Dragon Energy Limited (ASX:DLE) Release Letter To Shareholders Regarding Non-Renounceable Share Entitlement Issue And Option Entitlement Issue

Perth, Jan 20, 2011 AEST (ABN Newswire) - Dragon Energy Limited (ASX:DLE) is pleased to release the following letter to shareholders regarding non-renounceable share entitlement issue and
option entitlement issue.

Dear Shareholder

Dragon Energy Ltd (ASX:DLE) (Dragon Energy) is undertaking a pro rata non-renounceable entitlement issue of shares on the basis of one (1) New Share for every two (2) Shares held at the record date at an issue price of A$0.30 per New Share (Share Entitlement Issue). The Company also undertaking a pro rata non-renounceable entitlement issue of New Options on the basis of one (1) New Option for every three (3) Shares held at the record date at an issue price of A$0.001 per Option (Option Entitlement Issue). Together, the Share Entitlement Issue and Option Entitlement Issue will raise up to A$21.4 million (the Offers).

Based on the Company's current issued capital the Offers will result in 71,189,854 New Shares being issued and 47,459,902 New Options being issued. The New Options will be exercisable at A$0.35 each on or before 18 November 2014.

The Prospectus relating to this issue has been lodged with the Australian Securities and Investments Commission and ASX and is available on the ASX website for inspection. The timetable and important dates of the Offers are set out below:

- Lodgement of Prospectus with ASIC: 18 January 2011

- Notice sent to Shareholders: 20 January 2011

- Ex Date: 21 January 2011

- Record Date for determining Shareholder Entitlements: 28 January 2011 at 5:00pm WST

- Prospectus sent to Shareholders and Opening Date of Offers: 2 February 2011

- Closing Date of Offers: 16 February 2011 at 5:00pm WST

- ASX notified of any under subscriptions: 21 February 2011

- Despatch date/ Securities entered into Shareholders' security holdings: 24 February 2011

These dates are determined based on the current expectations of the Directors and may change without prior notice but subject to the Corporations Act and the ASX Listing Rules.
The capital structure of the Company on completion of the Offers will be as follows (assuming the Offers are fully subscribed):

Shares

- Shares on issue at date of Prospectus: 142,379,707

- Shares offered pursuant to the Share Entitlement Issue: 71,189,854

- Total Shares after completion of the Offers 213,569,561

Options

- Options on issue at date of Prospectus: 11,150,000

- Options offered pursuant to the Option Entitlement Issue: 47,459,902

- Total Options after completion of the Offers: 58,609,902

In calculating entitlements under the Offers fractions will be rounded up to the nearest whole number.

Full details of the Offers will be contained in the Prospectus that will be mailed to all shareholders who are registered on the Record Date. Shareholders eligible to participate should read the Prospectus carefully.

Contact

Ms Karen Logan Company Secretary Tel: +61-8-6389-2688 http://www.dragonenergyltd.com/