Flinders Mines : Second Supplementary Target's Statement

ASX Market Announcements Australian Securities Exchange 20 Bridge Street

In accordance with section 647(3)(b) of the Corporations Act 2001 (Cth), attached is a copy of the second supplementary target's statement of Flinders Mines Ltd (ABN 46 091 118 044) (Flinders) dated 8 August 2016 (Second Supplementary Target's Statement) in response to the off-market takeover bid by TIO (NZ) Limited (New Zealand Company No 3744171) (TIO), a wholly owned subsidiary of Todd Corporation Limited (New Zealand Company No 3491) for all the ordinary shares in Flinders.

As detailed in the Second Supplementary Target's Statement, Flinders has entered into a loan facility agreement with PIO Mines Pty Limited (a subsidiary of TIO) (Loan Agreement) and pursuant to the Loan Agreement, delivered a funding notice to PIO Mines on 2 August 2016, giving notice of a request to draw the aggregate amount of A$2,000,000 on 5 August 2016. Flinders received the loan funds on 5 August 2016.

All of the directors of Flinders recommend that you accept TIO's takeover offer.

The Second Supplementary Target's Statement was lodged with the Australian Securities

& Investments Commission today. It will also be sent to TIO. Yours faithfully

Flinders Mines Limited ABN 46 091 118 044

Level 1, 135 Fullarton Road Rose Park

South Australia 5067

PO Box 4031

Norwood South South Australia 5067

facsimile +61 8 8132 7999 www.flindersmines.com

This Target's Statement has been issued in response to the Takeover Bid made by

TIO (NZ) Limited (New Zealand Company No. 3744171)

For all the ordinary shares in

1. IMPORTANT INFORMATION Nature of this document

   This document is a supplementary target's statement under section 644 of the Corporations Act 2001 (Cth) (Corporations Act). It is the second supplementary target's statement (Second Supplementary Target's Statement) issued by Flinders Mines Limited (Flinders) in relation to the off-market takeover bid for all of the ordinary shares in Flinders by TIO (NZ) Limited (TIO).

   This Second Supplementary Target's Statement supplements, and should be read together with, Flinders' Supplementary Target's Statement dated 12 May 2016 (Supplementary Target's Statement) and Flinders' Target's Statement dated 15 April 2016 (Original Target's Statement).

   Capitalised Terms

   Unless the context requires otherwise, capitalised terms used in the Target's Statement have the same meaning as in this Second Supplementary Target's Statement.

2. SECOND SUPPLEMENTARY TARGET'S STATEMENT

   This Second Supplementary Target's Statement is intended to provide an update in respect of certain material information relevant to Flinders Shareholders in their consideration of the Offer.

3. LOAN AGREEMENT

   On 29 July 2016, Flinders entered into a loan facility agreement (Loan Agreement) with PIO Mines Pty Limited (PIO Mines), a subsidiary of TIO, to assist Flinders in meeting its short term capital requirements.

   The key terms of the Loan Agreement are set out below

4. Borrower

   Flinders Mines Limited (ACN 091 118 044).

5. Lender

   PIO Mines Pty Limited (ACN 605 697 461), a subsidiary of TIO.

6. Loan amount (the Commitment)

   A$2,000,000.

7. Security

   The facility is unsecured.

8. Availability Period

   The loan is available for drawing, in a single lump sum of A$2,000,000, from the date of the Loan Agreement until 19 August 2016.

9. Termination Date

   31 December 2016.

10. Payment of Interest

    Interest is payable on the Termination Date. The interest rate is the 6-Month Bank Bill Swap (BBSW) Mid-Rate plus 2% per annum.

    Interest is also payable on amounts due but unpaid at the above interest rate, plus an additional 2% per annum.

11. Repayment of principal

    The Borrower must repay the principal outstanding (being the amount of the Commitment) on the Termination Date.

    The Borrower can voluntarily prepay any of the principal outstanding at any time before the Termination Date.

    After the date of the Loan Agreement, any net proceeds from any funds raised by the Borrower (whether in the form of debt or equity) must, within 7 Business Days of receipt, be applied towards prepaying the principal outstanding.

12. Use of funds

    The funds drawn under the loan must be used to meet the Borrower's payment obligations under existing agreements as and when they fall due, and to otherwise assist with its ongoing working capital requirements (or for any other purpose that the Lender approves).

13. Conditions precedent to drawdown

    The Borrower can only drawdown under the Loan Agreement if it first provides the Lender with:

14. a certificate which:

15. certifies a copy of the Borrower's constitution and a copy of the Borrower's corporate authorisations in respect of entry into and performance of its obligations under the Loan Agreement and any related documents;

16. includes specimen signatures for each of the officers of the Borrower; and

17. certifies that the Borrower is solvent and, on the basis that the loan and all other amounts owing under the Loan Agreement will be repaid when due by way of a future capital raising and that capital raising is successful, the