XCEED RESOURCES LTD 
By
During the quarter, Xceed Resources Limited ("Xceed" or the "Company") executed an agreement with Keaton Energy Holdings Limited ("Keaton"), a company incorporated in South Africa and listed on the Johannesburg Stock Exchange Limited (JSE: KEH), pursuant to which Keaton has made an offer to Xceed's shareholders to acquire all issued shares in Xceed for a cash consideration of $0.14 per share.
The offer by Keaton is proposed to be implemented by way of a Scheme of Arrangement between Xceed and its shareholders ("Scheme") under the Australian Corporations Act 2001. For further details in regard to the Scheme and the Keaton proposal, shareholders are referred to the announcement that the Company made to the market on 26 August 2013.
Subject to no competing superior proposal emerging and an Independent Expert concluding, and continuing to conclude, that the Scheme is in the best interests of Xceed shareholders, Xceed's directors have recommended, and continue to recommend the Keaton proposal to Xceed Shareholders.
Pre-bid voting intentions in favour of the Scheme, representing approximately 57% of Xceed's shares, have been obtained from certain shaDRAFT reholders, including shareholders associated with the Xceed directors. These intentions are similarly conditional upon no superior proposal emerging and the Independent Expert concluding and continuing to conclude that the Scheme is in the best interests of Xceed shareholders.
Subsequent to announcing the Keaton proposal to the market, the Company has focused on the preparation of a Scheme Booklet, which will be dispatched to Xceed shareholders prior to the holding of an extraordinary general meeting called to consider the Keaton proposal. To this end, the Company engaged RSM Bird Cameron Corporate Pty Ltd to provide an Independent Expert Report and opinion to Xceed shareholders as to whether or not the Scheme is in the best interest of Xceed shareholders.
The drafting of the Scheme Booklet is nearing completion and separate announcements will be made to the market in regard to progress with the Scheme process.
In May, the Company received written advice from the South African Department: Mineral Resources ("DMR") that the Minister of Mineral Resources has granted a mining right in respect of the Moabsvelden thermal coal project. The notarized execution of the legal document that gives effect to the Mining Right by the DMR and Neosho Trading 86 (Pty) Ltd (the Moabsvelden project company) occurred on 18
October 2013.
On 10 September 2013, the Company advised the market that the Mpumalanga Provincial Government in South Africa has, under the powers conferred on it by the National Environmental Management Act
1998 and the Environmental Impact Assessment Regulations 2006, granted its approval for the development of the Moabsvelden thermal coal project.
No further work was undertaken on these projects during the quarter.
Cash position
As at 30 September 2013, the Company held cash of $0.828 million. In addition, an amount of $0.342 million is held in an escrow account maintained by the Company's lawyers. The execution of formal agreements governing Thebe's investment into Neosho triggered the payment of a success fee of $0.342 million into this escrow account. Payment from the escrow account will be made when the agreements with Thebe complete.
Other than recurrent administration and operational costs, the major costs incurred during the quarter were the partial cash collateralization of the environmental bond posted on the granting of the mining right for Moabsvelden ($470,000), and Scheme related costs ($93,000).
During the December quarter, in the absence of any changes relating to the Keaton proposal, and subject to no superior competing proposals emerging and the Independent Expert opining that the offer from Keaton is in the best interest of Xceed shareholders, the Company intends to progress with implementing the proposed Scheme of Arrangement as expediently as possible to allow Shareholders the earliest opportunity to vote on the Keaton proposal.
It is currently anticipated that the Scheme Meeting will take place in January 2014.
For further information regarding the Company, please contact the Company on +61 8 9226 0329 or refer to www.xceedresources.com.au
For and on behalf of the Board of
Ian Culbert
Managing Director
28 October 2013
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