On 1 June 2011, Richland Resources Ltd (“Richland”) entered into an option agreement to acquire an established Sapphire project, for an upfront cash fee of AUD$120,000 to acquire at the company’s sole discretion, following necessary and appropriate due diligence, an unencumbered 100% ownership of the project. Under the option agreement, Richland has an exclusivity period for a minimum of three months and a maximum of six months to conduct its due diligence. The project which comprise two mining leases covering around 490 hectares, has previously been partially mined and has produced significant quantities of gemstone quality sapphire, and it is situated in a known sapphire field in Australia. The assets to be acquired comprise the mining licences, tangible assets, completed exploration, operational and sales data over the mining licence area. Exercise of the option is conditional upon the mining licence(s) being granted. The total consideration for the project, if the company elects to proceed on completion of the due diligence will be cash of AUD$1.2 million and 18 million fully paid common shares in Richland, at the market price at the time of completion, representing approximately 13.5% of the enlarged issued share capital.