY OF TECHNICAL TERMS..................................................................................................................54 LIST OF FIGURES

Figure 1 – Project Location Plan............................................................................................................................33 Figure 2 – Tenement Location Plan........................................................................................................................35 Figure 3 – Regional Geology Map..........................................................................................................................37 Figure 4 – NIBDC Lot 1- Geology and Sampling.....................................................................................................41 Figure 5 – NIBDC Lot 3 and 4 - Geology and Sampling showing Historical Mining Locations...................................44 Figure 6 – NIBDC Lot 5 - Geology and Sampling....................................................................................................46 Figure 7 – GMC Tenure - GMC 1 - Sampling and Prospectivity...............................................................................51 LIST OF TABLES

Table 1 - Tenement Details....................................................................................................................................34 Table 2 - Rock chip Sampling Results - Lot 1.........................................................................................................39 Table 3 - Rock chip Sampling Results - GMC1.......................................................................................................49

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Independent Geologist's Report I.

Executive Summary

B. Geology and Mineralisation

A. Introduction

The Project area consists essentially of a large trondhjemite

BM Geological Services Perth Pty Ltd (“BMGS”) has been

intrusive complex, known as the Paracale Trondhjemite,

commissioned by Cape Range Limited (“CRL”) to provide an

hosted within an ultramafic basement. The metamorphic

Independent Geologist’s Report (“IGR”) on the Camarines

basement comprises ophiolitic lithologies, consistent

Norte Project (the “Project”) in the Bicol Region of the

with the basement of volcanic arc complexes that have

island of Luzon in the Philippines. The Project is located

experienced tectonic and magmatic extension through

approximately 300km east of the Philippine capital of

several back arc basin processes.

Manila, and straddles the border of the two municipalities (barangays) of Paracale and Jose Panganiban. The report

The regional NNW trending Panganiban - Malaguit shear

is to be included in a Prospectus to be lodged with

zone separates the metamorphic basement and Paracale

the Australian Securities and Investments Commission

Trondhjemite complex to the north from the Cretaceous

(“ASIC”), offering for subscription 25,000,000 shares at

and Miocene sediments and volcanics to the south. A

an issue price of 20c per Share (the “Prospectus”), to

large network of orthogonal NNE trending fracture systems

raise up to $5,000,000 (plus oversubscriptions of up to a

occur to the north and south of the shear zone, with a

further $1,000,000). The minimum amount to be raised

few crosscutting (and perhaps offsetting) it towards the

has been set at $4,000,000 for this Prospectus.

centre. The fractures are filled with gold bearing quartzcalcite minerals and associated sulphides. It is likely that

It comprises a number of prospects which are at varying

the fractures developed during compressive stresses

stages of exploration maturity. The tenure of the Project

occurring both synchronous with, and post emplacement

has not been independently verified by BMGS and the

of the trondhjemite. The faults are assumed to have been

report has been prepared on the assumption that the

reactivated during later tectonic activity associated with

tenements will prove lawfully accessible. The tenements

mineralisation. The regional Panganiban – Malaguit shear

are comprised of two parcels; the NIBDC package which

zone likely acted as an efficient conduit that dispersed

contains six tenements, and the GMC package which

mineralising fluids into the NNE trending fracture system.

contains three.

The mineralisation at Camarines Norte is likely related to CRL have advised BMGS that through legal due diligence

large Miocene Diorite Cu-Au porphyries, an intrusive type

they have confirmed the Owners have the legal right to put

that is characteristic of the Philippines. Epithermal veins

forward the mineral tenements for purchase. This advice

located in the Paracale Gold District are characterised

has not been independently verified by BMGS and will not

by a pinch and swell geometry. Quartz veins are banded,

be covered in this report. BMGS are not privileged to the

crustiform or open vugs and filled with base metal

nature of any transactions being discussed between the

sulphides. The distribution of gold in the vein systems is

current Owners and CRL regarding the purchase of the

highly irregular, although economic concentrations occur

tenements.

in steeply plunging ore shoots.

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Independent Geologist's Report If the narrow vein systems observed in the Paracale

grades, and therefore do not meet the requirements for

Gold District are consistent with those found in Eastern

reporting of mineral resources as defined by JORC.

Mindanao (the Pacific Cordillera), which have a similar geological setting, timing and style of mineralisation and

In order to generate sufficient confidence in the resource

are also located proximal to the Philippine Fault Zone

to support classification under JORC, a detailed and

(PFZ), then the best mineralisation is yet to be discovered.

systematic exploration program would be required. This may include accurate surface mapping and targeted

C. Exploration History

surface sampling, and may be supported by strategic

There are numerous small mines distributed within and

drilling and sampling. The collection of bulk samples

adjacent to the various Project tenements, the most

would be effective in increasing confidence in the estimate

significant of which being the Paracale Nacional and

of gold grades given the highly variable distribution of gold

Tumbaga Consolidated operations situated in Lot 4 of the

within this style of mineralisation, whereby standard

NIBDC tenure. The Paracale Nacional operation is reported

sampling may return unrepresentative results.

to have shipped a total of 22,500 tons at 13.4 g/t Au for milling at North Camarines Mining Customs Mill during the

E. Exploration Potential

period 1939 to 1940.

Of the NIBDC tenements comprising the Project, Lots 3, 4 and 5 offer the greatest prospectivity. These tenements

The Project areas have been variously worked by artisanal

contain either historical mines or extensive exploration

miners from local villages who have developed a range

history including trial mining and diamond drilling, and

of shallow shafts, test pits, and small scale workings

would be described as “advanced exploration areas� as

during exploitation and treatment of the numerous vein

defined by The Valmin Code.

structures. A number of generations of surface mapping, rock chip sampling, surface mapping and geophysics

The Lot 3 area contains two extensive veins; Virginia

have been conducted across a range of tenements

South and Pasacao South. Some historical details of

with results generally only available as hard copy plans.

drilling conducted in the area suggest intercepts in the

These plans are sometimes available as professional

northern part of up to 10g/t Au; however it is difficult to

drafted maps; however are generally hand sketched and

verify the spatial accuracy of this data.

annotated records providing indications of key features.

Within Lot 4 the Manila and Vallejo veins in the Paracale

D. Mineral Resources

Nacional area show exploration and resource potential

Documents provided to BMGS during the development

in this tenure, while the Tumbaga and San Rafael veins

of this IGR summarised potential mineral resources

in the north west of the tenement have hosted historical

for the Project area related to major identified veins.

operations. It is recommended that CRL investigate the

These resources were not discussed in this report as in

potential to acquire the strip of land between Lots 3 and 4,

the opinion of the Author they are based on limited or

as it is likely that the mineralisation seem in the Tumbaga

inadequate data, and broad geometries and assigned

and San Rafael veins within Lot 4 extend into this strip.

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Independent Geologist's Report The lithostratigraphic associations and structural

F. Conclusions

elements present in the Lot 5 tenement suggest this area

Given the lack of certainty regarding the position of the

could be a significant exploration target. The geological

features identified from the various hard copy plans

environment is particularly amenable to mineralisation

(i.e. trench locations, rock chip locations etc), and the

considering that historically, the north east trending vein

common and sometimes significant errors that can be

systems within the Trondhjemite are the dominant gold

introduced in trying to convert this information to digital

mineralisation host in the region.

data, there is limited spatial confidence in the displayed locations of these various features.

The most prospective of the GMC tenement group is GMC 1, with four separate veins identified on the tenement,

Together with this spatial uncertainty, there is some

and historical mines nearby. Previous work appears to

question over the representativeness of the samples

have targeted an unidentified structure, with the trend

collected and subsequently reported. This is due to a

of samples taken appearing to run parallel to Tabas 1

lack of available detail on the method used to collect the

and Tabas 3 veins, possibly representing a repetition of

sample, a geological description of the zone sampled, and

these veins. The presence of the large regional shear is

the analytical method used to report the results. Anecdotal

also promising as a source for fluid interaction. Based

evidence suggests that the sampling of the vein material

on the sampling conducted across this area, and the

was generally not constrained just to the mineralised zone,

identification of what could potentially be a previously

and may have included peripheral material considered

unmapped mineralised structure, the area could be

uneconomic. If this is the case it may be that the reported

described as an “advanced exploration area”.

grades from some of these samples are underestimating the true grades of the mineralised zones.

The remainder of the tenements across both parcels have far less historical work completed across them and would

Despite this, it is considered that the Project demonstrates

be considered “exploration areas” under The Valmin Code.

some potential to define economic concentrations of

Preliminary geological investigation in the form of mapping

mineralisation based on the historical production and

and basic sampling of identifiable structures should be

grades achieved. The use of modern, systematic exploration

conducted to assess the potential of these relatively

techniques, together with accurate identification and

unexplored areas, although in some instances the small

mapping of the vein structures should allow the generation

size of the tenement will negate the potential somewhat.

of exploration targets for subsequent investigation.

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Independent Geologist's Report II. Background

A. Project Location The Project is located in the Province of Camarines Norte, in the Bicol Region of the island of Luzon, Philippines (Figure 1) and is located approximately 300km east of the Philippine capital of Manila, and straddles the border of the two municipalities Paracale and Jose Panganiban.

Topographically, the region is undulating and is characterised by rolling hills and mountains. Elevation is generally less than 250 metres above sea level (ASL) but ranges in the mountainous regions up to 775 metres.

Access to the Project is more difficult during the wet season from July to November.

Access to the Project is via concrete roads that have been constructed through most major towns and hence on to small dirt or gravel roads to access the individual tenement areas within the Project.

Figure 1 - Project Location Plan

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Independent Geologist's Report

B. Project Tenements The tenements which make up the Project cover an area of 2,227 hectares and are comprised of two separate sets of claims, being; •

Mineral Production Sharing Agreement Application (APSA) 000322-V - Currently held by Northern Island Builders and Development Corporation (NIBDC); and

•

Exploration Permit Application (EXPA) 000061V - Currently held by Guidance Management Corporation (GMC).

Operator

Tenement Group

Northern Island Builders and Development Corporation (NIBDC)

APSA-000322-V

Guidance Management Corporation (GMC)

Details of the individual tenements comprising these applications are listed in Table 1 and displayed in Figure 2. No specific investigations have been made into the current status of the tenements listed, nor in determining the legal ownership or relationship of either NIBDC or GMC to the tenements as claimed, other than review of the tenement applications against records publically available from the Mines and Geosciences Bureau, Department of Environment and Natural Resources, Philippines (include as reference).

Tenement REFERENCE

AREA (Ha)

DISTRICT/S

Lot 1

332

Pinagbirayan

Lot 2

62

Malacbang

Lot 3

161

San Isidro/San Rafael

Lot 4

580

San Rafael

Lot 5

634

Santa Rosa Sur

Lot 6

9

Tawig

GMC1 374 Mangkasay/Tabas EXPA-000061-V

GMC2 64 Maybato/Dalnac GMC3 11 Tabas

Table 1 – Tenement Details

C. Geography and Vegetation The Project area is situated in moderate hilly country, with elevations ranging between 50 and approximately 300 metres above sea level. Vegetation includes coconut trees, hardwood forest and by a lesser degree banana trees.

Some areas have been cultivated by local subsistence farmers, and the area is sparsely and irregularly populated.

Artisanal underground and alluvial mining is the significant driver of the local economy. The Malaguit River is the major drainage feature in the area and flows from the south to the north east.

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D. Climate The Camarines Norte area is classified as having no dry season and with a very pronounced wet season. The average annual temperature is 27.3 degrees Celsius, with the coolest months being January and February, while the warmest is May. Camarines Norte is located within the zone of typhoon activity and is potentially seriously affected by these systems during the months from April to December.

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Figure 2 - Tenement Location Plan

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Independent Geologist's Report III. Regional Geology and Mineralisation

A. Regional Geology Numerous epithermal gold deposits are dispersed along the Philippine Archipelago. Geologically, the islands consist mainly of Cenozoic and Cretaceous arc systems developed on ophiolite and metamorphic basement. The epithermal gold deposits are predominately concentrated along the axes of late Cenozoic volcanic arcs. Stratigraphic associations indicate that during mineralisation the majority of the epithermal systems intersected a regional unconformity.

The Philippine archipelago is almost entirely contained within the Philippine Mobile Belt, a seismically active and complex tectonic zone situated along the convergent Philippine Sea and Eurasian plate boundaries. Oblique convergence between these two plate boundaries is accommodated by subduction along the Philippine and Manila Trenches, as well as by strike-slip faulting along the Philippine Fault zone (PFZ). The Philippines’ largest and richest gold deposits tend to be located on or proximal to the Philippine fault zone, an extensive north - south trending sinistral strike-slip system.

The regional geology of northern Camarines Norte consists essentially of a large trondhjemite intrusive complex, known as the Paracale Trondhjemite, hosted within an ultramafic basement. The metamorphic basement comprises ophiolitic lithologies, consistent with the basement of volcanic arc complexes that have experienced tectonic and magmatic extension through several back arc basin processes (Figure 3).

The metamorphic rocks are mainly Mesozoic undifferentiated schists and quartzites. Stratigraphically, these are unconformably overlain by Cretaceous sediments including inter-bedded greywackes, arkoses, mudstones and limestones. A series of conglomerates, arkoses, carbonaceous (black) shales and limestones characterise the mid to upper Paleogene aged Universal Formation which rests unconformably on the Cretaceous sediments and is in turn overlain by the younger Larap Volcanics, a succession of hydrothermally altered andesites.

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The lower Miocene sedimentary rocks, comprising conglomerate, shale and limestone covered by basaltic lava flows, chert, breccia and tuffs, are the most predominant and extensive unit in the area. A suite of diorite, dacite and rhyolitic rocks intrude all of the older sequences. These are of varying sizes and extent and occur as dikes, stocks and necks. Contact metamorphism and in some cases mineralisation is associated with these intrusives.

Another sequence of Miocene - Pliocene sedimentary and volcanic rocks unconformably overlie the basaltic lavas followed by Quaternary volcanics and alluvium, the youngest rocks in the region.

To the south of the gold district is the 25 kilometre long arcuate iron belt localised within the contact of the sedimentary rocks and the Larap Volcanics. The contact between the two units is a thrust plane, the geometry of which suggests that perhaps the volcanics were thrusted over the sediments. Hosted within andesite and sedimentary rock units to the south of the iron belt is a zone of base metal mineralisation.

The regional NNW trending Panganiban - Malaguit shear zone separates the metamorphic basement and Paracale Trondhjemite complex to the north from the Cretaceous and Miocene sediments and volcanics to the south. A large network of orthogonal NNE trending fracture systems occur to the north and south of the shear zone, with a few crosscutting (and perhaps offsetting) it towards the centre. The fractures are filled with gold bearing quartzcalcite minerals and associated sulphides. It is likely that the fractures developed during compressive stresses occurring both synchronous with, and post emplacement of the trondhjemite. The faults are assumed to have been reactivated during later tectonic activity associated with mineralisation. The regional Panganiban - Malaguit shear zone likely acted as an efficient conduit that dispersed mineralising fluids into the NNE trending fracture system.

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Figure 3 – Regional Geology Map

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B. Mineralisation

that is characteristic of the Philippines. Epithermal veins

The Philippine archipelago hosts a large number of

located in the Paracale Gold District are characterised

gold ore bodies characterised by Cu-Au porphyry style

by a pinch and swell geometry. Quartz veins are banded,

or epithermal style mineralisation. These two distinct

crustiform or open vugs and filled with base metal

styles of mineralisation occur adjacent to each other

sulphides. The distribution of gold in the vein systems is

in several regions of the islands, usually dispersed

highly irregular, although economic concentrations occur

along or proximal to the PFZ. Gold districts adjacent

in steeply plunging ore shoots.

to the PFZ include the Baguio District in north-western Luzon, the Paracale District in south-east Luzon and

If the narrow vein systems observed in the Paracale

the Eastern Mindanao Goldfields. Though the exact

Gold District are consistent with those found in Eastern

relationship of the mineralisation to this fault has not

Mindanao (the Pacific Cordillera), which have a similar

been ascertained, the distribution of ore mineralisation

geological setting, timing and style of mineralisation

associated with these styles of deposits may be

and are also located proximal to the PFZ, then the best

controlled by large permeable fracture networks. These

mineralisation is yet to be discovered. Observations made

often provide pathways for magmatic and other fluids

at the Co-O and Diwalwal projects in Eastern Mindanao

to circulate around a cooling intrusion.

reveal a positive grade and thickness variation with depth.

Both Mindanao mines have narrow veining at surface, and

The mineralisation at Camarines Norte is likely related to

consolidate at depth to form a thicker, 2 to 4 metre wide

large Miocene Diorite Cu-Au porphyries, an intrusive type

vein, with grades from 25 g/t Au to 1000 g/t Au.

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Independent Geologist's Report IV. NIBDC Tenement Group CRL has provided BMGS with a preliminary exploration strategy and budget covering all of the NIBDC tenements.

It is understood from this broad strategy that CRL will conduct regional scale surveys using geophysics to assist with verification of vein structures, and identification of potentially undiscovered features. This will be supported by detailed surface mapping across the projects.

Potential targets identified from this work will be subsequently tested by drilling and sampling at sufficient density to allow the generation of resources aligned with JORC should economic quantities of mineralisation be discovered.

This program is consistent with the exploration potential for gold and the budget is considered sufficient to cover the scope of work.

A. Lot 1 1. Geology and Mineralisation

T he geology of the Lot 1 area comprises Cretaceous greywacke schists unconformably overlain by Miocene

Sample ID

Latitude (Decimal)

Longitude (Decimal)

age volcanogenic sediments. Intruding this sequence is a large Miocene diorite stock. The large, NNW striking, regional Panganiban - Malaguit Shear Zone occurs along the contact of the greywackes with the diorite.

2. Mining and Exploration History

A lthough there has been no previous mining on this tenement, it appears to straddle the north eastern boundary of the 25 kilometre long Iron Ore Belt. The Pinagbirayan and San Felipe Iron mines are both proximal to the tenement boundary and the Agusan Gold/Iron Mine is situated on the southern tenement border. A number of unnamed prospects have also been identified within the tenement area targeting both iron and gold mineralisation.

Reconnaissance rock chip sampling work completed in 2006 by Guidance Management Corporation returned anomalous gold, copper and silver values with gold assays of between 0.14g/t - 22.12g/t. Details are included in Table 2 and displayed in Figure 4. No details were recorded providing geological descriptions of the samples.

Au (g/t)

Ag (g/t)

Cu (ppm)

PAR-01-06 14.23928 122.77594 3.40 5.70 2,737 PAR-01-07 14.23922 122.77494 0.64 18.00 8,104 PAR-01-08 14.23917 122.77483 5.05 10.00 1,279 PAR-23-1 14.24161 122.75925 16.67 10.50 5,271 PAR-23-2 14.24081 122.77514 22.12 15.20 4,439 PAR-23-3 14.24081 122.77514 0.14 0.30 311 PAR-23-6 14.23967 122.78975 0.83 123.40 14,402 PAR-23-7 14.23961 122.78756 5.59 24.10 7,512 PAR-29-02 14.23717 122.77381 12.69 2.80 367 PAR-29-03 14.23564 122.76528 4.61 5.70 1,340 Table 2 - Rock chip Sampling Results - Lot 1

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3. Exploration Potential

2. Mining and Exploration History

T here is anecdotal evidence that a number of iron skarns are located on or near this tenement. This could warrant further exploration. The area also has potential Au, Ag and Cu mineralisation, particularly proximal to the diorite contact and also within the Miocene sedimentary sequence which is a host to gold mineralisation in the Paracale Nacional region.

A. Lot 2

1. Geology and Mineralisation

F rom the information available it does not appear as though there have been any commercial or artisanal style mining operations within this tenement. One sample was collected just north of this lease from within the Miocene volcanics and it assayed 28.7g/t Au. However, it is not known whether this sample was collected from a specific feature or what rock type it represented.

The tenement is comprised of Miocene aged volcanic sediments consisting primarily of Basaltic lava flows which overly conglomerates and limestones. This sequence is un-conformably overlain by Quaternary Alluvium to the south. The basalt is not recognised as being particularly prospective for mineralisation within the region.

The rock type is not particularly conducive to gold mineralisation within the Paracale Mining District although there are a few historical mine sites within the basalt to the east of this tenement.

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3. Exploration Potential

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Figure 4 - NIBDC Lot 1 - Gelogy and Sampling

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B. Lot 3 1. Geology and Mineralisation

Locally, the lease comprises andesitic lava flows overlying Cretaceous Marine sediments and overlain by Miocene volcanogenic sediments. There are two large and relatively continuous veins identified within the Lot 3 tenement, the Virginia South and Pasacao South Veins. The position

3. Exploration Potential

Based on the mapped extent of the veins within the tenement, their historical exploitation further north along this extent, and the limited amount of work completed to date, it can be surmised that there is potential for economic mineralisation to exist within the tenement.

of these veins is based on digitised interpretations of scanned hard copy documents from historical mapping programs. This process can commonly be associated with significant errors between the true outcrop locations and those depicted in subsequent maps and images.

The Virginia South Vein is mapped as having a strike length greater than four kilometres, however only approximately 1.5 kilometres lies within tenement boundary. The Pasacao South Vein is the extrapolated strike extension of the Pasacao vein present in Lot 4, with a mapped strike length of approximately one kilometre. A splay off the Pasacao South Vein (potentially the San Isidro Vein), trending 010°, cross-cuts the Virginia South Vein near the boundary of the Lot 3 tenement and continues further north. Neither of the two main veins appears to have had much work done within the Lot 3 tenement however both are known to be mineralised further north along strike in Lot 4.

2. Mining and Exploration History

Based on the information available there is no evidence of formal commercial mining within the tenement. It is likely however that various areas have been targeted by artisanal miners given the commercial scale operations conducted along these same features further to the north.

A program of test pit sampling was conducted to the north of the tenement, with results for samples within the tenement recording results not above 0.5g/t Au. Rock chip sampling returned a maximum result of 4.6g/t Au.

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Identification of localised structural controls on mineralisation will be important in focussing the initial exploration activities given the significant strike component of the identified vein features.

C. Lot 4 1. Geology and Mineralisation

The area is almost entirely comprised of sediments of the Universal Formation un-conformably overlain by the volcanics of the Larap formation. The Panganiban Malaguit Shear Zone is located on the northern contact of the Universal and Larap formations. Mineralisation in the area is primarily hosted in sedimentary rocks rather than the trondhjemite, and is represented by numerous veins.

The most significant of these veins in terms of historic activity are the Tumbaga, San Rafael, Vallejo and Manila.

Most veins generally trend 010°-040°, however the Torres and Pittsburg veins appear to be orthogonal to this direction, trending between 310°-340°, with the Manila and Vallejo veins northern limit interpreted to terminate at the Torres vein (Figure 5).

The accurate location of these veins is difficult to confirm as they have been interpreted from historical hard copy maps and descriptions provided in various historical reports. Therefore the displayed locations of these veins reflect interpreted locations and need to be verified via the use of survey controlled surface mapping.

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2. Mining and Exploration History

There are two significant historical mining operations located within the Lot 4 tenement; the Paracale Nacional, and Tumbaga Consolidated mines. The Paracale Nacional mine site is situated in between the Vallejo and Manila veins and targeted these two structures for its production,

sampling has been completed from historical drives.

This exploration work is focused on the mapped outcrop of numerous mineralised vein structures across the tenement.

3. Exploration Potential

which occurred prior to the Second World War. These two

The Manila and Vallejo veins within the Paracale

veins were developed for 3,000 metres and reportedly

Nacional area have significant historic production and

shipped a total of 22,500 tons at 13.4 g/t Au for

also demonstrate potential for identification of additional

milling at North Camarines Mining Customs Mill during

resources, with the veins producing historical head grades

the period 1939 to 1940.

At Tumbaga there exist

of greater than 12g/t Au. In addition the Tumbaga and San

large concrete foundations from previous processing

Rafael veins have also demonstrated that they can host

operations in the area.

economic quantities of mineralisation. Numerous other veins have been identified within the tenement occupying

A significant amount of surface exploration has occurred

a similar structural setting as those exploited in Paracale

across the tenement comprised of rock chip sampling,

Nacional and Tumbaga Consolidated operations.

trenching, mapping and drilling. In addition underground

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Figure 5 – NIBDC Lot 3 and 4 – Geology and Sampling showing Historical Mining Locations

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D. Lot 5 1. Geology and Mineralisation

The Paracale Trondhjemite and surrounding ultramafic basement rocks take up nearly this whole tenement.

There is a small corner of sediments juxtaposed against and separated from the ultramafic sequence by the Panganiban - Malaguit Shear Zone.

The majority of veins within this area, known as the Johnson area (Figure 6), are named based on their distance from an arbitrary point; 100 Series, 400-500 Series, and the 900 Series. Most of the mineralised veins are hosted within the trondhjemite itself with the exception of the La Fortuna vein which transects the ultramafic contact and extends into the trondhjemite unit. The rheological response to deformation of these very different rock units may explain the different strike direction of this vein compared to the 100, 400-500 and 900 Series veins.

There is anecdotal evidence suggesting that the highest gold grades occur on the contact of the ultramafic rock with the trondhjemite. If this is true then this lease has much potential.

two holes drilled from underground for a total of 2,488m.

Drill holes generally retuned quartz intervals down hole in the order of 0.1 to 1m in width with grades in the order of less than 5g/t. One sample from the 900 Series veins returned a result of 12.3g/t over 0.4 metres.

3. Exploration Potential

The lithostratigraphic associations and structural elements present in the Lot 5 tenement suggest this area could be a significant exploration target. The geological environment is particularly amenable to mineralisation considering that historically, the north east trending vein systems within the Trondhjemite are the dominant gold mineralisation host in the region. In addition, the main shear zone (PFZ) conduit is proximal, there is a competency contrast formed between the intrusive trondhjemite and the ultramafic rocks and several small extensional veins have formed and have possibly been reactivated during the Miocene orogeny within which gold mineralisation took place. Previous authors have also suggested that the trondhjemite/ ultramafic contact hosts the highest gold grades.

2. Mining and Exploration History

The area in the north east of this tenement appears

Three of the veins within the 400-500 Series, namely

relatively unexplored. The geology of this area is also

430E, 560E and 590E veins, were mined underground

prospective, particularly if the north east trending

for 70-135 metres, however only the 590E vein yielded a

structures can be located. La Fortuna Vein to the south

mineable block aggregating 16 metres long over a width

appears to be hosted within the ultramafic rocks. The

of 0.7 metres at a grade of 5.1g/t. In total 11 diamond

potential of this to host economic mineralisation should be

holes have been drilled from the surface, and a further

investigated further.

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Figure 6 – NIBDC Lot 5 – Geology and Sampling

Independent Geologist's Report

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Cape Range LTD

Independent Geologist's Report

E. Lot 6 1. Geology and Mineralisation

The geology of this tenement is consistent with that described for Lot 5.

diorite and ultramafic basement. The regional Panganiban - Malaguit shear zone effectively dissects the tenement, trending west to east and represents a potential pathway for fluid mobilisation, with all of the four veins identified in the area intersecting this shear.

2. Mining and Exploration History

Based on the information available there is no evidence of any formal mining within the tenement. In addition no data has been presented regarding exploration activities within this tenement.

3. Exploration Potential

While the La Fortuna vein is mapped as extending through this tenement, the limited size of the tenement would likely preclude the identification of any commercially viable tonnages of potential gold resources.

The four veins identified on this lease are the Tabas 1, 2, and 3 veins, and the Manning 2 Vein. The Tabas 1 and Tabas 3 veins show a similar trend of 040°, with the Manning 2 vein slightly more northerly on average, trending 010°. The Tabas 2 vein however trends approximately 330° and could be interpreted as a linking structure for Tabas 1 and Tabas 3 veins.

2. Mining and Exploration History

There are a number of historic mines within or immediately adjacent to the area. The Golden River and Mangkasay

V. GMC TENEMENT GROUP CRL has provided BMGS with a preliminary exploration strategy and budget covering all of the NIBDC tenements.

It is understood from this broad strategy that CRL will conduct regional scale surveys using geophysics to assist with verification of vein structures, and identification of potentially undiscovered features. This will be supported by detailed surface mapping across the projects.

Potential targets identified from this work will be subsequently tested by drilling and sampling at sufficient density to allow the generation of resources aligned with JORC should economic quantities of mineralisation be discovered.

mines are located on the southern limit of the tenement, while the Tabas Fe mine is adjacent to the northern limit of the Tabas 2 vein, and likely represents skarn style mineralisation.

Rock chip sampling conducted across the tenement has netted results up to 46.65 g/t Au, with other samples returning elevated silver and copper assays (Table 3).

3. Exploration Potential

From the mapped locations of the veins within the tenement, and the trend of rock chip sampling parallel and offset to these veins, the potential exists that

This program is consistent with the exploration potential for gold and the budget is considered sufficient to cover the scope of work.

a previously unmapped mineralised feature may exist (Figure 7). The indicated presence of this feature should be followed up with a mapping program to define the extent and consistency of the vein, as well as to collect

A. GMC1 1. Geology and Mineralisation

T his is the most significant of the GMC tenements and is principally composed of Quaternary alluvium overlying

further samples. The other veins should also be sampled in order to assess the likely grade ranges of any potential mineralisation, together with a broad mapping program to investigate if similar parallel structures may be present.

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47

Cape Range LTD

Independent Geologist's Report Sample ID

Latitude (Decimal)

Longitude (Decimal)

Au (g/t)

Ag (g/t)

Cu (ppm)

PAR-24-01

14.24506

122.81553

0.67

8.10

2,491

PAR-24-02

14.24506

122.81553

0.03

0.60

718

PAR-24-07

14.24514

122.81672

0.70

11.10

408

PAR-24-08

14.24431

122.81806

0.70

57.30

1,579

PAR-24-09

14.24431

122.81806

5.45

26.10

578

PAR-24-10

14.24431

122.81806

0.24

3.50

1,643

PAR-24-11

14.24431

122.81806

5.91

103.10

2,474

PAR-26-01A

14.24272

122.82508

8.68

51.30

523

PAR-26-01B

14.24272

122.82508

0.35

3.70

101

PAR-26-02

14.24344

122.82567

12.30

26.30

688

PAR-26-03

14.24375

122.82606

46.65

128.80

1,112

PAR-26-04

14.24247

122.82436

3.68

3.30

1,183

PAR-26-05A

14.25597

122.82056

0.07

5.40

493

PAR-28-04C

14.24739

122.82889

5.81

2.00

2,176

Table 3 – Rock chip Sampling Results – GMC1

B. GMC2 1. Geology and Mineralisation

The area is principally composed of volcanogenic sediments to the west and Quaternary alluvium to the east, with a minor component of andesitic lavas to the south. There is no evidence of mineralisation within the tenement.

2. Mining and Exploration History

Based on the information available there is no evidence of any formal mining within the tenement. In addition no data has been presented regarding exploration activities within this tenement.

3. Exploration Potential

While the volcanogenic sediments are hosts of the majority of the mineralised veins across the Tumbaga region, there is no information to suggest that potentially economic mineralisation may exist within this tenement. In addition its restricted size will make definition of material of suitable scale to be economically extracted difficult without securing access to adjacent tenure.

48

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B. GMC3

1. Geology and Mineralisation Regional mapping indicates that this tenement lies wholly within the Cretaceous ultramafic basement. No mineralised structures are identified as passing through this area, with the closest identified vein structure being the Delengkive Vein which lies approximately 600 metres to the west of the tenement.

2. Mining and Exploration History

Based on the information available there is no evidence of any formal mining within the tenement. In addition no data has been presented regarding exploration activities within this tenement.

3. Exploration Potential

There is little historical evidence of the potential to host mineralised features within this tenement. In addition the limited size of the tenement will restrict the ability to define a resource significant enough to be economic.

Cape Range LTD

Independent Geologist's Report

Figure 7 – GMC Tenure – GMC 1 – Sampling and Prospectivity

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Independent Geologist's Report VI. SUMMARY AND CONCLUSIONS BMGS considers the tenements CRL are investigating to vary between “exploration areas” for those areas with limited or no recorded data, through to “advanced exploration areas” (as defined in Valmin Code, clause D20), having undergone considerable exploration resulting in identification of specific targets, and with historical mining production having been recorded.

This lack of confidence in the spatial location of the veins should be addressed via a comprehensive, survey controlled, surface geology mapping program. This would include routine and regular sampling of the veins along strike, together with detailed descriptions. This would support the targeting of future exploration work.

A. NIBDC Tenement Group

The most promising of the NIBDC tenements are Lots 3, Documents provided to BMGS during the development of this IGR summarised potential mineral resources for each of the areas and major identified veins. These resources were not discussed in this report as in the opinion of the Author they are based on limited or inadequate data, and broad geometries and assigned grades, and therefore do not meet the requirements for reporting of mineral resources as defined by JORC. In order to generate sufficient confidence in the resource to support classification under JORC, a detailed and systematic exploration program would be required. This may include accurate surface mapping and targeted surface sampling, and may be supported by strategic drilling and sampling. The collection of bulk samples would be effective in increasing confidence in the estimate of gold grades given the highly variable distribution of gold within this style of mineralisation, whereby standard sampling may return unrepresentative results.

One of the primary difficulties observed in compilation of this report was confidently determining the accurate location the mineralised veins. The locations of the veins have generally been created from the digitising of scanned or transcribed images, and sometimes from hand drawn maps. This process is considered to have the potential to introduce significant errors in the final mapped position of the veins. In addition there is also some inconsistency with the names given to the veins, with different generations of work referring to the same vein interchangeably.

50

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4 and 5. These tenements contain either historical mines or extensive exploration history including trial mining and diamond drilling, and would be described as “advanced exploration areas” as defined by Valmin Code.

The Lot 3 area contains two extensive veins; Virginia South and Pasacao South. Some historical details of drilling conducted in the area suggest intercepts in the northern part of up to 10g/t Au, however for the reasons previously described it is difficult to verify the spatial accuracy of this data.

Within Lot 4 the Manila and Vallejo veins in the Paracale Nacional area show exploration and resource potential in this tenure, while the Tumbaga and San Rafael veins in the north west of the tenement have hosted historical operations. It is recommended that CRL investigate the potential to acquire the strip of land between Lots 3 and 4, as it is likely that the mineralisation seem in the Tumbaga and San Rafael veins within Lot 4 extend into this strip.

The lithostratigraphic associations and structural elements present in the Lot 5 tenement suggest this area could be a significant exploration target. The geological environment is particularly amenable to mineralisation considering that historically, the north east trending vein systems within the Trondhjemite are the dominant gold mineralisation host in the region. In addition, the main shear zone (PFZ) conduit is proximal, there is a competency contrast formed

Cape Range LTD

Independent Geologist's Report between the intrusive trondhjemite and the ultramafic rocks and several small extensional veins have formed and have possibly been reactivated during the Miocene orogeny within which gold mineralisation took place.

The remaining Lots 1, 2 and 6 could be defined “exploration areas” and are considered less prospective. The size of the tenements would make identification of economically viable quantities of mineralised material very difficult.

If, following preliminary surface mapping and sampling, potential targets were generated, CRL should investigate

VII. PRINCIPAL SOURCES OF INFORMATION AusIMM, 1998.

Code and Guidelines for Technical Assessments and/or Valuation of Mineral and Petroleum Assets and Mineral and Petroleum Securities for Independent Expert Reports (The Valmin Code) Issued 2005. Australasian Institute of Mining and Metallurgy, Melbourne, Australia.

Andam, B. V. 1986.

Summary Report on the Paracale Gold Project of Benguet Corporation, Jose Panganiban and Paracale, Camarines Norte, Philippines. Benguet Corporation.

options to increase its tenure in these areas.

B. GMC Tenement Group

The most prospective of these tenements is GMC 1, with four separate veins identified on the tenement, and historical mines nearby. Previous work appears to have targeted an unidentified structure, with the trend of samples taken appearing to run parallel to Tabas 1 and Tabas 3 veins, possibly representing a repetition of these veins. The presence of the large regional shear is also promising as a source for fluid interaction. Based on the

Blundell, J. Neubauer, F. Von Quadt, A. (Eds) 2002.

The Timing and Location of Major Ore Deposits in an Evolving Orogen. Geological Society Special Publication 204. The Geological Society Publishing House: London.

Diaz, J.S. 1985.

Property Evaluation Report, Paracale Nacional Gold Mine.

Mapleson. D. 2009.

Guidance Management Corporation, Philippines Visit.

Internal Report.

sampling conducted across this area, and the identification of what could potentially be a previously unmapped mineralised structure, the area could be described as an “advanced exploration area”.

The remainder of the tenements across both parcels have far less historical work completed across them. Preliminary geological investigation in the form of mapping and basic sampling of identifiable structures should be conducted to assess the potential of these relatively unexplored areas, although in some instances the small size of the tenement will negate the potential somewhat.

Mitchell. A.H.G., and Balce. G.R. 1990.

Geological features of some epithermal gold systems, Philippines. Journal of Geochemical Exploration. Volume 35. Elsevier B.V. Motton, N. 2009.

A Mineral Exploration Review of the Paracale Tenements in Camarines Norte, Philippines. Mineral Agencies Australia Pty Ltd. Internal Report.

Mines and Geosciences Bureau, Department of Environment and Natural Resources, Philippines.

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Independent Geologist's Report VIII. GLOSSARY OF TECHNICAL TERMS alluvium Sediment transported and deposited by running fresh water.

Cenozoic

andesite

A dark grey volcanic rock.

anomalous

A geological, geochemical or geophysical feature which is different from the general surrounds, and may be of potential economic value.

conglomerate A rock consisting of individual clasts within a finer grained matrix that have become cemented together.

arkose

A detrital sedimentary rock, specifically a sandstone containing at least 25% feldspar.

A reference to a geological time period representing approximately the last 63 million years.

Cretaceous A reference to a geological time period representing approximately from 135 to 63 million years ago.

barangay

The smallest local government unit in the Philippines.

epithermal A hydrothermal mineral deposit formed within about one kilometre of the Earth’s surface and in the temperature range of 50-200 degrees Celsius, occurring mainly as veins.

basalt

A dark coloured, volcanic igneous rock, with less than about 52 weight percent silica (SiO2) and composed of minerals that are relatively rich in iron and magnesium.

exploration The search for economic deposits and establishing their nature, shape, and grade, by applying geological surveys, geophysical prospecting, drill holes and trial pits, adits or tunnels.

basement

Any rock below sedimentary rocks or sedimentary basins that is metamorphic or igneous in origin.

fault

Faults are fractures or fracture zones in the Earth’s crust along which one side moves with respect to the other.

fold

A curved or angular shape of an originally planar geological surface.

grade

The relative quantity or the percentage of ore-mineral or metal content in an ore body.

greywacke

A dark coloured, poorly graded argillaceous sandstone.

base metal Any of the more common and more chemically active metals, e.g. lead, copper, tin zinc. breccia

52

A coarse grained rock, composed of angular, broken rock fragments held together by a mineral cement or a fine grained matrix.

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Independent Geologist's Report hydrothermal Relating to emanations of hot water that are rich in minerals, or to the rocks that formed from them. intrusive

A mass of igneous rock that, while molten, was forced into or between other rocks.

JORC

An acronym for Joint Ore Reserves Committee. The Code has been adopted by the Australasian Institute of Mining and Metallurgy (AusIMM) and the Australian Institute of Geoscientists (AIG), and is binding on their respective members. It is endorsed by the Minerals Council of Australia and the Securities Institute of Australia. The Code has been adopted by and included in the listing rules of the Australian (ASX) and New Zealand (NZX) Stock Exchanges, the purpose of which is to set the regulatory enforceable standards or a Code of Practice for the reporting of Exploration Results, Mineral Resources and Ore Reserves.

limestone

magmatic

Mesozoic

A sedimentary rock consisting mainly of calcium that was deposited by the remains of marine animals.

mineral

A naturally occurring inorganic element or compound with an internal structure and chemical composition, crystal form, and physical properties. mineralisation The process by which a mineral is introduced into a rock, forming a valuable or potentially valuable deposit. mudstone

A fine grained sedimentary rock whose original constituents were clays or muds.

ophiolite

A section of the Earth’s oceanic crust and the underlying upper mantle that has been uplifted or emplaced to be exposed within continental crustal rocks.

outcrop

The total area over which a particular rock unit occurs at the surface.

porphyry

An igneous rock of any composition that contains conspicuous phenocrysts in a fine grained groundmass.

proximal

Nearest to a point of reference, with the opposite term being distal.

Paleogene

A geological time which began approximately 63 million years ago and ended approximately 23 million years ago, and represents the first part of the Cenozoic Era.

quartz

A hard mineral, of many colours and varieties, composition SiO2.

regional

Extending over large areas.

schist

Any metamorphic rock that can be split into thin layers.

In respect to magma, the molten matter within the earth and the source of the material of lava flows.

A geological time period representing form 230 to 63 million years ago.

metamorphic A rock that has been changed from its original form by subjection to heat and/or pressure.

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Cape Range LTD

Independent Geologist's Report sediment

shear zone

Solid fragmental material derived from weathered rocks and transported or deposited by air, water, or ice, or accumulates by chemical precipitation or secretion by organisms, forming layers of the surface at ordinary temperatures in a loose, unconsolidated form; e.g. sand, gravel, silt, mud, alluvium.

A zone of ductile deformation between two (relatively) undeformed blocks that have suffered relative shear displacement; the ductile analogue of a faulty.

shoot

An elongated body, generally of higher grade, within a vein or lode.

sinistral

Refers to the horizontal movements of blocks on either side of a fault or the sense of movement within a shear.

structure

The larger features of rock formations, like bedding, flow banding, unconformities, dips, folds, faults, jointing, cleavage and brecciation.

subduction

A geological process in which one edge of a crustal plate is forced sideways and downward into the mantle below another plate.

sulphide

A mineral compound characterised by the linkage of sulphur with a metal or semimetal e.g. galena PbS, or pyrite FeS2.

tectonic

The geological processes by which rocks are deformed and that produce features of the Earth’s crust.

trondhjemite A light coloured intrusive igneous rock.

It is a variety of tonalite in which the plagioclase is mostly in the form of

splay

A small fault diverging at the extremities of a major fault, typically associated with rifts.

oligoclase, and may also be called plagiogranites.

stratigraphy The spatial ordering of geological layers or strata whereby one layer is laid down upon the previous layer in an orderly progression through time.

The Valmin Code

Code for the Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Experts Reports.

strike

ultramafic

An igneous rock with no free quartz and generally very little feldspar.

volcanic

Rock derived from volcano.

54

The direction of a horizontal straight line constructed on an inclined planar surface, at a direction of 90 degrees from the true dip direction.

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8 Independent Accountant's Report 37 Colin Street, WEST PERTH WA 6005 Telephone: (08) 9321 5445 Facsimile: (08) 6210 1517 procount@amnet.net.au PRO COUNT PTY LTD ATF The GUY FAMILY TRUST ABN 26 721 067 644 Liability limited by scheme approved under Professional Standards Legislation

The Directors

of financial position of Cape Range and Camarines

Cape Range Limited

Mining Pty Ltd (“CMPL”) and the pro-forma consolidated

3/28 Belmont Avenue

statement of financial position Appendix 2. The historical

BELMONT WA 6104

and pro-forma financial information is presented in an abbreviated form, insofar as it does not include all of the

INDEPENDENT ACCOUNTANT’S REPORT

disclosures required by Australian Accounting Standards

Introduction

applicable to annual financial reports, in accordance with

This Independent Accountant’s Report ("Report”) has been

the Corporations Act 2001.

prepared by Pro Count Pty Ltd (“Pro Count”) at the request of the Directors of Cape Range Limited (“the Company” or

This Report does not address the rights attaching to the

“Cape Range”), for inclusion in a prospectus to be lodged

Shares to be issued in accordance with the

with the Australian Securities and Investment Commission

the risks associated with the investment, nor form the

(“ASIC”) on or around 29 June 2011.

basis of an expert’s opinion with respect to a valuation

Prospectus,

of the Company or a valuation of the share issue pricing.

The Prospectus will offer up to 30,000,000 fully paid

Pro Count has not been requested to consider the

ordinary shares (“Shares”), at an issue price of $0.20

prospects for the Company nor the merits and risks

each to the general public, to raise up to $6,000,000

associated with becoming a shareholder and accordingly,

(“the Offer”).

has not done so, nor purports to do so. Pro Count accordingly takes no responsibility for those matters or

Basis of Preparation

for any matter or omission in the Prospectus, other than

The Report, which is not an audit, has been prepared

responsibility for this Report. Risk factors are set out in

to provide investors with information on the statement

Section 10 of the Prospectus.

Liability limited by scheme approved under Professional Standards Legislation

Cape Range 2011

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55

Cape Range LTD

Independent Accountant's Report Background

Step 1: Under the SSA, Cape Range can acquire 100%

Cape Range is an Australian public company listed

of the issued capital of CMPL through the

on the Australian Securities Exchange Limited (“ASX”).

following cash payment and issue of equity:

The Company has historically focused on information technology,

telecommunications

investments

and

exploration activities.

Cape Range is an Australian public company listed

a) b) c)

on the Australian Securities Exchange Limited (“ASX”).

Cash payment of $1,000,000; the issuing of 20,000,000 fully paid Cape Range shares; the issue of 10,000,000 Cape Range options with an exercise price of 25 cents and expiring 31 March 2015.

The Company has historically focused on information technology,

telecommunications

investments

and

exploration activities.

Step 2: Should a JORC inferred resource of 500,000 ounces of gold be delineated at the Project, then the following additional consideration will be paid:

On 15 February 2011, the Company announced to the ASX that it had entered into Heads of Agreement (“HOA”) with the shareholders of CMPL (“the Vendors”), for the acquisition of CMPL which has the rights to the Camarines Norte Gold project (“Project”), located in the Camarines Norte province in the Philippines. On 30 May 2011, a

a) b)

Cash Payment of $1,000,000; The issuing of 12,500,000 fully paid Cape Range shares; c) The issuing of 6,250,000 Cape Range options with an exercise price of 25 cents and expiring 31 March 2015.

Share Sale Agreement (“SSA”) was entered into which replaced and superseded the HOA.

Step 3: Should a JORC inferred resource of 1,000,000 ounces of gold be delineated at the Project, then the

The acquisition of CMPL, includes the acquisition of a

following additional consideration will be paid:

Philippines registered, wholly owned subsidiary of CMPL, Geomin Resources Asia Inc (“Geomin”).

The SSA is structured with an initial consideration for the acquisition of CMPL and additional consideration payable on the achievement of performance based milestones.

a) b)

Cash payment of $1,000,000; The issuing of 12,500,000 fully paid Cape Range shares; c) The issuing of 6,250,000 Cape Range options with an exercise price of 25 cents and expiring 31 March 2015.

Liability limited by scheme approved under Professional Standards Legislation

56

Cape Range 2011

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Independent Accountant's Report Step 4: If the Company completes a Bankable Feasibility Study, in relation to the project then the following consideration will be paid: a) b) c)

Cash payment of $5,000,000 The issuing of 30,000,000 fully paid Cape Range shares; The issuing of 15,000,000 Cape Range options with an exercise price of 30 cents and expiring at the later date of 12 months after the expiry of any restriction imposed by the ASX on the shares issued under “step 4” or 31 March 2016.

Should the project commence production, a royalty at a rate of 2.75% of Net Gold Smeltering Revenue derived from the project.

For the purpose of this report only the transactions related to “Step 1” have been considered due to the uncertainties of the achievement of the milestones required in Steps 2 to 4.

Scope of Report Pro Count has been requested to: (a)

report whether anything has come to our attention which would cause us to believe that the historical financial information disclosed in the appendices to this report is not fairly presented in accordance with generally accepted accounting principles as applied in Australia for reporting on financial information in a public offer document; and

(b) report whether anything has come to our attention which would cause us to believe that the pro-forma financial information disclosed in the appendices to this report is not properly drawn up in accordance with the basis of preparation and assumptions set out therein and with generally accepted practice as applied in Australia for presenting pro-forma financial information in a public offer document.

The report was carried out covering the following financial information: •

Cape Range’s audited Statement of Comprehensive Income for the 12 Months ended 31 December 2010;

•

Cape Range’s audited Statement of Financial Position as at 31 December 2010;

•

CMPL’s un-audited Balance Sheet as at 30 April 2011;

•

Geomin’s un-audited Statement of Income for the period ended 30 April 2011;

•

Geomin’s un-audited Statement of Financial Position as at 30 April 2011;

•

The pro-forma Statement of Financial Position as at 30 April 2011, adjusted to include the funds being raised by the Prospectus and the completion of transactions referred to in this report.

Liability limited by scheme approved under Professional Standards Legislation

Cape Range 2011

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57

Cape Range LTD

Independent Accountant's Report The historical financial information set out in the appendices to this report has been extracted from the financial statements of the Company for the 12 months ended 31 December 2010. The audit of these financial statements was conducted by Cape Range’s external auditor. A review or audit of the accounts for CMPL and Geomin for the period ended 30 April 2011, has not been conducted. Pro Count has not conducted a review or audit of any of the accounts for the respective companies.

The review was limited primarily to an examination of the historical financial information, the pro-forma financial information, analytical review and discussions with the directors of Cape Range. A review of this nature provides less assurance than an audit, accordingly, this report does not express an audit opinion on the historical and pro-forma financial information included in the appendices to this report or elsewhere in the Prospectus.

Statement on Historical Financial Information

Cape Range, CMPL and Geomin (as applicable) have prepared, and are responsible for, the historical and proforma financial information included in the appendices to this report.

Opinion

Pro Count has not audited the financial statements of Cape Range, CMPL or Geomin and has conducted its review of the historical financial information in accordance with Auditing and Assurance Standard ASRE 2405 “Review of Historical Financial Information other than a Financial Report”. We made such inquiries and performed such procedures as we, in our professional judgement, considered reasonable in the circumstances, including:

be required to comply with. It was impracticable for Pro

•

enquiry of directors, management and others;

•

a review of contractual arrangements;

•

a review of work papers, accounting records and other documents.

The review procedures were substantially less in scope than an audit examination or review conducted in accordance with generally accepted auditing standards. We have not performed an audit or review in accordance with generally accepted auditing standards and, accordingly, we do not express an audit opinion.

Rehabilitation provision No provision has been recognised for any rehabilitation provisions that the Company and or its subsidiaries may Count to quantify the effects of any such requirements on the financial statements.

Conclusion Based on our review, which was not an audit, except for the effects and possible effects of the matters described in the above paragraphs, nothing has come to our attention which would cause us to believe the historical financial information as set out in the appendices to this Report does not present fairly the financial performance for the Company for the twelve months ended 31 December 2010 or the financial position as at 31 December 2010 or in the case of CMPL and its controlled entities, the 10 month period ended 30 April 2011 in accordance with the measurement and recognition requirements (but not all of the disclosure requirements) of applicable Accounting Standards and other mandatory professional reporting requirements in Australia.

Liability limited by scheme approved under Professional Standards Legislation

58

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Cape Range LTD

Independent Accountant's Report Statement of Pro-forma Financial Statement Based on our review, which was not an audit, nothing has come to our attention which would cause us to believe the pro-forma financial information does not present fairly the financial position of the Consolidated Group, being the Company and all controlled entities, as at 30 April 2011.

In accordance with the measurement and recognition requirements (but not all the disclosure requirements) of applicable Accounting Standards and other mandatory professional reporting requirements in Australia as if the pro-forma transactions had occurred on that date.

Independence Pro Count does not have any interest in the outcome of the Offer, other than in connection with the preparation of this Report for which normal professional fees will be received.

Pro Count was not involved in the preparation of any part of the Prospectus, and accordingly, makes no representations or warranties as to the completeness and accuracy of any information contained in any part of the Prospectus.

Pro Count consents to the inclusion of this Report in the Prospectus in the form and content in which it is included.

At the date of this Report, this consent has not been withdrawn.

Subsequent Events Apart from the matters dealt with in this Report, and having regard to the scope of our Report, to the best of our

Yours faithfully

knowledge and belief, no other material transactions or events outside of the ordinary business of the Consolidated Group have come to our attention that would require comment on, or adjustment to, the information referred to

MILES GUY

in our Report or that would cause such information to be

M Com (PA) MIPA, MAICD

misleading or deceptive.

28 June 2011

Liability limited by scheme approved under Professional Standards Legislation

Cape Range 2011

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59

Cape Range LTD

Independent Accountant's Report Appendix 1 - Statement of Comprehensive Income

CMPL Consolidated Un-audited for the 10 month period ended 30 April 2011 $ Continuing operations Other income 37,819

Impairment on loans (1,009,858) Share registry fees (18,629) Accounting fees (83,945) Consultants fees (1,329,474) Legal and professional fees (67,021) Directors’ fees (274,209) Other expenses (536,974) Loss before income tax benefit (3,282,291) Income tax benefit - Cape Range Audited for the year ended 31 Dec 2010 $

Net loss for the year Total comprehensive loss for the period attributable to the owners of the Company

(3,282,291)

-

(3,282,291)

-

Liability limited by scheme approved under Professional Standards Legislation

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Cape Range LTD

Independent Accountant's Report Appendix 2 - Statement of Financial Position CMPL Consolidated 30 April 2011 $

Cape Range 31 Dec 2010 $

Pro-forma Consolidated GRoUP 30 April 2011 $

NOTE Current Assets Cash and equivalents

4

95,940

6,513

5,241,453

Trade and receivables

5

539,026

403,587

29,551

Financial assets

136,986

771,952

-

410,100

136,986 5,407,990

Non Current Assets Property, plant & equipment

28,081

-

28,081

Exploration Property

-

1,325,814

6,544,714

Intangible assets

-

599

599

28,081

1,326,413

6,573,394

Total Assets

800,033 1,736,513 11,981,384

Current liabilities Trade and other payables

6

887,523

1,004,036

381,559

Loans

7

136,986

-

-

1,024,509

1,004,036

381,599

Non Current Liabilities Loans

-

731,377

465,301

-

731,377

465,301

Total Liabilities

1,024,509

1,735,413

846,860

Net Assets

(224,476)

1,100 11,134,524

Equity

8

Reserves

9

Accumulated losses

6,085,079

1,100 16,130,079

54,000

-

1,518,000

10

(6,363,555)

-

(6,513,555)

(224,476)

1,100

11,134,524

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Independent Accountant's Report Appendix 3 - NOTES TO THE STATEMENT OF COMPREHENSIVE INCOME AND STATEMENT OF FINANCIAL POSITION NOTE 1: SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies adopted in the preparation of the historical information included in this Report have been set out below.

Basis of preparation The historical financial information has been prepared in accordance with the recognition and measurement, but not all the presentation and disclosure requirements of the Australian equivalents to the International Financial Accounting Standards (“A-IFRS”), other authoritative pronouncements of the Australian Accounting Standards Board, Australian Accounting Interpretations and the Corporations Act 2001.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Refer to note 2 for a discussion of critical judgements in applying the entity’s accounting policies, and key sources of estimation uncertainty.

The following significant accounting policies have been adopted in the preparation and presentation of the financial report: (a)

Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) (referred to as ‘the Consolidated Group’ in these financial statements). Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired during the period are included in the consolidated income statement from the effective date of acquisition, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Consolidated Group.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation. In the separate financial statements of the Company, intragroup transactions (‘common control transactions’) are generally accounted for by reference to the existing (consolidated) book value of the items.

The financial report has been prepared on the basis of historical cost. All amounts are presented in Australian dollars, unless otherwise noted.

Compliance with A-IFRS ensures that the financial statements and notes of the Company and the Consolidated Group comply with International Financial Reporting Standards (‘IFRS’).

Critical accounting judgments and key sources of estimation uncertainty In the application of the Consolidated Group’s accounting policies, management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

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Independent Accountant's Report

Goods and services tax Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:

(d) Share-based payments Equity-settled share-based payments with employees and others providing similar services are measured at the fair value of the equity instrument at the grant date. Fair value is measured by use of a Black Scholes model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.

i.

where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or

ii.

for receivables and payables which are recognised inclusive of GST.

Where the transaction value of common control transactions differ from their consolidated book value, the difference is recognised as a contribution by or distribution to equity participants by the transacting entities. (b)

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables.

(c) Revenue

Revenue is measured at the fair value of the consideration received or receivable.

Interest revenue Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount.

Equity-settled share-based payment transactions with other parties are measured at the fair value of the goods and services received, except where the fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service.

(e) Income tax

Current tax

Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxable profit or tax loss for the period. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by reporting date. Current tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).

(f) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash, which are subject to an insignificant risk of changes in value and have a maturity of three months or less at the date of acquisition.

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Independent Accountant's Report (g)

Property, plant and equipment Plant and equipment and leasehold improvements are stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all or part of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their present value as at the date of acquisition.

Depreciation on plant and equipment is calculated on a diminishing value basis so as to write off the net cost or other devalued amount of each asset over its expected useful life to its estimated residual value. Leasehold improvements are depreciated over the period of the lease or estimated useful life, whichever is the shorter, using the diminishing value method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period, with the effect of any changes recognised on a prospective basis.

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, the term of the relevant lease.

The gain or loss arising on disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

The following useful lives are used in the calculation of depreciation:

Furniture and fixtures Plant and equipment

5 - 10 years 5 – 10 years

(h)

Employee benefits A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave, and sick leave when it is probable that settlement will be required and they are capable of being measured reliably.

Liabilities recognised in respect of short-term employee benefits, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.

Liabilities recognised in respect of long-term employee benefits, are measured as the present value of the estimated future cash outflows to be made by the Consolidated Group in respect of services provided by employees up to reporting date.

(i) Impairment of long-lived assets excluding goodwill.

At each reporting date, the Consolidated Group reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Consolidated Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

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Independent Accountant's Report

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cashgenerating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

NOTE 2: CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS In preparing this Financial Report the Consolidated Group has been required to make certain estimates and assumptions concerning future occurrences. There is an inherent risk that the resulting accounting estimates will not equate exactly with actual events and results. a)

Significant accounting judgments In the process of applying the Consolidated Group’s accounting policies, management has made the following judgments, apart from those involving

estimations, which have the most significant effect on the amounts recognised in the financial statements. b) Significant accounting estimates and assumptions

The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:

(c)

Determination of fair values on assets and liabilities acquired in business combinations On initial recognition, the assets and liabilities of the acquired business are included in the consolidated statement of financial position at their fair values.

Determination of fair values of consideration paid in business combinations At the time of acquisition, consideration transferred is required to be measured at its acquisition date fair value.

Going Concern The Company’s ability to continue as a going concern and to meet the expenditure required to develop its assets is dependent on its ability to raise additional equity capital. In the Directors’ opinion there are reasonable grounds to believe that the Company can raise additional equity capital and continue as a going concern. No adjustments have been made to the financial statements relating the recoverability and classification of related asset amounts and the classification of liabilities that might be necessary should the Company not continue as a going concern.

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Independent Accountant's Report NOTE 3: ASSUMPTIONS ADOPTED IN COMPILING THE PRO-FORMA CONSOLIDATED GROUP'SSTATEMENT OF FINANCIAL POSITION The pro-forma Consolidated Group’s Statement of Financial Position post acquisition under the SSA is shown in Appendix 2. This has been prepared and based on the audited financial statements as at 31 December 2010 of Cape Range and the un-audited financial statements of CMPL and its controlled entities as at 30 April 2011 and the transactions and events relating to the issue of shares under this Prospectus.

•

The payment of expenses associated with the Offer and the preparation and issue of the Prospectus amounting to approximately $375,000 (these capital raising costs have been netted off against the share capital raise as a cost of equity);

•

The issue of 2,000,000 options with an exercise price of 25 cents expiring 31 March 2015, issued as a capital raising fee;

•

The financial statements of Geomin are recorded in Philippines Pesos, a conversion rate of ₱46.8952 to AU$1.00 (being the prevailing exchange rate as at 30 April 2011) has been applied in translating the accounts to Australian dollars;

•

The applying of an amount of $403,065 receivable by Geomin from Camarines Norte Mining and Exploration Inc with a loan payable

by Geomin to Minerals Agencies Australia Pty Ltd, and transferring of the remaining balance payable to a non-current liability;

•

The repayment by Cape Range of $510,000 received as part of the cancelled 2 December 2010 capital raising.

•

The payment of $50,000 and issue of 500,000 shares, being the consideration payable on Memorandums of Understanding (“MOU”) entered into and announced to the ASX on 7 October 2010 and 10 November 2010 respectively.

Pro-forma Adjustments: •

Issue of 5,000,000 fully paid shares at 12 cents each, as per the capital raising 4 March 2011, raising $600,000 less $36,000 capital raising costs;

•

Issue of 30,000,000 fully paid shares at 20 cents each through the Prospectus to raise $6,000,000 under the Offer;

•

Issue of 20,000,000 fully paid shares at 20 cents as consideration as per “Step 1” of the SSA;

•

Issue of 10,000,000 options with an exercise price of 25 cents, expiring 31 March 2015 as consideration as per “Step 1” of the SSA. The options have been valued at 12.2 cents for the purpose of the pro-forma Consolidated Group’s Statement of Financial Position;

•

The payment of $1,000,000 as consideration as per “Step 1” of the SSA, applied to an amount owed by CMPL to Camarines Norte Mining and Exploration Inc.;

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Cape Range LTD

Independent Accountant's Report NOTE 4: CASH AND EQUIVALENTS Cape Range 31 Dec 2010 $ Opening Balance

95,940

CMPL Consolidated 30 April 2011 $ 6,513

Pro-forma Consolidated Cape Range 30 April 2011 $ 102,453

Pro-forma adjustments Proceeds from 4 march 2011 share placement

-

-

600,000

Less capital raisings expenses

-

-

(36,000)

Proceeds from share placement related to this prospectus

-

-

6,000,000

Less capital raising expenses

-

-

(375,000)

“Step1 ” of the SSA

-

-

(1,000,000)

Payment of MOU fee

-

-

(50,000)

Pro-forma balance

-

-

5,241,453

Acquisition payments as per

NOTE 5: INVENTORY Funds received in relation to prospectus dated 2 December 2010 (i) GST receivable 29,026 Advances receivable (ii) - VAT receivable

-

539,026

- - 403,065 522 403,587

29,029 522 29,551

(i)

The Company issued a prospectus dated 2 December 2010 to raise up to $6,000,000, the amount of $510,000 represents funds received prior to 31 December 2010 for this purpose. On the 19 January 2011, the Company decided not to proceed with the prospectus and returned all application monies received.

(ii)

Represents an amount payable by Camarines Norte Mining and Exploration Inc. to Geomin, a controlled entity of CMPL. This amount receivable has been offset by an amount owed by Geomin to Minerals Agencies Australia Pty Ltd under an agreement between Cape Range, Camarines Norte Mining and Exploration Inc and Minerals Australia Pty Ltd.

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Independent Accountant's Report NOTE 6: TRADE AND OTHER PAYABLES CMPL Cape Range Consolidated 31 Dec 2010 30 April 2011 $ $

CURRENT Accounts payable (i) 241,751 - Accounts payable - 1,004,036 PAYG payable 25,772 - Accruals 110,000 - Funds received in relation to prospectus dated 2 December 2010 (ii) 510,000 -

887,523

4,036

Pro-forma Consolidated Cape Range 30 April 2011 $ 245,787 25,772 110,000 381,559

(i)

Accounts payable are non-interest bearing and are predominately settled on 30-day terms.

(ii)

Includes an amount payable by CMPL to Camarines Norte Mining and Exploration Inc, this amount is settled through the cash payment of $1,000,000 that forms part of the consideration payable under Step 1 of the SSA.

(iii) The Company issued a prospectus dated 2 December 2010 to raise up to $6,000,000, the amount of $510,000 represents funds received prior to 31 December 2010 for this purpose. On the 19 January 2011, the Company decided not to proceed with the prospectus and returned all application monies received

NOTE 7: Non-current Loans

Loans (i) 731,377

731,377

465,298 465,298

(i)

Represents an amount payable by Geomin to Minerals Agencies Australia Pty Ltd, a controlled entity of CMPL. This amount receivable has been offset by an amount owed by Geomin to Minerals Agencies Australia Pty Ltd under an agreement between Cape Range, Camarines Norte Mining and Exploration Inc and Minerals Australia Pty Ltd.

Minerals Agencies Australia Pty Ltd, have agreed that the amount will not be payable until the commencement of mining at the Camarines Norte gold project.

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Cape Range LTD

Independent Accountant's Report Pro-forma Consolidated CMPL Cape Range Cape Range Consolidated 31 Dec 2010 30 April 2011 30 April 2011

$ $ $

Opening balance 6,085,079 1,100 6,086,179 Pro-forma adjustment Proceeds from share placement - - 600,000 Cost of share placement - - (36,000) Shares issued under this Prospectus - - 6,000,000 Cost of equity raising - - (619,000) Shares issued as per SSA “Step 1” - - 4,000,000 Shares issued as per MOU - - 100,000 Equity eliminated on consolidation - - (1,100)

6,085,079 1,100 16,130.524 NOTE 8: TRADE AND OTHER PAYABLES

NOTE 9: RESERVES

Opening balance 54,000 - Options issued as per SSA “Step 1” - - Options issued - capital raising fee - -

54,000 1,220,000 244,000

-

1,518,000

Opening balance 6,363,555 - MOU fee payments - -

6,363,555 -

6,363,555 150,000 6,513,555

54,000

NOTE 10: Accumulated losses

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Independent Accountant's Report NOTE 11: BUSINESS COMBINATIONS A summary of the acquisition details with respect to the proposed CMPL acquisition are set out below. These details have been determined for the purpose of the pro-forma adjustments and Statement of Financial Position as at 30 April 2011.

These details will need to be re-determined as at the successful acquisition date and this may result in a change to the values as disclosed below.

CMPL Carrying Value $

CMPL Carrying Value $

Cash and cash equivalents 6,513 6,513 Trade and other receivables 403,587 522 Exploration property 1,325,814 6,544,714 Intangible 599 599 Trade and other payables (1,004,036) (4,036) Loans (731,377) (328,312) Net assets acquired 1,100 (6,220,000)

Less: Cost of acquisition Cash payments 1,000,000 Value of shares issued

4,000,000 Value of options issued

1,220,000

6,220,0000

NOTE 12: RELATED PARTY TRANSATIONS

Transactions with related parties and Directors including Directors’ interests are disclosed in the Prospectus.

NOTE 13: SUBSEQUENT EVENTS Other than normal commercial business transactions, we are not aware of any other matters or circumstance that at the date of this Report has significantly affected the financial position stated in this Report.

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9 Solicitor's Report on Claims RESTITUTO M. MENDOZA ATTORNEY-AT-LAW, NOTARY PUBLIC Unit 16G Tower One, Olympic Heights Condominium Orchard Road, Eastwood City, Libis, Quezon City 1110 Philippines Telefax: (632) 3834271 30 June 2011

(d)

The Directors Cape Range Limited ABN 43 009 289 481 Unit 3, 28 Belmont Avenue Belmont, Western Australia, 6104

ASSUMPTIONS

Gentlemen: This report (“Report”) has been prepared for inclusion in a Prospectus to be issued by Cape Range Limited (“Company”) for the purpose of raising funds through the Australian Stock Exchange (“ASX”) to be used for mineral exploration and operation. Cape Range is acquiring interests in mineral rights to mining projects subject of this report.

SCOPE OF THE REPORT For purposes of this Report, the inquiries:

show, based on documents available to the writer, that the mining projects subject of this report are valid and existing, and duly registered with the MGB.

For purposes of this Report, the following assumptions are made: (a)

that the information contained herein, as provided by the MGB-Region V and other concerned government agencies, as well as by concerned public officials are correct and current as of the time and date this Report was prepared;

(b)

all signatures, seals, stamps and respective dates, as well as markings on documents, are authentic;

(c)

the documents submitted and used in this Report were complete and conform to originals; and,

(d) all material facts contained in this Report, as certified to by officers of the Company and its affiliates, and who are identified in this Report, are accurate and authentic.

(a)

relate only to Philippine mining laws and regulations that are in force and in effect as of the time of the preparation of this report;

(b)

are based upon valid and existing contracts as well as on public documents and records of relevant Philippine government agencies, particularly those of the Mining and Geosciences Bureau (MGB) Regional Office V;

INTRODUCTION

are strictly limited to matters contained herein and do not extend, by implication or otherwise, to any other matter; and,

and Development Authority in June 2004 states that

(c)

Ranked as one of the most highly mineralized countries in the world, studies have shown that the Philippines ranks third in gold, fourth in copper, fifth in nickel, and sixth in chromite. A study by the Philippine National Economic the total untapped mineral wealth of the Philippines is estimated to be worth more than US$840 billion1.

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Solicitor's Report on Claims I. RELEVANT MINING LAWS AND REGULATIONS General Environmental Laws Relating to Mining Presidential Decree No. 1586 which took effect immediately after it was signed into law on 11 June 1978, established the Environmental Impact Statement founded and based under Section 4 of Presidential Decree No. 11512. This law gave the President, by himself or through the then National Environmental Protection Council (NECP), to declare certain projects and areas as environmentally critical. Thus, on 14 December 1981, Proclamation No. 2146 was signed into law. It classified major mining and quarrying projects, among others, as being resource extractive industries, and declared them as environmentally critical projects.

The Environmental Management Bureau (EMB) is the lead agency that implements the EIS System and handles the review and evaluation of the environmental impact of development projects. Under the EIS System, a project proponent of environmentally critical projects and projects within environmentally critical areas must obtain an environmental compliance certificate (“ECC”) prior to the commencement of the project.

An ECC certifies that a proposed project or undertaking will not cause significant negative environmental impact. The ECC also certifies that the proponent has complied with all the requirements of the EIS System and has committed to implement its approved Environmental Management Plan.

The ECC contains specific measures and conditions that the project proponent has to undertake before and during the operation of a project, and in some cases, during the project’s abandonment phase to mitigate identified

The 1987 Constitution of the Republic of the Philippines The 1987 Constitution’s preamble, directly or indirectly, affect the natural resources and environment of the Philippines, when it states boldly that the sovereign Filipino people shall “conserve and develop (our) patrimony”. As a corollary to this, it is one of the declared State principles to protect and advance the peoples’ right to a “balanced and healthful ecology in accord with the rhythm and harmony of nature”3. The State’s adherence to the Regalian doctrine is evident in Section II, Article XII thereof, which declares the State’s ownership of natural resources.

The mining industry in the Philippines is regulated by the government and subject to foreign equity restrictions because of the Constitutional policy that mineral resources are owned by the State and that their exploration, development, utilization, and processing are under its full control and supervision.

Under the 1987 Constitution of the Philippines, the State may directly undertake such activities or it may enter into mineral agreements with contractors, enter into co-production, joint venture, or production sharing agreements with Filipino citizens, or corporations or associations at least 60% of whose capital is owned by Filipinos with the other 40% foreign-owned. These agreements may be for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and under such terms and conditions as may be provided by Philippine law.

The State is also permitted to enter into agreements with foreign-owned corporations involving either technical or financial assistance for large-scale exploration, development, and utilization of minerals, petroleum, and other mineral oils according to the general terms and conditions provided by Philippine law.

environmental impacts.

1 2

QTE Primer on Mining Agreements The Philippine Environmental Policy (06 June 1977)

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3

Section 16, Article II. In the case of Minors v. DENR, 224 SCRA 792 (1993), the Supreme Court has ruled that the right to a balanced ecology is an enforceable legal right.

Cape Range LTD

Solicitor's Report on Claims Executive Orders 211 and 279 Executive Order No. 2114 provided interim rules with respect to the processing and approval of all applications for the exploration, development and utilization of minerals, in accordance with the provisions of the 1987 Constitution.

Thereafter, Executive Order No. 2795 was promulgated, which gave authority to the Secretary of Environment and Natural Resources to negotiate and conclude joint venture, co-production, or production sharing agreements for the exploration, development and utilization of mineral resources. It also gave him authority to prescribe the guidelines for such agreements, as well as those involving technical and financial assistance by foreign-owned corporations for the large-scale operation, development and utilization of minerals.

The Philippine Mining Act of 1995 The terms and conditions of these agreements are contained in Republic Act No. 7942, otherwise known as The Philippine Mining Act of 19956, which governs the exploration, development, utilization and processing of all mineral resources, and provides the requirements for the acquisition of mineral rights.

Under this law, only “qualified persons” may engage in the exploration, utilization, and development of mineral resources in the Philippines. These qualified persons are:

law at least sixty per centum (60%) of the capital of which is owned by citizens of the Philippines.

A legally organized foreign-owned corporation may be deemed a qualified person for purposes of granting an exploration permit (EP), financial or technical assistance agreement (FTAA) or a mineral processing permit. A financial or technical assistance agreement means a contract involving financial or technical assistance for large-scale exploration, development, and utilization of mineral resources.

The Act lays down the legal requirements for the acquisition of mineral rights, thus: 1. Exploration Permit An Exploration Permit is a grant from the Philippine government that gives the permit holder the right to conduct exploration for all minerals within a specified area.

An Exploration Permit is valid for a period of two years and can be renewed for another two years but cannot exceed a total of six years.

The maximum areas that an Exploration Permit can cover are as follows: • Onshore, in any one province For individuals: 20 blocks or 1,620 hectares; and,

(1) Any citizen of the Philippines with capacity to contract; or,

For partnerships, corporations, cooperatives or associations:

(2) Corporations, Partnerships, Associations, or Cooperatives organized or authorized for the purpose of engaging in mining, with technical and financial capability to undertake mineral resources development and duly registered in accordance with

• Onshore in the entire Philippines

4 10

July 1987 July 1987 6 Approved 03 March 1995 and took effect on 09 April 1995.

Subsequently the Department of Environment and Natural Resources 5 25

200 blocks or 16,200 hectares.

For individuals: 40 blocks or 3,240 hectares; and, For partnerships, corporations, cooperatives or associations: 400 hectares or 32,400 hectares. issued Department Administrative Order (DAO) No. 95-23 which laid out the implementing rules and regulations of this Act. This was then replaced by DAO No. 96-40 that dealt with the Revised Implementing Rules and Regulations of RA No. 7942.

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Solicitor's Report on Claims • Offshore beyond 500 meters from the mean low tide level For individuals: 100 blocks or 8,100 hectares; and, For partnerships, corporations, cooperatives or associations: 1000 blocks or 81,000 hectares.

Cape Range has acquired interests in mineral rights with respect to Exploration Permit Application No. 000061-V.

• Offshore, in the entire Philippines -

2. Mineral Agreements

By Constitutional mandate, the Philippine government can enter into various agreements with private parties for the exploitation of mineral deposits, such as:

a larger contract area may be granted to the contractor by

For individuals: 50 blocks or 4,050 hectares; and, For partnerships, cooperatives, associations or corporations: 500 blocks or 40,500 hectares.

Note that where the contract area covered under a mineral agreement is located within the Exclusive Economic Zone, the Secretary of the DENR. An Exclusive Economic Zone is the water, sea bottom and subsurface measure from the baseline of the Philippine archipelago up to 200 nautical miles offshore.

(a)

Mineral Production Sharing Agreement;

(b)

Co-Production Agreement; and,

(c)

Joint Venture Agreement.

The foregoing mineral agreements grant to the contractor the exclusive right to conduct mining operations and to extract all mineral resources found in the contract area.

Note that these agreements grant the contractor the right to operate within, but not title over, the contract area. The contractor may convert its mineral agreement into any of the other type of mineral agreement, or to an FTAA, subject to the approval of the Secretary of the Department of Environment and Natural Resources (“DENR”).

a. Mineral Production Sharing Agreement A Mineral Production Sharing Agreement (“MPSA”) is an agreement under which the Philippine government grants to the contractor the exclusive right to conduct mining operations within a contract area. The contractor provides the financing, technology, management and personnel necessary for the implementation of the MPSA. The Philippine government then takes a share in the gross output of the mining operation.

All MPSA applications must be filed with the Regional Office of the Mines and Geosciences Bureau (“MGB”) of the DENR where the area applied for is situated. An MPSA

The maximum areas that a mineral agreement can cover are as follows: • Onshore, in any one province For individuals: 10 blocks or 810 hectares; and, For partnerships, cooperatives, associations or corporations: 100 hundred blocks or 8,100 hectares.

• Onshore, in the entire Philippines For individuals: 20 blocks or 1,620 hectares; and For partnerships, cooperatives, associations or corporations: 200 blocks or 16,200 hectares.

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application may be assigned or transferred to another party, subject to the approval of the MGB Director or the Director of the Regional Office of the MGB where the area applied for is situated. Pending the approval of the MPSA application by the DENR Secretary, the MGB Director may, upon the request of the MPSA applicant, issue a Temporary Exploration Permit (“TEP”) to the MPSA applicant. The TEP is valid for a period of one year. However, the one-year period of the TEP will be deducted from the exploration period of the MPSA. If the MPSA application is disapproved, the TEP is deemed automatically canceled.

Cape Range LTD

Solicitor's Report on Claims After the DENR Secretary approves the MPSA, the same

For copper and other metallic minerals except gold and

will be forwarded to the MGB for numbering. The MPSA

chromite - 2%

contractor must then register the MPSA with the concerned MGB Regional Office within 15 working days from receipt of the notice of approval of the MPSA.

For gold and chromite - 2% On non-metallic minerals and quarry resources - 2% based on the actual market value of the annual gross

An MPSA is valid for 25 years and is renewable for another

output thereof at the time of removal.

period not exceeding 25 years. Upon the expiration of the MPSA, the Philippine government may, by itself or through

Mandatory Requirements in the Acceptance of an MPSA

a contractor, operate the mine. If through a contractor, the

Application

contract for the operation of a mine will be awarded to the highest bidder in a public bidding. However, the original

An MPSA application shall be filed in the Mines and

MPSA contractor has the right to equal the highest bid

Geosciences Bureau Regional Office concerned, for mineral

upon reimbursement of all reasonable expenses to the

and non-mineral reservation areas, using the prescribed

highest bidder.

form through payment of the filing fee and submission of five (5) sets of the following mandatory requirements:

During the exploration period, the original contract area may be relinquished by the contractor either totally or partially. After the exploration period, and prior to or upon approval of the declaration of mining project feasibility, the MPSA contractor shall relinquish to the Philippine government any portion of the contract area which will not be necessary for the mining operation and which is not covered under any declaration of mining project feasibility.

After such relinquishment, the mining area covered under the MPSA cannot exceed the following: For metallic minerals - 5,000 hectares; and, For non-metallic minerals - 2,000 hectares.

For an individual Location map/sketch plan of the proposed contract area showing its geographic coordinates/meridional block(s) and boundaries in relation to major environmental features and other projects using a NAMRIA topographic map in a scale of 1:50,000 duly prepared, signed and sealed by a deputized Geodetic Engineer; (a) Thee-year Development/Utilization Work Program duly prepared, signed and sealed by a licensed Mining Engineer or Geologist; (b)

Proof of technical competence of the technical

The Philippine government is entitled to a share in the

personnel who shall undertake the activities in

gross production of the mining operation, under an MPSA.

accordance with the submitted Development/

This share is in the form of an excise tax on the mineral

Utilization Work Program;

products extracted under such terms and conditions of the MPSA, which is computed as follows:

(c)

Proof of financial capability;

On metallic minerals, the excise tax based on the actual

(d)

Mining Project Feasibility Study; and,

(e)

Complete and final exploration report.

market value of the gross output thereof at the time of removal shall be as follows:

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Solicitor's Report on Claims For a corporation, partnership, association or cooperative -

(c)

Mining Project Feasibility Study Provided, That a Mineral Agreement applicant with existing mining operation may submit, in lieu of the Mining Project Feasibility Study, a Project Description and a detailed financial statement of its operations incorporating therein the social and environmental expenditures, taxes and fees paid; and,

(d)

Approved survey plan of the mining area.

Duly certified Certificate of Registration/ Articles of Incorporation/ Partnership/ Association and By-Laws; (a)

Location map/sketch plan;

(b)

Three-year Development/Utilization Work Program;

(c)

Proof of technical competence;

(d)

Proof of financial capability;

(e) Affidavit of Undertaking for corporation, partnership, association or cooperatives; (f)

Mining Feasibility Study; and,

Other Additional Requirements after an MPSA Application is filed After the acceptance of the application but before the issuance of the Mineral Agreement, the following additional requirements shall be submitted:

(g) Complete and final exploration report pertaining to the area.

(a)

Environmental Compliance Certificate;

For holders of valid and existing mining lease contracts,

(b)

Environmental Protection and Enhancement Program;

(c)

Certificate of Environmental Management and Community Relations Record / Certificate of Exemption;

(d)

Approved Survey Plan;

(e)

Certification from the National Commission on Indigenous Peoples that either the proposed permit area does not overlap any ancestral land/domain claim in case of non-Indigenous People area, or that the free and prior informed consent (“FPIC”) has been issued by the indigenous cultural community concerned.

operating agreements, Quarry Permits/licenses or unperfected mining/quarry claims, the following are additional requirements to the above requirements, whenever applicable: Certification from the Regional Office concerned that the mining/quarry claims are valid and subsisting; (a) Appropriate environmental report on the rehabilitation of mined-out and/or mine waste/tailings-covered areas and antipollution measures undertaken during the mining operations; (b)

Environmental Compliance Certificate for any new phase outside of the originally approved operation under the mining project;

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For OFFSHORE applications, the following additional requirements shall be submitted:

Cape Range LTD

Solicitor's Report on Claims (a)

Name, port of registry, tonnage, type and class of survey vessel(s) or platform(s). If a foreign vessel is to be used, the expected date of first entry or appearance and final departure of the survey vessel shall be provided and the necessary clearances obtained;

(b) A certification from the Coast and Geodetic Survey Department of NAMRIA that the proposed Exploration Work Program was duly registered to provide update in the publication of “Notice to Mariners” together with a list of safety measures to be regularly undertaken to ensure the safety of navigation at sea and prevent accident; (c)

An agreement to:

1. Properly identify all installations, vessels and other crafts involved in exploration recognizable to all vessels within reasonable distance;

2. Notify the Bureau thirty (30) calendar days prior to the intention to remove all scientific installations or equipment and apparatus; and

3. Allow the Bureau’s authorized personnel, the Philippine Coast Guard and other authorized persons during reasonable hours to board the vessel(s) while within the Exclusive Economic Zone.

(d)

Other supporting documents as may required by the Mines and Geosciences Bureau.

Cape Range has acquired interests in mineral rights with respect to Application for Mineral Production Sharing Agreement No. 00322-V.

b. Co-Production Agreement A Co-Production Agreement is an agreement between the Philippine government and the contractor under which the Philippine government provides inputs to the mining operations other than the mineral resource. c. Joint Venture Agreement A Joint Venture Agreement is an agreement under which the Philippine government and the contractor organize a joint venture company in which both parties have equity. The Philippine government takes a share from equity earnings as well as from the gross output of the mining operation.

3. Financial And Technical Assistance Agreement Pursuant to the Constitution, the Mining Act provides that the State may enter into an FTAA with qualified persons for the large-scale exploration, development and utilization of mineral resources. Under the Mining Act, qualified persons for an FTAA include 100% foreign-owned corporations.

The contractor must make a minimum investment for development, construction and utilization of US$50,000,000, or its Philippine Peso equivalent in the case of a Filipino contractor. An FTAA may be entered into for the exploration, development and utilization of gold, copper, nickel, chromite, lead, zinc and other minerals.

However, no FTAAs may be granted with respect to cement raw materials, marble, granite, sand and gravel and construction aggregates.

A decision of the Philippine Supreme Court in the landmark case ofLa Bugal - B’laan Tribal Association v. Ramos, issued on 1 December 2004, upheld the constitutionality of the FTAA. One of the main issues in this case was whether or not an FTAA violates the Constitutional principle that the State owns and controls all natural resources by allowing

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Solicitor's Report on Claims foreign contractors to manage mining operations. The High Court ruled in the negative, stating that: “[f]ull control is not anathematic to day-to-day management by the contractor, provided that the State retains the power to direct overall strategy… [The State] need not micro-manage mining operations and day-to-day affairs of the enterprise.” The provision in the Mining Act that allowed corporations that are up to 100% foreign-owned to enter into an FTAA with the government was also upheld. Highlighting estimates by the Philippines’ Economic Planning Secretary that the country’s untapped mineral wealth is worth US$840 billion, the Supreme Court has recognized the need to jumpstart the economy through mineral resource development.

This decision has been hailed by various sectors as a “go-signal” for foreign investment in mining.

A discussion on FTAAs is relevant to the extent that an MPSA such as APSA No. 00322-V may be converted into an FTAA. 4. Mineral Processing Permits Under the Mining Act, mineral processing means the milling, beneficiation or upgrading of ores or minerals and rocks or by similar means to convert the same into marketable products. A minerals processing permit shall be valid for a period of five years renewable for like periods but not to exceed a total term of 25 years.

Note that as of December 1996, 100 FTAA applications and 1454 MPSA applications have been filed before the Department of Environment and Natural Resources - Mines and Geosciences Bureau (“DENR-MGB”). It is noteworthy that of the 100 FTAA applications filed, 99 were filed by foreign-owned mining corporations and only one was filed

by Filipino mining company Benguet Corp. which is partly foreign-owned7.

7

“The Regulatory Climate for Mining in the Philippines”, Philippines International Review, Volume 2 No. 1, Autumn 1999.

6 Ibid.

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5. Capitalization Requirements Applicants for Exploration Permits, Mineral Agreements and FTAAs must possess. technical and financial capability to undertake mineral resources development and must be duly registered in accordance with law. Under the rules and regulations promulgated by the DENR, a mining applicant for an Exploration Permit, Mineral Agreement and FTAA must have an authorized capital stock of at least Philippine Ten Million Pesos (PHP10,000,000.00) and a paid-up capital of at least Philippine Two Million Five Hundred Thousand Pesos (PHP2,500.000.00). FTAA applicants must have at least an authorized capital stock of US Four Million Dollars (US$ 4,000,000.00) or its Philippine Peso equivalent.

Indigenous Peoples Rights Act Of 1997 (IPRA)9 The Philippine Constitution recognizes and promotes the rights of indigenous cultural communities within the framework of national unity and development. Furthermore, it declares that the State shall protect the rights of indigenous cultural communities to their ancestral lands to ensure their economic, social and cultural well-being. In recognition of the Constitutional declarations, Section 4 of RA 7942 states that “the State shall recognize and protect the rights of the indigenous cultural communities to their ancestral lands as provided for by the Constitution”.

Republic Act No. 8371, otherwise known as The Indigenous Peoples’ Rights Act of 1997 (“IPRA”) was approved on 29 October 1997. It grants to indigenous cultural communities or indigenous peoples (“ICCs/IPs”) certain preferential rights to their ancestral domains and all resources found therein. Thus as it touches significantly on the constitutional precepts that govern ownership and use of natural resources, it impinges on the Philippine Mining Act of 19958.

Cape Range LTD

Solicitor's Report on Claims Thus, in accordance with the Constitution, IPRA states in no uncertain terms the right of indigenous peoples to their ancestral domains, to self-governance and empowerment, to social and human rights, and to cultural integrity.

shall include, but are not limited to, the right over the fruits, the right to possess, the right to use, right to consume, right to exclude and right to recover ownership, and the rights or interests over land and natural resources.

Ancestral domains are defined as areas generally belonging to ICCs/IPs, subject to property rights within ancestral domains already existing or vested upon the effectivity of the IPRA, comprising lands, inland waters, coastal areas, and natural resources, held under a claim of ownership, occupied or possessed by ICCs/IPs by themselves or through their ancestors, communally or individually since time immemorial, continuously to the present, except when interrupted by war, force majeure or displacement by force, deceit, stealth, or as a consequence of government projects or any voluntary dealings entered into by the government and private persons, and which are necessary to ensure their economic, social and cultural welfare.

3. Right to Develop Lands and Natural Resources Subject to property rights within the ancestral domain already existing and/or vested when the IPRA took effect, ICCs/IPs have the right to control, manage, develop, protect, conserve, and sustainably use the following:

1. Free and Prior Informed Consent No mineral agreement shall be approved unless there is a prior certification from the National Commission on Indigenous Peoples (“NCIP”) that the area does not overlap any ancestral domain or that the prior free and informed written consent has been obtained from the ICC/ IP concerned.

This consent usually requires entering into a memorandum of agreement with the ICC/IP concerned, through their Council of Elders. The memorandum of agreement will govern the utilization, extraction and development of natural resources within their ancestral domain. This agreement is subject to a limited term of 25 years, renewable at the option of the ICC/IP for another 25 years.

2. Rights of Ownership ICCs/IPs have rights of ownership over lands, waters, and natural resources and all improvements made by them at any time within the ancestral domains/lands. These rights

(a)

land, air, water and minerals;

(b)

plants, animals and other organisms;

(c)

collecting, fishing and hunting grounds;

(d)

sacred sites; and,

(e) other areas of economic, ceremonial and aesthetic value in accordance with their indigenous knowledge systems and practices and customary laws and traditions, and duly adopted Ancestral Domain Sustainable Development and Protection Plan (“ADSDPP”) where ADSDPPs have been adopted, and to equitably benefit from the fruits thereof. In all instances, ICCs/IPs shall have priority in the development, extraction, utilization and exploitation of natural resources.

4. Right to Benefits The ICCs/IPs have the right to benefit from the utilization, extraction, use and development of lands and natural resources within their ancestral lands/domains. They shall also have the right to be compensated for any social and/ or environmental costs of such activities. Accordingly, the concerned ICC/IP community shall be extended all the benefits already provided under existing laws,

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Solicitor's Report on Claims administrative orders, rules and regulations governing particular resource utilization, extraction or development projects/activities, without prejudice to additional benefits as may be negotiated between the parties.

Investment Guarantees and Incentives Under Republic Act No. 79429 The Philippine Mining Act gives certain investment guarantees to contractors under mineral agreements, thus: (a) Repatriation of Investments - The right to repatriate the entire proceeds of the liquidation of the foreign investment in the currency in which the investment was originally made and at the exchange rate prevailing at the time of repatriation. (b) Remittance of Earnings - The right to remit earnings from the investment in the currency in which the foreign investment was originally made and at the exchange rate prevailing at the time of remittance. (c)

(d)

9 Based

Foreign Loans and Contracts - The right to remit at the exchange rate prevailing at the time of remittance such sums as may be necessary to meet the payments of interest and principal on foreign loans and foreign obligations arising from financial or technical assistance contracts.

Freedom from Expropriation - The right to be free from expropriation by the Government of the property represented by investments or loans, or of the property of the enterprise except for public use or in the interest of national welfare or defense and upon payment of just compensation. In such cases,

on QTE Primer on Mining, ibid.

10 Ibid.

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foreign investors or enterprises shall have the right to remit sums received as compensation for the expropriated property in the currency in which the investment was originally made and at the exchange rate prevailing at the time of remittance. (e) Requisition of Investment - The right to be free from requisition of the property represented by the investment or of the property of the enterprises except in case of war or national emergency and only for the duration thereof. Just compensation shall be determined and paid either at the time or immediately after cessation of the state of war or national emergency. Payments received as compensation for the requisitioned property may be remitted in the currency in which the investments were originally made and at the exchange rate prevailing at the time of remittance. (f)

Confidentiality - Any confidential information supplied by the contractor pursuant to the Mining Act and its Implementing Rules and Regulations shall be treated as such by the DENR and the Government during the term of the project.

The Omnibus Investment Code10 The Omnibus Investment Code (“OIC”) provides certain fiscal and non-fiscal incentives to contractors in mineral agreements and FTAAs and, for the duration of the permits or extensions thereof, to holders of exploration permits.

To avail of the incentives, mining companies must register with the Board of Investments (“BOI”). The OIC through tax exemption and other benefits, encourages investments in preferred areas of economic activity specified by the BOI in

Cape Range LTD

Solicitor's Report on Claims the Investment Priorities Plan (“IPP”). In recognition of the value of the mining industry in the economic development of the country, the Philippine Mining Act mandates that mining activities shall always be included in the annual IPP. The incentives under the OIC are generally available only to citizens of the Philippines or to domestic corporations owned and controlled by Philippine nationals. However, the nationality requirement shall be waived if the applicant will either export at least 70% of its total production or engage in a pioneer project. A pioneer enterprise either manufactures goods that have not been heretofore produced in the Philippines on a commercial scale, or employs a technology, formula, process or production scheme that has not been tried in the Philippines.

In case of waiver of the nationality requirement, the applicant should attain the status of a Philippine national (i.e., for corporations, at least 60% of the capital stock outstanding and entitled to vote must be owned and held by Philippine citizens) within 30 years from the date of its registration or such longer periods as may be determined by the BOI. However, a registered enterprise exporting 100% of its production need not comply with this divestment requirement.

The National Internal Revenue Code of the Philippines11

(a) at the normal rate of depreciation if the expected life is 10 years or lesser; (b) depreciated over any number of years between five years and the expected life if the latter is more than 10 years, and the depreciation thereon allowed as deduction from taxable income; provided, that the contractor notifies the Bureau of Internal Revenue (“BIR”) at the beginning of the depreciation period which depreciation rate will be used.

The Tax Code also permits mining companies to claim as a tax deduction a reasonable allowance for depletion or amortization computed in accordance with the cost-depletion method in accordance with rules and regulations prescribed by the Department of Finance, upon recommendation of the Commissioner of the BIR, and which should not exceed the capital invested. After production in commercial quantities has commenced, certain intangible exploration and development drilling costs shall be: (a) deductible in the year incurred if such expenditures are incurred for non- producing wells and/or mines; or, (b)

The National Internal Revenue Code of the Philippines (“Tax Code”) provides the general framework for the corporate tax regime observed in the Philippines.

deductible in full in the year paid or incurred or, at the election of the taxpayer, may be capitalized or amortized if such expenditures incurred are for producing wells and/or mines in the same contract area.

1. Allowable Deductions for Mining Companies Aside from business expenses and similar deductions from gross income, mining contractors may claim as a tax deduction an allowance for depreciation in respect of all properties used in mining operations, computed as follows:

Any intangible exploration, drilling and development expenses allowed as a deduction in computing taxable income during the year shall not be taken into consideration in computing the adjusted cost basis for the purpose of computing allowable cost depletion.

11 Ibid.

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Solicitor's Report on Claims In computing taxable income from mining operations, the taxpayer has the option to deduct exploration and development expenditures accumulated as cost or adjusted basis for cost depletion as of the date of prospecting, as well as exploration and development expenditures paid or incurred during the taxable year. However, the total amount deductible for exploration and development expenditures cannot exceed 25% of the net income from mining operations computed without the benefit of any tax incentives. The actual exploration and development expenditures minus 25% of the net income from mining can be carried forward to the succeeding years until fully deducted. This election by the taxpayer to deduct the exploration and development expenditures is irrevocable and binding in succeeding taxable years.

Under the Tax Code, the term “net income from mining operations” refers to gross income from operations less allowable deductions that are necessary or related to mining operations such as mining, milling and marketing expenses, and depreciation of properties used directly in mining operations. Moreover, the term “exploration expenditures” means expenditures paid or incurred for the purpose of ascertaining the existence, location, extent, or quality of any deposit of ore or other mineral, and paid or incurred before the beginning of the development stage of the mine or deposit; while, the term “development expenditures” refers to expenditures paid or incurred during the development stage of the mine or other natural deposits.

2. Excise Tax The Tax Code also imposes an excise tax on minerals, mineral products and quarry resources, thus: (a)

On coal and coke, a tax of Php10 per metric ton;

(b) On all non-metallic minerals and quarry resources, a tax of 2% based on the actual market value of the gross output thereof at the

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time of removal, in the case of those locally extracted or produced; or the value used by the Bureau of Customs in determining tariff and customs duties, net of excise tax and value- added tax, in the case of importation; (c)

On all metallic minerals, a tax of 2% based on the actual market value of the gross output thereof at the time of removal, in the case of those locally extracted or produced; or the value used by the Bureau of Customs in determining tariff and customs duties, net of excise tax and value-added tax, in the case of importation;

(d)

On indigenous petroleum, a tax of 3% of the fair international market price thereof, on the first taxable sale, barter, exchange or such similar transaction, such tax to be paid by the buyer or purchaser before removal from the place of production.

3. Value-Added Tax The Tax Code also imposes a value added tax (“VAT”) on any person who, in the course of trade or business, sells, barters, exchanges, leases goods or properties and renders services, and any person who imports goods into the Philippines.

The VAT is generally imposed on the sale of goods, properties and services at the standard rate of 10%. For sales of goods subject to VAT, the 10% rate is imposed on the “gross selling price” or the total amount of money or its equivalent, which the purchaser pays or is obligated to pay to the seller in consideration of the sale, barter or exchange of the goods or properties.

The Tax Code also imposes 10% VAT on every importation of goods based on the total value used by the Philippine Bureau of Customs in determining tariff and customs

Solicitor's Report on Claims duties, plus customs duties, excise taxes, if any, and other charges. The importer has the obligation to pay VAT on its importation. The 10% VAT must be paid, along with the other import duties and charges, before the imported goods may be released from customs custody.

SMALL-SCALE MINING Presidential Decree No. 1899 On 23 January 1984, Presidential Decree 1899 was passed, establishing small-scale mining as a new dimension in mineral development, and in recognition of the high cost and effects of large scale operations and its negative impact on the environment and economy.

It recognized the existence of small mineral deposits, which could be explored and mined without the use of sophisticated mining equipment and relying mostly on manual labor instead, and for minimum investment. Under this law, small-scale mining permittees/licensees were exempted from all forms of taxes except the income tax.

Small-scale mining was defined as “any single unit of mining operation having an annual production of not more than 50,000 metric tons of ore and satisfying the following requisites, thus: (a)

The working is artisanal, either open cast or shallow underground mining, without the use of sophisticated mining equipment;

(b) Minimal investment on infrastructures and processing plant; (c) (d)

Heavy reliance on manual labor; and, Owned, managed or controlled by an individual or entity qualified under existing mining laws, rules and regulations.

A small-scale mining permit/license issued under this decree was valid for two (2) years and renewable for another two (2) years.

People’s Small-Scale Mining Act of 199112 Republic Act No. 7076, otherwise known as the People’s Small-Scale Mining Act of 1991 was approved on 27 June 1991.13 In the Philippines, small-scale mining takes place in more than 30 provinces and involves as many as 200,000 people. Small-scale miners contribute significantly to the volume of gold production in the Philippines. In fact, in 1994, they have produced at least 46% of the 27,059 kilograms of gold produced in the country.

This law was aimed to promote the state policy to protect and develop viable small-scale mining activities in order to generate more opportunities for employment and ensure equitable sharing of the nation’s wealth and natural resources.

Small-scale mining under this law refers to mining activities which rely heavily on manual labor and which use simple implements and methods, and which do not use explosives or heavy mining equipment.

Small-scale miners are defined as “Filipino citizens who, individually or in the company of other Filipino citizens, voluntarily form a cooperative duly licensed by the DENR to engage, under the terms and conditions of a contract, in the extraction or removal of minerals or ore-bearing materials from the ground.”

Ancestral lands are respected in the sense that no ancestral land may be declared as a people’s smallscale mining area without the consent of the cultural communities concerned.

12 See 13

“The Regulatory Climate for Mining in the Philippines”, Ibid.

Implementing Rules finalized in 1992

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Solicitor's Report on Claims The People's Small-Scale Mining Act is characterized by the following major provisions, thus: (a)

(b)

(c)

(d)

Small-scale miners shall organize themselves into a cooperative and register with the Provincial or City Mining Regulatory Board, which shall serve as the implementing arm of the DENR; Small-scale miners shall identify the area to be declared as a People's Small-Scale Mining Area, which should not exceed 20 hectares and they shall also get the consent of the mining claimant or holder of the mining right over the area; After the required consent has been obtained, small-scale miners shall apply for a permit from the Provincial or City Mining Regulatory Board to mine the People's Small-Scale Mining Area for a period of two years, renewable for another two years; and, Any ore extracted from the small-scale mining area should be processed in a centralized custom mill and the gold may only be sold to a centralized buying station authorized by the Central Bank of the Philippines.

There has been approved a Small-Scale Mining Permit No. 001-2010 within APSA-00322-V. CORPORATE SOCIAL RESPONSIBILITY IN MINING In the Philippines, mining is one of the industries in where corporate social responsibility (“CSR”) is mandatory. It is central to ‘sustainable mining,’ a principle pursued by the government, the mining industry and the international community. By making companies socially responsible, CSR helps in the realization of sustainable mining. The

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Philippine Mining Act specifies and sets financial standards for CSR programs from the mining company’s exploration to the rehabilitation period. More importantly, CSR has become a primary tool for companies engaged in largescale mining in getting exploration and operation permits from the DENR. CNMEI and NIBDC are committed to corporate social responsibility in mining.

RELEVANT BACKGROUND ON THE PROPERTIES The Company has acquired mineral rights to the following mining projects/tenements: A. APSA No. 000322-V Applicant: Northern Islands Builders and Development Corporation Address: 312 Villareal St., Pasay City Philippines President: Ma. Corazon C. Villareal The application for Mineral Production Sharing Agreement has been filed with the MGB Regional V Office on 29 October 2004 and designated as APSA 0322-V. The mining claims subject of Cape Range’s interest covers six (6) lots located within the municipalities of Paracale, Sta. Rosa Sur, San Rafael Jose Panganiban, and Labo, Camarines Norte, Philippines, with approximately One Thousand Seven Hundred Seventy Eight and 9912/1000 hectares (1778 has.)

Status of Application / Claim To date, said application for MPSA has complied with all the mandatory requirements of mining laws and regulations, such as public consultation and publication and a certification from the National Commission on Indigenous Peoples (“NCIP”). Further, it has been issued an

Cape Range LTD

Solicitor's Report on Claims approval compliance certificate by the National Integrated Preotected Areas System (“NIPAS”) and Forest Management Service of the DENR-Region V. It has also been favorably endorsed by the concerned local government units covered by the mining project.

Having complied with all the mandatory requirements, APSA 00322-V is at present just awaiting the release from the Office of the Secretary of the DENR, for MPSA numbering.

Within the APSA area, Small-Scale Mining Permit No. 001-2010 has been approved and granted on 04 January 2010 and has already been issued a corresponding Environmental compliance Certificate.

In addition to this, an Environmental Compliance Certificate has also been issued for the project’s proposed smallscale gold and allied minerals processing plant located in Sitio Tumbaga, Barangay San Rafael, Jose Panganiban, Camarines Norte. Moreover, the technical requirements for mineral processing permit, hazardous waste permit, chemical order permit and waste water permit have been submitted along with the semi-annual reports, in accordance with the ECC. B. EXPA-000061-V Applicant: Originally in the name of Guidance Management Corporation President: Joaquin C. Rodriguez This Exploration Permit Application covering 449 hectares in Pinagbiyaran, Camarines Norte, Philippines, was filed on 24 November 2005 with the MGB-Region V for the exploration of gold, copper, silver, iron and other metallic minerals by Guidance Management Corporation (“GMC”).

This application was transferred to Camarines Norte

Mining and Exploration, Inc. (“CNMEI”) by virtue of a Deed of Assignment on 23 May 2009.

Status of Application / Claim This Deed of Assignment to CNMEI has already been submitted to the MGB-Region V for registration and transfer in the name of CNMEI, in accordance with MGB rules and regulations, to certify the validity and legality of the said transfer.

Prior to the transfer, the exploration and environmental work programs, as well as the affidavit of undertaking, have been filed, in accordance with mining laws, rules and regulations.

Should the results of exploration reveal the presence of mineral deposits, which are economically and technically feasible for mining operations, a declaration of mining project feasibility may be filed. Upon approval of the declaration of mining project feasibility, the holder of the exploration permit or its assignee shall be granted the exclusive right to a Mineral Agreement or an FTAA over the permit area with the government.

Encumbrances, Forfeitures and Conditions Affecting the Claims Based on records on file with the MGB, NIBDC and CNMEI by virtue of the Deed of Assignment, are the sole registered owner of the mineral rights to the subject mining claims / applications. These claims are subsisting and are protected by mining laws, rules and regulations.

The mineral rights to explore, develop, operate and mine APSA- 00322-V and SMMP 001-2010 have been validly transferred by NIBDC to CNMEI, under such terms and conditions defined by their Memorandum of Agreement, dated 04 August 2009. The mineral rights to APSA 00322-V, were transferred to Camarines Mining Pty Ltd (“CMPL”) via a Memorandum of Agreement (“MOA”) duly executed on 27 February 2011.

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Solicitor's Report on Claims The same MOA transfers the mineral rights with respect to EXPA-000061-V. CNMEI, by virtue of the deed of assignment to it by GMC and subsequent submission and registration of the deed of assignment to the Mines and Geosciences Bureau, is for all intents and purposes the holder of the said mining tenement.

This MOA will then be submitted to the MGB for registration and approval, as is required for all transfers and assignments of mining rights.

Based on MGB records available as of the time of this report, there are no caveats, encumbrances or interests of third parties with respect to the subject claims. At present, there is no formal notice of any condition that may affect the rights and interests in respect of the said claims, nor of any forfeiture and both NIBDC and CNMEI have no intention of surrendering any such right or interest.

Litigations, Disputes or Claims by Third Parties Based on records available at the time of this report, there are no legal proceedings of any kind, nor are there any claims or disputes with respect to the subject mining claims/applications.

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Reporting and Non-Disclosure This report was prepared under the prevailing Philippine laws and based on information and documentation supplied by CNMEI and Cape Range Ltd. This report was prepared for the sole purpose of being included in the prospectus for Cape Range Ltd that will be lodged with the Australian Securities and Investments Commission. This report or any part of it may not be used for any other purpose without the express and prior written consent of Restituto M. Mendoza and Cape Range Ltd.

Prepared By: RESTITUTO M. MENDOZA IBP Number 803227 03 January 2011 PTR No. 6670596

03 January 2011

MCLE Compliance Number III-0000707 12 September 2008 Laguna Chapter

Cape Range LTD

10 Risk Factors The Shares offered under this Prospectus should be considered speculative because of the nature of the Company’s business. The future profitability of the Company will be dependent on the successful commercial exploitation of its business and operations.

working conditions, rates of exchange, exchange control, exploration licensing, export duties, repatriation of income or return of capital, environmental protection, mine safety, labour relations as well as government control over mineral properties or government regulations.

Whilst the Directors recommend the Offer, there are numerous risk factors involved. The following is a summary of the more material matters to be considered.

However, this summary is not exhaustive and potential investors should examine the contents of this Prospectus in its entirety and consult their professional advisors before deciding whether to apply for the Shares.

Changes to the Philippine and Zimbabwean mining or investment policies and legislation or a shift in political attitude may adversely affect the Company’s operations and profitability.

Risks relating to the Company’s operations

The risk factors set out in this Section, and others not specifically referred to may, in the future, materially affect the financial performance of the Company and the value of the Shares. Therefore, the Shares carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those Shares.

10.2 The Philippine’s and Zimbabwe legal environment The Philippine and Zimbabwean legal systems are less developed than more established countries and this could result in the following risks:

(a) political difficulties in obtaining effective legal redress in the courts whether in respect of a breach of law or regulation or in an ownership dispute;

Based on the information available, a non-exhaustive list of risk factors which may affect the Company’s financial position, prospects and the price of its listed securities include the following.

(b) a higher degree of discretion held by various government officials or agencies;

Risks relating to the Company’s operations

(c) the lack of political or administrative guidance on implementing applicable rules and regulations, particularly in relation to taxation and property rights;

10.1 Risks associated with operating in the Philippines and Zimbabwe The Company’s projects are located in the Philippines and Zimbabwe and the Company will be subject to the risks associated with operating in those countries. Such risks can include economic, social or political instability or change, or instability and changes of law affecting foreign ownership, government participation, taxation,

(d) inconsistencies or conflicts between and within various laws, regulations, decrees, orders and resolutions; or (e)

relative inexperience of the judiciary and court in matters affecting the Company.

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Risk Factors 10.3 Sovereign risk - the Philippines and Zimbabwe The Company’s prospective projects are located in the Philippines and Zimbabwe which are countries considered to be a developing country and as such subject to emerging legal and political systems compared with the systems in place in Australia.

(g) limitations on activities due to seasonal weather patterns and monsoon activity; (h) unanticipated operational and technical difficulties encountered in survey, drilling and production activities; (i)

electrical and/or mechanical failure of operating plant and equipment, industrial and environmental accidents, industrial disputes and other force majeure events;

(j)

equipment failure, fires, spills or industrial and environmental accidents;

(k)

unavailability of aircraft or equipment to undertake airborne surveys and other geological and geophysical investigations;

(l)

risk that exploration, appraisal, development, plant or operating costs prove to be greater than expected or that the proposed timing of exploration, development or production may not be achieved;

Possible sovereign risks include, without limitation, changes in the terms of mining legislation, changes to royalty arrangements, changes to taxation rates and concessions and changes in the ability to enforce legal rights. Any of these factors may, in the future, adversely affect the financial performance of the Company and the market price of its Shares.

No assurance can be given regarding future stability in these or any other country in which the Company may have an interest.

10.4 Operating risks There can be no assurance that the Company’s intended goals will lead to successful exploration, mining and/ or production operations. Further, no assurance can be given that the Company will be able to initiate or sustain minerals production, or that future operations will achieve commercial viability.

When additional exploration at the Project is undertaken

(m) failure to achieve exploration success; (n)

the supply and cost of skilled labour;

(o)

unexpected shortages or increases in the costs of consumables, diesel fuel, spare parts, plant and equipment, and;

and if a JORC compliant resource or reserve is not defined, then it may have a negative impact on the Company.

Future operations of the Company may be affected by various factors including: (f)

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geological and hydrogeological conditions;

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(p) prevention and restriction of access by reason of political unrest, outbreak of hostilities and inability to obtain consents or approvals.

No assurances can be given that the Company will achieve commercial viability through the successful exploration and/or mining.

Cape Range LTD

Risk Factors 10.5 Exploration Mining exploration is inherently associated with risk.

Notwithstanding the experience, knowledge and careful evaluation a company brings to an exploration project there is no assurance that recoverable mineral resources will be identified. Even if identified, other factors such as technical difficulties, geological conditions, adverse changes in government policy or legislation or lack of access to sufficient funding may mean that the resource is not economically recoverable or may otherwise preclude the Company from successfully exploiting the resource.

10.6 Exploration and operating costs The proposed exploration expenditure of the Company is based on certain assumptions with respect to the method and timing of exploration and feasibility work. By their nature, these estimates and assumptions are subject to significant uncertainties and, accordingly, the actual costs may materially differ from these estimates and assumptions.

Accordingly, no assurance can be given that the cost estimates and the underlying assumptions will be realised in practice.

10.7 Title risk The mining claims in which the Company will, or may acquire an interest in the future are subject to the applicable local laws and regulations.

Claims in which the Company interest are subject to the relevant conditions applying in each jurisdiction. Failure to comply with these conditions may render the claims or licenses liable to forfeiture.

All of the projects in which the Company may acquirean interest will be subject to application for claim renewal from time to time. Renewal of the term of each claim is

subject to applicable legislation. If the claim is not renewed for any reason, the Company may suffer significant damage through loss of the opportunity to develop and discover any mineral resources on that claim.

Investors should refer to the Solicitors’ Report on Claims in Section 9 of this Prospectus for further details regarding CMPL’s interest in claims comprising the Project.

10.8 Contractual risks The Company, CMPL and CMPL’s subsidiary Geomin have entered into a number of agreements, as detailed in this Prospectus. The ability of the Company to achieve its objectives will depend on the performance by the counterparties to these agreements of their obligations.

If any counterparty defaults in the performance of their obligations, it may be necessary for the Company or CMPL to approach a court to seek a legal remedy. Legal action can be costly. Furthermore, certain contracts to which either the Company or CMPL is a party are governed by laws of jurisdictions outside Australia. There is a risk that the Company may not be able to seek legal redress that it could expect under Australian law; and generally there can be no guarantee that a legal remedy will ultimately be granted on the appropriate terms.

10.9 Price of gold Upon successful completion of the Offer the Company’s main focus will be on the Camarines Norte Gold Project.

The market price of gold is set in the world market and is affected by numerous industry factors beyond the Company’s control including the demand for precious metals, expectations with respect to the rate of inflation, interest rates, currency exchange rates, the demand for jewellery and industrial products containing metals, gold

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Risk Factors production levels, inventories, cost of substitutes, changes in global or regional investment or consumption patterns, and sales by central banks and other holders, speculators and producers of gold and other metals in response to any of the above factors, and global and regional political and economic factors.

A decline in the market price of gold could have a material adverse impact on the ability of the Company to finance the exploration and development of the Camarines Norte Gold Project and future gold projects 10.10 Recent commodity prices Recent increases in commodity prices have encouraged increases in exploration, development and construction activities, which have resulted in increased demand for, and cost of, exploration, development and construction services and equipment. Increased demand for services and equipment could cause exploration and project costs to increase materially, resulting in delays if services or equipment cannot be obtained in a timely manner due to inadequate availability, and could increase potential scheduling difficulties and costs due to the need to coordinate the availability of services or equipment, any of which could materially increase project exploration, development or construction costs or result in project delays or both. Any such material increase in costs would adversely affect the Company’s financial condition.

10.11 Health, safety and the environment The conduct of business in the resources sector involves

10.12 Compliance risk Title to a mining claim may be subject to the holder complying with the terms and conditions of the claim, including any minimum annual expenditure commitments.

There is a risk that if the holder does not comply with the terms and conditions of each claim, it may lose its interest in the relevant interest.

10.13 Resource estimates Resource estimates are expressions of judgement based on knowledge, experience and industry practice. Estimates which were valid when originally calculated may alter significantly when new information or techniques become available. In addition, by their very nature, resource estimates are imprecise and depend to some extent on interpretations, which may prove to be inaccurate. As further information becomes available through additional fieldwork and analysis, the estimates are likely to change.

This may result in alterations to development and mining plans which may, in turn, adversely affect the Company’s operations.

10.14 Environmental risks The mining claim operations and proposed activities of the Company are subject to the laws of the Philippines and Zimbabwean regulations concerning the environment. As with most exploration projects, the Company’s activities are expected to have an impact on the environment, particularly during advanced exploration and future mining activities. It is the Company’s intention to conduct its activities to the highest standard of environmental obligation, including compliance with all environmental laws.

a variety of risks to the health and safety of personnel and to the environment. It is conceivable that an incident may occur which might negatively impact on the Company’s business.

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10.15 Changes in government policy and laws Changes in government or statutory changes may affect the Company’s business and its operations.

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Risk Factors 10.16 International operations International sales and operations are subject to a number of risks, including: (q) potential difficulties in enforcing agreements (including joint venture agreements) and collecting receivables through foreign local systems; (r) potential difficulties in protecting intellectual property; (s)

increases in costs for transportation and shipping; and

(t)

restrictive governmental actions, such as imposition of trade quotas, tariffs and other taxes.

Any of these factors could materially and adversely affect the Company’s business, results of operations and financial condition.

10.17 Commodity price volatility and exchange rate risks The Company holds tenure in the Philippines, with expenditure required in Philippine pesos.

If the Company achieves exploration success leading to mineral production, the revenue it will derive through the sale of commodities exposes the potential income of the Company to commodity price and exchange rate fluctuations and risks.

Commodity prices fluctuate and are affected by many factors beyond the control of the Company. Such factors include supply and demand fluctuations for gold and other commodities, technological advancements, forward selling activities and other macro-economic factors.

Furthermore, international prices of various commodities (including gold) are denominated in United States dollars, whereas the expenditure of the Company is and will be taken into account in Australian currency, exposing the Company to the fluctuations and volatility of the rate of exchange between the United States dollar and the Australian dollar as determined in international markets.

In the future, a significant proportion of the Company’s revenues, cash inflows, other expenses, capital expenditure and commitments may be denominated in foreign currencies.

To comply with Australian reporting requirements the income, expenditure and cash flows of the Company will need to be accounted for in Australian dollars. This will result in the income, expenditure and cash flows of the Company being exposed to the fluctuations and volatility of the rate of exchange between other currencies and the Australian dollar, as determined in international markets.

Furthermore, at this stage the Company has decided to not put in place any hedges in relation to foreign exchange. This may result in the Company being exposed to exchange rate risk, which may have an adverse impact on the profitability and/or financial position of the Company.

General risks 10.18 Subsidiary risk The Camarines Norte Gold Project’s exploration assets are held by, CMPL, which on completion of the acquisition of CMPL will become a subsidiary of the Company.

The Company’s rights to participate in a distribution of CMPL’s assets in the event of liquidation, re-organisation or insolvency is generally subject to prior claims of that entity’s creditors, including trade creditors.

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Risk Factors 10.19 General economic climate The Company’s future can be affected by factors beyond its control such as supply and demand for its goods and services, and general economic conditions.

10.20 Reliance on key management The responsibility of overseeing the day-to-day operations and the strategic management of the Company and its controlled entities depends substantially on its senior management and its key personnel. There can be no assurance given that there will be no detrimental impact on the Company if one or more of these senior management, key personnel or employees cease their involvement or employment with the Company or its controlled entities.

10.21 Additional requirements for capital The continued operations of the Company are dependent on its ability to obtain financing through debt and equity financing, or generating sufficient cash flows from future operations. There is a risk that the Company may not be able to access capital from debt or equity markets for future projects or developments, which could have a material adverse impact on the Company’s business and financial condition.

10.22 Insurance risks The Company maintains insurance for certain activities within ranges of coverage that it believes to be consistent with industry practice and having regard to the nature of activities being conducted. The occurrence of an event that is not covered or fully covered by insurance could have a material adverse effect on the business, financial condition and results of the Company.

10.23 Market risk and interest rate volatility From time to time, the Company may borrow money and accordingly will be subject to interest rates which may be fixed or floating. A change in interest rates would be

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expected to result in a change in the interest cost to the Company and, hence, may affect its profit.

10.24 Competition There is a risk that the Company will not be able to continue to compete in the competitive industry in which it operates. The potential exists for the nature and extent of the competition to change rapidly, which may cause loss to the Company.

10.25 Share market There are general risks associated with any investment and the share market. The price of the Company’s securities on the ASX may rise and fall depending on a range of factors beyond the Company’s control and which are unrelated to the Company’s financial performance. These factors may include movements on international stock markets, interest rates and exchange rates, together with domestic and international economic conditions, inflation rates, investor perceptions, changes in government policy, commodity supply and demand, government taxation and royalties, war, global hostilities and acts of terrorism.

10.26 Liquidity risk There is no guarantee that there will be an ongoing liquid market for the Company’s securities. Accordingly, there is a risk that, should the market for the Company’s securities become illiquid, Shareholders will be unable to realise their investment in the Company.

10.27 Potential acquisitions As part of its business strategy, the Company may make acquisitions of, or significant investments in, complementary companies or prospects although other than as disclosed in this Prospectus no such acquisitions or investments are currently planned. Any such transactions will be accompanied by risks commonly encountered in making such acquisitions.

Cape Range LTD

11 Material Contracts 11.1 Share Sale Agreement On 30 May 2011, the Company and the Vendors entered into the Share Sale Agreement, the material terms of which are described as follows.

Conditions Precedent Settlement of the acquisition of CMPL is subject to the satisfaction or waiver (as applicable) of a number of conditions precedent. The outstanding conditions as at the date of this Prospectus are as follows: (a)

(b)

the Company complying with any requirements of ASX including, if necessary, the requirements of Chapters 1 and 2 of the ASX Listing Rules, including issuing this Prospectus, as if the Company were applying for admission to the Official List of ASX (as required by ASX Listing Rule 11.1.3); and the receiving of sufficient applications to meet the minimum subscription under this Prospectus.

Purchase Price The Purchase Price of CMPL is comprised of: (a) an initial consideration of 20,000,000 Shares and 10,000,000 Vendor Options; (b) subject to the delineation of a JORC inferred resource of 500,000 ounces of gold in relation to the Camarines Norte Gold Project: (i) 12,500,000 Shares; (ii) 6,250,000 Vendor Options; and (iii) $1,000,000; (c)

subject to the delineation of an aggregate JORC inferred resources of 1,000,000 ounces of gold in relation to the Camarines Norte Gold Project: (i) 12,500,000 Shares; (ii) 6,250,000 Vendor Options; and (iii) $1,000,000;

(d) subject to the Company completing a bankable feasibility study in relation to the Camarines Norte Gold Project: (i) 30,000,000 Shares; (ii) 15,000,000 Milestone Options; and (iii) $5,000,000; and (e) a royalty at the rate of 2.5% of Net Smeltering Revenue derived from the Camarines Norte Gold Project.

At completion the Company is also required to pay on behalf of CMPL the sum of $1,000,000 to or at the direction of CNMEI. CMPL Assets and Liabilities The assets of CMPL comprise: (a)

the right to minerals on the tenements comprising the Camarines Norte Gold Project subject to the Permitted Encumbrances;

(b)

100% of the issued capital in Geomin; and

(c)

all data relating to the exploration and mining on the Camarines Norte Gold Project in the possession of CMPL.

The liabilities of CMPL are as set out in the Investigating Accountant’s Report. wSettlement On settlement of the acquisition of CMPL: (a)

The Vendors must deliver to the Company duly executed and completed transfers in favour of the Company of all of the shares in CMPL.

(b) The Company must pay on behalf of CMPL

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Material Contracts $1,000,000 to or at the direction of Camarines Norte Mining and Exploration Inc in satisfaction of monies owing by CMPL and issue 20,000,000 Shares and grant 10,000,000 Vendor Options to the Vendors.

11.2 Memorandum of Agreement - CNMEI and NIBDC NIBDC, the registered holder of Application for Production Sharing Agreement APSA 00322-V and Small Scale Mining Permit ECC-RO5-0711-3721 has entered into a Memorandum of Agreement with CNMEI pursuant to which CNMEI has the right to explore, mine and develop APSA 0032-V and Small Scale Mining Permit ECCRO5-0711-3721.

CNMEI is entitled to 90% of the profits from work carried out pursuant to the Memorandum of Agreement and NIBDC is entitled to 10% of the profits.

Geomin (a wholly owned subsidiary of CMPL) has entered into an Operating Agreement with CNMEI pursuant to which Geomin is entitled to mine and produce gold on the properties comprising the Camarines Norte Gold Mining Project.

Pursuant to the Operating Agreement Geomin is entitled to 80% of the gross gold mined and CNMEI is entitled to 20% of the gross gold mined.

11.5 Memorandum of Agreement - CNMEI and CMPL CMPL has entered into a Memorandum of Agreement with CNMEI pursuant to which CMPL has assumed all of the obligations and been assigned all of the rights of CNMEI in relation to the Camarines Gold Mining Project comprising: (a) the rights pursuant to the Memorandum of Agreement with NIBDC;

NIBDC is also entitled to: (a)

(c) the right to be reimbursed for expenses relating to perfection of mineral rights in relation to APSA 00322-V. 11.3 Deed of Assignment between GMC and CNMEI GMC, the registered holder of Exploration Permit Application EXPA-000061-V, has entered into a Deed of Assignment with CNMEI assigning all of the rights to EXPA-000061-V to CNMEI. 11.4 Operating Agreement - CNMEI and Geomin

the rights pursuant to the Operating Agreement with Geomin; and

(c)

the rights pursuant to the Deed of Assignment with GMC.

2% of Net Smeltering Revenue on all future mineral production from the mining of APSA 00322-V;

(b) 2,000,000 Philippines peso upon commercial production; and

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(b)

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The consideration for the assignment is the sum of $1,000,000, which is payable by the Company at completion in relation to the Share Sale Agreement.

11.6 Domboshawa Hill Option On 6 October 2010, the Company entered into a memorandum of understanding with Willaway Enterprises (Private) Limited (a company incorporated under the laws of Zimbabwe) (Willaway) pursuant to which Willaway has granted the Company the option to acquire up to a 75% interest in claim EPO 13/10 located in the Harare-

Cape Range LTD

Material Contracts Bindura-Shamva greenstone belt in Zimbabwe (being the Domboshawa Hill Project).

Willaway holds a 90% interest in the mineral rights in relation to the Domboshawa Hill Project.

The Company has the exclusive rights to undertake due diligence on the Domboshawa Hill Project until 6 October 2011 in exchange for a US$50,000 fee payable on requotation of the Company’s Shares on ASX. Following completion of due diligence, the Company has the option to acquire a 51% interest in the Domboshawa Hill Project for payment of US$500,000 in cash and US$500,000 in Shares to Willaway within 18 months of signing of the MOU. The Company may acquire a further 24% (being a total 75%) interest in the Domboshawa Hill Project by payment of a further US$500,000 in cash and US$500,000 of Shares to Willaway within 24 months of settlement of the acquisition of the initial 51% interest.

11.7 Snakes Head Option On 9 November 2010, the Company entered into a memorandum of understanding with Willaway pursuant to which Willaway has granted the Company the option to acquire a 100% interest in 79 prospecting claims located within part of the “Great Dyke”, which is approximately 150km north of Harare in Zimbabwe (being the Snakes Head Platinum Project).

the option to acquire a 51% interest in the Snakes Head Platinum Project for payment of US$500,000 in cash and US$1,500,000 of Shares to Willaway within 3 months of exercise of the option.

The Company may acquire a further 24% (being a total 75%) interest in the Snakes Head Platinum Project at any time within 24 months of settlement of the 51% acquisition by payment of US$500,000 in cash and US$500,000 of Shares to Willaway within 3 months of exercise of the option.

The Company may acquire a further 25% (being a total 100%) interest in the Snakes Head Platinum Project at any time within 24 months of settlement of the 75% acquisition by payment of US$1,000,000 in cash and US$1,000,000 of Shares to Willaway within 3 months of exercise of the option.

In the event the option is exercised, Willaway is entitled to a net royalty of US$5 per ounce in platinum value equivalence, of any minerals produced from the Snakes Head Platinum Project.

11.8 Corporate Advisor and Sponsoring Broker Mandate On 21 June 2011, the Company executed a mandate with MDS Financial Services Pty Ltd which sets out the terms on which MDS Financial Services Pty Ltd has agreed to act as corporate advisor to the Company, and lead manager and sponsoring broker to the Offer (Mandate).

The Company has the exclusive right to undertake due diligence on the Snakes Head Platinum Project until 30 October 2011 in exchange for a fee of 500,000 Shares in the Company to be issued on requotation of the Company’s Shares on ASX.

MDS Financial Services Pty Ltd will be paid the following fees under the terms of the Mandate:

Following completion of due diligence, the Company has

(b)

(a) a success fee of 5% of funds raised under the Offer (plus GST); a sponsoring broker fee of $15,000 (plus GST); and

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Material Contracts Agreement by 3 months written notice. (c) 2,000,000 Options to be issued to MDS Financial Services Pty Ltd or its nominee/s, with an exercise price of $0.25, expiring 3 years from the date of issue.

11.9 Managing Director Agreement The Company, Mr Joe Cornelius and Ms Dawn Cornelius (as trustee for Goldfind Holdings Pty Ltd) (Contractor) have entered into an agreement pursuant to which Mr Cornelius (on behalf of the Contractor) will provide the services of Managing Director of the Company (Managing Director Agreement).

The term of the Managing Director Agreement is 3 years, commencing on 9 September 2009 (Term).

The Company currently pays to the Contractor a fee of $210,000 per annum (plus GST) payable monthly in arrears (Fee).

The Fee will be reviewed on each anniversary of the commencement date, and on completion of each capital raising or any new acquisition undertaken by the Company.

In addition to the Fee, the Company will reimburse the Contractor for all reasonable expenses incurred in the performance of the services under the Managing Director Agreement.

Either party may terminate the Managing Director

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If the Company gives notice of termination, or the Managing Director Agreement is terminated as a result of Mr Cornelius being removed as a Director, the Company must pay the Contractor any of the Fee accrued at the date of termination plus an amount equal to 5% of the equity interests of the Company as set out in the Company’s latest published accounts, or such lesser amount permitted by the Listing Rules or any Shareholder approval.

In addition, in the event the Company terminates the Managing Director Agreement as a result of either deciding to change its principal business activities or the responsibilities of Mr Cornelius are materially changed, the Contractor will be entitled to an amount equal to 5% of the equity interest of the Company as set out in the Company’s latest published accounts, or such lesser amount permitted by the Listing Rules or any Shareholder approval.

If the Company gives notice of termination due to breach by the Contractor, the Contractor is entitled to a payment equal to 6 months’ entitlement under the contract.

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12 Incorporation of Documents by reference Pursuant to section 712 of the Corporations Act the following documents that have been released to the ASX and lodged with ASIC are incorporated in this Prospectus:

Date

Title of Announcement

18 May 2011

2010 Annual Report

30 May 2011

Notice of General Meeting

31 May 2011

Results of Annual General Meeting

3 June 2011

Appendix 3B – grant of 10,200,000 Options

8 June 2011

Transfer of Share Registry

16 June 2011

Board changes

16 June 2011

Final Director’s interest notice

16 June 2011

Initial Director’s interest notice

28 June 2011

Results of General Meeting

Copies of all documents lodged with ASIC in relation to the Company can be inspected at the registered office of the Company during normal office hours.

ASX maintains files containing publicly available information for all listed companies on its internet site (www.asx.com.au).

The Company’s announcements can be viewed at this site.

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13 Additional Information 13.1 Rights Attaching to Shares The rights, privileges and restrictions attaching to Shares can be summarised as follows: (a)

(b)

(c)

Dividend Rights

The Directors may from time to time declare a dividend to be paid to the Shareholders entitled to the dividend.

General Meetings Shareholders are entitled to be present in person, or by proxy, attorney or representative to attend and vote at general meetings of the Company.

holders of any shares created or raised under any special arrangement as to dividend, the dividend as declared shall be payable on all Shares according

Shareholders may requisition meetings in accordance with Section 249D of the Corporations Act and the Constitution of the Company.

Voting Rights Subject to any rights or restrictions for the time being attached to any class or classes of shares, at general meetings of shareholders or classes of shareholders: (i)

(ii)

each shareholder entitled to vote may vote in person or by proxy, attorney or representative; on a show of hands, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder has one vote; and

Subject to the rights of any

preference shareholders and to the rights of the

to the proportion that the amount paid (not credited) is of the total amounts paid and payable (excluding amounts credited) in respect of such Shares in accordance with Part 2H.5 of Chapter 2H of the Corporations Act. (d) Winding-Up

If the Company is wound up, the liquidator may, with the authority of a special resolution of the Company, divide among the Shareholders in kind the whole or any part of the property of the Company, and may for that purpose set such value as he considers fair upon any property to be so divided, and may determine how the division is to be carried out as between the shareholders or different classes of shareholders. The liquidator may, with the authority

(iii) on a poll, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder shall, in respect of each fully paid share held by him, or in respect of which he is appointed a proxy, attorney or representative, have one vote for the share, but in respect of partly paid shares shall have such number of votes as bears the same proportion to the total of such shares registered in the shareholder’s name as the amount paid (not credited) bears to the total amounts paid and payable (excluding amounts credited).

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of a special resolution of the Company, vest the whole or any part of any such property in trustees upon such trusts for the benefit of the contributories as the liquidator thinks fit, but so that no shareholder is compelled to accept any shares or other Shares in respect of which there is any liability. Where an order is made for the winding up of the Company or it is resolved by special resolution to wind up the Company, then on a distribution of assets to members, shares classified by ASX as restricted Shares at the time of the commencement of the winding up shall rank in priority after all other shares.

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Additional Information (e)

(f)

Transfer of Shares Generally, shares in the Company are freely transferable, subject to formal requirements, the registration of the transfer not resulting in a contravention of or failure to observe the provisions of a law of Australia and the transfer not being in breach of the Corporations Act or the Listing Rules.

Variation of Rights Pursuant to Section 246B of the Corporations Act, the Company may, with the sanction of a special resolution passed at a meeting of shareholders vary or abrogate the rights attaching to shares.

If at any time the share capital is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class), whether or not the Company is being wound up may be varied or abrogated with the consent in writing of the holders of three-quarters of the issued shares of that class, or if authorised by a special resolution passed at a separate meeting of the holders of the shares of that class.

Mr Johnson is a director of MDS Financial Services Pty Ltd and is a member of the class of beneficiaries of a trust that owns approximately 7% of the parent entity of MDS Financial Services Pty Ltd. 13.3 Remuneration The Company’s Constitution provides that the remuneration of non-executive Directors will be not more than the aggregate fixed sum determined by a general meeting. The aggregate remuneration for nonexecutive Directors has been set at an amount not to exceed $150,000 per annum.

The remuneration of executive Directors will be fixed by the Directors and may be paid by way of fixed salary or consultancy fee.

The remuneration of each of the two non-executive Directors is currently fixed at $50,000 per annum (inclusive of superannuation).

As at the date of this Prospectus, the remuneration paid to the Directors is set out as follows: Director

13.2 Disclosure of Interests - Directors Directors are not required under the Company’s Constitution to hold any Shares. As at the date of this Prospectus, the Directors of the Company have relevant interests in Shares and Options as set out in the table below: DIRECTOR

SHARES OPTIONS

Wayne Johnson

62,000

120,000

Joseph Cornelius

184,000

200,000

Michael Higginson

180,000

160,000

Financial Year ended 31 December 2010

1 January 2011 to 30 June 2011

Wayne Johnson

$48,670

$25,000

Joseph Cornelius

$205,000

$105,000

Michael Higginson

$31,000

$18,000

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Additional Information 13.4 Director Indemnity Clause 27.1 of the Constitution relevantly provides that the Company indemnifies and agrees to keep indemnified every director, principal executive officer or secretary of the Company against a liability to another person, other than the Company or a related corporate of the Company, provided that: (a) the provisions of the Corporations Act (including, but not limited to, Chapter 2E) are complied with in relation to the giving of the indemnity; and

insuring an officer in relation to the period during which that officer held that office, including in respect of a liability for costs and expenses incurred by a person in defending civil or criminal proceedings whether or not the officer has successfully defended himself in these proceedings, provided that: (a) the provisions of the Corporations Act (including, but not limited to, Chapter 2E) are complied with in relation to the payment of the premium; and (b)

(b) the liability does not arise in respect of conduct involving a lack of good faith on the part of the officer.

Clause 27.2 of the Constitution provides that the Company indemnifies and agrees to keep indemnified every director, principal executive officer and secretary of the Company out of the property of the Company in relation to the period during which that officer held office against a liability for costs and expenses incurred by that officer in that capacity: (a)

(b)

judgement is given in favour of that officer; or

(ii)

that officer is acquitted; or

in connection with an application in relation to any proceedings referred to in clause 27.2(c) in which relief is granted to that officer by the Court under the Corporations Act.

Clause 27.3 of the Constitution relevantly provides that the Company or a related body corporate of the Company may pay, or agree to pay, a premium under a contract

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13.5 Fees and Benefits Other than as set out below or elsewhere in this Prospectus, no: (a)

Director of the Company;

(b)

person named in this Prospectus as performing a function in a professional advisory or other capacity in connection with the preparation or distribution of this Prospectus; or

(c)

promoter of the Company,

in defending proceedings, whether civil or criminal, in which: (i)

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the liability does not arise out of conduct involving a wilful breach of duty to the Company or a contravention of Sections 184(2) or (3) of the Corporations Act.

has, or had within two (2) years before lodgement of this Prospectus with ASIC, any interest in: (a)

the formation or promotion of the Company;

(b)

any property acquired or proposed to be acquired by the Company in connection with its formation or promotion or in connection with the Offer of Shares under this Prospectus; or

(c)

the Offer of Shares under this Prospectus,

Cape Range LTD

Additional Information and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to any of those persons as an inducement to become, or to qualify as, a Director of the Company or for services rendered in connection with the promotion of the Company or the Offer of Shares under this Prospectus other than the remuneration set out in Section 13.3.

MDS Financial Services Pty Ltd the fees as outlined in Section 11.8 for its services.

13.6 Consents Each of the parties referred to in this Section: (a)

do not make, or purport to make, any statement in this Prospectus other than those referred to in this Section; and

(b)

to the maximum extent permitted by law, expressly disclaim and take no responsibility for any part of this Prospectus other than a reference to its name and a statement included in this Prospectus with the consent of that party as specified in this Section.

Pro Count Pty Ltd has acted as Independent Accountant and has prepared an Independent Accountant’s Report which has been included in Section 8 of this Prospectus.

The Company estimates it will pay Pro Count Pty Ltd a total of $4,500 for these services.

Bennett + Co has acted as the Australian solicitors to the Company in relation to this Prospectus. The Company estimates it will pay Bennett + Co $20,000 for these services up to the date of lodgement of this Prospectus with ASIC. Subsequently, fees will be charged in accordance with normal charge out rates.

BMGS Perth Pty Ltd has acted as the Independent Geologist and has prepared the Independent Geologist’s Report set out in Section 7 of this Prospectus. The Company estimates that it will pay BMGS Perth Pty Ltd a total of $20,000 for these services.

Restituto M Mendoza has acted as the Philippines solicitors to the Company in relation to this Prospectus, has been involved in and has prepared the Solicitor’s Report on Claims set out in Section 9 of this Prospectus. The Company estimates it will pay approximately $2,500 for these services.

MDS Financial Services Pty Ltd has acted as Corporate Advisor to the Company and Sponsoring Broker for the Offer in relation to this Prospectus. The Company will pay

Pro Count Pty Ltd has given their written consent to being named as Independent Accountant in this Prospectus and to the inclusion of the Independent Accountant’s Report in Section 8 in the form and context in which the report is included. Pro Count Pty Ltd has not withdrawn its consent prior to lodgement of this Prospectus with ASIC. Bennett + Co has given its written consent to being named as the Australian solicitor to the Company in this Prospectus. Bennett + Co has not withdrawn its consent prior to the lodgement of this Prospectus with ASIC. MDS Financial Services Pty Ltd has given its written consent to being named as the Corporate Advisor to the Company and Sponsoring Broker to the Offer in this Prospectus has not withdrawn its consent prior to the lodgement of this Prospectus with ASIC. Restituto M Mendoza has given its written consent to be named as the Philippines solicitor to the Company in this Prospectus and to the inclusion of the Solicitor’s Report on Claims in Section 9 in the form and context in which the

Cape Range 2011

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Cape Range LTD

Additional Information report is included. Restituto M Mendoza has not withdrawn its consent prior to lodgement of this Prospectus with ASIC. BMGS Perth Pty Ltd has given its written consent to being named as the Independent Geologist to the Company in this Prospectus and to the inclusion of the Independent Geologist’s Report in Section 7 in the form and context

in which the report is included. BMGS Perth Pty Ltd has not withdrawn its consent prior to the lodgement of this Prospectus with ASIC. 13.7 Expenses of the Offer The cash expenses of the Offer are estimated to be approximately $345,000 and are expected to be applied towards the items set out in the table below:

ITEMS OF EXPENDITURE

AMOUNT $

ASIC fees

2,500

ASX fees1 25,000 Printing, mail, postage

2,000

Artwork, website

3,500

Legal Fees - Bennett + Co

20,000

Legal Fees - Restituto M Mendoza

2,500

Corporate Advisory Fees1 265,000 Independent Accountant’s Fees

4,500

Independent Geologist’s Fees

20,000

TOTAL

$345,000

Notes:

1 Based on the Company raising $5,000,000 pursuant to the Offer.

13.8 Litigation On 19 May 2011 the Supreme Court of Western Australia gave the Company leave to issue a writ against Ox Mining (PVT) Limited (Ox Mining) and for leave to serve the writ outside Western Australia. The writ was issued on 26 May 2011 and in accordance with the Supreme Court Rules, arrangements have been made for notice of the writ to be served on Ox Mining through diplomatic channels.

The writ claims amongst other relief, the return of the sum of US$950,000 loaned to Ox Mining and restitution of the sum of US$250,000 paid to Ox Mining as an option fee under the terms of a loan agreement, heads

102

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SECTION 13

of agreement and option agreement entered into with Ox Mining in July and September 2010, further or alternatively damages, together with interest and costs.

Once notice of the writ is served, Ox Mining will have 30 days to file and serve a notice of appearance failing which judgment in default may be entered against it.

As at the date of this Prospectus, the Company is not involved in any other legal proceedings and the Directors are not aware of any other legal proceedings pending or threatened against the Company.

Cape Range LTD

Additional Information 13.9 Electronic Prospectus Pursuant to Class Order 00/044, ASIC has exempted compliance with certain provisions of the Corporations Act to allow distribution of an electronic Prospectus on the basis of a paper Prospectus lodged with ASIC, and the publication of notices referring to an electronic Prospectus, subject to compliance with certain conditions.

If you have received this Prospectus as an electronic Prospectus, please ensure that you have received the entire Prospectus accompanied by the appropriate Application Forms. If you have not, please email the Company at admin@caperange.com.au and the Company will send you, for free, either a hard copy or a further electronic copy of the Prospectus or both. Alternatively, you may obtain a copy of the Prospectus from the Company’s website at www.caperange.com.au.

The Company reserves the right not to accept an Application Form from a person if it has reason to believe that when that person was given access to the electronic Application Form, it was not provided together with the electronic Prospectus and any relevant supplementary prospectus or any of those documents were incomplete or altered.

13.10 Taxation The acquisition and disposal of Shares in the Company will have tax consequences, which will differ depending on the individual financial affairs of each investor. All potential investors in the Company are urged to obtain independent financial advice about the consequences of acquiring Shares from a taxation viewpoint and generally.

To the maximum extent permitted by law, the Company, its officers and each of their respective advisors accept no liability and responsibility with respect to the taxation consequences of subscribing for Shares under this Prospectus.

13.11 Financial Forecasts The Directors have considered the matter set out in ASIC Regulatory Guide 170 and believe that they do not have a reasonable basis to forecast future earnings on the basis that the operations of the Company are inherently uncertain. Accordingly, any forecast or projection information would contain such a broad range of potential outcomes and possibilities that it is not possible to prepare a reliable best estimate forecast or projection.

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Cape Range LTD

14 Directors' Authorisation This Prospectus is issued by the Company and its issue has been authorised by a resolution of the Directors.

In accordance with Section 720 of the Corporations Act, each Director has consented to the lodgement of this Prospectus with ASIC.

____________________ Joe Cornelius Managing Director For and on behalf of CAPE RANGE LIMITED

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Cape Range LTD

15 Glossary Where the following terms are used in this Prospectus they have the following meanings: A$ or $ means an Australian dollar.

Application Form means the application form accompanying this Prospectus relating to the Offer.

ASIC means the Australian Securities & Investments Commission.

Constitution means the constitution of the Company.

Corporations Act means the Corporations Act 2001 (Cth).

CMPL means Camarines Mining Pty Ltd (ACN 149 248 448).

CNMEI means Camarines Norte Mining and Exploration Inc, a corporation duly established and existing under and by virtue of Philippines law.

Directors means the directors of the Company at the date of this Prospectus.

ASX means ASX Limited (ABN 98 008 624 691).

Board means the board of Directors of the Company as constituted from time to time.

Camarines Norte Gold Project or Project means the rights of CMPL to minerals on the following tenements in the Camarines Norte province of the Philippines subject to the Permitted Encumbrances: (a) Small Scale Mining Permit granted under Environmental Compliance Certificate ECCRO5-O711-3721; (b) Application For a Production Sharing Agreement APSA 00322-V; and (c)

Exploration Permit Application EXPA-000061-V.

Closing Date means the closing date for the Offer as set out in Section 3.2, or such other date as determined by the Directors at their sole discretion.

Company means Cape Range Limited (ABN 43 009 289 481).

Exposure Period means the period of 7 days after the date of lodgement of this Prospectus, which period may be extended by ASIC by not more than 7 days pursuant to Section 727(3) of the Corporations Act. Geomin means Geomin Resources Asia, Inc, registration number CS200917115, a private company incorporated in accordance with the laws of the Republic of the Philippines, a wholly owned subsidiary of CMPL. GMC means Guidance Management Corporation, a corporation duly established and existing under and by virtue of Philippine law.

JORC means the Australasian Joint Ore Reserves Committee for reporting Mineral Resources and Ore Reserves.

Listing Rules means the official listing rules of ASX. Loyalty Option means an option to acquire a Share proposed to be offer under the non-renounceable entitlements offer referred to in Section 4.9.

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105

Cape Range LTD

Glossary Milestone Option means an option to acquire a Share exercisable at 30 cents and expiring on the later of 31 March 2016 or 12 months after the expiration of any escrow restriction imposed by ASX. Net Smeltering Revenue means a royalty based on gold production calculated as a percentage of the gross revenue received from the gold produced less all costs associated with the mining and processing of gold, including depreciation and amortisation.

NIBDC means Northern Islands Builders and Development Corporation, a domestic corporation duly organised and existing under the laws of the Republic of the Philippines.

Offer means the offer of 25,000,000 Shares at $0.20 cents each (with the ability to accept oversubscriptions for a further 5,000,000 Shares) as set out in this Prospectus.

(c) the surface land owners are jointly entitled to a total of 1% of Net Smeltering Revenue on all future mineral production on APSA 00322-V; and (d)

Geomin is required to repay $250,000 to Mineral Agencies Pty Ltd upon the commencement of commercial production on the Camarines Norte Gold Project.

Prospectus means this Prospectus.

Section means a section of this Prospectus.

Share means a fully paid ordinary share in the capital of the Company.

Share Registry means Advanced Share Registry

Official List means the Official List of ASX.

Services Ltd.

Official Quotation means official quotation by ASX in accordance with the Listing Rules.

Share Sale Agreement means the agreement between

Option means an option to subscribe for a Share.

Permitted Encumbrances means: (a)

NIBDC has the right to a 10% share of net profits derived from the mining of APSA 00322-V and is also entitled to receive 2% of Net Smeltering Revenue on all future mineral production from that tenement;

the Company and the Vendors dated 30 May 2011 which provides the Company with the right to acquire 100% of the issued share capital of CMPL. Shareholder means a holder of Shares.

US$ or USD means a United States dollar.

Vendor Option means an option to acquire a Share exercisable at 25 cents and expiring on 31 March 2015.

(b)

NIBDC is entitled to receive the amount of 2,000,000 Philippines peso upon commercial production and is to be reimbursed by CMPL for expenses relating to perfection of mineral rights in relation to APSA 00322-V;

106

Vendors means all of the shareholders of CMPL and Vendor means any one of the Vendors.

WST means Western Standard Time in Western Australia.

Cape Range 2011

SECTION 15

✂

APPLICATION FORM CAPE RANGE LIMITED ACN 009 289 481

The securities to which this application form (Application Form) relates are fully ordinary paid shares (Shares) in the capital of Cape Range Limited (Company). A prospectus containing information regarding investment in Shares was lodged with the Australian Securities and Investments Commission on 1 July 2011 (Prospectus). While the Prospectus is current, the Company will send paper copies of the Prospectus, any supplementary documents and the Application Form, free of charge to any person upon request. You should read the Prospectus before applying for Shares. A person who gives another person access to the Application Form must at the same time and by the same means give the other person access to the Prospectus and any supplementary document.

PLEASE READ CAREFULLY ALL INSTRUCTIONS ON THE REVERSE OF THIS FORM. Full Name: (PLEASE PRINT)

Title, Given Name(s) & Surname or Company Name

Joint Applicant #2 or <designated account>

Joint Applicant #3 or <designated account>

Postal Address: (PLEASE PRINT)

Street Number

Suburb/Town

ABN, Tax File Number or Exemption

Street

Applicant #2

Post Code

Applicant #3

CHESS HIN or Existing SRN (where applicable) Number of Shares applied for

Application money enclosed at 20 cents per Share

A$……………………………

I/We whose full name(s) and address appear above hereby apply for the number of Shares shown above (to be allocated to me/us by the Company in respect of this application) under the Prospectus on the terms set out in the Prospectus.

PLEASE ENTER CHEQUE DETAILS THANKYOU Drawer

Bank

BSB or Branch

Amount

My/Our contact numbers in the case of inquiry are: Telephone ( ) . . . . . . . . . . . . . . . . . . . . . . . . .

Fax ( ) . . . . . . . . . . . . . . . . . . . . . . . . .

Cheques should be made payable to Cape Range Limited - Subscription Account, crossed “NOT NEGOTIABLE”. Cheques and completed Application Forms should be forwarded, to arrive no later than 5:00pm WST on 5 August 2011 (or such other date as is determined by the Directors) to Cape Range Ltd: Cape Range Limited - Subscription Account Cape Range Ltd PO Box 401 BELMONT WESTERN AUSTRALIA 6984

If an applicant has any questions on how to complete this Application Form, please telephone Advanced Share Registry on (08) 9389 8033

✂

GUIDE TO THE APPLICATION FORM A.

Application for Shares The Application Form must only be completed in accordance with instructions included in the Prospectus.

B.

Name of Applicant Write the applicant’s FULL NAME. This must be either an individual’s name or the name of a company. Please refer to the bottom of this page for the correct form of registrable title. Applications using the incorrect form of registrable title may be rejected.

C.

Name of Joint Applicants or Account Designation If JOINT APPLICANTS are applying, up to three joint applicants may register. If applicable, please provide details of the account designation in brackets. Please refer to the bottom of this page for instructions on the correct form of registrable title.

D. Address

Enter the applicant’s postal address for all correspondence. If the postal address is not within Australia, please specify Country after City/Town.

E.

Contact Details Please provide a contact name and daytime telephone number so that the Company can contact the applicant if there is an irregularity regarding the Application Form.

F.

CHESS HIN or existing SRN Details The Company participates in CHESS. If the applicant is already a participant in this system, the applicant may complete this section with their existing CHESS HIN. If the applicant is an existing Shareholder with an Issuer Sponsored account, the SRN for this existing account may be used.

Otherwise leave the section blank and the applicant will receive a new Issuer Sponsored account and statement.

G.

Cheque Details Make cheques payable to “Cape Range Limited – Subscription Account” in Australian currency and cross them “Not Negotiable”. Cheques must be drawn on an Australian bank. The amount of the cheque should agree with the amount shown on the Application Form.

H. Declaration

This Application Form does not need to be signed. By lodging this Application Form and a cheque for the application money the applicant hereby: (1) applies for the number of Shares specified in the Application Form or such lesser number as may be allocated by the Directors; (2) agrees to be bound by the Constitution of the Company; (3) authorises the Directors of the Company to complete or amend this Application Form where necessary to correct any errors or omissions; (4) acknowledges that he/she has received a copy of the Prospectus attached to this Application Form before applying for the Shares; and (5) acknowledges that he/she will not provide another person with this Application Form unless it is attached to or accompanied by the Prospectus.

(6) Acknowledges that by completing the Application Form constitutes a binding and irrevocable offer to subscribe for the number of Shares specified in the Application Form CORRECT FORMS OF REGISTRABLE TITLE Note that ONLY legal entities are allowed to hold securities. Application Forms must be in the name(s) of a natural person(s), companies or other legal entities acceptable to the Company. At least one full given name and the surname is required for each natural person. Application Forms cannot be completed by persons under 18 years of age. Examples of the correct form of registrable title are set out below.

TYPE OF INVESTOR Individual Use given names in full, not initials

CORRECT FORM OF REGISTRABLE Mr John Alfred Smith

INCORRECT FORM OF REGISTRABLE TITLE J A Smith

Company

Use the company’s full title, not abbreviations

ABC Pty Ltd

ABC P/L or ABC Co

Joint Holdings Mr Peter Robert Williams & Use full and complete names Ms Louise Susan Williams

Peter Robert & Louise S Williams

Trusts Mrs Susan Jane Smith Use the trustee(s) personal name(s) <Sue Smith Family A/C>

Sue Smith Family Trust

Deceased Estates Ms Jane Mary Smith & Estate of late John Smith Use the executor(s) personal name(s) Mr Frank William Smith or <Est John Smith A/C> John Smith Deceased Minor (a person under the age of 18) Use the name of a responsible adult with an appropriate designation.

Mr John Alfred Smith <Peter Smith A/C>

Master Peter Smith

Partnerships Mr John Robert Smith & Use the partners personal names.

Mr Michael John Smith

<John Smith and Son A/C>

John Smith and Son

Long Names. Mr John William Alexander Robertson-Smith

Mr John W A Robertson-Smith

Clubs/Unincorporated Bodies/Business Names Use office bearer(s) personal name(s).

ABC Tennis Association

Mr Michael Peter Smith <ABC Tennis Association A/C>

Superannuation Funds Jane Smith Pty Ltd Jane Smith Pty Ltd Use the name of the trustee of the fund. <Super Fund A/C> Superannuation Fund

✂

APPLICATION FORM CAPE RANGE LIMITED ACN 009 289 481

The securities to which this application form (Application Form) relates are fully ordinary paid shares (Shares) in the capital of Cape Range Limited (Company). A prospectus containing information regarding investment in Shares was lodged with the Australian Securities and Investments Commission on 1 July 2011 (Prospectus). While the Prospectus is current, the Company will send paper copies of the Prospectus, any supplementary documents and the Application Form, free of charge to any person upon request. You should read the Prospectus before applying for Shares. A person who gives another person access to the Application Form must at the same time and by the same means give the other person access to the Prospectus and any supplementary document.

PLEASE READ CAREFULLY ALL INSTRUCTIONS ON THE REVERSE OF THIS FORM. Full Name: (PLEASE PRINT)

Title, Given Name(s) & Surname or Company Name

Joint Applicant #2 or <designated account>

Joint Applicant #3 or <designated account>

Postal Address: (PLEASE PRINT)

Street Number

Suburb/Town

ABN, Tax File Number or Exemption

Street

Applicant #2

Post Code

Applicant #3

CHESS HIN or Existing SRN (where applicable) Number of Shares applied for

Application money enclosed at 20 cents per Share

A$……………………………

I/We whose full name(s) and address appear above hereby apply for the number of Shares shown above (to be allocated to me/us by the Company in respect of this application) under the Prospectus on the terms set out in the Prospectus.

PLEASE ENTER CHEQUE DETAILS THANKYOU Drawer

Bank

BSB or Branch

Amount

My/Our contact numbers in the case of inquiry are: Telephone ( ) . . . . . . . . . . . . . . . . . . . . . . . . .

Fax ( ) . . . . . . . . . . . . . . . . . . . . . . . . .

Cheques should be made payable to Cape Range Limited - Subscription Account, crossed “NOT NEGOTIABLE”. Cheques and completed Application Forms should be forwarded, to arrive no later than 5:00pm WST on 5 August 2011 (or such other date as is determined by the Directors) to Cape Range Ltd: Cape Range Limited - Subscription Account Cape Range Ltd PO Box 401 BELMONT WESTERN AUSTRALIA 6984

Cape Range LTD ABN 43 009 289 481

Unit 5, 324 Great Eastern Highway Ascot, Western Australia, 6104 PO Box 401, Belmont, WA, 6984 Telephone: +61 (08) 9479 6044 Facsimile: +61 (08) 9479 4044 Email: admin@caperange.com.au