Non- Renounceable Rights Issue Prospectus

Unit B3, 431 Roberts Road Subiaco WA 6008

Telephone:[phone]

Facsimile: [phone]

12 January 2012
Dear Shareholder

Non- Renounceable Rights Issue Prospectus

On behalf of the Board I am pleased to announce that the Company intends to conduct a pro-rata, non-renounceable entitlement issue to raise approximately $1.58 million, before costs.
The offer is for 1 new share for every 5 existing shares held at an issue price of 4 cents each. Unfortunately, due to the requirements of Australian law, the offer is only open to those shareholders with registered addresses in Australia and New Zealand.

Entitlement Issue

The entitlement issue is made under a prospectus lodged with the Australian Securities and Investments Commission ("ASIC") on 12 January 2011 ("Prospectus"). The entitlement issue will be open to existing holders of fully paid ordinary shares in Liberty with registered addresses in Australia or New Zealand.
The Directors are of the view that a pro-rata entitlement issue to all shareholders is the most responsible and fair means of raising capital in the current market.
The funds raised will be used for progressing the Company's Coal to Fertiliser Project in Queensland. The Project scope has expanded to include an Above Ground Coal to Fertiliser component, which will require coal exploration on the companies' Permits. Should the exploration prove successful, Liberty intends to evaluate traditional coal mining opportunities as part of the broader Project.
The Coal to Fertiliser Project plans to convert coal into ammonia for the production of low cost Urea fertiliser. Ammonium Nitrate for explosives manufacture is also being investigated.
The Project is based on value adding Queensland's significant coal resources. The company undertook a Project Development Plan on one of its Permits in 2011. The key findings of the Plan included the potential to produce low cost energy for the production of fertiliser and associated products, and the potential to host a large Fertiliser manufacturing plant capable of producing Urea fertiliser (or ammonia equivalent) for both domestic and export markets.
The Project is located in Queensland, Australia, with well established industry services and infrastructure in the Central Queensland region. The area is well serviced by the Port of Gladstone.
Based on the encouraging findings in 2011, the Company is now focussed on advancing the
Project.

ABN: 98 103 348 947 | Email: [e-mail] | Website: www.libertyresources.com.au

Unit B3, 431 Roberts Road Subiaco WA 6008

Telephone:[phone]

Facsimile: [phone]

Timetable

The indicative timetable for the entitlement issue is as follows:

ASX announcement of Entitlement Issue.	12 January 2012
Lodgement of Prospectus and Appendix 3B.	12 January 2012
Notice to Shareholders.	12 January 2012
Ex Date (date from which securities commence trading without the entitlement to participate in the Entitlement Issue).	17 January 2012
Record Date (date for determining Entitlements of eligible shareholders to participate in the Entitlement Issue).	23 January 2012
Dispatch of Prospectus and Entitlement & Acceptance Forms and announcement that dispatch complete.	25 January 2012
Entitlement Issue Opens.	25 January 2012
Closing Date (5pm) at least 10 Business days after announcement that dispatch complete.	9 February 2012
Shares quoted on a deferred settlement basis.	10 February 2012
Notification to ASX of under-subscriptions.	14 February 2012
Dispatch of holding statements.	17 February 2012
Normal (T+3) trading starts.	20 February 2012

The Company reserves the right to amend this timetable including, subject to the
Corporations Act and the ASX Listing Rules, to extend the closing date.
If you have any questions in relation to the Entitlement Issue, please do not hesitate to contact the Company on [phone].
Yours faithfully
Andrew Haythorpe
Managing Director

ABN: 98 103 348 947 | Email: [e-mail] | Website: www.libertyresources.com.au