Dear Fellow ShareholderTAKE NO ACTION IN RELATION TO THE SOUL...

Dear Fellow Shareholder

TAKE NO ACTION IN RELATION TO THE SOUL PATTINSON UNSOLICITED TAKEOVER OFFER

On 23 August 2012, Washington H. Soul Pattinson & Company Limited (Soul Pattinson) announced its intention to make an unsolicited takeover offer for all of your shares in Exco at a price of 19 cents.

Your directors have now had an opportunity to consider the Soul Pattinson offer. Exco non-executive director, Mr Mike Spreadborough, is a representative of Ivanhoe Australia Limited which has sold part of its shareholding in Exco and committed to accept the Soul Pattinson offer in the absence of a superior proposal for Ivanhoe. For that reason, Mr Spreadborough will not be making a recommendation to Exco shareholders in relation to the Soul Pattinson offer.

For the reasons summarised on the following pages, all of the directors of Exco other than Mr Spreadborough (referred to in this letter as the “Independent Directors”) have unanimously concluded that the Soul Pattinson offer is INADEQUATE and UNFAIR.

Your Independent Directors believe that taking control of Exco is important to Soul Pattinson in the context of the challenges its subsidiary CopperChem faces with a limited mine life at the Great Australia project. In principle, your Independent Directors have no problem with Soul Pattinson taking control of Exco if, and only if, minority shareholders receive a fair price for their shares.

In approximately four weeks you will receive a Target’s Statement from your directors which will provide you with all of the information you need to consider the Soul Pattinson offer. Until you receive the Target’s Statement you should TAKE NO ACTION IN RELATION TO YOUR EXCO SHARES.

As Soul Pattinson has now lodged its Bidder's Statement, it is entitled to purchase more shares in Exco on market at the offer price. Accordingly, your Independent Directors think it appropriate to provide you with a more detailed response now than they might otherwise have provided in advance of issuing the Target's Statement because there is a risk that control of Exco might pass to Soul Pattinson before you have had a chance to consider relevant issues.

Furthermore, we have received strong messages of support from a number of our key shareholders since the offer was announced and you can rest assured that your Independent Directors intend to do everything possible to ensure that this inadequate and unfair offer fails. To assist us in dealing with the offer, we have appointed Macquarie Capital as our financial adviser and Ashurst as our legal adviser.
Your board looks forward to your continuing support as we respond to the offer.

Yours sincerely
Barry Sullivan
Chairman