ALARA RESOURCES LIMITED — Capital/Financing Update 2017

Dec 13, 2017

Alara Resources Limited A.B.N. 27 122 892 719 Level 11, 216 St Georges Tce, Perth WA 6000, Australia PO Box 1227 West Perth WA 6872

Telephone | +61 8 9322 3383 Facsimile | +968 2449 2491 Web | www.alararesources.com Email | cosec@alararesources.com

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ASX/MEDIA RELEASE

Thursday, 14 December 2017

ISSUE OF PLACEMENT SHARES

Perth: Further to the announcement earlier today, Alara Resources Limited (ASX: AUQ) ( Alara or Company ) advises that the first instalment of 15,750,000 ordinary fully paid Alara shares has been issued today to Al Hadeetha Investments LLC (‘Al Hadeetha’) at an issue price $0.03 per share, raising A$472,500.00.

Al Hadeetha is joint venture partner with Alara Oman Operations Pty Ltd in the Al Hadeetha Copper Gold Project in Oman.

Notice under Section 708A

Alara issued under the placement 15,750,000 shares on 14 December 2017 to a sophisticated investor.

These securities are part of a class of securities quoted on the Australian Securities Exchange Limited (ASX).

The Company gives this notice pursuant to Section 708A(5)(e) of the Corporations Act. The shares were issued without disclosure to the investors under Part 6D.2, in reliance on Section 708A(5) of the Corporations Act. The Company, as at the date of this notice, has complied with:

a) the provisions of Chapter 2M of the Corporations Act as they apply to the Company, and b) Section 674 of the Corporations Act.

There is no excluded information as at the date of this notice, for the purposes of Section 708A(7) and (8) of the Corporations Act.

An ASX Appendix 3B Application for Quotation of Additional Securities is attached.

For further information, please contact:

Justin Richard T | +968 2449 1162 Managing Director E | jrichard@alararesources.com Ian Gregory T | +61 8 9322 3383 Company Secretary E | cosec@alararesources.com

About Alara Resources

Alara Resources Limited (ASX: AUQ) is an Australian minerals exploration company with a portfolio of projects in Saudi Arabia and Oman. Alara has completed a Definitive Feasibility Study on the Khnaiguiyah Zinc-Copper Project in Saudi Arabia, an Advanced Scoping Study on the Daris and Washihi, Mullaq and Al Ajal exploration licences in Oman and a Feasibility Study for the Al Hadeetha Copper Gold Project, Washihi ore reserve. The Company is transitioning to establish itself as a base and precious metals mine development and production company. For more information, please visit: www.alararesources.com.

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ASX Code | AUQ

Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

ALARA RESOURCES LIMITED ABN 27 122 892 719

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of +securities issued or to be issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued 3 Principal terms of the+securities (e.g. if options, exercise price and expiry date; if partly paid+securities, the amount outstanding and due dates for payment; if+convertible securities, the conversion price and dates for conversion)	Fully paid ordinary shares.
	15,750,000.
	Fully paid ordinary shares.

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

4 Do the+securities rank equally in all respects from the+issue date with an existing+class of quoted+securities? If the additional+securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 6a Is the entity an+eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h_in_ relation to the+securities the subject of this Appendix 3B, and comply with section 6i 6b The date the security holder resolution under rule 7.1A was passed 6c Number of+securities issued without security holder approval under rule 7.1 6d Number of+securities issued with security holder approval under rule 7.1A 6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of+securities issued under an exception in rule 7.2	Yes. The fully paid ordinary shares rank equally with existing quoted securities AUQ.
	$0.03 per fully paid ordinary share for a total consideration of $472,500.00.
	Placement of shares with proceeds to be used on funding development of Alara’s JV Copper Gold projects in Oman and working capital.
	Yes.
	14 November 2017.
	Nil.
	Nil.
	15,750,000 fully paid ordinary shares – approved at the AGM held on 14 November 2017 (resolution 5).
	Nil.

• See chapter 19 for defined terms.

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6g If[+] securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the[+] issue date and both values. Include the source of the VWAP calculation.

6h If[+] securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements

7 +Issue dates Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B.

N/A. N/A. Rule 7.1 – 91,990,138 Rule 7.1A – 61,326,758 (refer Annexure 1) 14 December 2017.

8 Number and+class of all+securities quoted on ASX (_including_the +securities in section 2 if applicable) 9 Number and +class of all +securities not quoted on ASX (including the +securities in section 2 if applicable) 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	Number		+Class
	+	597,517,589 15,750,000	Ordinary fully paid shares.
		613,267,589
	Number		+Class
	3,000,000		Unlisted options exercisable at $0.04 each on or before 9 March 2020.
	N/A.

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Part 2 - Pro rata issue

11 Is security holder approval required? 12 Is the issue renounceable or non- renounceable? 13 Ratio in which the+securities will be offered 14 +Class of +securities to which the offer relates 15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has security holders who will not be sent new offer documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of acceptances or renunciations 20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of security holders 25 If the issue is contingent on security holders’ approval, the date of the meeting	N/A.
	N/A.
	N/A.
	N/A.
	N/A.
	N/A.
	N/A.
	N/A.
	N/A.
	N/A.
	N/A.
	N/A.
	N/A.
	N/A.
	N/A.

• See chapter 19 for defined terms.

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26 Date entitlement and acceptance form and offer documents will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do security holders sell their entitlements_in full_through a broker? 31 How do security holders sell part of their entitlements through a broker and accept for the balance? 32 How do security holders dispose of their entitlements (except by sale through a broker)? 33 +Issue date	N/A.
	N/A.
	N/A.
	N/A.
	N/A.
	N/A.
	N/A.
	N/A.

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of[+] securities ( tick one )

• (a) +Securities described in Part 1

• (b) All other[+] securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

• 35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional +securities, and the number and percentage of additional +securities held by those holders

36 If the[+] securities are[+] equity securities, a distribution schedule of the additional[+] securities setting out the number of holders in the categories 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

• 37 A copy of any trust deed for the additional[+] securities

Entities that have ticked box 34(b)

38	Number of +securities for which
	+quotation is sought
39	+Class of +securities for which quotation
	is sought
40	Do the+securities rank equally in all
	respects from the+issue date with an
	existing+class of quoted+securities?
	If the additional+securities do not rank
	equally, please state:
	• the date from which they do
	• the extent to which they participate
	for the next dividend, (in the case of
	a trust, distribution) or interest
	payment
	• the extent to which they do not rank
	equally, other than in relation to the
	next dividend, distribution or interest
	payment
41	Reason for request for quotation now
	Example: In the case of restricted
	securities, end of restriction period
	(if issued upon conversion of another
	+security, clearly identify that other
	+security)

• See chapter 19 for defined terms.

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Number +Class

42 Number and[+] class of all[+] securities quoted on ASX ( including the[+] securities in clause 38)

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the +securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted[+] quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

  • Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the[+] securities to be quoted under section 1019B of the Corporations Act at the time that we request that the +securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before[+] quotation of the[+] securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: Date: 14 December 2017 ( ~~Director/~~ Company Secretary) Print name: Ian Gregory == == == == ==

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1

Rule 7.1 – Issues exceeding 15% of capital

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

Part 1	Part 1
Rule 7.1 – Issues exceeding 15% of capital
Step 1: Calculate “A”, the base figure from which the placement capacity is calculated
Insertnumber of fully paid+ordinary securities on issue 12 months before the+issue date or date of agreement to issue	592,506,073
Addthe following: • Number of fully paid+ordinary securities issued in that 12 month period under an exception in rule 7.2 • Number of fully paid+ordinary securities issued in that 12 month period with shareholder approval • Number of partly paid+ordinary securities that became fully paid in that 12 month period Note: • Include only ordinary securities here – other classes of equity securities cannot be added • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items	3,187,535 – 7 April 2017 exercise of options 1,823,981 – 10 May 2017 exercise of options 15,750,000 –(Subject of this Appendix 3B) – approved at AGM held on 14 November 2017 N/A
Subtractthe number of fully paid+ordinary securities cancelled during that 12 month period	Nil.
“A”	613,267,589

• See chapter 19 for defined terms.

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Step 2: Calculate 15% of “A”
“B” 0.15
[Note: this value cannot be changed]
Multiply “A” by 0.15 91,990,138
Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has
already been used
Insert number of [+] equity securities issued or agreed
to be issued in that 12 month period not counting
those issued:
• Under an exception in rule 7.2
• Under rule 7.1A
• With security holder approval under rule 7.1 or
rule 7.4
Note:
• This applies to equity securities, unless
specifically excluded – not just ordinary securities
• Include here (if applicable) the securities the
subject of the Appendix 3B to which this form is
annexed
• It may be useful to set out issues of securities on
different dates as separate line items
“C” –
Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity
under rule 7.1
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Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity
under rule 7.1
“A” x 0.15 91,990,138
Note: number must be same as shown in Step 2
Subtract “C” –
Note: number must be same as shown in Step 3
Total [“A” x 0.15] – “C” 91,990,138
[Note: this is the remaining placement capacity under
rule 7.1]
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• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Part 2

Rule 7.1A – Additional placement capacity for eligible entities

Rule 7.1A – Additional placement capacity for eligible entities	Rule 7.1A – Additional placement capacity for eligible entities
Step 1: Calculate “A”, the base figure from which the placement capacity is calculated
“A” Note: number must be same as shown in Step 1 of Part 1	613,267,589
Step 2: Calculate 10% of “A”
“D”	0.10 Note: this value cannot be changed
Multiply“A” by 0.10	61,326,758
Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used
Insertnumber of+equity securities issued or agreed to be issued in that 12 month period under rule 7.1A Notes: • This applies to equity securities – not just ordinary securities • Include here – if applicable – the securities the subject of the Appendix 3B to which this form is annexed • Do not include equity securities issued under rule 7.1 (they must be dealt with in Part 1), or for which specific security holder approval has been obtained • It may be useful to set out issues of securities on different dates as separate line items	Nil
“E”	Nil
Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A
“A” x 0.10 Note: number must be same as shown in Step 2	61,326,758
Subtract“E” Note: number must be same as shown in Step 3	Nil
Total[“A” x 0.10] – “E”	61,326,758 Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

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