Aurizon : Joint bid for Aquila - Bidders reach 81% relevant interest

ASX Market Announcements

ASX Limited

20 Bridge Street

Sydney NSW 2000

4 July 2014

BY ELECTRONIC LODGEMENT

Dominic D Smith

Vice President & Company Secretary

Aurizon Holdings Limited

ABN 14 146 335 622

T [phone]

F [phone]

E [e-mail]

W aurizon.com.au

Level 17, 175 Eagle Street

Brisbane QLD 4000

GPO Box 456

Brisbane QLD 4001

Joint bid for Aquila - Offer unconditional, bidders reach 81% relevant interest in Aquila and offer extended

Please find attached announcement for immediate release to the market. Yours faithfully

Dominic D Smith

VP & Company Secretary

ASX Release 4 July 2014 OFFER UNCONDITIONAL, BIDDERS REACH 81% RELEVANT INTEREST IN AQUILA AND OFFER EXTENDED

We refer to the joint takeover offer by Baosteel Resources Australia Pty Ltd (ABN 66 154 815 362) and Aurizon Operations Limited (ABN 47 564 947 264) (together, the Bidders) to acquire 100% of the ordinary shares in Aquila Resources Limited (ABN 81 092 002 769) (Aquila) that they do not already own for A$3.40 per share (the Offer).

Yesterday the Bidders declared the Offer free from all defeating conditions.

The Bidders' relevant interest in Aquila shares has now increased to 81% (equivalent to 333,572,219 Aquila shares).

The Bidders attach, in accordance with section 650D of the Corporations Act 2001 (Cth), a formal notice varying the Offer to extend the offer period. The notice of variation extending the Offer has been lodged with the Australian Securities and Investments Commission.

The Offer will now close at 7.00pm (Sydney time) on 25 July 2014 (unless further extended). A letter to holders of Aquila shares and securities convertible into Aquila shares in relation to the extension of the period of the Offer is also attached.

The Offer remains open now for acceptance and the Bidders encourage you to ACCEPT now.

Ms Yiming Wu

Director

Baosteel Resources Australia Pty Limited

ABN 66 154 815 362

Registered office

Level 20, Allendale Square

77 St Georges Terrace

Perth WA 6000

AUSTRALIA

Mr Dominic D Smith

Director

Aurizon Operations Limited

ABN 47 564 947 264

Registered office

Level 17

175 Eagle Street

Brisbane QLD 4001

AUSTRALIA

ENDS For further information regarding the Offer, please contact the Bidder's advisers: Financial adviser (Baosteel):

Damian Pearson

Deutsche Bank

Tel: [phone]

Financial adviser (Aurizon):

Paul Glasson Satori Investments Tel: [phone]

Media Enquiries:

Greg Baxter

Newgate Communications

Tel: [phone]

Mark Hairsine

Aurizon

Tel: [phone]

Aquila Shareholder Enquiries:

Offer Information Line:

Within Australia (toll-free): 1300 309 589

Outside Australia: [phone]

Offer Website: www.aquilaoffer.com.au

CORPORATIONS ACT 2001 (CTH)

NOTICE BY

BAOSTEEL RESOURCES AUSTRALIA PTY LTD ABN 66 154 815 362 (BAOSTEEL) AND

AURIZON OPERATIONS LIMITED ABN 47 564 947 264 (AURIZON) UNDER SECTION 650D OF THE CORPORATIONS ACT 2001 (CTH) VARIATION OF THE OFFER (EXTENSION)

To Aquila Resources Limited ACN 092 002 769 (Aquila)

ASX Limited

Australian Securities and Investments Commission (ASIC)

The holders of ordinary shares in Aquila registered at 7.00pm (Sydney time) on 25 June 2014 and the holders of Aquila Options, Aquila Performance Rights or Aquila Share Appreciation Rights registered at 7.00pm (Sydney time) on 25 June 2014 (other than persons who have already accepted the offer by Baosteel and Aurizon)

This is a notice given by Baosteel and Aurizon under section 650D of the Corporations Act 2001 (Cth) that

• Baosteel and Aurizon vary the offers dated 6 June 2014 under their joint off-market takeover bid

for all of the ordinary shares in Aquila to which their bidders statement dated 14 May 2014

draft

(as supplemented by supplementary bidders statements dated 5 June 2014 and 20 June 2014) (Bidders' Statement) relates by extending the period during which the offers remain open for acceptance by 14 days so that it now ends at 7.00pm (Sydney time) on 25 July 2014; and

• the terms of the variation are, to replace the date "11 July 2014" wherever appearing in the Bidders Statement with the date "25 July 2014".

The original of this notice was lodged with ASIC on 4 July 2014. ASIC takes no responsibility for the contents

of this notice.

DATED: 4 July 2014

This notice is approved by a resolution passed at a directors meeting of each of Baosteel and Aurizon.

Ms Yiming Wu Mr Dominic Smith Director Director Baosteel Resources Australia Pty Limited Aurizon Operations Limited

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4 July 2014

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Dear Aquila security holder

BAOSTEEL ANO AURIZON EXCEEO 50% IN AQUILA - OFFER NOW UNCONOITIONAL ANO CLOSING 25 JULY (UNLESS EXTENOEO)

This letter is to update you on the progress of the offer by Baosteel Resources Australia Pty Ltd ABN 66 154 815 362 (Baosteel) and Aurizon Operations Limited ABN 47 564 947 264 (Aurizon)
(together, the Bidders) to acquire 100% of the ordinary shares in Aquila Resources Limited

draft

ACN 092 002 769 (Aquila) that they do not already own for A$3.40 per share (the Offer).
On 3 July 2014:
• Mr Tony Poli accepted the Offer for his entire 28.92% relevant interest in Aquila. As a result, the Bidders have acquired effective control of Aquila, having a relevant interest in more than 50% of Aquila shares, and the Minimum Acceptance Condition was fulfilled;
• the Bidders waived all remaining defeating conditions of the Offer, so that the Offer became
unconditional; and
• the Bidders announced an acceleration of the time for payment of Offer consideration to within
5 business days after the later of 3 July 2014 (being the date the Offer was declared
unconditional) and the date the relevant valid acceptance is processed by their share registry.
We encourage you to ACCEPT the Bidders' unconditional Offer now for the following reasons:
• Aquila's independent board committee has recommended that Aquila shareholders now accept
the Offer;
• Following acceptance into the Offer of Mr Tony Poli's shareholding the Bidders have acquired
effective control of Aquila, having a relevant interest in more than 50% of Aquila shares;
• The all cash consideration being offered by the Bidders is a compelling offer and represents a significant premium to the levels at which Aquila shares were trading prior to the announcement of the Offer on 5 May 2014;
• The Offer provides an opportunity to dispose of all your Aquila shares, and to realise full and
certain value for your entire Aquila shareholding;
• f you accept the Offer, you will avoid:

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ofuture funding uncertainties associated with Aquila s projects;
ofuture operating and project development risks associated with Aquila s projects;
oexposure to the iron ore market, which has significantly declined since the Bidders made their Offer; and
othe risks associated with being a minority shareholder in Aquila, including reduced liquidity, which may negatively impact your ability to realise your Aquila Shares at an attractive price in the future;
• The Offer is the only offer available for all Aquila shares today; and
• Aquila s independent expert has concluded that the Offer is not fair but is reasonable to Aquila
shareholders (in the absence of a superior proposal).

Further detail on why you should accept the Offer is set out in the Bidders Statement dated 14 May 2014
sent to you (as supplemented) (the Bidders Statement).
The Bidders have today extended the period during which the Offer remains open for acceptance to
7.00pm (Sydney time) on 25 July 2014 (unless further extended). A copy of the statutory notice required
to give legal effect to this extension of the Offer is attached.
Aquila shareholders who have accepted or ACCEPT the Offer before it closes at 7.00pm (Sydney time) on 25 July 2014 (unless further extended) will receive A$3.40 cash per Aquila share in accordance with the terms set out in the Bidders Statement and the Bidders 3 July 2014 announcement. Payment will be made within 5 business days after the later of 3 July 2014 (being the date the Offer was declared
unconditional) and the date the relevant valid acceptance is processed by the Bidders share registry.
To ACCEPT this Offer and receive A$3.40 cash per draAft
quila share, please follow the instructions on the
Acceptance Form enclosed with the Bidders Statement. lf you have lost your Acceptance Form and require a replacement, please call the Offer lnformation Line (details below). Your acceptance must be received in sufficient time to be acted upon before the end of the Offer Period. You will not pay brokerage or stamp duty if you ACCEPT the Offer.
lf you have any questions in relation to the Offer, please contact your professional adviser, or call
the Offer lnformation Line on 1300 309 589 (toll free if you are dialling from within Australia) or
[phone] (if you are dialling from outside Australia).

Yours sincerely,

Ms Yiming Wu Mr Lance Hockridge Director Director
Baosteel Resources Australia Pty Ltd Aurizon Operations Limited