ADAVALE RESOURCES LIMITED — Share Issue/Capital Change 2011

Apr 10, 2011

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11 April 2011

SALE OF UNMARKETABLE PARCELS OF SHARES

Dear Shareholder

IMPORTANT NOTICE - Sale of your unmarketable parcel of Adavale Resources Limited shares

I am writing to advise you that Adavale Resources Limited ( Adavale ) has established a share sale facility ( Facility ) for holders of shares valued at less than $500 as at close of trade on 31 March 2011 ( Unmarketable Parcels ). The Facility is being established in accordance with Adavale's constitution.

Adavale is offering the Facility to assist holders of Unmarketable Parcels to sell their shares. Holders of Unmarketable Parcels who take advantage of the Facility will have their shares sold without having to act through a broker or pay brokerage. Adavale will also pay all other costs associated with the sale (although any tax consequences from the sale of your shares will be your responsibility).

Our records show that you hold an Unmarketable Parcel based on the Adavale share price of $0.033 as at close of trade on 31 March 2011. Unless you advise Adavale that you do not wish to sell your shares, Adavale intends to sell your shares through the Facility in accordance with clause 3 of Adavale’s constitution. The proceeds of the sale will be sent to you as soon as practicable following the completion of the sale.

What should I do?

If you do not wish to sell your shares through the Facility you must complete and return the enclosed form so that it is received by 5.00pm (Perth time) on 25 May 2011 .

If you want to sell your shares through the Facility you do not need to take any action.

If you need help deciding what to do, or if you require information regarding the financial, legal or tax consequences of participating in the Facility you should consult your legal, financial or taxation adviser.

This letter sets out further details of the Facility, which you should read before making any decision. You can also contact Adavale’s share registry on 1300 850 505 (inside Australia) or on +61 3 9415 4000 (outside Australia) if you have any queries about lodging your form or the practical operation of the Facility.

Yours faithfully Adavale Resources Limited

Ms Sylvie Dimarco

Company Secretary

Address: U8-9 Forrest Street Cottesloe, Perth, Western Australia, Australia 6001 l Postal Address: PO Box 968, Cottesloe, Perth, Western Australia, Australia 6911.

Telephone: (08) 9467 2049 l Facsimile: (08) 9286 2900 l Email: admin@adavaleresources.com.au l Website: www.adavaleresources.com.au

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MORE INFORMATION ON THE FACILITY

1. What is an Unmarketable Parcel of shares?

A parcel of shares valued at less than $500 as at close of trade on 31 March 2011.

2. What price will I receive for shares sold through the Facility?

The price that you receive for your shares under the Facility will be determined by when and how the shares are sold, but will not be less than the average closing price of Adavale shares on ASX over the 10 trading days prior the date on which the offer for your shares is received by Adavale. The Adavale directors may sell your shares on market or in any other way they consider fair and reasonable in the circumstances. If the shares are sold on market the price will depend on a number of factors, including market conditions at the time of sale. You will not have control over the time at which your shares are sold. The price you receive may be different from the price appearing in the newspaper or quoted by ASX on any day, may not be the best price on the days that your shares are sold and may be an average price per share based on the price obtained for all the shares sold under the Facility. If the Adavale directors sell your shares other than on market, the price will be the price that the Adavale directors have been able to negotiate with the acquirer or acquirers.

3. What is the price of Adavale shares?

The last sale price of Adavale shares on 31 March 2011 was $0.033. The share price changes frequently and more recent prices are available in newspapers and from the ASX website (www.asx.com.au) under ASX code “ADD”.

4. How much will the sale of shares through the Facility cost?

Nothing, Adavale will bear all costs associated with the sale of unmarketable parcels. Tax consequences from the sale of shares will, however, be your responsibility.

5. When will the proceeds from the sale of shares be sent to me?

Payment will be sent to you as soon as practicable after your shares are sold. Payment will be made in Australian dollars by cheque. Computershare Investor Services Pty Ltd will notify you, by way of a transaction confirmation advice, of the number of your shares sold and the price and total sale proceeds you have received. The transaction confirmation advice and cheque will be sent by post, to your address as shown in the share register.

6. If I buy more shares, will I retain my holding?

Yes, Adavale will treat any purchase of additional shares as an indication that you do not want your shares to be sold through the Facility. For a purchase to be an effective notification that you wish to retain your shares, any additional shares must be registered by 5.00pm (Perth time) on 25 May 2011 under the same name and address and with the same holder number (SRN or HIN) as set out in this letter.

7. Where can I get further information?

If you have any questions concerning your shareholding or how the Facility will work, please contact our share registry, Computershare Investor Services Pty Ltd, by telephone on 1300 850 505 (inside Australia) or on +61 3 9415 4000 (outside Australia).

8. Important notes

Adavale reserves the right to change any of the dates referred to in this letter by notice to the ASX. After 25 May 2011, for the purpose of selling Unmarketable Parcels that are held in a CS Facility holding, Adavale may initiate a holding adjustment to move those shares from the CS Facility holding to an issuer sponsored holding or certificated holding.

This letter does not constitute advice nor a recommendation to buy, sell or hold shares nor that the Facility is the best way to sell Adavale shares.

If you are in any doubt about what to do, you should consult your legal, financial or tax advice.

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Note: If you currently have more than one holding on the Adavale share register, you may wish to consider amalgamating them. This may result in your amalgamated holding no longer being an Unmarketable Parcel and therefore no longer eligible to participate in the Facility. For further advice in this regard, please contact Adavale's share registry on 1300 850 505 (inside Australia) or on +61 3 9415 4000 (outside Australia).

TO RETAIN YOUR SHARES

To ensure your shares are not sold in the Facility, complete the enclosed form and return it to the Adavale share registry. The form can be returned using the enclosed envelope:

• by post to Computershare Investor Services Pty Limited, GPO Box D182, Perth Western Australia 6840; or

• by facsimile to Computershare Investor Services Pty Ltd on facsimile number +61 8 9323 2033.

Yours faithfully Adavale Resources Limited Ms Sylvie Dimarco Company Secretary

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Adavale Resources Limited ABN 91 008 719 015

All correspondence to: Computershare Investor Services Pty Limited GPO Box D182 Western Australia 6840 Australia Enquiries (within Australia) 1300 850 505 (outside Australia) 61 3 9415 4000 www.computershare.com

A

000001 000 1301011221012102012221332120133322113 SAM MR JOHN SMITH 1 FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

Securityholder Reference Number (SRN)

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I1234567890
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I 1234567890 I N D

Use a black pen. Where a choice is required, Print in CAPITAL letters A B C 1 2 3 mark the box with an ‘X’ X inside the grey areas.

 For your security keep your SRN/HIN confi dential.

Small Holding Sale Facility - Share Retention Form

IMPORTANT :

This is an important document and requires your immediate attention. If you wish to retain your ordinary shares (“Shares”) in the Company, you must complete this form and return it so that it is received by no later than 5:00pm (Perth time) on 25 May 2011. You should also refer to the detailed terms and conditions and other documents that accompanied this form. If you are in any doubt as to how to deal with this form, please consult a professional advisor.

B

Number of Shares as at Record Date

The number of Shares that you held at 5:00pm (Perth time) on 31 March 2011.

xxxxxxxxx

C

Retention of Shares

I/we refer to the notice from the Company dated 11 April and record my/our wish to retain my/our Shares.

D Contact details

Please provide your contact details in case we need to speak to you about this form.

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Name of contact person Contact person’s daytime telephone number
( )
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E Sign here - this section must be signed before we can process this form.

By signing and returning this form, I/we confirm that I/we understand that my/our Shares will not be sold under the Small Holding Sale Facility.

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Individual or Securityholder 1 Securityholder 2 Securityholder 3
Sole Director and Sole Company Secretary Director Director/Company Secretary
Day Month Year
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TO BE A VALID INSTRUCTION, THIS FORM MUST BE RECEIVED BY NO LATER THAN 5:00PM (PERTH TIME) ON 25 MAY 2011

See back of form for important completion guidelines

S R F

A D D

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How to complete this form

Securityholders who wish to retain their shares must lodge a Share Retention form.

A Registration Name(s) D Contact details Your name and address as it appears on the register of Adavale Resources Enter the name of a contact person and telephone number. These details Limited. will only be used in the event that the registry has a query regarding this form. B Number of Shares as at Record Date E Signature(s) This is the total number of Shares you held at 5:00pm (Perth time) on 31 March 2011. You must sign and date the form as follows in the space provided: Joint holding: where the holding is in more than one name all of the C Retention of Shares securityholders must sign. If you would like to retain your shares, please mark the box on the front of Companies: where the company has a Sole Director who is also the form and return it in accordance with the lodgement instructions below. the Sole Company Secretary, this form must be

Joint holding: where the holding is in more than one name all of the securityholders must sign.

Companies: where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please sign in the appropriate place to indicate the office held.

If this form is not received by that time, and you have not otherwise validly notified the Company that you wish to retain your Shares by that time, the Company will be entitled to have your Shares sold for you.

If you wish to sell your Shares under the Small Holding Sale Facility, you should not complete this form.

Consolidation of shareholdings

If you have more than one holding on Adavale Resources Limited register and you do not sell your Shares under the Small Holding Sale Facility, you should consider consolidating them. For further advice in this regard, please contact Computershare Investor Services Pty Limited (‘CIS’) on 1300 850 505 (within Australia) or 61 3 9415 4000 (outside Australia).

Lodgement of Form

If you wish to retain your Shares, this Share Retention Form must be completed and received by CIS Perth by no later than 5:00pm (Perth time) on 25 May 2011.

It is your responsibility to allow sufficient time for this form to be received by CIS. [A reply paid envelope is enclosed for posting from within Australia.]

Your Share Retention Form must be sent to:

Computershare Investor Services Pty Limited GPO Box D182 Perth WA 6840

Neither CIS nor the Company accepts any responsibility if you lodge the Share Retention Form at any other address or by any other means.

Privacy Statement

Personal information is collected on this form by CIS, as registrar for the Company, for the purpose of effecting your instructions in relation to the Small Holding Sale Facility, maintaining registers of securityholders, facilitating distribution payments and other corporate actions and communications. Your personal information may be disclosed to our related bodies corporate, to the Company and its professional advisers, to external service companies such as print or mail service providers, or as otherwise required or permitted by law. If you would like details of your personal information held by CIS, or you would like to correct information that is inaccurate, incorrect or out of date, please contact CIS. In accordance with the Corporations Act 2001, you may be sent material (including marketing material) approved by the Company in addition to general corporate communications. You may elect not to receive marketing material by contacting CIS. You can contact CIS using the details provided on the front of this form or e-mail privacy@computershare.com.au

If you have any enquiries concerning your Securityholding please contact CIS on telephone 1300 850 505.

This form may not be used to notify your change of address. For information please contact CIS on 1300 850 505 or visit the share registry at www.computershare.com