Confidential: Kinetiko Energy Limited - Information Memorandum January 2010

CB35025

(ACN Pending)

Information
Memorandum
For the Issue of 3,000,000 shares
At an issue price of $0.10 per share to raise
$300,000.00

January 2010
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Confidential: Kinetiko Energy Limited - Information Memorandum January 2010

DISCLAIMER & CONFIDENTIALITY NOTICE

This Information Memorandum (“Memorandum”) is not a disclosure document. This

Memorandum is specifically provided to the receiving party (“Recipients”) for the purpose of
reviewing the investment opportunity in Kinetiko Energy Ltd (“Kinetiko”). Any information
contained in this Memorandum, or subsequently provided to the Recipient whether orally or in
writing by or on behalf of the Company or its respective employees, agents or consultants
(“Information”) is provided to the Recipient on the terms and conditions set out in this
Memorandum.
The information contained in this Memorandum is confidential and proprietary to Kinetiko and
has been prepared to assist the recipient in an evaluation of an investment in Kinetiko and is
only being provided to selected persons who are entitled to be offered and issued Shares
pursuant to Section 761G of the Corporations Act without the need for a disclosure document.
The offer may only be accepted by the person to whom it is made. This Memorandum is
confidential and is not to be copied or disseminated in any form to any other person without the
prior written consent of Kinetiko.
Before deciding to invest in Kinetiko, the Recipient should read the entire Memorandum and, in
particular, in considering the prospects for Kinetiko, the Recipient should consider the risk factors that
could affect the financial performance of Kinetiko. Investors should carefully consider these factors
in light of personal circumstances (including financial and taxation issues). Kinetiko is in the early
stages of development and the risks are therefore significant. The Shares offered by this
Memorandum should be considered speculative. Refer to Section 9 of this Memorandum for details
relating to risk factors. Investors should seek professional advice from an accountant, stockbroker,
lawyer or other professional advisor before deciding whether to invest.
The Memorandum (and the information contained therein) is confidential to Kinetiko and it is not
intended for and should not be distributed to any other person other than as permitted herein. By
its acceptance, the Recipient agrees that it will not transmit, reproduce or make available the
Memorandum (or any information contained herein) to anyone other than to its professional
advisers without the prior consent of Kinetiko. Any such disclosure to the advisers of the Recipient
must be on a confidential basis, for the purpose only of assessing the information contained herein as
adviser to the Recipient.
The Memorandum does not purport to contain all the information that a prospective investor may
require. In all cases, before acting in reliance on any information, the Recipient should conduct its
own investigation and analysis in relation to the business opportunity and should check the
accuracy, reliability and completeness of the information and obtain independent and specific
advice from appropriate professional advisers.
Kinetiko makes no representation or warranty (express or implied) as to the accuracy, reliability or
completeness of the information. Kinetiko and its respective directors, employees, agents and
consultants shall have no liability (including liability to any person by reason of negligence or
negligent misstatement) for any statements, opinions, information or matters (express or implied)
arising out of, contained in or derived from, or for any omissions from the Memorandum, except
liability under statute that cannot be excluded.
The Memorandum contains reference to certain intentions, expectations and plans of Kinetiko. Those
intentions, expectations and plans may or may not be achieved. They are based on certain
assumptions which may not be met or on which views may differ. The performance and operations
of Kinetiko may be influenced by a number of factors, many of which are outside the control of
Kinetiko. No representation or warranty, express or implied, is made by Kinetiko or any of its
respective directors, officers, employees, advisers or agents that any intentions, expectations or
plans will be achieved either totally or partially or that any particular rate of return will be achieved.
Kinetiko reserves the right to reject any expression of interest and to withdraw this Memorandum
at any time without giving notice of reasons to Recipients. The lodgement of an expression of
interest by a Recipient may or may not result in an offer being made to the Recipient, on such
terms as Kinetiko may determine.
This Memorandum replaces the previous information memorandum issued by Kinetiko and
supersedes all the statements and representations made therein.
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Confidential: Kinetiko Energy Limited - Information Memorandum January 2010
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19

TABLE OF CONTENTS

1.CORPORATE DIRECTORY 4

2. EXECUTIVE SUMMARY 5

3.LETTER FROM CHAIRMAN 6

4.PROPOSED CAPITAL STRUCTURE 7

5.PROPOSED APPLICATION OF FUNDS . 7

6.COMPANY OVERVIEW & OBJECTIVES .. 8

7.CURRENT AND PROSPECTIVE PROJECTS. . 9

0.MANAGEMENT TEAM

8. RISK FACTORS .

9. GLOSSARY OF TERMS 21
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Confidential: Kinetiko Energy Limited - Information Memorandum January 2010
1.CORPORATE DIRECTORY
Executive Chairman
Managing Director:
Executive Director:
Registered Office:
Solicitors:
Accountants:
Corporate Advisors:
Bankers:
Agapitos M. (Geoff) MICHAEL
C/- 283 Rokeby Road
Subiaco WA 6008
Phone +61 8 6314 0556
Dr. D. James SEARLE
C/- 283 Rokeby
Road Subiaco WA
6008
Phone +61 8 6314 0556
Michael M. MICHAEL
C/- 283 Rokeby
Road Subiaco WA
6008
Phone +61 8 6314 0556
C/- Price Sierakowski Lawyers
Level 24, 44 St Georges
Terrace Perth WA 6000
Price Sierakowski Lawyers
Level 24, 44 St Georges
Terrace Perth WA 6000
Barrington Partners
283 Rokeby Rd
Subiaco WA 6008
Trident Capital Pty Ltd
Level 24, 44 St George’s
Terrace Perth WA 6000
Ageus Ltd
283 Rokeby Rd
Subiaco WA
6008
ANZ Bank
Hay St Subiaco
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Confidential: Kinetiko Energy Limited - Information Memorandum January 2010

2.EXECUTIVE SUMMARY

PROFILE Kinetiko’s objective is to create wealth for its shareholders through

the development of its energy prospects via the
implementation of sound strategies and action plans.

MANAGEMENT Kinetiko is managed by competent and experienced

professionals
with a strong background in exploration and the
administration of companies. In addition, the Company
has associations with and access to some of the industry’s
best corporate, engineering and resource consultants.

PROSPECTS The Company is pursuing a portfolio considered to be highly

prospective due to the quality of exploration targets in the
areas selected and historical references.

THE OFFER The Company is seeking to raise seed capital of up to $300,000

by the issue of 3,000,000 fully paid ordinary shares at
10.0 cents per share to persons whom exceptions in
Section 761G of the Corporations Act apply. The Board of
the Company reserves the right to extend this offer and
raise additional seed capital.

MINIMUM The minimum subscription to be raised pursuant to this

SUBSCRIPTION Memorandum is $300,000. No Shares will be allotted by
the
Company until minimum subscription has been
reached. The Board of the Company reserves the right to
change the minimum subscription.
USE OF FUNDS Funds raised pursuant to this Issue will be used to fund
the
operation, management and administration of the
Company, to secure and establish the portfolio of
exploration properties.

EXIT STRATEGY The Directors intend pursuing liquidity options for

shareholders
such as a trade sale, joint venture or listing on the ASX via
an IPO in the short to medium term should it be viable
to do so. The Directors cannot guarantee that the
Company will achieve any of these outcomes and the
raising of funds is not conditional upon this occurring.

APPLICATIO To apply for Shares offered pursuant to this

NS FOR Memorandum, the Application Form accompanying this
SHARES Memorandum must be completed in accordance with
the instructions accompanying it.
The Company reserves the right to decide whether or not
to make offers and to issue Shares to such persons as
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The Company
Confidential: Kinetiko Energy Limitedwill make offersMemorandum
- Information to personal, sophisticated
January 2010
and professional investors in accordance with the
requirements of Section 761G of the Corporations Act
and others as permitted.
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Confidential: Kinetiko Energy Limited - Information Memorandum January 2010

3.LETTER FROM CHAIRMAN

Dear Investor,

On behalf of the Board of Directors, I am pleased to invite you to become a shareholder

of Kinetiko Energy Ltd.
The Company was incorporated with a view to giving investors the opportunity for early
participation in emerging energy exploration and development opportunities. By this
Information Memorandum, the Company seeks to raise sufficient capital and gain
sufficient shareholder spread to enable it to seek out and evaluate opportunities before it
today in the Republic of South Africa. In particular and with focus on the proposed Joint
Venture with Badimo Gas on its Coal Bed Methane Licences in Amersfoort South Africa.

With an experienced Board of Directors, a spread of supportive shareholders, and the

ability to raise further funds, I believe the Company will be able to progress these
opportunities and to develop then further to the advantage of The Company and its
shareholders.

In determining the suitability of these opportunities and further development, your

directors will use their knowledge and experience to analyse these opportunities in
Southern Africa. To get The Company to this point they have involved themselves in a
process to locate and identify prospective Coal bed Methane fields and Joint Venture
partners with the following criteria:

Exploration targets in known coal fields with gassy coal deposits of the correct nature
Prospective Joint Venture partners with the correct attributes and abilities
Locations within infrastructure serviced regions assisting with development
Ability to achieve realistic commercial milestones to develop and explore the projects.

Due to the uncertainties inherent in the process of identifying and acquiring a suitable
acquisition and the nature of exploring and developing existing projects, an investment in
the Company should be considered speculative in nature.

I look forward to welcoming you as a shareholder of the Company.

Yours faithfully

A.M.G (Geoff) Michael

Chairman
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Confidential: Kinetiko Energy Limited - Information Memorandum January 2010

4.PROPOSED CAPITAL STRUCTURE

Shares Seed Seed IPO Options

ITEM 5 Cents 10 cents 20 cents
Promoters and
facilitators 20,000,000 29,000,000

Seed Investors 2,000,000

Seed Investors 3,000,000 1,000,000

IPO and Listing of
Kinetiko 35,000,000

SUB TOTALS: 20,000,000 2,000,000 3,000,000 35,000,000 30,000,000

TOTAL SHARES & OPTIONS: 60,000,000 30,000,000

5.PROPOSED APPLICATION OF FUNDS

The company intends raising a minimum $300,000 by this issue, which it

currently expects to expend as follows including capital raised in the initial
seed raising of $100,000 (expenditure may change at the direction of the
Board),

Travel $ 35,000 .00

Geological Consultants $ 20,000 .00
Land Tenure Advice & Search $ 15,000 .00
Data Acquisition $ 20,000 .00
Legal Advice Domestic $ 15,000 .00
Legal Advice Overseas $ 30,000 .00
Corporate Overheads $ 15,000 .00
Operation Expenses $ 40,000 .00
IPO - Corporate Advisory $ 30,000 .00
IPO - Accounting & Legals $ 25,000 .00
IPO - Ind. Geologist Rep/Apps. $ 55,000 .00
IPO - Corporate Services $ 30,000 .00
IPO - ASX / ASIC Fees $ 10,000 .00
IPO - Printing & Production $ 20,000 .00
Contingency $ 40,000 .00
TOTAL: $ 400,000.00
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Confidential: Kinetiko Energy Limited - Information Memorandum January 2010

6.COMPANY OVERVIEW & OBJECTIVES

The Company is an unlisted Australian public company with the key

objective to capitalise the Company and provide a spread of additional
shareholders. In this position the Company will then be able to engage in the
exploration and possible development of energy related coal seam gas/ coal
bed methane opportunities as are currently before The Company in Southern
Africa.
The Company’s Board will actively seek out and examine these investment
opportunities drawing upon their significant corporate experience and network
of contacts to evaluate the viability of these projects and investment
opportunities that will add shareholder wealth. It will also use these
capabilities to seek out and locate other opportunities for The Company at
the appropriate time.
Investment Criteria
The Board will be seeking to provide solid returns for its shareholders over
time by participating in business and/or investment opportunities in energy
related projects.
The Company’s philosophy is to provide an appropriate return to shareholders
with an acceptable degree of risk in the medium to longer term in accordance
with the guidelines and processes detailed below.
Investment Guidelines
In determining the suitability of these opportunities, your Directors have
used their knowledge and experience plus carried out appropriate research
and field trips to Southern Africa to establish the correct opportunities to
pursue. The principal investment criteria for CSG/CBM opportunities in
Southern Africa are:
Exploration targets in known coal fields with gassy coal deposits of the correct nature
Prospective Joint Venture partners with the correct attributes and abilities
Locations within infrastructure serviced regions assisting with exploration,
development and commercialization
Ability to achieve realistic commercial milestones to develop and explore the
projects.

Future Funding
The Company may continue to raise additional capital in the future (at
prices to be determined) to ensure appropriate prudential reserves are
maintained to secure and protect shareholder funds. These future equity
raisings may be through a public offering or private placement of stock with
strategically selected investors. The impact of these future raisings may
dilute the position of current shareholders and Investors under this Information
Memorandum.
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Confidential: Kinetiko Energy Limited - Information Memorandum January 2010

7.CURRENT PROJECTS.
Kinetiko has executed a Memorandum of Understanding, “The MOU”
with Badimo Gas Pty Ltd to form a Joint Venture to explore and
develop 4 CBM / CSG licences at Amersfoort in Eastern South Africa
as set out in the Overview and Context below.

The MOU is a precursor to a Joint venture agreement that will see

Kinetiko enter into an, ‘Earn in Agreement’ to spend ZAR 26,000,000
before December 2011.

It is proposed at present that once the funds have expended at the

direction of Kinetiko and Kinetiko exercises its rights and executes
its obligations to continue with the Amersfoort proj ect, Kinetiko will
have a 49% commercial interest in the Amersfoort project via a JV
company with Badimo that will direct and manage all activities of
the JV by Mutual consent. The current proposed structure and possible
events are set out in the diagram below.

Amersfoort Coal Bed Methane Project Overview

and Context
Introduction
The Amersfoort Coal Bed Methane (CBM) Project has the potential to
be a significant long term supplier of gas and chemical feedstock
into a growing and energy hungry domestic market in the Republic of
South Africa. With CBM Gas in Place (GIP) of 1.7 Tcf (trillion cubic feet)
calculated for the project exploration licences there is the
opportunity for exploration and production testing to rapidly and cost
effectively demonstrate a viable gas production potential which will
support a range of commercialisation scenarios. The project is further
enhanced by the potential for conventional gas originally generated
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Confidential:
by the coalKinetiko Energy Limited
maturation process- Information Memorandum
but now trapped January
within 2010
sandstone
reservoirs adjacent to the
independent e
seams. The current CBM GIP estimate prepared by xperts Gustavson
and
Associates of Denver, Colorado, of 1.7tcf does not yet include
conventional gas.
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Confidential: Kinetiko Energy Limited - Information Memorandum January 2010

Demands for all forms of energy are growing throughout sub Saharan Africa.
The South African parastatal electrical generator and transmission company
Eskom has in recent years been finding it increasingly difficult to meet peak
demands of the countries that constitute the Southern African Power Pool
including South Africa. Eskom not only faces considerable challenges in
financing and building new generating and transmission capacity but has also
had issues with supply of coal to its power stations. Demand is also growing in
the region for petrochemicals, fertilizers and transport fuels. The Amersfoort
CBM Project is located close the majority of South Africa’s power
generation infrastructure and the majorpopulation and manufacturing centre
of Johannesburg. The Majuba Power Station, a 4,110MW coal fired facility is
located within sight of the Amersfoort CBM Project. Originally the power
station was to be fed by the Majuba Colliery in the Amersfoort area before it
was closed prematurely for technical reasons that included methane gas issues.

Kinetiko Energy is earning a 49% interest in the Amersfoort Project by

spending R26 million (A$4m) on exploration within a 2 year period.
Exploration and development then be funded by Kinetiko (49%) and Badimo
(51%). Kinetiko will also pay Badimo Gas R10m on conclusion of the earn in
phase as partial re-imbursement of costs once regulatory approval for transfer
of Kinetiko’s 49% interest is completed.
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Confidential: Kinetiko Energy Limited - Information Memorandum January 2010

Amersfoort Coal and CBM Geology

The most productive coal measures of Southern Africa are Permian in age
contained within the extensive Permo-Triassic basins containing the Karoo
Supergroup. These temperate climate coals are generally equivalent to the
similarly aged coals of Eastern Australia. At Amersfoort the most significant coal
seams are contained within the Vryheid Formation of the Ecca Group. The shales
and sandstones of the Vryheid are intruded by dolerite sills and dykes.

The Amersfoort Project is located in the Ermelo Coalfield within the coal bearing
region of Permian coals that has been supplying a significant portion of
Southern Africa’s energy needs for over a century. However the coals of the
Amersfoort area have proved difficult to mine commercially. The Majuba
Colliery near Amersfoort was intended to supply the nearby Majuba Power
Station; however a range of technical factors including methane gas
terminated operations in 1993. Exploration drilling for coal during the early
1980’s in the deeper parts of the Ermelo Coalfields around Amersfoort area
has defined with considerable detail the distribution and depth of the seams
beneath the Kinetiko-Badimo CBM licences and the geology of overlying
sandstones and intruding dolerite dykes and sills. As part of this exploration
854 diamond core holes were drilled on or near what are now the Amersfoort
gas exploration licenses. This data has provided detailed information on coal
depths, thicknesses that form the basis of the independent resource
assessment by Gustavson and Associates of 1.7tcf of gas in place (GIP) within
the Kinetiko-Badimo gas exploration licenses.

The geology of the Amersfoort area is exceptionally well defined due to coal
exploration drilling.
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Confidential: Kinetiko Energy Limited - Information Memorandum January 2010

Average depths to the most significant coal seams range from 315 to 385m,
total coal thicknesses range from less than 1 to 16m. The coals range from
high volatile bituminous to medium bituminous. Gas contents of the coals in
excess of 10m3/t were measured in studies associated with the various mining
attempts. For the GIP calculations a mean value of 5m3/t was used.
The conventional gas potential of the Amersfoort area stems from
consideration of the maturation history of the coals. Burial and basin heat flows
began the coal maturation but the process would have been on-going and
overlapping with the emplacement of the dolerite sills. There is clear
evidence of devolatilization of the coals in proximity to the dolerites (Kavonic
et al ,1987). During maturation coals typically generate over 10 times the
amount of methane gas that can be retained in the coals (Eddy etc al ,
1982, Rightmire, 1984). This normally migrates over time from the host
sequences. However there is the potential for the dolerites and siltstones to
have trapped this fugitive gas in conventional accumulations in the porous
sandstones.

Gas escaping from a drill hole Gas bubbling in drill hole standing water.

Evidence for the conventional gas potential in the Amersfoort area is

indicated by the escape of gas that has been occurring from a number of the
coal exploration drill holes that have not been sealed. Gas can be seen
vigorously bubbling up through the standing water in the drill holes, and
reports from local farmers indicate this has been occurring continuously since
the holes were drilled nearly 30 years ago. The gas is unlikely to be derived by
desorption from the coal seams as hydrostatic pressure would be keeping the
CBM in place.
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Confidential: Kinetiko Energy Limited - Information Memorandum January 2010

Exploration and reserve definition strategies

As the Amersfoort Project already has a GIP estimate of 1.7tcf and well
defined coal distributions exploration has the opportunity to rapidly increase the
value of the project by moving towards independently certifiable reserves
within a 2 year period. The abundance of existing coal exploration drill holes
means there is limited need for drilling to define coal distribution in greater
detail. Exploration can commence with core drilling to recover material from
already defined coal sequences for CBM desorption testing and rapidly
progress to site selection for production test wells. Completion of production
test wells in tandem with commercialisation studies will then enable the
certification of reserves for the project. Kinetiko considers this progression
could be achieved within 2 years.

Amersfoort is a well defined exploration play with the potential for

rapid cost effective
definition of resources and reserves.
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Confidential: Kinetiko Energy Limited - Information Memorandum January 2010

Proposed expenditure and program for Amersfoort exploration and resource definition.

CBM Commercialisation

quently commercialisation scenarios for Amersfoort gas are varied in both nature and scale. However a

The 4,110Mw Majuba Power Plant viewed

from the Amersfoort Gas Project

the different energy demand sectors due to competition for inputs

like coal and gas and regulatory measures that have sought to try and
diversify energy demand to overcome increasing shortages in particular
sectors like electrical power. The optimal commercialisation route or
routes for Amersfoort CBM will depend on many factors not the least
being how different gas demand profiles compare with different
development, ramp up and production profiles that can only reliably be
determined at the production testing stage.
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Confidential: Kinetiko Energy Limited - Information Memorandum January 2010

Demand is growing but funding for increased power generation

is hard to come by.

Amersfoort CBM Project located at the heart of

South Africa's energy and transport infrastructure
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Confidential: Kinetiko Energy Limited - Information Memorandum January 2010

Commercialisation scenarios for Amersfoort include but are not limited to :

Independent Power Production either grid coupled or direct to a major customer.

Mini LNG interfaced IPP for peak load and distributed demand.
Gas sales into the existing coal powered generation plants for flame control
and ultimately for full co-generation.
CNG production and distribution by road and rail for to manufacturing
customers and fleet transport depots.
New generation plants (smaller capital) for synfuels and chemical feedstock
production probably in conjunction with a major industry partner or partners.

Sasol’s Secunda coal and gas to liquids complex 60km E of

Amersfoort
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Confidential: Kinetiko Energy Limited - Information Memorandum January 2010

8. MANAGEMENT TEAM
Donald James Searle B.Sc., PhD, MAusIMM, MAICD

Dr. Searle is a geologist, mining company executive and consultant with over
30 years experience worldwide in precious and base metals and energy
minerals. As an exploration geologist he has directed and participated in a
number of exploration programs resulting in significant commercial gold
discoveries. Corporately he has been involved at senior management and
board level leadership in resource project identification, acquisition,
financing, development and management in Australia and overseas. Dr
Searle was CEO and Executive Director of ASX listed Nordic goldminer Dragon
Mining Ltd for 8 years until 2005, and was instrumental in the company acquiring,
financing and developing gold mining projects in Sweden and Finland.

In the energy sector Dr Searle has been involved in oil and gas exploration and
research into modern marine sedimentation analogues of hydrocarbon
reservoirs. He has also provided consulting advice to major marine
engineering project proponents, governmental and international agencies on
coastal and near shore dynamics in Australia and South East and Southern
Asia.

Dr Searle has served on the boards of a number of stock exchange listed

mining and exploration companies in executive and non executive capacities
over the last 14 years. He is currently Chairman of the ASX listed copper
exploration and development company Redbank Copper Ltd.

Agapitos Marcus Geoffrey Michael B.A. (UWA)

Mr. Michael’s expertise and commercial experience lie in the areas of

project development, consulting and delivery in Australia, Europe and South
East Asia. He has experience in running projects and organizational based
enterprises in multi jurisdictional scenarios and putting together a best for
project team of professionals for the project delivery and operation.

Mr. Michael has been responsible for the creation and management of
various joint venture companies, investment syndicates and business start-
ups across a range of asset classes, from property investment, through
mining services and drilling to engineering and resources for over 20 years.

This has involved asset, property and equipment purchases, capital raisings,
structured finance, project feasibility, management and delivery, management
of the enterprises and assets along with devising correct and appropriately
timed exit strategies from investments to maximize return and manage
financial risk.

Prior to this, Mr. Michael had been involved with a family owned contracting
operation specializing in earthworks and civil construction on a large scale.
This involvement has endowed Mr. Michael with practical construction and civil
contracting experience.
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These Kinetiko
Confidential: areas of Energy
expertise are essential
Limited when dealing
- Information with project
Memorandum based
January 2010
operations and
outcome delivery as are present in the mining and exploration sector
along with

understanding of the operations and complexities of Joint Ventures and other

forms of financial and outcome partnering.

Partners and clients include: Multiplex Constructions Australia and United

Kingdom ( in JV), Grange Resources Ltd, British Telecom PLC, BT Syntegra
Benelux BV (The Netherlands), KPN Telephonica, Kantor Fond De
Netherlands, Life Care, Delta Health Care, Kailis Consolidated, Barrington
Partners, Quest Serviced Apartment Group, Coldwell Banker Pro Property,
Shangri –La Hotels and Resorts, Kerry City Properties Shanghai and various
private clients, investment syndicates and partners.

Geoff is also a Director of the engineering and construction contractor Unison

Holdings Ltd, Ageus Ltd a boutique corporate advisory practice, Lambrose Ltd
a focused property funds manager and is Chairman of Metaliko Resources
Ltd an unlisted public gold exploration company active in WA and Victoria.

Michael Marcus Michael B.A. (UWA), B.Bus. (ECU), AAIM, MAICD

Mr. Michael has accumulated many years of practical experience in founding,

developing and operating businesses in the roles of Executive and Non-
Executive Director, Managing Director, and Chairman. Many of which have
been enterprises in start-up.

Mr. Michael is skilled in areas as diverse as concept origination, innovation,

demand and commercial environment analysis, feasibility and due diligence
preparation, promotion and equity raising, joint venturing, competitive
presentations, sales and marketing.

Mr. Michael is tasked with designing, maintaining and implementing overall

planning frameworks for strategy formulation and change, optimal
organizational structure, and decision making processes to achieve a limiting
of contingent liability through financial and process control and reporting
systems for risk management, financial performance and profit maximization
through budgeting and cost control, and the provision of high product quality
and customer service based on identified competitive advantage, team
building and human resource management.

Mr. Michael has a track record on both coasts and abroad, demonstrating the
expertise to instruct and coordinate various professionals such as lenders,
capital raisers, funds managers and merchant bankers, accountants,
lawyers, town planners, architects, engineers and scientists, building and
civil contractors, that are all needed to deliver a project based outcome for a
financially driven solution in areas highly controlled by regulation and
governance.

Mr. Michael also has extensive experience in large scale earthmoving and
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mining services
Confidential: Kinetiko businesses at -managerial
Energy Limited Information and board level.
Memorandum This2010
January has
included being Non-Executive Founding Chairman of a drilling and mining
services company.

Mr. Michael is the serving President of the Hellenic Australian Chamber of

Commerce and Industry in Western Australia.

9. RISK FACTORS
As with any share investment, there are risks involved. This section identifies
the major areas of risk associated with an investment in Kinetiko; however
they should not be taken as an exhaustive list of the risk factors to which the
Company and its shareholders are exposed. Potential investors should read
the entire Memorandum and consult their professional advisor before
deciding whether to apply for Shares.

Investment Risk

The Shares to be issued pursuant to this Memorandum should be

considered speculative. They carry no guarantee as to liquidity, payment of
dividends, return of capital or the market value of the Shares. While the
Directors commend the Offer, prospective investors must make their own
assessment of the likely risks and determine whether an investment in Kinetiko
is appropriate to their own circumstances.

There are a number of risk factors that may impact on the future performance
of Kinetiko and the achievement of the Company’s financial objectives. Some of
these risks can be mitigated by appropriate safeguards and risk management
systems, but may are outside the control of the Company and cannot be
mitigated.

Investors need to consider the risks involved in an investment in Kinetiko before

making a decision whether or not to apply for Shares. The principal risk factors
include, but are not limited to, the following:

Non Diversification of Investments

The risk of non-diversified asset portfolio is generally higher than that of a fully
diversified investment portfolio.

The Company intends not to diversify its investments but rather focus on
identifying a few meaningful transactions.

Investors should note that a decision not to diversify may increase the overall
risk profile of the Company.

No liquid market to sell Shares and Options

Shareholders will not have a ready market to sell Shares and Options in the
Company because although the Shares and Options are freely transferable the
Company is at this stage a public unlisted company.
Additional Requirements for Capital/Debt Finance

The Company’s capital requirements depend on numerous factors. Depending

on the Company’s investment opportunities and its ability to generate
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income from
Confidential: its investments,
Kinetiko the- Company
Energy Limited may
Information require further
Memorandum financing
January 2010in
addition to the amounts raised pursuant to the offer. For a number of reasons
these funds may not be readily available.

Additional equity financing will dilute shareholdings and debt financing may
involve restrictions on future financing and operating activities. If the
Company is unable to obtain additional financing as required, the Company
may be required to review the scope of its operations.
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Confidential: Kinetiko Energy Limited - Information Memorandum January 2010

Reliance on Personnel
The Company’s success depends in part on the ability of the Directors to
operate effectively, both independently and as a group. The Company’s
success is wholly dependent on the ability of the Directors to identify and
acquire an investment business or project which fits the investment guidelines.
To manage its growth, the Company must also in due course identify, hire,
train, and retain skilled personnel and senior management. The Company
presently has no employees and no Director has a service contract with the
Company.

Other Business Risks

The Company, depending upon the investment it makes may be exposed to a

number of other business risks which include higher than anticipated operating
costs, an increase in competition and loss or damage to the Company’s
intellectual property and other assets, all of which may have a material
adverse affect on the business and financial position of the Company.

Timing

The Company has not presently identified a sustainable asset or project. The
timing of such asset identification is not known and the Directors can give no
assurance as to the ultimate timing or whether a suitable asset or project will
be identified at all.

Economic Risk and External Factors

Factors such as, but not limited to, economic slow-down or recession,
political movements, stock market trends, changing customer preferences,
interest rates, inflation levels, technological innovation, industrial disruption,
international competition and taxation changes may all have an adverse
impact on the Company and the Company cannot, to a degree of certainty,
predict how they will impact on the Company.

Investment May Not be Successful

Although the Company will adopt an extensive approach to analysing an

investment opportunity there is no guarantee that the investment will
ultimately be successful.

Investment is Speculative
An investment in the Company is speculative. The Company intends to
acquire a business or project that falls within its investment guidelines.
There is no guarantee that it will be able to acquire such a business or
project, if it does, there is no guarantee that any business or project will be
profitable. There are risks associated with the uncertainty surrounding the
Company’s future investments.
 Page
Confidential: Kinetiko Energy Limited - Information Memorandum January 2010

10. GLOSSARY OF TERMS

Application Form —The application form attached to, and forming part of
this Memorandum
ASX — Australian Stock Exchange
A$ — Australian Dollars
Board — The board of directors of Kinetiko
Corporations Act — Corporations Act 2001 ( C t h )
Directors — Directors of the Company
Kinetiko or Company — Kinetiko Energy Ltd A.C.N. Pending
— IPO Initial Public Offering
Issue — The offer of Shares pursuant to this Memorandum
Share — One (1) fully paid ordinary share in Kinetiko
 CB35025

APPLICATION FORM

Please read all instructions on the reverse of this form

I/We apply for_________Shares in Kinetiko Energy Ltd at $A0.10 per Share.

I/We accept that the Shares that are to be allotted to me/us shall be in
accordance with the terms and conditions as appearing in the Information
Memorandum to which this Application Form is attached and subject to the
Constitution of the Company.

I/We enclose full application monies of $_____________.

Title, Given Name(s) & Surname or Company name

Joint Applicant 2 or Designated Account

Postal Address Number Street Road

Suburb/Town State Postcode

Contact Name Telephone Number- Business Hours

Telephone Number - After Hours

CHESS HIN (Where applicable)

Tax File Number or Exemption - Applicant # 1

Tax File Number or Exemption - Applicant # 2

You should only attempt to complete this Application Form after you have
fully and carefully considered the contents of the Information Memorandum.
 INSTRUCTIONS TO APPLICANTS

Each Applicant must complete all applicable sections of the Application Form
(in block letters) and return it together with a cheque for the total amount
due to:

Kinetiko Energy Ltd

C/- Price Sierakowski
Lawyers Level 24,
44 St George’s Terrace
PERTH WA 6000

Enquiries in respect of this Issue should be addressed to Mr Geoff Michael

at gmichael@ageus.com.au or to the above address or by telephone on
mobile:
(+61 4) 17 09 45 08

Enter the number of Shares that you are applying for on the face of the
Application Form. Applications can be accepted or rejected at the absolute
discretion of the Directors.

Multiply the number of Shares that you are applying for on the face of the
Application form by $0.10 per share then fill in the details in the spaces
provided and send your cheque/draft and completed Application Form to the
abovementioned address.

All cheques/bank drafts (which are to be expressed in Australian currency)

are to be made payable to "Kinetiko Energy Ltd” and crossed "Not
Negotiable”.
If the Application Form is lodged on behalf of joint Applicants then each
Applicant must sign the Form. Forms lodged by incorporated bodies must
be executed under the common seal of the body, duly affixed in accordance
with its constituent documents or by a properly authorised Attorney. The ACN
or ABN (if applicable) for the company should also be indicated.

The collection of Tax File Numbers ("TFN”) is authorized by the relevant tax
laws and the Privacy Act. Quotation of a Shareholders TFN is not compulsory
but if a Shareholder chooses not to quote his her or its TFN or exemption, tax
must be taken out at the top personal marginal rate plus Medicare levy
(currently 48.5 percent in aggregate) from any dividends paid by the Company
(to the extent that they are unfranked) on shares which may be received.
Completion of this section does not constitute notice to the Company of trust.
Applicants who have questions on the use of TFN’s or the exemptions that may
be available are asked to contact their local branch of the Australian Taxation
Office.
Please note that if an Application Form is not completed correctly, or if the
accompanying payment is for the wrong amount, it may still be accepted.
Any decision of the Directors as to whether to accept an Application Form,
and how to construe, amend or complete it, shall be final. An Application Form
will not be treated as being an offer to subscribe for more Shares than is
indicated by the amount of the accompanying cheque.