Gladstone Pacific Nickel Limited: Fairway Takeover Offer - Change to Recommendation

ORONTO, Sept. 11, 2012 - On 11 May 2012, Fairway Coal Pty Ltd (ACN 127 220 642) ("Fairway Coal") announced an unconditional takeover offer for all the ordinary shares in Gladstone Pacific Nickel Limited (ACN 104 261 887) ("GPNL" or the "Company") which it did not already own for $0.05 cash per GPNL share ("Offer").

The Company released its Target's Statement in respect to the Offer on 5 July 2012. In the Target Statement, Mr Domenic Martino (your only non-interested director) ("Non Interested Director") recommended that GPNL shareholders reject the Offer on the basis that, among other things, the Independent Expert opined that the Offer was not fair and not reasonable, attributing a value range of between $0.52 to $0.85 per GPNL share.

Since this time, Fairway Coal has:

- extended the period within which the Offer is open for acceptance to 5:00pm (Sydney time) on 2 October 2012; and

- advised GPNL that it has received acceptances into the Offer representing approximately 8% of the total issued share capital of GPN, bringing its total voting power in GPN to approximately 92.7%.

In this context and having regard to Fairway Coal's intention to proceed with compulsory acquisition under Part 6A.1 or Part 6A.2 of the Corporations Act 2001 (Cth) ("Corporations Act") following its acquisition of 90% or more of GPNL shares (as stated in section 6.4 of the Bidder's Statement), your Non Interested Director has reviewed his recommendation and recommends that GPNL shareholders ACCEPT Fairway Coal's Offer, in the absence of a superior offer. Accordingly, your Non Interested Director intends to ACCEPT the Offer in respect of his own GPNL shares.

Whilst your Non Interested Director maintains confidence in the underlying value of GPNL's assets, he considers that GPNL shareholders ought to carefully consider the risks and opportunities associated with retaining a shareholding in GPNL. If GPNL shareholders do not accept the Offer before it expires then potential risks include:

- GPNL shareholders having to wait an extended period of time before becoming entitled to payment under the compulsory acquisition provisions of the Corporations Act;1 and

- Fairway Coal not proceeding with compulsory acquisition, as a result of which any remaining GPNL shareholder will be subject to various minority shareholding risks, including risks arising from a lack of liquidity in the market for GPNL shares.

The Company's other Directors, Professor Clive Palmer and Mr Blair Brewster, continue to decline to make a recommendation in respect of the Offer, for the reasons set out in the Target's Statement.

GPNL will shortly be dispatching a Supplementary Target's Statement reflecting the above to GPN shareholders who have not yet accepted the Offer.


1 For example, Fairway Coal can exercise its right under Part 6A.2 of the Corporations Act to compulsorily acquire the remaining GPNL shares at any time within six months of acquiring a relevant interest in 90% of the issued share capital of GPNL.



Blair Brewster
Gladstone Pacific Nickel Ltd
Tel: +61(0)7 3231 7100
Email: info@gladstonepacific.com.au