ANAX METALS LIMITED - Proxy Solicitation & Information Statement 2010

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11 May 2010

The Manager Announcements Company Announcements Office ASX Limited PO Box H224 Australia Square SYDNEY NSW 2000

Dear Sir/Madam

Extraordinary General Meeting

An Extraordinary General Meeting of Aurora Minerals Limited will be held at the offices of the company, 271 Great Eastern Highway, Belmont, on Tuesday 15 June 2010 commencing at 10.00 am.

The Notice of Meeting and Explanatory Memorandum containing details of the Meeting are attached.

Yours faithfully

Peter Ruttledge Company Secretary

Aurora Minerals Limited PO Box 707, Belmont WA 6984 Telephone: (08) 6365 4817 Fax: (08) 6162 9079

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Notice of Extraordinary General Meeting

Notice is hereby given that an Extraordinary General Meeting of Aurora Minerals Limited will be held at the Company’s office at 271 Great Eastern Highway, Belmont on 15 June 2010 commencing at 10.00 am to conduct the following business:

1. Resolution 1- Approve the Company entering into a Joint Venture to farm out a 51%, 70% or 75% interest in the Camel Hills Project to Desert Energy Limited.

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

“That for the purposes of Listing Rule 10.1 and for all other purposes, the Shareholders approve the Company’s subsidiary Aurora Resources Pty Ltd entering into the Camel Hills JVA to farm out a 51%, 70% or 75% interest in the Company’s Camel Hills Project to Desert Energy Limited pursuant to and subject to the terms and conditions of the Camel Hills JVA described in the accompanying Explanatory Memorandum.”

Voting Exclusion Statement

The Company will disregard any votes cast on this resolution 1 by a party to the transaction and any associates of such persons. However, the Company need not disregard a vote if:

it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
it is cast by the person chairing the meeting as a proxy for a person who is entitled to vote, in accordance with a direction on the proxy forms to vote as the proxy decides.

The opinion of the Independent Expert is that the proposal is not fair but reasonable to Shareholders.

2. Resolution 2 - Approve the Company giving Financial Benefits to Related Parties.

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

“That for the purposes of section 208 of the Corporations Act, the Shareholders approve the giving of financial benefits by the Company’s subsidiary Aurora Resources Pty Ltd to related parties of the Company including Desert Energy Limited and others as described in the accompanying Explanatory Memorandum under and by virtue of Aurora Resources Pty Ltd entering into and performing its obligations, and exercising its rights under, the Camel Hills JVA.”

Voting Exclusion Statement

In accordance with section 224 of the Corporations Act, the Company will disregard any votes cast in relation to Resolution 2 by any related party of the Company to whom the resolution will permit a financial benefit to be given and any associate of such person. However, the Company need not disregard a vote if it is cast by a person as a proxy appointed in writing that specifies how the proxy is to vote on the proposed resolution and it is not cast on behalf of a related party or associate or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

AURORA MINERALS LIMITED ACN 106 304 787

3. Resolution 3 - Approve Desert Energy giving Financial Benefits to Related Parties.

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

“That for the purposes of section 208 of the Corporations Act, the Shareholders approve the giving of financial benefits by Desert Energy Limited to related parties described in the accompanying Explanatory Memorandum under and by virtue of Desert Energy entering into and performing its obligations under, and exercising its rights under the Camel Hills JVA.”

Voting Exclusion Statement

In accordance with section 224 of the Corporations Act, the Company will disregard any votes cast in relation to Resolution 3 by any related party of the Company to whom the resolution will permit a financial benefit to be given and any associate of such person. However, the Company need not disregard a vote if it is cast by a person as a proxy appointed in writing that specifies how the proxy is to vote on the proposed resolution and it is not cast on behalf of a related party or associate or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

4. Resolution 4 - Issue of Options to Wajarri Yamatji Native Title Claimants

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

"That for the purposes of Listing Rule 7.1 and for all other purposes, the Shareholders approve the issue by the Company pursuant to the Heritage Agreement, of 350,000 Options to the Nominated Entity of the Wajarri Yamatji Native Title Claimants to be issued on the terms and conditions set out in the Explanatory Memorandum.”

Voting Exclusion Statement

The Company will disregard any votes cast on this Resolution 4 by any person who may participate in the proposed issue, and any person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the resolution is passed, or any associates of those persons. However, the Company need not disregard a vote if:

it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
it is cast by the person chairing the meeting as a proxy for a person who is entitled to vote, in accordance with a direction on the proxy forms to vote as the proxy decides.

5 . Resolution 5 - Issue of Aurora Consultant Options to Mr John Jordan, Chief Operating Officer

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

"That for the purposes of Listing Rule 7.1 of the Listing Rules of the Australian Securities Exchange and for all other purposes, the Company approve and authorise the grant and issue of 1,000,000 options, with a term of 4 years, to subscribe for 1,000,000 ordinary shares in the capital of the Company to Mr John Jordan the Chief Operating Officer of the Company or his approved Nominee at a 33.4% premium above the average closing Market Price of the Company’s shares on the five trading days prior to the date on which the Aurora Consultants Options are issued, or $1.20, whichever is the greater, to be issued on the terms and conditions set out in the Explanatory Memorandum.”

Voting Exclusion Statement

The Company will disregard any votes cast on this resolution 5 by any person who may participate in the proposed issue, and any person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the resolution is passed, or any associates of those persons. However, the Company need not disregard a vote if:

 it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

it is cast by the person chairing the meeting as a proxy for a person who is entitled to vote, in accordance with a direction on the proxy forms to vote as the proxy decides.

AURORA MINERALS LIMITED

ACN 106 304 787

The Explanatory Memorandum that accompanies and forms part of this Notice describes in more detail the matters to be considered.

PROXIES

A form of proxy is enclosed herewith. A member who is entitled to attend and vote at a meeting is entitled to appoint a proxy (and a member who is entitled to cast 2 or more votes may appoint not more than two proxies) to attend and vote at the meeting. A proxy need not be a member of the Company. Where a member appoints two proxies, the proportion of the member’s voting rights given in favour of each proxy must be specified. Proxies must be received by the Company not later than 48 hours before the meeting. Proxies may be lodged by fax.

ENTITLEMENT TO VOTE

In accordance with regulation 7.11.37 of the Corporations Regulations 2001, the Company determines that members holding ordinary shares held as at 5.00pm Perth time on 11 June 2010 will be entitled to attend and vote at the Annual General Meeting.

BY ORDER OF THE BOARD

P C RUTTLEDGE

Company Secretary

4 May 2010

AURORA MINERALS LIMITED ACN 106 304 787

Notice of Extraordinary General Meeting

Explanatory Memorandum

This Explanatory Memorandum has been prepared for the information of Shareholders of Aurora Minerals Limited ( “Aurora” or “the Company” ) in connection with the business to be conducted at the Extraordinary General Meeting of Shareholders to be held at 271 Great Eastern Highway, Belmont on 15 June 2010 (“the Meeting”).

This Explanatory Memorandum should be read in conjunction with the accompanying Notice of Extraordinary General Meeting (“the Notice”).

1. Company overview

The Company was incorporated in September 2003 as a public company. Following an initial public offering in May 2004, the Company was admitted to the official list of the ASX in June 2004.

Currently, the principal business of the Company is mineral exploration in Western Australia and assessing further exploration opportunities in Western Australia.

Directors

The Company’s Directors are:

Phillip Sidney Redmond Jackson (Non-Executive Chairman of Directors) Robert Spencer Taylor (Managing Director) Garry Patrick O’Hara (Executive Director)

RESOLUTIONS ONE, TWO AND THREE

2. Background to the Resolutions

2.1 Overview of transaction

On 4 February 2010, the Company made an announcement to the ASX regarding its intention to seek shareholder approval to enter into a Joint Venture with Aurora Resources Pty Ltd to farm out a 70% to 75% interest in the Camel Hills Project (Transaction) to Desert Energy Limited (Desert or Desert Energy) , of which Aurora Minerals Limited is a 47.59% shareholder.

An interim step has been introduced under which Desert can earn a 51% interest in the Camel Hills Joint Venture by incurring $3.8 million in exploration expenditure. This figure is based on the valuation of the Project of $3.8 million estimated by the independent valuer. The Camel Hills Project comprises a large number of granted exploration licences and applications for exploration licences considered to be prospective for iron ore (magnetite), gold, nickel, PGE’s, rare earths and uranium deposits. Advantages for the Company may potentially include:

The transaction would potentially enable Aurora Resources Pty Ltd to focus more on its extensive manganese and base metals tenements at Capricorn, and its hard rock uranium tenements at Glenburgh.
The transaction would enable exploration on the Camel Hills Project to be funded by Desert Energy until the first $3.8 million is spent on exploration by Desert to earn a 51% interest or until completion of a bankable feasibility study if Desert chooses to sole fund to earn a 70% interest.
As a large shareholder in Desert Energy, Aurora Minerals Limited could potentially gain from the upside in the event of a discovery by Desert Energy. The targeting of commodities on the Camel Hills tenements is advancing. The majority of the tenements are granted and a native title heritage agreement has been signed, clearing the path for exploration.

AURORA MINERALS LIMITED ACN 106 304 787

The farmout is in keeping with Aurora Resources Pty Ltd long stated policy of development by:
direct exploration itself
spin offs
farmouts
relinquishment of Tenements which no longer meet the Company’s criteria

2.2 Reports

In accordance with the requirements of Listing Rule 10.10.2, (and for the purposes of better informing shareholders generally) the Company has obtained an independent expert’s report on the Transaction from RSM Bird Cameron Corporate Pty Ltd, a copy of which is included with this Explanatory Memorandum (Independent Expert’s Report). The Company urges Shareholders to carefully read and consider the Independent Expert’s Report to understand the scope of the report, the methodology applied, sources of information, assumptions made and conclusions arrived at.

3. Project Information

Details of Aurora Resources Pty Ltd’s holdings in the Camel Hills Project are as follows:

Total of 28 Exploration Licences or Exploration Licence Applications – (23 Granted Licences – 5 Licence applications)
5,031km[2] portfolio size
12,175 line kilometers of Radiometric Surveys flown in 2008 by Aurora Resources Pty Ltd.

In the event that approval is granted for Aurora Resources Pty Ltd to farmout the Camel Hills Project, any major discovery by Desert could potentially have benefits for Aurora Minerals Limited as the major shareholder of Desert.

Aurora Minerals Limited considers that the entering into of a joint venture of Camel Hills to Desert Energy provides the opportunity for Desert to potentially conduct a number of exploration programs during 2010 due to:

the number of Camel Hills tenements that have been granted, with the added benefit that a native title heritage agreement is in place with Aurora Resources Pty Ltd; and
Desert having the expertise and working capital to conduct exploration.

If the Camel Hills JVA is approved, Aurora Resources Pty Ltd will be in a position to concentrate its exploration activities on its extensive manganese, base metals, gold and hardrock uranium tenements.

As each of the Directors has a material personal interest in the outcome of the proposed Transaction, they do not make a recommendation. However, they do urge shareholders to read all of the documentation and carefully consider the proposed Transaction.

4. Transaction Agreements

The Company’s subsidiary Aurora Resources Pty Ltd has entered into a farmin and joint venture agreement to give effect to the transaction outlined above in Section 2.1 (“ Camel Hills JVA ” or “ Agreement” ).

A summary of key terms and conditions is contained in this section 4, and in Appendix 5 of this notice.

The Agreement provides for Aurora Resources Pty Ltd to farmout its 100% owned Camel Hills Project to Desert Energy Limited.

AURORA MINERALS LIMITED ACN 106 304 787

As further consideration for the rights issued under the Camel Hills JVA, Desert Energy will issue to Aurora Minerals Limited 10 million options each of which will entitle Aurora Minerals Limited to acquire one share in Desert Energy for a price of $0.40 at any time within 84 months of issue.

Aurora Resources Pty Ltd is wholly owned by Aurora Minerals Limited.

Aurora Minerals Limited also owns approximately 47% of the issued capital of Desert Energy.

The Agreement is conditional upon:

(a) The shareholders of the Company approving the Transaction in accordance with Rule 10.1 of the Listing Rules.
(b) The shareholders of Desert Energy approving the Transaction in accordance with Rule 10.1 of the Listing Rules.
(c) The shareholders of the Company approving the issue of the Desert Energy Options in accordance with Rule 7.1 and to a related party in accordance with Rule 10.11 of the Listing Rules.
(d) The shareholders of the Company and also the shareholders of Desert Energy approving the issue of the Desert Energy Options as giving financial benefits to related parties in accordance with section 208 of the Corporations Act.
(e) The shareholders of the Company approving the issue of the Desert Energy Options to Aurora Minerals in accordance with section 611 of the Corporations Act.
(f) In respect of those provisions of the Camel Hills JVA that require such consent, the consent of the Minister, pursuant to section 64 of the Act, to the Camel Hills JVA in respect of any of the Tenements which are granted as at the date of the Camel Hills JVA but still in the first year of their term.

The Camel Hills JVA provides that if the Conditions above have not been satisfied within four months of the date of the Agreement (or such further period as the Companies may agree in writing) either party may terminate this Agreement by notice in writing to the other party.

Aurora Resources Pty Ltd has already spent approximately $600,000 on the Tenements, some of this in airborne surveys which is expenditure attributable to the first year of the tenements. This, together with the minimum of $1.5 million of Desert expenditure in year 1 is designed to meet the combined DMP minimum expenditure requirement in year 1 of the JV.

It is acknowledged that at the Commencement Date of the JV some of the granted tenements owned by Aurora Resources Pty Ltd will not have met pro rata minimum expenditure requirements imposed as conditions of grant by the Mining Act and that Aurora Resources Pty Ltd offers no warranties in that regard and gives no indemnity to Desert regarding any losses Desert may incur as a result of this. A number of tenements may require exemption from expenditure applications to be lodged by Desert depending on how much is spent prior to the anniversary date of the tenement. Desert is aware of the shortfalls but if any fines are imposed on Aurora Resources Pty Ltd for non compliance with minimum expenditure commitments, such fines will be paid by Desert unless it withdraws from such Tenements

The Minister also has power under the Mining Act to forfeit the tenements for non compliance with the minimum expenditure commitments. There is also the possibility that some granted tenements could be plainted by third parties and potentially subject to forfeiture however this is not considered to be the most likely outcome because the granted tenements are at pre-drilling exploration stage and all but one tenement has an anniversary date in October/November 2010

AURORA MINERALS LIMITED ACN 106 304 787

so significant expenditure can be incurred before then. The Company is not aware of any plaints having been issued. Aurora Resources Pty Ltd gives Desert no warranties in regard to the possible forfeiture or any other matter concerning the tenements and gives no indemnity to Desert regarding any losses Desert Energy may incur as a result of any such matter.

The Company recognizes and acknowledges the risks associated with tenements and minerals exploration including as set out in the Sustainable Development and Risks Sections on the Company’s and Desert Energy Limited’s website and in their respective annual reports and shareholders and potential investors are advised to familiarize themselves with these.

The Desert Options will be escrowed for a period of 12 months from their date of issue or such time as determined by ASX in accordance with the requirements of the Listing Rules.

A summary of the Camel Hills JVA appears in Appendix 5.

5. Resolution 1- Approve Aurora Resources Pty Ltd entering into the Camel Hills JVA.

5.1 General

Resolution 1 seeks Shareholder approval under Listing Rule 10.1 for the farmout and joint venture of a substantial asset to an associated party.

As mentioned above, Aurora Minerals Limited holds 47.59% of the issued shares in Desert. Additionally, the Directors of the Company are also the directors of Desert Energy. The Directors of the Company provide consulting services to Desert Energy on commercial terms through their respective private consulting companies. Additionally the directors of the Company have interests in securities in both companies as detailed in Appendix 3.

5.2 Listing Rule 10.1 approval

Listing Rule 10.1 requires the Company to obtain Shareholder approval in order to dispose of a substantial asset to any of the various associated parties including a related party or a person whose relationship to the Company is such that in the ASX’s opinion the transaction should be approved by security holders. The farmout by the Company’s subsidiary Aurora Resources Pty Ltd of all of the tenements in the Camel Hills Project to Desert Energy Limited pursuant to the Camel Hills JVA is subject to this requirement.

Under Listing Rule 10.10, a Company seeking Shareholder approval under Listing Rule 10.1 must include in its notice of meeting:

(a) a voting exclusion statement; and
(b) a report on the transaction from an independent expert, which report must state whether the transaction is fair and reasonable to Shareholders whose votes are not to be disregarded and, unless the opinion is that the transaction is fair and reasonable, the opinion must be displayed prominently in the notice of meeting and on the covering page of any accompanying documents.

A voting exclusion statement is included in the Notice of General Meeting.

The Independent Expert’s Report concludes that the Transaction is not fair but reasonable to Shareholders whose votes are not to be disregarded.

6. Resolution 2- Approve Aurora Resources Pty Ltd giving Financial Benefits to Related Parties as a consequence of the Camel Hills JVA.

Section 208 of the Corporations Act requires the Company to obtain Shareholder approval for a company it controls to give a financial benefit to a related party (unless one of the exceptions in that section applies) which benefit must be given within 15 months after the approval. Aurora Resources Pty Ltd is controlled by the Company. The entering into and performance of and

AURORA MINERALS LIMITED ACN 106 304 787

exercise of rights under the Camel Hills JVA by Aurora Resources Pty Ltd may require Shareholder approval under section 208 of the Corporations Act.

Although the entering into, and performance of, and the exercise of rights under, the Camel Hills JVA may fall within one of the exceptions referred to in the paragraph above , this may not be absolutely certain and accordingly, in the interests of certainty, it has been determined to seek shareholder approval to the transaction.

Under section 218(1)(b) of the Corporations Act, an explanatory statement satisfying section 219 of the Corporations Act is required. The explanatory statement is required to include the information set out below:

(a) The related parties to whom proposed resolution 2 would permit financial benefits to be given.

Proposed resolution 2 would permit financial benefits to be given to:

Desert Energy.*
The Directors of the Company and the Directors Entities (the Directors and the Directors entities are shareholders or option holders in Desert Energy and may therefore obtain an indirect financial benefit as a consequence of any financial benefit being given to Desert Energy);
The family members of Directors listed in Appendix 3 as holding options or shares in Desert Energy.

*The directors of the Company comprise all the directors of Desert Energy and therefore the directors “control” Desert Energy within the meaning of section 50AA of the Corporations Act. This would ordinarily constitute Desert Energy a related party of the Company unless the Company also controls Desert Energy. It is considered that the Company does control Desert Energy as the holder of 47.59% of the issued shares in Desert Energy and therefore, for this reason Desert Energy is not necessarily a related party of the Company. Nevertheless, out of caution, approval is being sought on the basis that Desert Energy is a related party of the Company.

(b) The Nature of the Financial Benefits

The nature of the financial benefits are:

In the case of Desert Energy, the rights and interests conferred on Desert Energy under the Camel Hills JVA; and
In the case of the Directors and the Directors Entities or family members of directors, any accretion in value of their security holdings in Desert Energy which may arise by virtue of the Camel Hills JVA.
(c) In relation to each Director, the Director’s recommendation about the proposed resolution 2 and the reasons for it (if the Director didn’t want to make a recommendation or was not available to consider it – why not)

None of the Directors makes a recommendation in relation to Resolution 2 on the grounds that:

Each of the Directors is a director of Desert Energy (and the Company); and

AURORA MINERALS LIMITED ACN 106 304 787

Each of the Directors or the Director’s Entity or the director’s family members holds securities in Desert Energy.
(d) In relation to each such Director, whether the Director had an interest in the outcome of the proposed resolution (and if so, what it was).

Each of the Directors has an interest in the outcome of Resolution 2 by virtue of the Director or the Director’s Entity or family members holding securities in Desert Energy (See the summary of holdings in Appendix 3).

(e) All other information that is reasonably required by Shareholders in order to decide whether or not it is in the Company’s interests to pass proposed Resolution 2 and is known to the Company or any of its Directors.

See the Independent Expert’s Report and the conclusions therein.

7. Resolution 3- Approve Desert Energy giving Financial Benefits to Related Parties as a consequence of entering into the Camel Hills JVA.

Section 208 of the Corporations Act requires the Company to obtain Shareholder approval for an entity that the Company controls to give a financial benefit to a related party (unless one of the exceptions applies) which benefit must be given within 15 months after the approval. Desert Energy is an entity that the Company controls. The entering into and performance of, and the exercise of rights under, the Camel Hills JVA by Desert Energy may require Shareholder approval under section 208 of the Corporations Act.

Although the entry and performance of, and exercise of rights under, the Camel Hills JVA may fall within one of the exceptions referred to in the paragraph above, this is not entirely certain and accordingly, in the interests of certainty it has been determined to seek shareholder approval for the transaction.

Under section 218(1)(b) of the Corporations Act, an explanatory statement satisfying section 219 of the Corporations Act, is required. The explanatory statement is required to include the information set out below:

(a) The related parties to whom proposed resolution 3 would permit financial benefits to be given.

Proposed resolution 3 may permit indirect financial benefits to be given to the Directors and the Directors Entities or Director’s family members which are shareholders or option holders in the Company as shown in Appendix 3 and may therefore obtain an indirect financial benefit as a consequence of any financial benefit being given to the Company.

(b) The Nature of the Financial Benefits

The nature of the financial benefits which may be given to the Directors and the Directors Entities or family members would comprise any accretion in value of their security holdings in the Company which may arise by virtue of the Camel Hills JVA. These security holdings are detailed in Appendix 3.

(c) In relation to each Director, the Director’s recommendation about the proposed resolution 3 and the reasons for it (if the Director didn’t want to make a recommendation or was not available to consider it – why not)

None of the Directors makes a recommendation in relation to Resolution 3 on the grounds that:

AURORA MINERALS LIMITED ACN 106 304 787

Each of the Directors is a director of Desert Energy(and the Company); and
Each of the Directors or the Director’s Entity or Director’s family members holds securities in the Company (and Desert Energy).

(d) In relation to each such Director, whether the Director had an interest in the outcome of the proposed resolution (and if so, what it was).

Each of the Directors has an interest in the outcome of Resolution 3 by virtue of the Director or the Director’s Entity or family members holding securities in the Company and Desert Energy (See the summary of holdings Appendix 3).

(e) All other information that is reasonably required by Shareholders in order to decide whether or not it is in the Company’s interests to pass proposed Resolution 3 and is known to the Company or any of its Directors.

See the Independent Expert’s Report and the conclusions therein.

8. Resolution 4 - Issue of Options to the Nominee of the Wajarri Yamatji Native Title Claimants

8.1 Background

The Wajarri Native Title Claim encompasses the majority of the Company’s tenements including all of its manganese discoveries to date at the Capricorn Southeast Project, Camel Hills and Glenburgh.

Pursuant to the Heritage Agreement dated 29 September 2009 entered into between the Company and the Wajarri Yamatji Native Title Claimants ( Claimant Group ) (the Heritage Agreement ), the Claimant Group are to receive a number of potential benefits including:

(a) payments upon the delineation of mineral resources which the Company discovers within the Claim Area;
(b) a royalty on the production of minerals produced by the Company within the Claim Area; and
(c) the issue of 350,000 Options to the Claimant Group’s Nominated Entity ( Wajarri Options ) at an exercise price equal to the closing market price on the day prior to the execution of the Heritage Agreement plus 100% of that price or 30 cents, whichever is the higher.

Resolution 4 seeks Shareholder approval under Listing Rule 7.1 to issue the Wajarri Options to the Claimant Group’s Nominated Entity. This Resolution was put to the Annual General Meeting of the Company in November 2009, but the Claimant Group did not advise the name of the Nominated Entity into which the Wajarri Options would be issued by the required date of 28 February 2010, and as a result, approval for the issue by shareholders is required for the second time.

The closing market price of the Company’s shares on the date prior to execution of the Heritage Agreement was $0.46 and therefore the exercise price of the Wajarri Option will be 92 cents.

The Heritage Agreement provides that the issue of the Wajarri Options will be subject to compliance with the Listing Rules, and such additional terms and conditions as the Company may reasonably require (provided that such additional terms will in no way affect the agreed exercise price except to the extent required by the Listing Rules in the event of a reconstruction of the Company’s capital) and may, if the Company considers it necessary, be subject to the issue of a prospectus or other disclosure document to meet the requirements of the Corporations Act prior to the issue of the Wajarri Options.

AURORA MINERALS LIMITED

ACN 106 304 787

8.2 Listing Rule 7.1 approval

Listing Rule 7.1 requires the Company to obtain Shareholder approval in order to issue Options representing more than 15% of the Equity Securities on issue (unless one of the exceptions in Listing Rule 7.2 applies). The Company’s proposed issue of the Options to the Claimant Group Nominated Entity pursuant to the terms of the Heritage Agreement falls within this requirement (none of the exceptions apply).

In accordance with Listing Rule 7.3, the following information is provided in relation to the issue of the Wajarri Options to the Nominated Entity:

(a) The maximum number of securities the entity is to issue (if known) or the formula for calculating the number of securities the entity is to issue

350,000 Wajarri Options.

(b) The date by which the entity will issue the securities (which must be no later than 3 months after the date of the meeting)

Allotment and issue will take place on one date which is expected to be on or around the date 14 days after the day following the date on which the Company is advised as to the name of the Nominated Entity but in any event the Wajarri Options will not be allotted and issued later than 3 months following the date of the Meeting unless the ASX extends the time within which the Wajarri Options may be allotted.

The Wajarri Options are to be issued free to the Nominated Entity. The Options are to be issued by the Company as part of the consideration to be provided by the Company under the terms of the Heritage Agreement. The exercise price for the Wajarri Options is specified below.

(d) The names of the allottees (if known) or the basis upon which the allottees will be identified or selected

The Wajarri Options will be issued to the Nominated Entity.

(e) The terms of the securities

The Wajarri Options will have the following key terms:

an exercise price of 92 cents to convert each Wajarii Option into one fully paid Aurora Minerals share and
an expiry date of 28 September 2019, being ten years after the date of the Heritage Agreement.

A complete set of the Wajarri Option terms is set out in Appendix 2.

(f) The intended use of the funds raised

No funds will be raised by the issue of the Wajarri Options. If any of the Wajarri Options are exercised in the future the funds received on exercise will be applied in exploration, development, working capital and administration as appropriate to the circumstances of the Company at the time of exercise.

(g) The dates of allotment or a statement that allotment will occur progressively

See paragraph 8.2(b) above.

(h) A voting exclusion statement

A voting exclusion statement for Resolution 4 is included in the Notice of Meeting.

(i) In the case of an agreement for the allotment of securities which is part of a public offer, a voting exclusion statement in relation to a party to the agreement, and an adequate summary of the agreement

AURORA MINERALS LIMITED ACN 106 304 787

Not applicable.

9. Resolution 5 – Issue of Aurora Options to Mr John Jordan, Chief Operating Officer

The Company proposes to offer, and if accepted, grant and issue a total of 1,000,000 Aurora Consultant Options with a term of 4 years to Mr John Jordan, the Chief Operating Officer of the Company (or his approved Nominee). Mr Jordan, who is not a director of the Company, provides geological and other consulting services to the Company through his company Churchlands Consulting Pty Ltd.

The exercise price of these Aurora Consultant Options will be at a 33.4% premium above the average closing Market Price of the Company’s shares on the five trading days prior to the date upon which the Aurora Consultant Options are issued, or $1.20, whichever is the greater. For example if the market price for the shares in the Company at the time the Aurora Consultant Options are issued is $1.00, the exercise price will be $1.334 and if all of the Aurora Consultant Options are exercised this will raise $1,334,000 for the Company.

The grant of the Aurora Consultant Options is designed to:

i) encourage the consultant to have a greater involvement in the achievement of the Company's objectives by providing a material additional incentive for his ongoing commitment and dedication to the continued growth of the Company and
ii) do this in a way which does not deplete the Company’s cash reserves.

The number of Aurora Consultant Options to be issued to Mr Jordan or his approved Nominee was negotiated at arms length and is considered by the Directors to be appropriate.

Table 1

Name of Allottee	Consulting Service	No of Options Tranche 1	Tranche 1 Exercisable from	No of Options Tranche 2	Tranche 2 Exercisable from
Mr John Jordan or approved Nominee	Geological	500,000	12 mths after issue	500,000	24 mths after issue
Total		500,000		500,000

Additional information

The following additional information is provided to Shareholders pursuant to Listing Rule 7.3:

(a) the maximum number of Aurora Consultant Options to be issued under Resolution 5 is 1,000,000;
(b) the exercise price for the Aurora Consultant Options is the average closing Market Price for the Shares on the 5 trading days prior to the date of the issue of the Aurora Consultant Options plus 33.4% of that price, or $1.20, whichever is the greater;
(c) the Aurora Consultant Options will be issued and allotted on a date which is no later than three months after the date of the Meeting;
(d) the Aurora Consultant Options will be issued for nil consideration;
(e) the allottee is the Consultant specified in the first column in Table 1 above, or his approved Nominee;
(f) the Aurora Consultant Options will be exercisable from the date of issue subject to the terms and conditions of the Aurora Consultants Options as set out in the Appendix 4 to this Explanatory Memorandum;
(g) no funds will be raised by the issue of the Aurora Consultant Options;

AURORA MINERALS LIMITED ACN 106 304 787

(h) if all the Aurora Consultant Options are exercised, the amount raised will depend on the exercise price for the Aurora Consultant Options which will vary depending on the market price for the Company’s Shares on the date of issue of the Aurora Consultant Options; and
(i) the Company’s adoption of Australian equivalents to International Financial Reporting Standards for reporting periods commencing from 1 July 2005 means that, under AASB2 Share-based Payment, equity-based compensation is recognised as an expense in respect of the services received. In the case of the Aurora Consultant Options, the cost to the Company will be approximately $580,000.

AURORA MINERALS LIMITED

ACN 106 304 787

Glossary

“A$” means the lawful currency of Australia.

“ASIC” means Australian Securities and Investments Commission.

“ASX” means ASX Limited (ABN 98 008 624 691) and where the context permits, the Australian Securities Exchange operated by ASX Limited.

“Aurora” or “Aurora Minerals” means Aurora Minerals Limited ABN 46 106 304 787.

“Aurora Resources Pty Ltd” means Aurora Resources Pty Ltd ACN 118 050 687

“Aurora Consultant Options” means the one million Options proposed to be issued to Mr John Jordan or his approved Nominee under Resolution 5.

“Board” means the board of Directors of Aurora Minerals Limited.

“Business Day” means Monday to Friday inclusive, except New Year’s Day, Good Friday, Easter Monday, Christmas Day, Boxing Day, and any other day that the ASX declares is not a business day.

“Camel Hills JVA” means the Farmin and Joint Venture Agreement dated 22 April 2010 and made between Aurora Resources Pty Ltd and Desert Energy Limited pursuant to which Aurora resources Pty Ltd agreed subject to satisfaction of the Conditions, to farmout its Camel Hills Project to Desert Energy and Desert Energy agreed to the expenditure of a minimum $1.5 million on the Project and thereafter can sole fund expenditure up until either earning a 51% interest by expenditure of $3.8 million on exploration or completion of a bankable feasibility study to earn a 70% or 75% interest.

“Camel Hills Project” or “Project” means the tenements comprising the Camels Hills Project and which is detailed fully in the Camel Hills JVA.

“Company” means Aurora Minerals Limited ABN 46 106 304 787.

“ Conditions ” means the conditions to which the Camel Hills JVA is subject, details of which appear in paragraph 4 of the Explanatory Statement.

“Corporations Act” means the Corporations Act 2001 (Cth).

“Desert” or “Desert Energy” means Desert Energy Limited. ACN123 102 974

“Desert Options” or “Desert Energy Options” means 10 million May 2017 unlisted Desert Energy Limited options exercisable at 40 cents each, the Terms and Conditions of which are attached as Appendix 1.

“Directors” means the directors of Aurora Minerals Limited.

“Director’s Entities” means:

(a) In relation to Philip Jackson , Holihox Pty Ltd and the PSR Family Trust, and Holihox Pty Ltd as trustee for the PSR Superannuation Fund;
(b) In relation to Robert Taylor, Able Kids Pty Ltd, Pelican Trust and the Reindeer Super Fund;
(c) In relation to Garry O’Hara, Anketell Pty Ltd.

“Explanatory Memorandum” means the explanatory memorandum to this Notice of General Meeting.

Independent Expert ” means RSM Bird Cameron

AURORA MINERALS LIMITED ACN 106 304 787

“ Independent Expert’s Report ” means the expert’s report given by the Independent Expert which accompanies this Explanatory Statement.

“Listing Rules” means the listing rules of ASX.

“Market Price” means the closing price on ITS, excluding special crossings, overnight sales and exchange traded option exercises.

“Nominated Entity” means a trust or other entity to be nominated by the lawyers for the Wajarri People under the Heritage Agreement for the purposes of receiving various benefits under the Heritage Agreement.

“ Notice of General Meeting ” means this Notice of General Meeting and includes the Explanatory Statement and Proxy Form.

“Resolution” means a resolution contained in this Notice of General Meeting.

“Robert Taylor Entities” means Robert S Taylor (Pelican Trust) and Robert S & Myra F Taylor (Reindeer Super Fund A/C).

“Share” means a fully paid ordinary share in the capital of the Company.

“Shareholder” means a shareholder of the Company.

“Transaction” means the proposed transaction the subject of the Camel Hills JVA Agreement whereby the Company is to farm out the Company’s Camel Hills Project to Desert Energy on terms and conditions as outlined in this explanatory statement including Appendix 5.

“WST” means Australian Western Standard Time.

AURORA MINERALS LIMITED ACN 106 304 787

APPENDIX 1 Desert Energy Options

Terms and Conditions of the 10 Million Desert Options to be Issued to Aurora Minerals Limited under Under Resolution 1

The Options will entitle the optionholders to subscribe for Shares in the Company on the following terms:

(a) Exercise price

Each Option shall entitle the optionholder to acquire one fully paid ordinary share in the capital of the Company upon exercise and payment of an exercise price of 40 cents (“the Exercise Price”).

(b) Expiry date

The Options will have an expiry date of 84 months from date of issue.

(c) Certificate

A certificate will be issued for the Options and sent to the optionholder together with the terms and conditions of the Options and a written notice that is to be completed when exercising Options.

(d) Options not listed

The Options will not be listed for official quotation on the ASX.

(e) Exercise

The Options may be exercised by notice in writing to the Company (“the Exercise Notice”), delivery of the Option certificates and payment of the Exercise Price to the Company at any time between the date of issue and the Expiry Date (“the Exercise Period”). The Options may be exercised in one or more lots, of not less than 100,000 Options at any one time, on different occasions during the Exercise Period, unless otherwise approved by the Directors in writing. Within 5 business days of receipt of the “Exercise Notice” and Option certificates and payment of the “Exercise Price”, the Company will allot the corresponding number of fully paid ordinary shares to the optionholder, procure the issue a statement of holding for the shares and apply for the shares to be listed on the stock exchanges on which the Company is listed. The shares issued as a result of exercise of the Options shall rank equally in all respects with the other issued fully paid shares in the Company.

(f) New share issue

If the Options are exercised before the record date of an entitlement, the optionholder can participate in a pro rata issue to the holders of the underlying securities in the Company. The Company must notify the optionholder of the proposed issue at least 9 business days before the record date. Optionholders do not have a right to participate in new share issues without exercising their Options in accordance with Listing Rule 6.19.

(g) Bonus Issue

If, from time to time, before the expiry of the Options the Company makes a pro rata issue of Shares to Shareholders for no consideration, the number of Shares over which the Options are exercisable will be increased by the number of Shares which the optionholder would have received if the Option had been exercised before the record date for calculating entitlements to the pro rata issue.

(h) Reorganisations

In the event of any reorganization of the issued capital of the Company, the Options will be reorganized by the Company in accordance with the Listing Rules (including without limitation by changing the number or exercise price for the Options in such manner as may be required by the Listing Rules.)

AURORA MINERALS LIMITED ACN 106 304 787

(i) Change of Option's exercise price or the number of underlying securities

(i) In the event that a pro rata issue (except a bonus issue) is made to the holders of the underlying securities in the Company, the exercise price of the Options may be reduced according to the following formula:

O' = O - E[P - (S + D)]

N + 1

O' = the new exercise price of the Option;
O = the old exercise price of the Option;
E = the number of underlying securities in the Company into which one option is exercisable;
P = the average market price per security (weighted by reference to volume) of the underlying securities in the Company during the five (5) trading days ending on the day before the ex rights date or ex entitlements date;
S = the Subscription price for a security under the pro rata issue;
D = the Dividend due but not yet paid on the existing underlying securities (except those to be issued under the pro rata issue);
N = the Number of securities with rights or entitlements that must be held to receive a right to one new security in the Company.

(ii) The number of shares to be issued pursuant to the exercise of Options will be adjusted for bonus issues made prior to exercise of Options. The effect will be that upon exercise of the Options the number of shares received by the optionholder will include the number of bonus shares that would have been issued if the Options had been exercised prior to the record date for bonus issues. The exercise price of the Options shall not change as result of any such bonus issue.

(j) Dividends

The Options carry no entitlement to participate in dividends until shares are allotted pursuant to the exercise of the Options.

(k) Options Transferable

Subject to the Listing Rules of the ASX, the Options can be transferred to any nominee of the option holder or from any such Nominee to another Nominee.

(l) Interpretation

In these terms and conditions the following terms will bear the following means unless the context otherwise requires:

“Listing Rules” means the listing rules as amended from time to time of the ASX.

AURORA MINERALS LIMITED ACN 106 304 787

APPENDIX 2 Terms and Conditions of Wajarri Options to be offered by Aurora Minerals Limited

The Wajarri Options will entitle the optionholders to subscribe for Shares in the Company on the following terms:

(a) Issue price

Each Wajarri Option is issued for nil consideration

(b) Exercise price

Each Wajarri Option shall entitle the option holder to acquire one fully paid ordinary share in the capital of the Company upon exercise and payment of 92 cents (“the Exercise Price”).

(c) Expiry date

Subject to the provisions herein or in the Heritage Agreement which provide for Wajarri Options to lapse earlier in certain circumstances, Wajarri Options will expire on the Expiry Date for that class of Options. The Expiry Dates for the Wajarri Options are 10 years after the date of issue.

(d) Certificate

A certificate will be issued for the Wajarri Options and sent to the optionholder together with the terms and conditions of the Wajarri Options and a written notice that is to be completed when exercising Wajarri Options.

(e) Wajarri Options not listed

The Wajarri Options will not be listed for official quotation on the ASX.

(f) Wajarri Options not transferable

The Wajarri Options are not transferable without the prior written approval of the Directors.

(g) Exercise

Subject to m) below, the Wajarri Options may be exercised by notice in writing to the Company (“the Exercise Notice”), delivery of the Wajarri Option certificates and payment of the Exercise Price to the Company at any time between the date of issue and the Expiry Date (“the Exercise Period”).

The Wajarri Options may be exercised in one or more lots, of not less than 10,000 Options at any one time, on different occasions during the Exercise Period.

Within 5 business days of receipt of the “Exercise Notice” and Wajarri Option certificates and payment of the “Exercise Price”, the Company will allot the corresponding number of fully paid ordinary shares to the optionholder, procure the issue of a statement of holding for the shares and apply for the shares to be listed on the stock exchanges on which the Company is listed. The shares issued as a result of exercise of the Wajarri Options shall rank equally in all respects with the other issued fully paid shares in the Company.

(h) New share issue

If the Wajarri Options are exercised before the record date of an entitlement, the optionholder can participate in a pro rata issue to the holders of the underlying securities in the Company. The Company must notify the optionholder of the proposed

AURORA MINERALS LIMITED ACN 106 304 787

issue at least 9 business days before the record date. Optionholders do not have a right to participate in new share issues without exercising their Wajarri Options in accordance with Listing Rule 6.19.

(i) Bonus Issue

(j)

Reorganisations

In the event of any reorganization of the issued capital of the Company, the Wajarri Options will be reorganized by the Company in accordance with the Listing Rules (including without limitation by changing the number or exercise price for the Wajarri Options in such manner as may be required by the Listing Rules.)

(k) Change of Wajarri Option's exercise price or the number of underlying securities

(i) In the event that a pro rata issue (except a bonus issue) is made to the holders of the underlying securities in the Company, the exercise price of the Wajarri Options may be reduced according to the following formula: O' = O - E[P - (S + D)]
- N + 1
O' = the new exercise price of the Wajarri Option;
O = the old exercise price of the Wajarri Option;
E = the number of underlying securities in the Company into which one option is exercisable;
P = the average market price per security (weighted by reference to volume) of the underlying securities in the Company during the five (5) trading days ending on the day before the ex rights date or ex entitlements date;
S = the Subscription price for a security under the pro rata issue;
D = the Dividend due but not yet paid on the existing underlying securities (except those to be issued under the pro rata issue);
N = the Number of securities with rights or entitlements that must be held to receive a right to one new security in the Company.
(ii) The number of shares to be issued pursuant to the exercise of Wajarri Options will be adjusted for bonus issues made prior to exercise of Wajarri Options. The effect will be that upon exercise of the Wajarri Options the number of shares received by the optionholder will include the number of bonus shares that would have been issued if the Wajarri Options had been exercised prior to the record date for bonus issues. The exercise price of the Wajarri Options shall not change as result of any such bonus issue.

(l)

Dividends

The Wajarri Options carry no entitlement to participate in dividends until shares are allotted pursuant to the exercise of the Wajarri Options.

AURORA MINERALS LIMITED ACN 106 304 787

(m) Death of optionholder.

In the event of the death of an optionholder of a parcel of Wajarri Options then such parcel of Wajarri Options shall remain in full force and effect for the full term up until the Expiry Date and may be exercised at any time up to the Expiry Date by the holder or a deceased optionholder's legal personal representative.

(n)

Prospectus

The issue of the Securities will be subject to compliance with the ASX Listing Rules, and may, if the Issuing Proponent considers it necessary, be subject to the issue of a prospectus or other disclosure document to prior to the issue of the Securities.

(o)

Escrow

The Nominated Entity and any controller of the Nominated Entity must comply with any escrow restrictions which may apply to the Wajarri Options under the ASX Listing Rules.

(p)

Definitions

In these terms and conditions the following terms will bear the following means unless the context otherwise requires:

“ASX” means ASX Ltd as operator of the Australian Securities Exchange;

“Company” means Aurora Minerals Limited;

“Heritage Agreement” means an agreement dated 29 September 2009 and made between the Company and The Wajarri Yamatji People and Wadjarri Consulting Services.

“Listing Rules” means the listing rules as amended from time to time of the ASX;

“Nominated Entity” means a trust, company or other entity nominated in writing by a lawyer representing the Claimant Group in accordance with the terms of the Heritage Agreement to be the holder of the Wajarri Options.

AURORA MINERALS LIMITED ACN 106 304 787

APPENDIX 3 SECURITY HOLDINGS OF THE DIRECTORS AND THE DIRECTORS ENTITIES IN AURORA MINERALS LIMITED AND DESERT ENERGY LIMITED

Aurora Minerals Limited

Director	Consulting Company	No of Shares	Holder of Shares	No of Unlisted Options	Holder of Options
Phillip Jackson	Holihox Pty Ltd	2,050,000	Phillip Sidney Redmond Jackson	3,500,000	Phillip Jackson (PSR Family Trust A/C)
Phillip Jackson	Holihox Pty Ltd			750,000	Holihox Pty Ltd (PSR Super fundA/C)
Phillip Jackson	Holihox Pty Ltd			2,000,000	Holi Jackson
Phillip Jackson	Holihox Pty Ltd			500,000 500,000	Oliver Jackson Sebastian Jackson
Garry O’Hara	Anketell Pty Ltd	440,000	Anketell Pty ltd	6,625,000	Garry O’Hara
Garry O’Hara	Anketell PtyLtd	3,100,000	Garry O’Hara
Robert Taylor	Able Kids Pty Ltd	3,350,000	Robert S Taylor (Pelican A/C)	3,125,000	Robert S Taylor (Pelican A/C)
RobertTaylor	AbleKidsPtyLtd	100,000	MyraF Taylor
Robert Taylor	Able Kids Pty Ltd			3,500,000	Robert S & Myra F Taylor (Reindeer Super FundA/C)

Desert Energy Limited

Director	Consulting Company	No of Shares	No of Listed Options	Holder of Shares	No of Unlisted Options	Holder of Options
Phillip Jackson	Holihox Pty Ltd	1,160,250	290,062	Phillip Sidney Redmond Jackson	1,500,000	Phillip Jackson (PSR Family Trust A/C)
Phillip Jackson	Holihox Pty Ltd				1,500,000	Sebastian Jackson
Garry O’Hara	Anketell Pty Ltd	Nil	Nil		6,000,000	Garry O’Hara
Robert Taylor	Able Kids Pty Ltd	100,000	25,000	M F Taylor (Reindeer Super Fund)	3,000,000	Robert S Taylor (Pelican A/C)
Robert Taylor	Able Kids Pty Ltd				3,000,000	Robert S & Myra F Taylor (Reindeer Super Fund A/C)

AURORA MINERALS LIMITED ACN 106 304 787

APPENDIX 4 Aurora Consultant Options to be issued to Mr John Jordan under Resolution 5

Terms and Conditions of options to be issued to Mr John Jordan or his nominee approved by Aurora Minerals Limited (Aurora Consultant Options)

The Aurora Consultant Options will entitle the optionholder to subscribe for Shares in the Company on the following terms:

(a) Issue price

Each Aurora Consultant Option is issued for nil consideration.

(b) Exercise price

The exercise price for the Aurora Consultant Options will be the average closing Market Price for the Shares on ITS (excluding special crossings, overnight sales and exchange traded option exercises) for the five days prior to the date of issue of the Aurora Consultant Options plus 33.4% of that price, or $1.20, whichever is the greater;

(c) Expiry date

The Aurora Consultant Options will expire on the Expiry Date for that class of Options. The Expiry Date is the date which is 48 calendar months after the date of issue.

(d) Certificate

A certificate will be issued for the Aurora Consultant Options and sent to the optionholder together with the terms and conditions of the Aurora Consultant Options and a written notice that is to be completed when exercising the Aurora Consultant Options.

(e) Aurora Consultant Options not listed

The Aurora Consultant Options will not be listed for official quotation on the ASX.

(f) Aurora Consultant Options not transferable without Company approval

Subject to the Listing Rules of the ASX, the Jordan Options can be transferred to any Nominee of the optionholder.

(g) Exercise

Subject to m) below, the Aurora Consultant Options may be exercised by notice in writing to the Company (“the Exercise Notice”), delivery of the Aurora Option certificates and payment of the Exercise Price to the Company, as follows: 500,000 Aurora Consultant Options can be exercised at any time after 12 months has passed from the date of issue and the other 500,000 Aurora Consultant Options can be exercised at any time after 24 months has passed from the date of issue and up to the Expiry Date (“the Exercise Period”) or may be exercised earlier with the written approval of the Company. The Aurora Consultant Options may be exercised in one or more lots, of not less than 10,000 Options at any one time, on different occasions during the Exercise Period. Within 5 business days of receipt of the “Exercise Notice” and Aurora Option certificates and payment of the “Exercise Price”, the Company will allot the corresponding number of fully paid ordinary shares to the optionholder, procure the issue of a statement of holding for the shares and apply for the shares to be listed on the stock exchanges on which the Company is listed. The shares issued as a result of exercise of the Aurora Consultant Options shall rank equally in all respects with the other issued fully paid shares in the Company.

If the optionholder intends to exercise any Aurora Consultant Options with a view to selling all or a substantial number of the resultant Shares within two months following exercise the optionholder will not exercise such Aurora Consultant Options (or sell any resultant Shares within 2 months of exercise) unless the holder has first received

AURORA MINERALS LIMITED ACN 106 304 787

written confirmation from the Board that no capital raising or other material corporate activity is proposed or expected during such two month period or that the Board waives this requirement.

(h) New share issue

If the Aurora Consultant Options are exercised before the record date of an entitlement, the optionholder can participate in a pro rata issue to the holders of the underlying securities in the Company. The Company must notify the optionholder of the proposed issue at least 9 business days before the record date. Optionholders do not have a right to participate in new share issues without exercising their Aurora Consultant Options in accordance with Listing Rule 6.19.

(i) Bonus Issue

If, from time to time, before the expiry of the Aurora Consultant Options the Company makes a pro rata issue of Shares to Shareholders for no consideration, the number of Shares over which the Aurora Consultant Options are exercisable will be increased by the number of Shares which the optionholder would have received if the Aurora Consultant Options had been exercised before the record date for calculating entitlements to the pro rata issue.

(j)

Reorganisations

In the event of any reorganization of the issued capital of the Company, the Aurora Consultant Options will be reorganized by the Company in accordance with the Listing Rules (including without limitation by changing the number or exercise price for the Aurora Consultant Options in such manner as may be required by the Listing Rules.)

(k) Change of Aurora Option's exercise price or the number of underlying securities

(i) In the event that a pro rata issue (except a bonus issue) is made to the holders of the underlying securities in the Company, the exercise price of the Aurora Consultant Options may be reduced according to the following formula:
O' = O - E[P - (S + D)] N + 1
O'= the new exercise price of the Aurora Consultant Option;
O= the old exercise price of the Aurora Consultant Option;
E= the number of underlying securities in the Company into which one option is exercisable;
P= the average market price per security (weighted by reference to volume) of the underlying securities in the Company during the five (5) trading days ending on the day before the ex rights date or ex entitlements date;
S= the Subscription price for a security under the pro rata issue;
D= the Dividend due but not yet paid on the existing underlying securities (except those to be issued under the pro rata issue);
N= the Number of securities with rights or entitlements that must be held to receive a right to one new security in the Company.

AURORA MINERALS LIMITED ACN 106 304 787

(ii) The number of shares to be issued pursuant to the exercise of the Aurora Consultant Options will be adjusted for bonus issues made prior to exercise of Aurora Consultant Options. The effect will be that upon exercise of the Aurora Consultant Options the number of shares received by the optionholder will include the number of bonus shares that would have been issued if the Aurora Consultant Options had been exercised prior to the record date for bonus issues. The exercise price of the Aurora Consultant Options shall not change as result of any such bonus issue.

(l)

Dividends

The Aurora Consultant Options carry no entitlement to participate in dividends until shares are allotted pursuant to the exercise of the Aurora Consultant Options.

(m) Cessation of engagement of the Consultant or death of the optionholder.

(i) In the event of the death of the holder in relation to a parcel of Aurora Consultant Options then such parcel of Aurora Consultant Options shall remain in full force and effect for the full term up until the Expiry Date and may be exercised at any time up to the Expiry Date by the holder or a deceased optionholder's legal personal representative.
(ii) In the event of a Consultant ceasing to be engaged as a consultant by the Company or any of its subsidiaries following the takeover of the Company, all of the Aurora Consultant Options issued to that Consultant or its Nominee shall remain in full force and effect for the full term up until the Expiry Date.
(iii) subject to clause (m) (i) and (ii) in the event that a Consultant ceases to be engaged by the Company or any of its subsidiaries within two years of the issue of the Aurora Consultant Options to such Consultant, then all such aurora Consultant Options will lapse unless otherwise determined by the Board of Directors of the Company.
(iv) subject to clause (m) (i) and (ii) in the event that a Consultant ceases to be engaged by the Company or any of its subsidiaries, after two years of the issue of any Aurora Consultant Options to such Consultant, any Aurora Consultant Options held by that Consultant may, provided they have reached their Exercise Date, be exercised within 3 months of the Consultant ceasing to be so engaged by the Company, or if not exercised within such 3 months will then lapse unless otherwise determined by the Board of Directors of the Company.
(v) subject to clause (m) (i) and (ii) in the event that a Consultant ceases to be engaged by the Company or any of its subsidiaries, after two years of the issue of any Aurora Consultant Options to such Consultant, any Aurora Consultant Options held by that Consultant which have not reached their Exercise Date will lapse unless otherwise determined by the Board of Directors of the Company.

(n) Directorships

For the avoidance of doubt it is recorded that if any of the Consultants are at any time directors of the Company but then cease to be directors this alone shall not cause the Aurora Consultant Options to be forfeited and they shall remain in full force and effect.

(o) Interpretation

In these terms and conditions the following terms will bear the following means unless the context otherwise requires:

“ASX” means ASX Ltd as operator of the Australian Securities Exchange;

“Aurora Consultant Options” means the Jordan Options;

AURORA MINERALS LIMITED ACN 106 304 787

“Change in Control” means a change in the composition of the shareholders of the Company whereby a person who does not presently control the Company within the meaning of section 50AA of the Corporations Act gains such control over the Company;

“Company” means Aurora Minerals Limited;

“Consultant” means John Jordan;

“Jordan Options” means 1,000,000 Options issued to John Jordan or any nominee approved by the Company;

“Listing Rules” means the listing rules as amended from time to time of the ASX;

“Nominee” or “Permitted Nominee” means:

(a) the Consultant;

(b) a spouse or de facto spouse of the Consultant;

(c) a child, sibling or parent of the Consultant;
(d) a family trust associated with the Consultant;
(e) a superannuation fund in which the Consultant or any of the persons referred to above is a member; or
(f) any other nominee approved by the Company.

AURORA MINERALS LIMITED ACN 106 304 787

APPENDIX 5 Summary of the key conditions of the Camel Hills JVA

The Camel Hills JVA is between Desert Energy Limited, Aurora Minerals Limited and Aurora Resources and is dated 22 April 2010.
The Camel Hills JVA is subject to the Conditions and commences on the date the last of the Conditions are satisfied (“the Commencement Date”). The Conditions are:
(a) Approval in general meeting by the shareholders of both Desert and Aurora Minerals as required by the ASX Listing Rules or the Corporations Act for the Camel Hills JVA to be entered into by the Parties, for the issue of the Desert Energy Options and any other resolution terms and conditions stipulated in the respective notices of meeting for such meetings which are directly concerned with the Camel Hills JVA or the JV; and
(b) In respect of those provisions of the Camel Hills JVA that require such consent, the consent of the Minister, pursuant to section 64 of the Mining Act , in respect of any of the Tenements which are granted as at the date of this Agreement but still in the first year of their term.
If the Conditions are not satisfied within 4 months (or any longer period as the Parties may agree) either party may terminate the JVA.
Desert may earn a 51% Participating Interest under the JV by sole funding expenditure of $3.8 million within 4 years of the Commencement Date.
If any of the Tenements or part thereof which are specifically listed in Schedule 1 are removed from the JV during Desert’s Farmin Period prior to it earning a 51% Participating Interest then the amount of Expenditure which Desert is required to spend to earn a 51% Participating Interest will reduce by the same proportion that the JV Area reduces, provided always that the amount of Expenditure shall not reduce below $3.2 million to earn a 51% Participating Interest.
If Desert earns a 51% Participating Interest it may elect to earn a further 19% Participating Interest (taking its total interest to 70%) by sole funding Expenditure until completion of a Bankable Feasibility Study which concludes that any development would have a minimum Net Present Value (NPV) of $50 million. This study must be completed within 7 years of the Commencement Date for Desert to earn the further 19% interest.
If Desert earns a 70% Participating Interest then Aurora Resources can elect to reimburse Desert 50% of the costs of the Feasibility Study and Bankable Feasibility Study and the Parties will then have the following Participating Interests in the JV: Desert 70% and Aurora Resources 30%.

Desert’s Participating Interest will increase to 75% and Aurora Resources Participating Interest will reduce to 25% if Aurora Resources elects not to reimburse Desert 50% of the costs of the Feasibility Study and Bankable Feasibility Study.

A Bankable Feasibility Study must comply with certain criteria set out in the Camel Hills JVA and must conclude that economic development is feasible. The study must be of sufficient detail to be acceptable to a lender of repute to assist in determining whether to finance a Party’s share of the cost of the development.

AURORA MINERALS LIMITED ACN 106 304 787

Desert is required to incur expenditure of $1.5 million in relation to the Tenements within 12 months of the Commencement Date.
Once Desert earns a Participating Interest and ceases sole funding, the parties will contribute to further expenditure in accordance with their Participating Interests subject to the right of a Party to elect not to contribute in which case that Party’s Participating Interest will dilute in accordance with dilution formula set out in the Camel Hills JVA.
During the Farmin Period Desert will endeavour to keep the Tenements in good standing by ensuring as follows:
(a) by incurring Expenditure to meet the minimum DMP annual expenditure requirements on a per Tenement basis or otherwise on a Project basis (if Project status is granted by the DMP), pro rata for the time the Tenement (or for any group of Tenements which have been granted Project Status by the DMP) is in the JV; or
(b) where expenditure has not been met on any Tenements, that exemptions from minimum expenditure conditions are lodged ; and
(c) if such exemptions from minimum expenditure are not granted but fines have been imposed under the Mining Act due to under-expenditure on a Tenement , to pay such fines in the required time.

The Manager may lodge applications with DMP for exemptions from expenditure in relation to any Tenement where the minimum annual expenditure required pursuant to the Act has not been met and in the event that a fine is imposed in respect of a Tenement for failure to meet such minimum expenditure, then the Manager shall pay such fine, on behalf of Desert during the Farmin Period and the Parties after the Farmin Period but, in no event whatsoever will the Manager nor Desert or Aurora Resources be liable to the other for any financial or other impact resulting from failure to meet the minimum expenditure requirements in relation to any Tenement or group of Tenements.

During the Farmin Period (effectively the period during which Desert is sole funding expenditure to earn its Participating Interest), Desert is not under a strict obligation to meet the minimum annual expenditure commitment on all tenements every year. Desert is, however, obliged to seek exemptions from expenditure where necessary and to pay any fines which may be imposed under the Mining Act as a result of under-expenditure.
Desert is under an obligation to use reasonable efforts to advise Aurora Resources at least 60 days before the expiry of a tenement year if a Tenement is not anticipated to have the minimum expenditure required under the Mining Act. Aurora Resources will then have the right to take the Tenement out of the JV if it so wishes.
Desert shall use reasonable endeavours to identify and advise Aurora Resources of any Tenements which Desert anticipates will not be kept in good standing at least 60 days before the expiration of the tenement year of that Tenement and if Desert so advises Aurora in respect of a Tenement then either:

Desert may elect to omit the Tenement from this JV and all rights of Desert in relation to that Tenement under this Agreement shall cease (and any interest previously earned by Desert in such Tenement will be retransferred to Aurora Resources and any Royalty right in respect of each Tenement which Desert may have shall be forfeited); or

AURORA MINERALS LIMITED ACN 106 304 787

If Desert does not so elect Aurora and Desert may agree that the Tenement is to remain in the JV.

While Desert is sole funding, Desert will make all decisions as to activities on the Tenements. After that time the operating committee comprising representatives of both parties will make all such decisions. The committee will make decisions by majority vote with each party having votes in proportion to its Participating Interest. Any Party with more than a 50% Participating Interest will have the majority vote.
A decision to mine will be made if the representatives of any Party votes in favour of such a decision. Where a Party’s representatives vote against the decision to mine, that Party may elect not to participate in the proposed development (“Discontinuing Party”).
The Discontinuing Party must offer its Participating Interest for sale to the other Party for a price as agreed or as determined by an expert. If the other party accepts the offer such party must pay the price so determined plus a royalty equal to 1% of the value of minerals mined and sold commercially (“Royalty”).
If the other Party doesn’t accept such offer, the Discontinuing Party may sell its Participating Interest to a third party which wishes to participate in the proposed development.
The proposed development will not proceed until the Discontinuing Party’s Participating Interest is sold.
The Camel Hills JVA contains pre-emptive rights pursuant to which a Party may not assign its Participating Interest unless such interest is first offered for sale to the other Party for the same price.
Desert is appointed manager of the JV. The Manager is entitled levy an administrative overhead charge of 15% of all JV expenditure to reimburse the manager for indirect or overhead costs. This charge does not apply to capital expenditure associated with mine development (in respect of which a charge to be agreed will apply or failing agreement a charge equal to 3% of such expenditure will apply).
As further consideration for the rights issued under the Camel Hills JVA, Desert will issue to Aurora Minerals Limited ) 10 million options each of which will entitle the holder to acquire one share in Desert for a price of $0.40 at any time within 84 months of issue.
Both Parties have the right to withdraw from the JV but Desert may only do so once it has made the first $1.5 million of expenditure. Upon withdrawal, ownership of the Tenements and other JV assets will pass to the other Party. If Aurora withdraws it will remain entitled to the Royalty. If Desert withdraws before earning a 51% interest in the JV it shall not be entitled to a Royalty. If Desert withdraws after earning a 51% interest in the JV it shall be entitled to the Royalty.

The Royalty shall cease to apply on any Tenement relinquished by both Parties and would not apply to any new party if a Party assigned its interest to such party.

Each Party has the right and obligation to take in kind its Participating Interest share of any minerals produced.

ACN 106 304 787

AURORA MINERALS LIMITED

Desert may surrender any Tenements provided the Tenements are first offered to Aurora Resources.
If a Party’s Participating Interest dilutes to 10%, then such Party must either recommence contributing its share of expenditure or will be deemed to have withdrawn, in which case the withdrawing Party will be entitled to be paid the Royalty.
In this Appendix:

“Conditions” means the conditions to which the Camel Hills JVA is subject as summarized in paragraph 2 above.

“Expenditure” means expenditure in relation to the Tenements in accordance with the Camel Hills JVA;

“JV” means the joint venture created by the Camel Hills JVA;

“Participating Interest” means a participating interest for the purpose of the Camel Hills JVA including a Party’s interest from time to time in the Tenements;

“Royalty” means a royalty of the kind referred to in paragraphs 15 and 25 of this Appendix 5 as provided for in the Camel Hills JVA;

“Tenements” means the tenements the subject of the Camel Hills JVA (being 23 exploration licences and 5 applications for exploration licences). (Refer to Schedule 1)

AURORA MINERALS LIMITED ACN 106 304 787

Schedule 1

TENEMENTS

Granted Licences

Tenement	%	Grant Date/	Area	Annual
Number	Interest	Anniversary	(blocks)	Commitment
		Date		$
E09/1313	100	30 Oct 2009	63	63,000
E09/1314	100	30 Oct 2009	50	50,000
E09/1320	100	30 Oct 2009	39	39,000
E09/1321	100	30 Oct 2009	47	47,000
E09/1322	100	30 Oct 2009	59	59,000
E09/1323	100	30 Oct 2009	69	69,000
E09/1398	100	15 Mar 2010	70	70,000
E09/1399	100	15 Mar 2010	66	66,000
E09/1400	100	15 Mar 2010	53	53,000
E09/1535	100	24 Nov 2009	67	67,000
E09/1546	100	24 Nov 2009	56	56,000
E09/1548	100	24 Nov 2009	61	61,000
E09/1549	100	24 Nov 2009	34	34,000
E09/1550	100	24 Nov 2009	57	57,000
E09/1587	100	24 Nov 2009	54	54,000
E09/1588	100	24 Nov 2009	70	70,000
E09/1589	100	24 Nov 2009	70	70,000
E09/1595	100	24 Nov 2009	69	69,000
E09/1596	100	24 Nov 2009	65	65,000
E09/1597	100	24 Nov 2009	70	70,000
E09/1634	100	24 Nov 2009	70	70,000
E09/1635	100	24 Nov 2009	70	70,000
E52/1961	100	13 Mar 2007	70	70,000
Applications
E09/1712	100	Application	59	59,000
E09/1713	100	Application	63	63,000
E09/1718	100	Application	36	36,000
E09/1735	100	Application	59	59,000
E09/1736	100	Application	61	61,000

Registered Holder

Aurora Resources Pty Ltd Aurora Resources Pty Ltd Aurora Resources Pty Ltd Aurora Resources Pty Ltd Aurora Resources Pty Ltd Aurora Resources Pty Ltd Aurora Resources Pty Ltd Aurora Resources Pty Ltd Aurora Resources Pty Ltd Aurora Resources Pty Ltd Aurora Resources Pty Ltd Aurora Resources Pty Ltd Aurora Resources Pty Ltd Aurora Resources Pty Ltd Aurora Resources Pty Ltd Aurora Resources Pty Ltd Aurora Resources Pty Ltd Aurora Resources Pty Ltd Aurora Resources Pty Ltd Aurora Resources Pty Ltd Aurora Resources Pty Ltd Aurora Resources Pty Ltd Aurora Resources Pty Ltd

Applicant

Aurora Resources Pty Ltd Aurora Resources Pty Ltd Aurora Resources Pty Ltd Aurora Resources Pty Ltd Aurora Resources Pty Ltd

AURORA MINERALS LIMITED ACN 106 304 787

AURORA MINERALS LIMITED ABN 46 106 304 787

271 Great Eastern Highway Telephone: 61 (8) 6365 4817 Belmont WA 6104 Facsimile: 61 (8) 6162 9079 PO Box 707 Email: [email protected] Belmont WA 6984 Website: www.desertenergy.com.au Proxy Form I/we....................................................................................................................………(full name, block letters) of........................................................…................................................................…........…………………….....

being a member of Aurora Minerals Limited hereby appoint

....................................................………………………………………………………………………………………..

of…..………………………………………………………………………………………………………………………..

or, failing him, the Chairman of the meeting as my/our proxy to vote for me/us and on my/our behalf at the Extraordinary General Meeting of the company to be held at 10.00 am on 15 June 2010 and at any adjournment thereof.

I/we direct my/our proxy how to vote in the following manner:

FOR AGAINST ABSTAIN ORDINARY BUSINESS Resolution 1 : To approve the Company entering into the Camel Hills JVA with Desert Energy Limited Resolution 2 : To approve the Aurora Resources giving benefits to related parties by virtue of the Camel Hills JVA Resolution 3: to approve Desert Energy giving benefits to related parties by virtue of the Camel Hills JVA Resolution 4: To approve the issue of Options to Wajarri Yamatji Resolution 5 : To approve issue of Aurora Options to Mr John Jordan or his permitted nominee

If no directions are given my/our proxy may vote as the proxy thinks fit or abstain.

If the Chair of the meeting is appointed as your proxy, or may be appointed by default and you do not wish to direct your proxy how to vote as your proxy in respect of the resolution, please place a mark in the box

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By marking this box, you acknowledge that the Chair of the meeting may exercise your proxy even if he has an interest in the outcome of the resolutions and that votes cast by the Chair of the meeting for those resolutions other than as proxy holder will be disregarded because of that interest.

If you do not mark this box, and you have not directed your proxy how to vote, the Chair will not cast your votes on the resolution(s) and your votes will not be counted in calculating the required majority if a poll is called on the resolution(s).

Where the Chairman is appointed as proxy, the Chairman’s voting intention in relation to undirected proxies in respect of these resolutions is to vote FOR the resolutions.

This Proxy is appointed to represent _% of my voting right, or if 2 proxies are appointed Proxy 1 represents _% and Proxy 2 represents __% of my total votes My total voting right is ___shares

If the shareholder(s) is an individual(s), every shareholder is to If the shareholder is a company, sign in accordance with Section sign: 127(1) of Corporations Act or affix common seal (if required by Constitution). Signed: Director or Sole Director and Secretary Signed: Director/Secretary Dated: 2010 Dated: 2010

This form is to be used in accordance with the directions overleaf.

AURORA MINERALS LIMITED ACN 106 304 787

Instructions for completing and lodging this Proxy Form

A shareholder who is entitled to attend and vote at a meeting is entitled to appoint a proxy (and a shareholder who is entitled to cast two or more votes may appoint not more than two proxies) to attend and vote at the meeting.
Where two proxies are appointed each proxy must be appointed to represent a specified proportion of the shareholder's voting rights. Where two proxies for a shareholder are present at the meeting, neither proxy shall be entitled to vote on a show of hands, and on a poll the appointment shall be of no effect, unless each proxy is appointed to represent a specified proportion of the shareholder's voting rights, not exceeding 100% in aggregate.
A proxy need not himself be a shareholder of the Company.
The proxy form must be signed personally by the shareholder or his attorney, duly authorised in writing. If a proxy is given by a corporation, the proxy must be executed under either the common seal of the corporation or in accordance with section 127 of the Corporations Act or by its duly authorised attorney. In the case of joint shareholders, this proxy must be signed by at least one of the joint shareholders, personally or by a duly authorised attorney.
If a proxy is executed by an attorney of a shareholder, then the original of the relevant power of attorney or a certified copy of the relevant power of attorney, if it has not already been noted by the company, must accompany the proxy form.
If the proxy form specifies a way in which the proxy is to vote on any of the resolutions stated above, then the following applies:
(a) the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way; and
(b) if the proxy has 2 or more appointments that specify different ways to vote on the resolution, the proxy must not vote on a show of hands; and
(c) if the proxy is Chairman, the proxy must vote on a poll and must vote that way, and
(d) if the proxy is not the Chairman, the proxy need not vote on a poll, but if the proxy does so, the proxy must vote that way.

If a proxy is also a shareholder, the proxy can cast any votes the proxy holds as a shareholder in anyway that the proxy sees fit.

The Proxy Form (and any power of attorney or other authority pursuant to which the Proxy Form has been signed) must:

either be deposited at the registered office of the Company, 271 Great Eastern Highway, Belmont, WA 6104

or be sent by post to Aurora Minerals Limited, PO Box 707, Belmont WA 6984,
or be sent by facsimile to Aurora Minerals Limited at (08) 6162 9079
so as to be received not later than 48 hours before the time fixed for the holding of the meeting
that is to be received by 10.00 am Western Standard Time on 13 June 2010.

Change of Address

Should your address have changed please use this section to advise the Company and, if faxing your proxy form, please fax this side of the proxy form as well.

My new address is:

My email address is:_________

My phone number is:_________

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8 St Georges Terrace Perth WA 6000 GPO Box R1253 Perth WA 6844 T +61 8 9261 9100 F +61 8 9261 9102 www.rsmi.com.au

E-mail: andy.gilmour Direct Telephone: 08 9261 9447 AJG/ SM

21 April 2010

Mr Garry O‟Hara Aurora Minerals Limited 27 Great Eastern Highway BELMONT WA 6104

Dear Mr O‟Hara

Independent Expert’s Report – Proposed joint venture re Camel Hills Project

1. Introduction

1.1. RSM Bird Cameron Corporate Pty Ltd (“RSMBCC”) has been engaged by Aurora Minerals Limited (“Aurora” or “the Company”) to prepare an Independent Expert‟s Report (“IER”) to express an opinion in relation to the following transaction (“Proposed Transaction”). The Proposed Transaction is to create a joint venture (“Camel Hills Joint Venture”) between Aurora and Desert Energy Limited (“Desert Energy”) to explore and develop the Camel Hills Project. We have concluded that the Proposed Transaction is not fair but reasonable to the non-associated shareholders of Aurora.
1.2. The Proposed Transaction is set out in the Notice of Meeting expressed in the following resolution to be considered by Aurora shareholders at the Meeting on or about 16 June 2010:
- Resolution 1 - Approve the Company entering into a Joint Venture to farm out a 51%, 70%or 75% interest in the Camel Hills Project to Desert Energy Limited

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

“That, for the purposes of ASX Listing Rule 10.1 and for all other purposes, the Shareholders approve the Company’s subsidiary Aurora Resources Pty Ltd entering into the Camel Hills JVA to farm out a 51%, 70% or 75% interest in the Company’s Camel Hills Project to Desert Energy Limited pursuant to and subject to the terms and conditions of the Camel Hills JVA described in the accompanying Explanatory Memorandum.”

1.3. This resolution is subject to the following voting exclusion.

“The Company will disregard any votes cast on this resolution 1 by a party to the transaction and any associates of such persons. However, the Company need not disregard a vote if:

C:\Users\rmoore\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\L3VQBLCA\100421 IER Final.docx

RSM Bird Cameron Corporate Pty Ltd ABN 82 050 508 024 Licensed Investment Adviser No 255847

Major Offices in: RSM Bird Cameron Corporate Pty Ltd is Perth, Sydney, an independent member firm of RSM International, an affiliation of Melbourne, Adelaide independent accounting and consulting firms. and Canberra

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it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
it is cast by the person chairing the meeting as a proxy for a person who is entitled to vote, in accordance with a direction on the proxy forms to vote as the proxy decides.”
1.4. Since the Proposed Transaction represents the disposal of a substantial asset to a related party it is required by ASX Listing Rule 10.10 that the Notice of Meeting (for the shareholders‟ meeting at which the Proposed Transaction is to be voted on) is accompanied by an Independent Expert Report to non-associated shareholders of the Company stating whether the transaction is fair and reasonable to Aurora shareholders who are not associated with Desert Energy (“Non-Associated Shareholders”).
1.5. Our Report is to be included in the Notice of Extraordinary General Meeting (“Notice of Meeting”) for Aurora to be sent to all Aurora shareholders to assist them in deciding whether to approve the Proposed Transaction.

Page 2 of 28

2. Summary and Conclusion

2.1. We have formed an opinion on the Proposed Transaction comprising the farming out of an interest in the Camel Hills Project to Desert Energy through a joint venture agreement.
2.2. In our opinion and for reasons set out in sections 8 and 9 of this report, the Proposed Transaction is not Fair but Reasonable to the Non-Associated Shareholders of Aurora.

Proposed Transaction

Fairness

2.3. We have addressed the question of fairness on the basis of a comparison between the assessed value of the major asset to be disposed of (effectively 36.69% of Aurora‟s 100% interest in the Camel Hills Project) and the consideration offered by Desert Energy for its acquisition, being the assessed value of the Desert Energy options to be issued to Aurora.
2.4. For the Proposed Transaction to be fair we would expect the consideration offered to be equal to or greater than the assessed value of the asset.
2.5. Our assessed value of the asset, based on the Consultant Geologist‟s Report and the percentage proposed to be disposed of is $1,394,220.
2.6. The consideration offered by Desert Energy, being 10 million Desert Energy options is estimated to have a value of $1,095,000.
2.7. On the basis of the above comparison we conclude that the Proposed Transaction is not fair to the Non-Associated Shareholders of Aurora since our assessed value of the asset is greater than our assessed value of the consideration offered by Desert Energy.

Reasonableness

2.8. In assessing whether the Proposed Transaction is reasonable, we have considered a number of other factors relating to:
the issues facing the Non-Associated Shareholders; and
the substance of the transaction rather than the legal mechanism used to achieve it.
2.9. We have concluded that the Proposed Transaction is reasonable for the NonAssociated Shareholders.
2.10. The key reasons for our conclusion are set out in the following paragraphs.
2.11. The advantages of approving the Proposed Transaction outweigh the disadvantages.

Advantages

2.12. The essential advantages offered by the Proposed Transaction are:
Allows Aurora to focus on its Capricorn project to develop the manganese and base metals tenements at Capricorn.
Aurora is a major shareholder in Desert Energy and so Aurora will retain a significant stake in any upside from the Camel Hills Project despite the farm out.

Page 3 of 28

Disadvantages

2.13. The essential disadvantage of approving the Proposed Transaction is that the upside potential of the Camel Hills Project is diluted for Aurora shareholders

Alternative Proposal

2.14. The directors have not set out any alternative strategy for the Camel Hills Project should the Proposed Transaction not be approved.

Other factors

2.15. As set out in paragraph 8.13 above the conclusion as to fairness is sensitive to the underlying variables used in the option pricing model. Small increases in the current Desert Energy share price would increase the value of the consideration to the (fair) range of the value of the asset being disposed of.

Scenarios

2.16. We have considered the various outcomes in terms of the economic viability of the Camel Hills Projects which the proposed expenditure by Desert Energy under the Joint Venture Agreement has indicated.
2.17. If the Camel Hills Project is not economically viable then the Proposed Transaction is to the advantage of the non-associated shareholders because Aurora will have avoided making the expenditure necessary to reach that conclusion.
2.18. If the Camel Hills Project is economically viable but has a net present value less than $50 million then it can be assumed that Desert Energy will have expended the $3.8 million required to earn a participating interest of 51%. In this case although Aurora will have disposed of part of the Camel Hills Project (effectively 26.7%) which is to the disadvantage of non-associated shareholders, they will have the advantage of having avoided expending resources to gain that information.
2.19. If the Camel Hills Project has a net present value of $50 million or greater then the Proposed Transaction is to the disadvantage of the non -associated shareholders as they will have disposed of a larger part of the Camel Hills Project (effectively 36.69%) of significant value.
2.20. However in this case it is appropriate to consider the current alternatives for the Camel Hills Project:
Fund development with internal resources which would divert funds from what are currently perceived to be more prospective projects for Aurora; or
Enter into a different joint venture which, if it can be arranged, may be on less advantageous terms than the Proposed Transaction; or
Spin off into a new float or sell, either of which would be extremely difficult with the current geologists valuation of only $3.8 million; or
Do nothing now and wait for appropriate funding to be available in the future.
2.21. None of these alternatives appear to be particularly attractive compared with progressing with the expenditure now in the Proposed Transaction.

Page 4 of 28

Impact on the share prices of Aurora and Desert Energy

2.22. The Proposed Transaction was announced to the market on 4 February 2010. Based on the reaction of the market, where the share price of both Aurora and Desert Energy rose in the following few days, the Proposed Transaction is viewed positively by the market.
2.23. These opinions should be considered in conjunction with, and not independently of, the information set out in the remainder of this Report.

Page 5 of 28

3. Report Structure

3.1. The remainder of our report is divided into the following sections:

Section	Page
4.	Outline of the Proposed Transaction ............................................................................. 7
5.	Purpose of this Report ................................................................................................... 9
6.	Profile of Aurora ......................................................................................................... 11
7.	Camel Hills Project ..................................................................................................... 14
8.	Approach to assessment .............................................................................................. 15
9.	Is the Proposed Transaction Fair? ............................................................................... 16
10.	Is the Proposed Transaction Reasonable? ................................................................... 19

Appendices

A Declarations and Disclaimers B Sources of Information C Financial Services Guide

Page 6 of 28

4. Outline of the Proposed Transaction

4.1. The Proposed Transaction comprises the following elements:
Aurora currently owns a tenement located in Central Western Australia, comprising 23 granted exploration licenses, 5 exploration licenses and covering approximately 5,031 km[2] , named the Camel Hills Project.
It is proposed to create the Camel Hills Joint Venture between Aurora and Desert Energy to explore and, if so decided in the future, develop the Camel Hills Project. The details of the Camel Hills Joint Venture are set out in the Camel Hills Joint Venture Agreement (“JV Agreement”).
The Camel Hills Joint Venture commences on the date that the last of the conditions specified in the JV Agreement clause 2 are satisfied.
In the first 12 months from the commencement date of the JV Agreement, Desert is required to spend not less than $1.5 million.
Desert may earn a 51% participating interest by expending $3.8 million sole funding expenditure on Activities (as defined in the JV Agreement clause 1) in the 5 years from commencement date.
If Desert earns the 51% participating interest it may elect to earn a 70% participating interest by sole funding the Camel Hills Joint Venture up to completion of a bankable feasibility study (“BFS”), as defined in the JV Agreement clause 1), and the BFS must conclude that the net present value of a development of the tenements comprising the Camel Hills Project has a minimum value of $50 million.
Upon Desert Energy earning the 70% interest by fulfilling its exploration funding obligation, the percentage interest of Aurora and Desert Energy in the Camel Hills Joint Venture to be adjusted in response to Aurora‟s decision as to whether to reimburse Desert for 50% of the cost of the feasibility study and 50% of the cost of the BFS.
If Aurora elects to make the reimbursement then the interests of the parties will remain: Desert Energy 70% and Aurora 30%. If Aurora chooses not to make the reimbursement then the interests of the parties will be adjusted to: Desert Energy 75% and Aurora 25%.
The proposed interests and changes in interest are summarised in the table below.

	Interest in Camel Hills Project	Interest in Camel Hills Project
	Aurora	Desert Energy
Current position	100%	0%
Interest on Desert Energy expending $3.84 million on Activities in the 5 years from Commencement Date	49%	51%
Interest on Desert Energy solely fund exploration costs through to finalisation of a BFS with a net present value of at least $50 million	30%	70%
Interest if Aurora reimburses 50% of costs	30%	70%
Interest if Aurora elects not to reimburse 50% of costs	25%	75%

Table 1: Proposed interests in the Camel Hills Project

Page 7 of 28

Following the BFS, both Aurora and Desert Energy will be required to contribute their respective share of the cost of mining development.
If one party elects to proceed with the mining development but the other does not, then the proceeding party may only do so if it buys out the interest of the nonproceeding party at a price agreed between the parties.
Desert Energy will not be required to reimburse Aurora for any of its past expenditure on the Camel Hills Project.
In consideration for entering into the JV Agreement, Desert Energy will issue to Aurora 10 million unlisted options each to acquire a share in Desert Energy at an exercise price of 40 cents, to be issued promptly following the commencement date and with an expiry date 84 months from the date of issue, expected to be mid to late June 2010.

Page 8 of 28

5. Purpose of this Report

ASX Listing Rules

5.1. Under the Australian Securities Exchange (“ASX”) Listing Rules Chapter 10 „Transactions with persons in a position of influence‟, the approval of non-associated shareholders is required where an entity proposes to dispose of a substantial asset to a related party. The relevant definitions within ASX Listing Rules Chapter 10 are:
An asset is defined as substantial where its value or the value of the consideration for it, represents 5% or more of the equity interests of the entity as set out in the latest financial statements given to the ASX under its Listing Rules; and
A related party is defined as having at least 10% of the total votes attaching to voting securities.
5.2. The equity of the Company as at 31 December 2009 was $7,446,273. The independent geologist has provided a preferred valuation of 100% of the Camel Hills Project of $3.8 million. On a pro rata basis a 70% share has a value of $2.66 million. On this basis the pro-rata 70% value of the Camel Hills Project is approximately 35.7% of the equity interest of the Company as set out in the latest financial statements given to the ASX (independently reviewed financial statements for the six months to 31 December 2009) and therefore the asset proposed to be disposed of represents a substantial asset.
5.3. Aurora owns approximately 47.59% of Desert Energy‟s issued share capital as at the date of this report and so Desert Energy is an entity controlled by Aurora and therefore is a related party within the meaning of ASX Listing Rule 10.1.
5.4. In addition the Directors of Aurora and Desert Energy are identical as set out in the table below meaning that neither company has any independent directors.

Director	Role	Aurora	Desert Energy
Robert Taylor	Managing Director		
Philip Jackson	Executive Director		
Garry O‟Hara	Chairman		

Table 2: Directors of Aurora and Desert Energy

5.5. Accordingly, shareholder approval of the Proposed Transaction is being sought by the Company.
5.6. Listing Rule 10.10 states that the notice of meeting must include a report on the transaction from an independent expert. This report must state whether the proposed transaction is fair and reasonable to non-associated shareholders.

Basis of Assessment

5.7. The ASX Listing Rules do not define the term „fair and reasonable‟ and provide no guidance as to what should be considered when assessing whether or not a particular transaction is fair and reasonable. While the Corporations Act also does not define „fair and reasonable‟, the Australian Securities and Investments Commission (“ASIC”) Regulatory Guide 111: Content of Expert Reports (“RG 111”) provides some guidance as to what matters an independent expert should consider and how „fair and reasonable‟ should be interpreted in a range of circumstances.

Page 9 of 28

5.8. RG 111 states that the expert report should focus on:
the issues facing the security holders for whom the report is being prepared; and
the substance of the transaction rather than the legal mechanism used to achieve it.
5.9. Consistent with the guidance contained in RG 111, in assessing whether or not the Proposed Transaction is fair and reasonable to the Non-Associated Shareholders of Aurora, we have considered the advantages and disadvantages of the Proposed Transaction in the event that it proceeds or does not proceed including the following.
The consideration offered for the assets being disposed of by the Company in comparison with the assessed value of those assets
The trading history of Aurora and Desert Energy shares on the ASX.
Other significant matters.

Page 10 of 28

6. Profile of Aurora

6.1. Aurora is an Australian exploration company listed on the ASX (code “ARM”) with a portfolio of mineral tenements prospective for manganese, base metals, gold, uranium and iron ore held in Western Australia.
6.2. Aurora‟s Capricorn South East - Manganese and Base Metals Project consists of 16 exploration license applications within Aurora‟s Capricorn Project located in the southern Pilbara Region of central Western Australia.
6.3. The Capricorn Project in central Western Australia covers the northwestern part of the mid Proterozoic aged Bangemall Basin, including 150 kilometres of strike of the Talga Fault, a major basin-margin fault zone, and a further 80 kilometres strike of interpreted fault extensions to the southeast.
6.4. The northern Camel Hills project area is located in the southern Gascoyne Region of central Western Australia.
6.5. In June 2009, the Company increased its interest in Desert Energy to 52.89% as a result of the sale transaction of Dawn Metals Limited. This interest has subsequently reduced to 47.59%.

Capital Structure

6.6. At 31 December 2009, Aurora had 80,774,722 ordinary shares on issue. In addition Aurora had a total of 36,572,500 unlisted options on issue with various exercise prices and expiry dates as set out in the table below.

	Exercise
Number	price (cents)	Expiry date
1,800,000	38.80	19-Jan-10
6,000,000	38.80	19-Dec-11
3,550,000	57.63	30-Nov-10
7,500,000	57.63	31-Oct-14
562,500	47.00	30-Nov-12
500,000	57.00	30-Apr-11
330,000	34.00	31-May-13
630,000	47.00	30-Nov-12
7,500,000	50.00	22-Nov-15
2,050,000	50.00	22-Dec-11
2,800,000	30.00	30-Jun-13
1,350,000	50.00	30-Sep-13
1,500,000	100.50	15-Nov-15
500,000	82.50	16-Dec-12
36,572,500

Table 3: Aurora Options on issue as at 31 December 2009

Profit and Loss

6.7. The summary profit and loss statement for the 3½ years to 31 December 2009 is set out in the table below.
6.8. This table is based on the audited financial statements for Aurora for the 3 years to 30 June 2009 and the independently reviewed financial statements for Aurora for the 6 months to 31 December 2009.

Page 11 of 28

Reference Revenue 6.9 Exploration expenditure written off Consulting fees Depreciation Stock Exchange fees Equity based compensation Rent & outgoings Insurance & legal Other expenses Loss before income tax expense Income tax expense Loss for year Loss attributable to minority interest 6.10 Loss attributable to members of the parent entity	6m to Year to Year to Year to 31-Dec-09 30-Jun-09 30-Jun-08 30-Jun-07 $000s $000s $000s $000s 133 455 809 205 (2,573) (3,416) (4,759) (2,275) (278) (694) (752) (444) (14) (206) (102) (24) (72) (70) (45) (91) (796) (989) (3,213) (971) (27) (78) (56) (63) (43) (105) (95) (124) (305) (194) (496) (188)
	(3,975) (5,299) (8,709) (3,975)
	- - - -
	(3,975) (5,299) (8,709) (3,975)
	766 1,792 1,473 -
	(3,209) (3,507) (7,236) (3,975)

Table 4: Aurora Group Profit & Loss Summary for 3½ years to 31 December 2009

6.9. Revenue relates to interest income.
6.10. The minority interest relates to the minority interest in the equity of Desert Energy.

Balance Sheet

6.11. Aurora‟s summary balance sheet as at 31 December 2009 and 30 June 2009 is set out in the table below based on the audited financial statements of Aurora as at 30 June 2009 and the independently reviewed financial statements for Aurora as at 31 December 2009.

Reference Current assets Cash & cash equivalents Trade & other receivables Other current assets Total current assets Non-current assets Plant & equipment Total non-current assets Total assets Current liabilities Trade & other payables Total current liabilities Total liabilities Net assets 6.12	31-Dec-09 30-Jun-09 $000s $000s 6,419 7,193 504 403 97 44
	7,020 7,639
	563 608
	563 608

	7,583 8,247
	137 109
	137 109

	137 109

	7,446 8,138

Table 5: Aurora Group Balance Sheet as at 30 June 2009

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6.12. Aurora had net assets of approximately $7.446 million as at 31 December 2009 and $8.138 million as at 30 June 2009.

Share price and performance

6.13. On 29 March 2010, Aurora‟s closing share price was 97.5 cents.
6.14. Aurora currently has a market capitalisation of around $80 million.
6.15. The chart below shows the monthly movement in Aurora‟s closing share price and average daily volumes over the last 12 months.

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Figure 1: Monthly Closing Share Price and Average Daily Volume for Aurora

(Source: Reuters)

6.16. The Proposed Transaction was announced to the market on 4 February 2010. An analysis of the Aurora share price just prior to and subsequent to the transaction suggests that the market‟s reaction was relatively neutral in relation to the Proposed Transaction with the price remaining around the pre-announcement level in the days following the announcement.

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Figure 2: Daily Closing Share Price and Daily Volume for Aurora from just prior to announcement (Source: Reuters)

Camel Hills Project

6.17. The Camel Hills Project comprises a large number of granted exploration licences and applications for exploration licences considered to be prospective for iron ore (magnetite), gold, nickel, PGEs, rare earths and uranium deposits.
6.18. In total there are 23 granted exploration licences and 5 exploration licence applications covering an area of approximately 5,000m[2] and located 670 km north of Perth and 50 km west of the proposed new railroad at Jack Hills (Oakagee Infrastructure Project) planned for completion in 2014.

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7. Approach to assessment

Fairness

7.1. In assessing the fairness of the Proposed Transaction for the non-associated shareholders of Aurora we have made a comparison between
the value of the asset which is being disposed of (farmed out); and
the value of the consideration received by Aurora, being the 10 million options being issued by Desert Energy to Aurora.
7.2. We have considered the value of the asset being disposed of by utilising the Independent Valuation Report on the Camel Hills Project prepared by Malcolm Castle.
7.3. We have considered the value of the consideration by valuing the options using standard option valuation methodology.

Reasonableness

7.4. In assessing whether Aurora‟s shareholders are likely to be better off if they approve Resolution 1, we have compared various advantages and disadvantages that are likely to accrue to the Non-Associated Shareholders from approval of the Proposed Transaction.
7.5. We have assessed that in all cases the advantages and disadvantages of approving Resolution 1 are the inverse of rejecting the Resolution. Therefore for ease of evaluation, we have set out the significant factors only in the context of approving Resolution 1.

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8. Is the Proposed Transaction Fair?

Comparison of the value of the asset being disposed of with the value of the consideration received

8.1. We have considered the fairness of the Proposed Transaction by comparing our assessment of the value of the asset to be disposed of with our assessment of the value of the consideration to be received.

Valuation of the asset being disposed of – portion of Camel Hills Project

8.2. We have valued the asset being disposed of based on the independent valuation report of the consultant geologist (Malcolm Castle) dated 26 March 2010 (“Independent Geologist Report”) which valued the Camel Hills Project as a whole at $3.8 million.
8.3. This valuation in the Independent Geologist Report has then been adjusted to reflect the portion of the asset being disposed of (farmed out) being less than 100%. We consider that the asset being disposed of represents 36.69% of the Castle Hills Project, calculated as set out in the table below.

Direct Indirect Current interest 100.00% 0.00% Interest under Proposed Transaction 30.00% 47.59% of 70% = 33.31% Interest being disposed of	Total 100.00% 63.31%
	36.69%

Table 6: Summary of assessed value of asset to be disposed of

8.4. Our valuation is based on Aurora retaining control of Desert Energy through its 47.59% interest. This holding has only recently fallen below 50% (with the placement of 10,000,000 Desert Energy shares to a third party investor in February 2010). In practical terms the relatively wide spread of other shareholders allows Aurora to retain control of Desert Energy with a 47.59% holding.
8.5. We have valued the asset being disposed of at $1,394,220 being 36.69% of $3.8 million.
8.6. There are a number of issues in connection with this valuation.
We consider that the 70% of the Camel Hills Project is being disposed of, even though Desert Energy may limit itself to a 51% participating interest because the decision to continue to earn a 70% interest is Desert‟s alone and can only be limited to 70% by Aurora‟s actions.
We consider that although Desert Energy may only earn 70% if the BFS shows a net present value of development of the Camel Hills Project in excess of $50 million, the appropriate base valuation of the (Camel Hills Project) asset is the $3.8 million as assessed by the Consulting Geologist.

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Valuation of the consideration – options in Desert Energy

8.7. We have valued the 10,000,000 options in Desert Energy to be issued to Aurora based on standard Binomial option valuation methodology.
8.8. Full details of the options are set out in the Notice of Meeting but the key characteristics of the options are as follows:
Exercise price of 40 cents;
Expiry date of 31 May 2017;
Escrowed for 12 months from date of issue. The NOM states that the date of issue is to be the date of “completion of the (Farming and Joint Venture) Agreement”.
8.9. In order to apply the option valuation methodology, one of the key inputs is the volatility of the underlying shares. We based our assessment of the expected future volatility of Desert Energy shares on the historical volatility of comparable listed entities being uranium focused exploration companies with interests in Australia and with a history of market share prices covering a period similar to the time to expiry of the options.
8.10. On the basis described above we assessed the volatility at 102%.
8.11. We have valued the options by applying the Binomial option pricing model. The key variables we have applied in the model are:
Exercise price of 40 cents;
Expiry date of 31 May 2017;
Escrowed for 12 months from date of issue;
Risk Free Rate of 5.835% based on the Treasury Bond Rates at 12 April 2010 of duration appropriate to the option life;
Expected future volatility of 102% as discussed above;
Share Price of 19.0 cents based on the closing price of Desert Energy shares on 12 April 2010;
Exercise multiple, being a factor which assesses the possibility of early exercise based on the amount by which the share price exceeds the exercise price. We have estimated this exercise factor as 2.5 based on research undertaken by Huddart & Lang, and Carpenter; and
Dividend yield estimated as nil.
8.12. Using these inputs, we have valued the options at 10.95 cents, or a total of $1,095,000.
8.13. Note that the option valuation is sensitive to changes in the key variables input to the Binomial option pricing model. For example:
a 10% increase in the current share price (to 20.90 cents) would increase the valuation to 12.25 cents per option, or $1,225,008; or
a 10% increase in the expected volatility (to 112%) would increase the valuation to 11.38 cents per option, or $1,138,000.

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Valuation Summary

8.14. Set out in the table below is a comparison of the valuation of the asset being disposed of and the valuation of the consideration to be received.

	Reference
Valuation of asset being disposed of	8.5	$1,394,220
Valuation of consideration	8.12	$1,095,000

Table 7: Summary of assessed value of asset to be disposed of compared with assessed value of

consideration to be received

Assessment

8.15. On the basis of the above comparison the Proposed Transaction is not fair to NonAssociated Shareholders since the assessed value of the asset to be disposed of is greater than the assessed value of the consideration to be received.

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9. Is the Proposed Transaction Reasonable?

9.1. We have considered the position of the shareholders if Resolution 1 is approved. We have addressed the advantages and disadvantages that are likely to accrue to the NonAssociated Shareholders from approval of the Proposed Transaction. In all cases the advantages and disadvantages of approving Resolution 1 are the inverse of rejecting the Resolution. Therefore for ease of evaluation, we have set out the significant factors only in the context of approving Resolution 1.
9.2. We have also considered the range of possible future outcomes in connection with the Camel Hills Project, addressed as a series of scenarios.

Advantages and Disadvantages

9.3. In assessing whether Aurora‟s shareholders are likely to be better off if they approve Resolution 1, we have identified the following advantages and disadvantages.

Advantages

9.4. The essential advantages offered by the Proposed Transaction are:

Allows Aurora to focus on its Capricorn project

9.5. Approving the Proposed Transaction would free Aurora to focus on its extensive manganese and base metals tenements at Capricorn. Potentially Aurora would also be able to direct attention to its hard rock uranium tenements at Glenburgh.

Aurora is a major shareholder in Desert Energy

9.6. Even in farming out 70% of the Camel Hills Project, Aurora will retain a significant stake in any upside from the project through its (current) 47.59% interest in Desert Energy.

Disadvantages

9.7. The essential disadvantages of approving the Proposed Transaction are:

Upside potential of the Camel Hills Project is diluted for Aurora shareholders

9.8. If further development of the Camel Hills Project shows it to have significant value, a portion of that upside will be lost to Aurora shareholders.

Assessment

9.9. In our opinion, the advantages of the Proposed Transaction outweigh the disadvantages.

Future Prospects of Aurora if the Proposed Transaction is not approved

9.10. If the Proposed Transaction is not approved by the non-associated shareholders, then it is likely that the Company will be forced to choose which of its projects to concentrate on. If the Capricorn project is favoured then it is likely that the Camel Hills Project will not be developed for some considerable time.

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Alternative Proposal

9.11. The directors have not set out any alternative strategy for the Camel Hills Project should the Proposed Transaction not be approved.

Other factors

9.12. As set out in paragraph 8.13 above the conclusion as to fairness is sensitive to the underlying variables used in the option pricing model. Small increases in the current Desert Energy share price would increase the value of the consideration to the range of the value of the asset being disposed of.

Scenarios

9.13. It is important to consider how the position of Aurora‟s non-associated shareholders is impacted by the different possible outcomes of the Camel Hills Project. To do this we have focused on the value of the Camel Hills Project as it will be understood after Desert Energy has completed the BFS with a net present value of $50 million or more, or has chosen to cease expenditure at some prior point. This is inevitably a simplification but assists in understanding the impact.

A) Camel Hills Project is not economically viable

9.14. The assumption is that whatever amount has been expended by Desert Energy, it will be sufficient to conclude that the Camel Hills Project is not economically viable.
If Desert Energy have reached this conclusion without spending the required $3.8 million then there will be no disposal of part of the Camel Hills Project and non associated shareholders will be better off because they will have avoided having to expend whatever Desert Energy have expended to that point.
If Desert Energy have reached this conclusion and have spent the $3.8 million then part of the Camel Hills Project (effectively 26.7%) will have been disposed of, but as it is not economically viable the non-associated shareholders do not appear to be worse off; indeed they appear to be better off because again they have avoided having to expend the amount (in this case $3.8 million plus) to reach that conclusion.
B) Camel Hills Project is economically viable but has a net present value less than $50million
9.15. The assumption is that Desert Energy will have expended the $3.8 million required to earn a participating interest of 51% but the BFS shows that a development of the Camel Hills Project Tenements does not have a net present value of $50 million.
9.16. The non associated shareholders will have disposed of part of the Camel Hills Project (effectively 26.7%) which has some value to develop but not enough to be considered as a major development on the scale which Aurora is seeking.
9.17. In this case the non-associated shareholders appear to be worse off in terms of value but have again avoided having to expend resources on a project which does not meet its goals of a major development.

C) Camel Hills Project has a net present value of $50 million or greater

9.18. The assumption is that the high net present value is indicative of a major development. The non-associated shareholders will have disposed of a larger part of the Camel Hills Project (effectively36.69%) of significant value.

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9.19. However in this case it is appropriate to consider the current alternatives for the Camel Hills Project:
Fund development with internal resources which would divert funds from what are currently perceived to be more promising projects for Aurora; or
Enter into a different joint venture which, if it can be arranged, may be on less advantageous terms than the Proposed Transaction; or
Spin off into a new float or sell, either of which would be difficult with the current geologists valuation of only $3.8 million; or
Do nothing now and wait for appropriate funding to be available in the future.
9.20. None of these alternatives appear to be particularly attractive compared with progressing with the expenditure now in the Proposed Transaction.

Impact on the share prices of Aurora and Desert Energy

9.21. The Proposed Transaction was announced to the market on 4 February 2010. The impact on the share price of Aurora is set out in Figure 2 above. The impact on the Desert Energy share price is set out in the figure below.

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Figure 3: Daily Closing Share Price and Daily Volume for Desert Energy from just prior to announcement (Source: Reuters)

9.22. Based on the reaction of the market, where the share price of both Aurora and Desert Energy rose in the first few days following the initial announcement, the Proposed Transaction is viewed positively by the market and that is a definite advantage for the non-associated shareholders of Aurora.

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Conclusion

9.23. Based on the above and our assessment that the advantages of the Proposed Transaction outweigh the disadvantages for Aurora‟s Non-Associated Shareholders, we conclude that the Proposed Transaction is Reasonable to Aurora‟s NonAssociated Shareholders.

Yours faithfully

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A J GILMOUR Director

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APPENDIX A

Declarations and Disclosures

RSM Bird Cameron Corporate Pty Ltd holds Australian Financial Services Licence 255847 issued by ASIC pursuant to which they are licensed to prepare reports for the purpose of advising clients in relation to proposed or actual mergers, acquisitions, takeovers, corporate reconstructions or share issues.

Qualifications

RSM Bird Cameron Corporate Pty Ltd is beneficially owned by the partners of RSM Bird Cameron (RSMBC) a large national firm of chartered accountants and business advisors.

Mr. Andrew Gilmour is a director of RSM Bird Cameron Corporate Pty Ltd. He is a Chartered Accountant with extensive experience in the field of corporate valuations and the provision of independent expert‟s reports for transactions involving publicly listed and unlisted companies in Australia.

Reliance on this Report

This report has been prepared solely for the purpose of assisting the non-associated shareholders of Aurora in considering the Proposed Transactions. We do not assume any responsibility or liability to any party as a result of reliance on this report for any other purpose.

Reliance on Information

Statements and opinions contained in this report are given in good faith. In the preparation of this report, we have relied upon information provided by the directors and management of Aurora and we have no reason to believe that this information was inaccurate, misleading or incomplete. However, we have not endeavoured to seek any independent confirmation in relation to its accuracy, reliability or completeness. RSM Bird Cameron Corporate Pty Ltd does not imply, nor should it be construed that it has carried out any form of audit or verification on the information and records supplied to us.

The opinion of RSM Bird Cameron Corporate Pty Ltd is based on economic, market and other conditions prevailing at the date of this report. Such conditions can change significantly over relatively short periods of time.

In addition, we have considered publicly available information which we believe to be reliable. We have not, however, sought to independently verify any of the publicly available information which we have utilised for the purposes of this report.

We assume no responsibility or liability for any loss suffered by any party as a result of our reliance on information supplied to us.

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Independence and Disclosure of Interest

At the date of this report, none of RSM Bird Cameron Corporate Pty Ltd, RSMBC, Andrew Gilmour, nor any other member, director, partner or employee of RSM Bird Cameron Corporate Pty Ltd and RSMBC has any interest in the outcome of the Proposed Transaction, except that RSM Bird Cameron Corporate Pty Ltd are expected to receive a fee of approximately $12,000 based on time occupied at normal professional rates for the preparation of this report. The fees are payable regardless of whether Aurora‟s non-associated shareholders approve or reject Resolution 1.

RSM Bird Cameron Partners are the auditors of Desert Energy.

Neither the signatory to this report nor RSM Bird Cameron Corporate Pty Ltd holds shares or options in Aurora. Neither the signatory to this report nor RSM Bird Cameron Corporate Pty Ltd has had, within the part two years, any business relationship material to an assessment of RSM Bird Cameron Corporate Pty Ltd‟s impartiality with Aurora or its associates.

Consents

RSM Bird Cameron Corporate Pty Ltd consents to the inclusion of this report in the form and context in which it is included with the Notice of Meeting. Other than this report, none of RSM Bird Cameron Corporate Pty Ltd, RSM Bird Cameron Partners or RSMBC has been involved in the preparation of the Notice of Meeting and Explanatory Statement. Accordingly, we take no responsibility for the content of the Notice of Meeting and Explanatory Statement as a whole.

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APPENDIX B

Sources of Information

In preparing this report and arriving at our opinion, we have considered, amongst others, the following principal sources of information:

Aurora Minerals Limited Annual Financial Reports for the years to 30 June 2008 and 2009
Aurora Minerals Limited‟s Independently Reviewed Interim Financial Report for half year ended 31 December 2009
Drafts of Notice of Extraordinary General Meeting
Various announcements by Aurora and Desert Energy to the ASX;
Camel Hills Joint Venture Agreement (draft);
Independent Geologists Report by Malcolm Castle dated 26 February 2010;
Aurora website;
Various databases including Reuters and IBISWorld Pty Ltd; and
Information provided to us during meetings and correspondence with management and directors of Aurora.

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APPENDIX C

Financial Services Guide

Overview

RSM Bird Cameron Corporate Pty Ltd, ABN 82 050 508 024 (“RSM Bird Cameron Corporate Pty Ltd” or “we” or “us” or “ours” as appropriate) has been engaged to issue general financial product advice in the form of a report to be provided to you.

In the above circumstances we are required to issue to you, as a retail client, a Financial Services Guide (“FSG”). This FSG is designed to help retail clients make a decision as to their use of the general financial product advice and to ensure that we comply with our obligations as financial services licensees.

This FSG includes information about:

who we are and how we can be contacted;
the services we are authorised to provide under our Australian Financial Services Licence, Licence No 255847;
remuneration that we and/or our staff and any associates receive in connection with the general financial product advice;
any relevant associations or relationships we have; and
our complaints handling procedures and how you may access them.

Financial services we are licensed to provide

We hold an Australian Financial Services Licence, which authorises us to provide financial product advice in relation to:

deposit and payment products limited to:
(a) basic deposit products;
(b) deposit products other than basic deposit products.
interests in managed investments schemes (excluding investor directed portfolio services); and
securities (such as shares and debentures).

We provide financial product advice by virtue of an engagement to issue a report in connection with a financial product of another person. Our report will include a description of the circumstances of our engagement and identify the person who has engaged us. You will not have engaged us directly but will be provided with a copy of the report as a retail client because of your connection to the matters in respect of which we have been engaged to report.

Any report we provide is provided on our own behalf as a financial services licensee authorised to provide the financial product advice contained in the report.

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General Financial Product Advice

In our report we provide general financial product advice, not personal financial product advice, because it has been prepared without taking into account your personal objectives, financial situation or needs.

You should consider the appropriateness of this general advice having regard to your own objectives, financial situation and needs before you act on the advice. Where the advice relates to the acquisition or possible acquisition of a financial product, you should also obtain a product disclosure statement relating to the product and consider that statement before making any decision about whether to acquire the product.

Benefits that we may receive

We charge fees for providing reports. These fees will be agreed with, and paid by, the person who engages us to provide the report. Fees will be agreed on either a fixed fee or time cost basis.

Except for the fees referred to above, neither RSM Bird Cameron Corporate Pty Ltd, nor any of its directors, employees or related entities, receive any pecuniary benefit or other benefit, directly or indirectly, for or in connection with the provision of the report.

Remuneration or other benefits received by our employees

All our employees receive a salary.

Referrals

We do not pay commissions or provide any other benefits to any person for referring customers to us in connection with the reports that we are licensed to provide.

Associations and relationships

RSM Bird Cameron Corporate Pty Ltd is beneficially owned by the partners of RSM Bird Cameron, a large national firm of chartered accountants and business advisers. Our directors are partners of RSM Bird Cameron Partners.

From time to time, RSM Bird Cameron Corporate Pty Ltd, RSM Bird Cameron Partners, RSM Bird Cameron and / or RSM Bird Cameron related entities may provide professional services, including audit, tax and financial advisory services, to financial product issuers in the ordinary course of its business.

Complaints Resolution

Internal complaints resolution process

As the holder of an Australian Financial Services Licence, we are required to have a system for handling complaints from persons to whom we provide financial product advice. All complaints must be in writing, addressed to The Complaints Officer, RSM Bird Cameron Corporate Pty Ltd, P O Box R1253, Perth, WA, 6844.

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When we receive a written complaint we will record the complaint, acknowledge receipt of the complaint within 15 days and investigate the issues raised. As soon as practical, and not more than 45 days after receiving the written complaint, we will advise the complainant in writing of our determination.

Referral to External Dispute Resolution Scheme

A complainant not satisfied with the outcome of the above process, or our determination, has the right to refer the matter to the Financial Industry Complaints Service Limited (“FICS”). FICS is an independent company that has been established to provide free advice and assistance to consumers to help in resolving complaints relating to the financial services industry.

Further details about FICS are available at the FICS website www.fics.asn.au or by contacting them directly via the details set out below.

Financial Industry Complaints Service Limited P O Box 579 Collins Street West MELBOURNE VIC 8007 Toll Free: 1300 78 08 08 Facsimile: (03) 9621 2291

Contact Details

You may contact us using the details set out at the top of our letterhead on page 1 of this report.

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Malcolm Castle

Consulting Geologist Agricola Mining Consultants Pty Ltd P.O. Box 473, South Perth, WA 6951 Phone: 08 9474 9351 Mobile: 04 1234 7511 Email: [email protected] ABN: 84 274 218 871

26 March 2010

The Directors, Aurora Metals Limited

Dear Sirs,

Re:

INDEPENDENT VALUATION REPORT ON THE CAMEL HILLS PROJECT WESTERN AUSTRALIA

I have been commissioned by Aurora Minerals Limited (“Aurora” or “the company”) to provide a Mineral Asset Valuation Report (“Report”) on the Camel Hills Project (“Project”) in Western Australia.

This Report serves to comment on the geological setting and exploration results on the properties and presents a technical and market valuation for the tenement based on the information in this Report.

The Camel Hills project is in the south-western part of the Gascoyne, and covers the Camel Hills Gneiss Belt (part of the Morrissey Metamorphic Suite), an east-west trending sequence of intercalated pelitic schist, quartzo-feldspathic schist, and paragneiss with numerous thin bands of calc-silicate gneiss. Metamorphic grade drops in the western part of the Camel Hills Belt where fine grained sericite-chlorite-muscovite schist dominates. The Camel Hills Belt is caught up in and forms part of the ENE trending Errabiddy Shear Zone,

Details in respect to the legal status and tenure of the tenements comprising the Project have not been considered in this report.

Independent Valuation – Camel Hills Project. Page 1

DECLARATIONS

Relevant codes and guidelines

This report has been prepared as a technical assessment and valuation in accordance with the Code for Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Expert Reports (the “VALMIN Code”) , which is binding upon Members of the Australasian Institute of Mining and Metallurgy (“AusIMM”) and the Australian Institute of Geoscientists (“AIG”), as well as the rules and guidelines issued by the Australian Securities and Investments Commission (“ASIC”) and the ASX Limited (“ASX”) which pertain to Independent Expert Reports (Regulatory Guides RG111 and RG112).

Where mineral resources have been referred to in this report, the classifications are consistent with the ”Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (“JORC Code”), prepared by the Joint Ore Reserves Committee of the AusIMM, the AIG and the Minerals Council of Australia, effective December 2004.

Under the definition provided by the VALMIN Code, the properties are classified as ‘exploration areas’, which are inherently speculative in nature. The properties are considered to be sufficiently prospective, subject to varying degrees of risk, to warrant further exploration and development of their economic potential.

Sources of Information

The statements and opinion contained in this report are given in good faith and this review is based on information provided by the title holders, along with technical reports by consultants, previous tenements holders and other relevant published and unpublished data for the area. I have endeavoured, by making all reasonable enquiries, to confirm the authenticity, accuracy and completeness of the technical data upon which this report is based. A final draft of this report was provided to the Company, along with a written request to identify any material errors or omissions prior to lodgement.

The independent technical report has been compiled based on information available up to and including the date of this report. Consent has been given for the distribution of this report in the form and context in which it appears. I have no reason to doubt the authenticity or substance of the information provided.

Qualifications and Experience

The person responsible for the preparation of this report is:

Malcolm Castle, B.Sc.(Hons), GCertAppFin (Sec Inst), MAusIMM

Malcolm Castle has over 40 years experience in exploration geology and property evaluation, working for major companies for 20 years as an exploration geologist. He

Independent Valuation – Camel Hills Project. Page 2

established a consulting company 20 years ago and specialises in exploration management, technical audit, due diligence and property valuation at all stages of development. He has wide experience in a number of commodities including gold, base metals, iron ore and mineral sands. He has been responsible for project discovery through to feasibility study in Australia, Fiji, Southern Africa and Indonesia and technical Audits in many countries.

Mr. Castle completed studies in Applied Geology with the University of New South Wales in 1965 and has been awarded a B.Sc.(Hons) degree. He has completed postgraduate studies with the Securities Institute of Australia in 2001 and has been awarded a Graduate Certificate in Applied Finance and Investment in 2004.

Mr. Castle is a Member of the Australasian Institute of Mining and Metallurgy (AusIMM) and has the appropriate relevant qualifications, experience, competence and independence to be considered as an “Expert” and “Competent Person” under the Australian Valmin and JORC Codes, respectively.

Independence

I am not, nor intend to be a direct employee of The Company and have no material interest in the tenement. The relationship with The Company is solely one of professional association between client and independent consultant. The review work and this report are prepared in return for professional fees based upon agreed commercial rates and the payment of these fees is in no way contingent on the results of this Report.

Yours faithfully

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Malcolm Castle

B.Sc.(Hons) MAusIMM, MSME, GCertAppFin (Sec Inst)

Independent Valuation – Camel Hills Project. Page 3

THE CAMEL HILLS PROJECT

The Camel Hills Project covers part of the northwest margin of the Archaean Yilgarn Block. Previous exploration has been limited to reconnaissance sampling for magnetite-iron, gold and copper-nickel which has yielded numerous anomalies and targets for follow-up and drill-testing.

A number of significant discoveries have been made around the northern margin of the Yilgarn Block and the adjoining Proterozoic basins, including Nathans (Gold), Labouchere (Gold), Peak Hill (Copper, Gold, Manganese), Three Rivers (Gold), De Grussa (Copper-gold), Plutonic (Gold). On the eastern margin of the Yilgarn Block, discoveries include Mulga Rocks (Uranium) and Tropicanna (Gold). The Jack Hills Iron Ore deposit lies 55km to the east of the Camel Hills Project (See regional Map).

Some of the key features of the Camel Hills Project include:

Aurora recently discovered high-grade Magnetite over an extensive area of banded iron formation ridges in the south of the Project with initial beneficiation testwork yielding up to 70.2% Fe.
The testwork on four samples demonstrated that the magnetite is quite crystalline and would produce a high quality concentrate if crushed to -75µm. All concentrates have high iron and low combined Si and Al, making them amenable to carbon cleaning uses which demands a premium price.
Detailed airborne magnetic and radiometric survey flown for Aurora.
The Project also hosts widespread anomalous values in gold, nickel PGE, uranium and rare earths, and is considered highly prospective for ‘Tropicana’ style gold mineralization, Jinchuan nickel-PGE, and unconformity uranium deposits.
Early drill targeting is advancing

Independent Valuation – Camel Hills Project. Page 4

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TENEMENT DETAILS, LOCATION AND PROPOSED INFRASTRUCTURE

The Camel Hills Project comprises 23 granted exploration licenses and 5 exploration license applications, covering an approximately 5,031 km[2] area, located 670km north of Perth, Western Australia, and approx 55km west of the proposed new railroad at Jack Hills (Oakajee Infrastructure Project) planned for completion in 2014. Oakajee Port and Rail (OPR) is owned jointly by Chinese-backed Murchison Metals Ltd and Japanese-backed Mitsubishi Development Ltd, a subsidiary of the Mitsubishi Corporation (See Map).

Independent Valuation – Camel Hills Project. Page 5

TECHNICAL AND MARKET VALUATION OF THE TENEMENT

In arriving at a technical value for a particular exploration tenement, I have valued 100% equity in the tenement and have only considered the net area of a tenement where it does not overlap with any pre-existing titles.

VALUATION OF THE EXPLORATION POTENTIAL – GEOSCIENCE RATING METHOD

This valuation is based on an assessment of the exploration potential of the projects. No resources have been delineated in these areas at this stage and no financial studies are possible to assess the impact of the net profits interest and royalty at this stage.

Kilburn Geoscience Rating Method of valuation is essentially a technique to define a value based on geological prospectivity. The method appraises a variety of mineral property characteristics detailed below;

location and nature of any mineralisation, geochemical, geological or geophysical anomaly within the property and the tenor of any mineralisation known to exist on the property being valued;
location with respect to any off-property mineral occurrence of value, or favourable geological, geochemical or geophysical anomalies;
number and relative position of anomalies on the property being valued;
geological models appropriate to the property being valued.

The Kilburn Method systematically assesses and grades these four key technical attributes of a tenement to arrive at a series of multiplier factors. The Basic Acquisition Cost (BAC) is the important input to the Kilburn Method and it is calculated by summing the application fees, annual rent, work required to facilitate granting (e.g. native title, environment etc) and statutory expenditure for a period of 12 months. The BAC is adjusted for various aspects of the project area such as equity, status of granting and whether the tenement is granted or in application stage.

Each factor then multiplied serially to the BAC to establish the overall technical value of each mineral property.

As there are many of the tenements under application and a discount of 60% has been applied to the technical value to reflect the uncertainty in the timing and likely granting of these tenements.

Elements of the valuation are as follows.

Independent Valuation – Camel Hills Project. Page 6

TENURE

The Camel Hills project covers 28 Exploration Licences with a total area of 5,031 square kilometres. Twenty three of the tenements are granted and the remaining five are pending.

BAC – BASE ACQUISITION COST

This represents the exploration cost for the current period of the tenements in Western Australia aimed at exploration activities leading to the estimation of a mineral resource. The base acquisition cost for Exploration Permits is made up of rents and rates plus the current work commitment and possible exemptions that may be warranted and is estimated to be $300 to $350 per square kilometre.

GRANT FACTOR

A factor of 1.00 has been applied to granted tenements and 0.75 to pending applications.

Independent Valuation – Camel Hills Project. Page 7

						Prospective	Prospective
Tenement	Equity	Status					Area	Area	BAC		Grant
09/1313	100%	Granted	30	Oct	09	40%	50%	189.00	300	350	1.00
09/1314	100%	Granted	30	Oct	09	40%	50%	150.00	300	350	1.00
52/1961	100%	Granted	13	Mar	07	40%	50%	210.00	300	350	1.00
09/1321	100%	Granted	30	Oct	09	40%	50%	141.00	300	350	1.00
09/1322	100%	Granted	30	Oct	09	40%	50%	177.00	300	350	1.00
09/1323	100%	Granted	30	Oct	09	40%	50%	207.00	300	350	1.00
09/1320	100%	Granted	30	Oct	09	40%	50%	117.00	300	350	1.00
09/1398	100%	Granted	15	Mar	10	40%	50%	210.00	300	350	1.00
09/1399	100%	Granted	15	Mar	10	40%	50%	198.00	300	350	1.00
09/1400	100%	Granted	15	Mar	10	40%	50%	159.00	300	350	1.00
09/1535	100%	Granted	24	Nov	09	40%	50%	201.00	300	350	1.00
09/1546	100%	Granted	24	Nov	09	40%	50%	168.00	300	350	1.00
09/1548	100%	Granted	24	Nov	09	40%	50%	183.00	300	350	1.00
09/1549	100%	Granted	24	Nov	09	40%	50%	102.00	300	350	1.00
09/1550	100%	Granted	24	Nov	09	40%	50%	171.00	300	350	1.00
09/1587	100%	Granted	24	Nov	09	40%	50%	162.00	300	350	1.00
09/1588	100%	Granted	24	Nov	09	40%	50%	210.00	300	350	1.00
09/1589	100%	Granted	24	Nov	09	40%	50%	210.00	300	350	1.00
09/1595	100%	Granted	24	Nov	09	40%	50%	207.00	300	350	1.00
09/1596	100%	Granted	24	Nov	09	40%	50%	195.00	300	350	1.00
09/1597	100%	Granted	24	Nov	09	40%	50%	210.00	300	350	1.00
09/1634	100%	Granted	15	Mar	10	40%	50%	210.00	300	350	1.00
09/1635	100%	Granted	15	Mar	10	40%	50%	210.00	300	350	1.00
09/1712	100%					40%	50%	177.00	300	350	0.75
09/1713	100%					40%	50%	189.00	300	350	0.75
09/1718	100%					40%	50%	108.00	300	350	0.75
09/1735	100%					40%	50%	177.00	300	350	0.75
09/1736	100%					40%	50%	183.00	300	350	0.75

PROSPECTIVITY ASSESSMENT FACTORS

This includes a consideration of

Off Site - Regional mineralisation, old and current workings and the validity of conceptual model. The Camel Hills tenements are located at the northwest margin of the Archaean Yilgarn Block. A number of significant discoveries have been made around the northern margin of the Yilgarn Block as discussed in the project description.

Independent Valuation – Camel Hills Project. Page 8

On Site - Magnetite has been mapped and sampled within the tenements with encouraging results. The concept of extensive iron mineralisation has been validated.
Anomalies - The indentified anomalies warranting follow up within the tenements. Several strong target areas have been identified in the tenement group that warrant follow-up drilling and testing.
Geological Setting - The proportion of structural and lithological settings within the tenements and difficulty encountered by cover rocks and other factors. The area is generally covered by shallow alluvium with some outcrop. The lithologies exposed and interpreted are generally favourable to the target model.

Assessments in each category are based on a set scale (see appendix) and are multiplied together to arrive at a “prospectivity index”.

PROSPECTIVITY	PROSPECTIVITY
Tenement	Off Site		On Site		Anomaly		Geology
	Low	High	Low	High	Low	High	Low	High
09/1313	1.25	1.35	1.50	1.60	1.50	1.60	1.50	1.60
09/1314	1.25	1.35	1.50	1.60	1.50	1.60	1.50	1.60
52/1961	1.25	1.35	1.50	1.60	1.50	1.60	1.50	1.60
09/1321	1.25	1.35	1.50	1.60	1.50	1.60	1.50	1.60
09/1322	1.25	1.35	1.50	1.60	1.50	1.60	1.50	1.60
09/1323	1.25	1.35	1.50	1.60	1.50	1.60	1.50	1.60
09/1320	1.25	1.35	1.50	1.60	1.50	1.60	1.50	1.60
09/1398	1.25	1.35	1.50	1.60	1.50	1.60	1.50	1.60
09/1399	1.25	1.35	1.50	1.60	1.50	1.60	1.50	1.60
09/1400	1.25	1.35	1.50	1.60	1.50	1.60	1.50	1.60
09/1535	1.25	1.35	1.50	1.60	1.50	1.60	1.50	1.60
09/1546	1.25	1.35	1.50	1.60	1.50	1.60	1.50	1.60
09/1548	1.25	1.35	1.50	1.60	1.50	1.60	1.50	1.60
09/1549	1.25	1.35	1.50	1.60	1.50	1.60	1.50	1.60
09/1550	1.25	1.35	1.50	1.60	1.50	1.60	1.50	1.60
09/1587	1.25	1.35	1.50	1.60	1.50	1.60	1.50	1.60
09/1588	1.25	1.35	1.50	1.60	1.50	1.60	1.50	1.60
09/1589	1.25	1.35	1.50	1.60	1.50	1.60	1.50	1.60
09/1595	1.25	1.35	1.50	1.60	1.50	1.60	1.50	1.60
09/1596	1.25	1.35	1.50	1.60	1.50	1.60	1.50	1.60
09/1597	1.25	1.35	1.50	1.60	1.50	1.60	1.50	1.60
09/1634	1.25	1.35	1.50	1.60	1.50	1.60	1.50	1.60
09/1635	1.25	1.35	1.50	1.60	1.50	1.60	1.50	1.60
09/1712	1.25	1.35	1.50	1.60	1.50	1.60	1.50	1.60

Independent Valuation – Camel Hills Project. Page 9

09/1713	1.25	1.35	1.50	1.60	1.50	1.60	1.50	1.60
09/1718	1.25	1.35	1.50	1.60	1.50	1.60	1.50	1.60
09/1735	1.25	1.35	1.50	1.60	1.50	1.60	1.50	1.60
09/1736	1.25	1.35	1.50	1.60	1.50	1.60	1.50	1.60

TECHNICAL VALUE

Technical Value is estimated by multiplying the Basic Project Value (calculated from the area, BAC, equity, prospective area and grant factor) by the Prospectivity Index (calculated from the geoscience ratings). Values are expressed in million Australian dollars.

Technical Value, A$m	Low	High	Preferred
09/1313	0.10	0.18	0.14
09/1314	0.08	0.15	0.11
52/1961	0.11	0.20	0.15
09/1321	0.07	0.14	0.10
09/1322	0.09	0.17	0.13
09/1323	0.10	0.20	0.15
09/1320	0.06	0.11	0.08
09/1398	0.11	0.20	0.15
09/1399	0.10	0.19	0.14
09/1400	0.08	0.15	0.11
09/1535	0.10	0.19	0.14
09/1546	0.09	0.16	0.12
09/1548	0.09	0.18	0.13
09/1549	0.05	0.10	0.07
09/1550	0.09	0.17	0.12
09/1587	0.08	0.16	0.12
09/1588	0.11	0.20	0.15
09/1589	0.11	0.20	0.15
09/1595	0.10	0.20	0.15
09/1596	0.10	0.19	0.14
09/1597	0.11	0.20	0.15
09/1634	0.11	0.20	0.15
09/1635	0.11	0.20	0.15
09/1712	0.07	0.13	0.10
09/1713	0.07	0.14	0.10
09/1718	0.04	0.08	0.06
09/1735	0.07	0.13	0.10
09/1736	0.07	0.13	0.10
Total	2.44	4.67	3.47

Independent Valuation – Camel Hills Project. Page 10

MARKET VALUE

In arriving at a fair market value for a particular exploration tenement group, I have considered the current market for exploration properties in Australia and overseas. Country risk is considered to be neutral for projects in Australia. The tenement has not shown much encouragement to date but the exploration concept and the presence of anomalous zones on the area may attract a small premium of 10% to the technical value.

In this report, I have systematically established the value of the exploration assets. The final valuation is arrived at by multiplying the Basic Project Value by the Prospectivity Index to give the Technical value. This is then multiplied by the Market Factor the give the estimated value.

When the market factors are taken into account the following final valuation is considered appropriate. Values are expressed in million Australian dollars.

Market Value, A$m	Low	High	Preferred
09/1313	0.11	0.20	0.15
09/1314	0.08	0.16	0.12
52/1961	0.12	0.22	0.17
09/1321	0.08	0.15	0.11
09/1322	0.10	0.19	0.14
09/1323	0.12	0.22	0.16
09/1320	0.07	0.12	0.09
09/1398	0.12	0.22	0.17
09/1399	0.11	0.21	0.16
09/1400	0.09	0.17	0.13
09/1535	0.11	0.21	0.16
09/1546	0.09	0.18	0.13
09/1548	0.10	0.19	0.14
09/1549	0.06	0.11	0.08
09/1550	0.10	0.18	0.14
09/1587	0.09	0.17	0.13
09/1588	0.12	0.22	0.17
09/1589	0.12	0.22	0.17
09/1595	0.12	0.22	0.16
09/1596	0.11	0.21	0.15
09/1597	0.12	0.22	0.17
09/1634	0.12	0.22	0.17
09/1635	0.12	0.22	0.17
09/1712	0.07	0.14	0.10
09/1713	0.08	0.15	0.11
09/1718	0.05	0.09	0.06

Independent Valuation – Camel Hills Project. Page 11

09/1735	0.07	0.14	0.10
09/1736	0.08	0.15	0.11
Total	2.69	5.13	3.81

VALUATION OPINION

The valuation of the project by a geoscience rating method has been arrived at from a consideration of the prospectivity of the tenements. In this report, I have systematically established the value of the mineral assets as at 26 March 2010.

Based on an assessment of the factors involved I estimate the value of the various components of the project area to be in the range AU$2.7 million and AU$5.1 million with a preferred value of AU$3.8 million.

PROJECT REFERENCES

Aurora Minerals Limited, 2006, Camel Hills Project, South-western Gascoyne Region, New Project Summary, Western Australia, 27 July 2006

Aurora Minerals Limited, 2006, Application to include iron ore exploration, Camel Hills Project

Aurora Minerals Limited, 2010, Desert Energy Limited proposes farmin on Aurora’s highly prospective project, Central Western Australia, ASX Release 4 February 2010

Independent Valuation – Camel Hills Project. Page 12

APPENDIX

MINERAL ASSETS VALUATION METHODOLOGY

FAIR MARKET VALUE OF MINERAL ASSETS

Mineral assets include, but are not limited to, mining and exploration tenements held or acquired in connection with the exploration, the development of, and the production from those tenements together with all plant, equipment and infrastructure owned or acquired for the development, extraction and processing of minerals in connection with those tenements.

Mineral assets classification

		Mineral assets classification
Exploration areas		Mineralisation may or may not have been identified, but where a
		mineral resource has not been defined.
Advanced	exploration	Mineral resources have been identified and their extent
areas		estimated (possibly incompletely). This includes properties at the
		earlystage of assessment.
Pre-development		A positive development decision has not been made. This
projects		includes properties where a development decision has been
		negative, properties on care and maintenance and properties
		held on retention titles.
Development projects		Committed to production, but which, are not yet commissioned
		or not initiallyoperatingat design levels.
Operating Mines		Mineral properties, particularly mines and processing plants,
		which have been fully commissioned and are in production.

The fair market value, of a mineral asset is the estimated amount of money or the cash equivalent or some other consideration for which the mineral asset should change hands between a willing buyer and a willing seller in an arm’s length transaction. Each party is assumed to have acted knowledgeably, prudently and without compulsion.

The value of a mineral asset usually consists of two components,

The underlying or Technical Value which is an assessment of a mineral asset’s future net economic benefit under a set of appropriate assumptions, excluding any premium or discount for market, strategic or other considerations.
The Market Component, which is a premium relating to market, strategic or other considerations which, depending on circumstances at the time, can be either positive, negative or zero.

When the technical and market components of value are combined the resulting value is referred to as the market value. A consideration of country risk should also be taken into account for overseas projects.

Independent Valuation – Camel Hills Project. Page 13

The value of mineral assets is time and circumstance specific. The asset value and the market premium (or discount) changes, sometimes significantly, as overall market conditions, commodity prices, exchange rates, political and country risk change.

REGULATORY AUTHORITIES

Mineral asset valuations are governed by the VALMIN code and ASIC Practice Note 43 in Australia and by the CIMVAL code, NI43-101 and TSXV Appendix 3G in Canada

THE VALMIN CODE

The four main requirements of the VALMIN Code are

Transparency The report needs to explain how the valuation was done and the assumptions used in calculating the value. The objective is to provide sufficient information that other people can come up with the same answer.

Materiality This means the valuer has to ensure that all important data that could have a significant impact on the valuation is included in the report.

Competence The valuer must be competent at doing valuations. The person needs to be an expert in the particular exploration target being evaluated. Typically the person needs at least 5 years experience in that commodity.

Independence . The valuer must act in a professional manner and not favour the buyer or the seller. In other words the price must be set at a “fair market value”. To achieve independence, the valuer must not receive any special benefit from doing the study.

The decisions as to the valuation methodology or methodologies to be used and the content of the Report are solely the responsibility of the Expert or Specialist whose decisions must not be influenced by the Commissioning Entity. The Expert or Specialist must state the reasons for selecting each methodology used in the Report. Methods chosen must be rational and logical and be based upon reasonable grounds.

The Expert or Specialist should make use of valuation methods suitable to the Mineral or Petroleum Assets or Mineral or Petroleum Securities under consideration. Selection of the appropriate valuation method will depend on, inter alia:

(a) the purpose of the Valuation;
(b) the development status of the Mineral or Petroleum Assets;
(c) the amount and reliability of relevant information;

Independent Valuation – Camel Hills Project. Page 14

(d) the risks involved in the venture; and

(e) the relevant market conditions for commodities and/or shares.

The Expert or Specialist should choose, discuss and disclose the selected valuation method(s) appropriate to the Mineral or Petroleum Assets or Mineral or Petroleum Securities under consideration, stating the reasons why the particular valuation method(s) have been selected in relation to those factors set out in Paragraph 39 and to the adequacy of available data. It may also be desirable to discuss why a particular valuation method has not been used. The disclosure should give a sufficient account of the valuation method(s) used so that another Expert could understand the procedure used and assess the Valuation. Should more than one valuation method be used and different valuations result, the Expert or Specialist should comment on the reason(s) for selecting the Value adopted.

Australian Securities and Investment Commission – Regulatory Guides RG111 and RG112

It is not the ASIC’s role or intention to limit the expert’s exercise of skill and judgment in selecting the most appropriate method or methods of valuation. However, it is appropriate for the expert to consider:

(a) the discounted cash flow method;
(b) the amount which an alternative acquirer might be willing to offer if all the securities in the target company were available for purchase;

The ASIC does not suggest that this list is exhaustive or that the expert should use all of the methods of valuation listed above. The expert should justify the choices of valuation method and give a sufficient account of the method used to enable another expert to replicate the procedure and assess the valuation. It may be appropriate for the expert to compare the figures derived by more than one method and to comment on any differences.

The complex valuations in an expert’s report necessarily contain significant uncertainties. Because of this an expert who gives a single point value will usually be implying spurious accuracy to his or her valuation. An expert should, however, give as narrow a range of values as possible. An expert report becomes meaningless if the range of values is too wide. An expert should indicate the most probable point within the range of values if it is feasible to do so.

The expert should carry out sufficient enquiries or examinations to establish reasonable grounds for believing that any profit forecasts, cash flow forecasts and unaudited profit figures that are used in the expert’s report, and have been prepared on a reasonable basis. If there are material variations in method or presentation the expert should adjust for or comment on them in the report.

Independent Valuation – Camel Hills Project. Page 15

The expert should discuss the implications to his or her valuation if:

(a) the current market value of the subject of the report is likely to change because of market volatility (for example, boom or depression); or
(b) the current market value differs materially from that derived by the chosen method.

VALUATION METHODOLOGY FOR EXPLORATION TENEMENTS

Valuation of exploration properties is exceptionally subjective. If an economic resource is subsequently identified then a new valuation will be dramatically higher, or alternatively if expenditure of further exploration dollars is unsuccessful then it is likely to decrease the value of the Tenements. There are a number of generally accepted procedures for establishing the value of exploration properties and, where relevant, the use of more than one such method to enable a balanced analysis and a check on the result has been undertaken. The value will always be presented as a range with the preferred value identified. The preferred value need not be the median value, and will be determined by the Independent Expert based on his experience.

The Independent Expert, when determining a value for a mineral asset, must assess a range of technical issues prior to selection of a valuation methodology. Often this will require seeking advice from a specialist in specific areas. The key issues are:

geological setting and style of mineralisation
level of knowledge of the geometry of mineralisation in the district
mining history, including mining methods
location and accessibility of infrastructure
milling and metallurgical characteristics of the mineralisation
results of exploration including geological mapping, costeaning and drilling of interpretation of geochemical anomalies
parameters used to identify geophysical and remote sensing data anomalies
location and style of mineralisation identified on adjacent properties
appropriate geological models

In addition to these technical issues the Independent Expert needs to make a judgement about the market demand for the type of property, commodity markets, financial markets and stock markets. The technical value of a property should not be adjusted by a “market

Independent Valuation – Camel Hills Project. Page 16

factor” unless there is a marked discrepancy between the technical value and the market value. When this is done the factor should be clearly identified.

Where there are identified reserves it is appropriate to use financial analysis methods to estimate the net present value (NPV) of the properties. This technique has deficiencies which include assessment of only a very narrow area of risk, namely the time value of money given the real discount rate, and the underlying assumption that a static approach is applicable to investment decision making, which is clearly not the case.

When assessing value of exploration properties with no identified mineral resources or only inferred resources it is inappropriate to prepare any form of financial analysis to determine the net present value. The valuation of exploration tenements or licences, particularly those without identified resources, is highly subjective and a number of methods are appropriate to give a guide as discussed below.

All of these valuation methods are relatively independent of the location of the mineral property. Consequently the valuer will make allowance for access to infrastructure etc when choosing a preferred value. It is observed that the Prospectivity Exploration Multiplier (PEM) is heavily based on the expenditure, while the Kilburn Geoscience Rating (Kilburn) is more heavily based on opinions of the prospectivity hence tenements can have marked variation in value between the methods . If the Kilburn assessment is high and the PEM is low it indicates effective well focussed exploration, if the Kilburn is low and the PEM high it suggests that the tenement is considered to have lower prospectivity.

PROSPECTIVITY ENHANCEMENT MULTIPLIER (PEM) OR

MULTIPLE OF EXPLORATION EXPENDITURE (MEE)

Past expenditure on a tenement and/or future committed exploration expenditure can establish a base value from which the effectiveness of exploration can be assessed. Where exploration has produced documented results a PEM can be derived which takes into account the valuer’s judgment of the prospectivity of the tenement and the value of the database. Future committed exploration expenditure is discounted to 60% by some valuers to reflect the uncertainty of results and the possible variations in exploration programmes caused by future undefined events. Expenditure estimates for tenements under application are often discounted to 60% of the estimated value by some valuers to reflect uncertainty in the future granting of the tenement. The PEM technique has been employed on the exploration properties in this portfolio. The assigning of PEM factors has to a large extent followed that described by Lawrence (2007) and is defined in the following table. The PEM method has been used as an audit check in this work.

Independent Valuation – Camel Hills Project. Page 17

PEM Factors Used in this valuation method

PEM Range	Criteria
0.2 – 0.5	Exploration (past and present) has downgraded the tenement prospectivity, no mineralisation identified
0.5 – 1.0	Exploration potential has been maintained (rather than enhanced) by past and present activity from regional mapping
1.0 – 1.3	Exploration has maintained, or slightly enhanced (but not downgraded) the prospectivity
1.3 – 1.5	Exploration has considerably increased the prospectivity (geological mapping, geochemical or geophysical)
1.5 – 2.0	Scout Drilling has identified interesting intersections of mineralisation
2.0 – 2.5	Detailed Drilling has defined targets with potential economic interest.
2.5 – 3.0	A resource has been defined at Inferred Resource Status, no feasibility study has been completed
3.0 – 4.0	Indicated Resources have been identified that are likely to form the basis of a prefeasibility study
4.0 – 5.0	Indicated and Measured Resources have been identified and economic parameters are available for assessment.

KILBURN GEOSCIENCE RATING METHOD

Valuation is based on a calculation in which the geological prospectivity, commodity markets, financial markets, stock markets and mineral property markets are assessed independently. The Kilburn method is essentially a technique to define a value based on geological prospectivity. The method appraises a variety of mineral property characteristics:

location with respect to any off-property mineral occurrence of value, or favourable geological, geochemical or geophysical anomalies;
location and nature of any mineralisation, geochemical, geological or geophysical anomaly within the property and the tenor of any mineralisation known to exist on the property being valued;
number and relative position of anomalies on the property being valued;
geological models appropriate to the property being valued.

Independent Valuation – Camel Hills Project. Page 18

The Kilburn Method systematically assesses and grades these four key technical attributes of a tenement to arrive at a series of multiplier factors. The Basic Acquisition Cost (BAC) is the important input to the Kilburn Method and it is calculated by summing the application fees, annual rent, work required to facilitate granting (e.g. native title, environment etc) and statutory expenditure for a period of 12 months. This has been established at $300 to $350 per square kilometre for Exploration Licences in Western Australia. Each factor then multiplied serially to the BAC to establish the overall technical value of each mineral property.

Tenement Type	Expenditure per square kilometre (BAC)
Exploration License and equivalents	$300 to $350
Prospecting License and equivalents	$4,000 to $4,500
MiningLease and equivalents	$10,000 to$12,500

The multipliers or ratings and the criteria for rating selection across these 6 factors are summarised in the following table.

		KILBURN RATING CRITERIA - SIMPLIFIED	KILBURN RATING CRITERIA - SIMPLIFIED	KILBURN RATING CRITERIA - SIMPLIFIED
			On Property
Rating		Off Property Factor	Factor	Anomaly Factor	Geological Factor
					Unfavourable
					geological
	0.1				environment
				Extensive previous
				exploration with	Minor favourable
				poor results - no	geological
	0.5			encouragement	environment
				Extensive previous	Generally favourable
				exploration with	geological
				encouraging results	environment under
	0.9			- regional targets	cover
					Generally favourable
		Indications of	Indications of		geological
	1	Prospectivity	Prospectivity	No targets outlined	environment
					Generally favourable
				Exposure of	lithology with
			Targets identified	mineralised zones	structures or
		Resource targets	with successful	or surface drilling	exposures of
	2	Identified	early drilling	(RAB)	mineralised zones
			Grade intercepts on
			adjacent sections -	Significant grade
		Along Strike or	Exploration Targets	intercepts not yet	Significant mineralised
		adjacent to known	Estimated from	linked on cross and	zones exposed in
	3	mineralisation	sound evidence	long sections	prospective host rocks
			Inferred Resource
			identified not yet	Grade intercepts on
	4		estimated	adjacent sections

Independent Valuation – Camel Hills Project. Page 19

VALUATION REFERENCES

AusIMM, (2004), “Australasian Code for Reporting of Mineral Resources and Ore Reserves (JORC Code), prepared by the Joint Ore Reserves Committee (JORC) of the AusIMM, the Australian Institute of Geoscientists (AIG) and the Minerals Council of Australia (MCA), effective December 2004.

AusIMM. (2005), “Code for the Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Expert Reports (the VALMIN Code)” 2005 Edition

AusIMM, (1998), “Valmin 94 – Mineral Valuation Methodologies”

Barnett, D W and Sorentino, C, 1994. Discounted cash flow methods and the capital asset ‐ pricing model, in Proceedings Mineral Valuation Methodologies 1994 (VALMIN ‘94) pp 17 35 (The Australasian Institute of Mining and Metallurgy: Melbourne).

CANADIAN INSTITUTE OF MINING, METALLURGY AND PETROLEUM, (2000), “CIM Standards on Mineral Resources and Reserves-Definitions and Guidelines”. Prepared by the CIM Standing Committee On Reserve Definitions. Adopted by CIM Council August 20, 2000.

CIM, (April 2001), “CIM Special Committee on Valuation of Mineral Properties (CIMVAL)” Discussion paper

CIM, (2003) – “Standards and Guidelines for Valuation of Mineral Properties. Final Version, February 2003” Special Committee of the Canadian Institute of Mining, Metallurgy and Petroleum on Valuation of Mineral Properties (CIMVAL)

Goulevitch J and Eupene G S; 1994; Geoscience rating for valuation of exploration properties – applicability of the Kilburn Method in Australia and examples of its use; Proceedings of VALMIN 94; pages 175 to 189; The Australasian Institute of Mining and Metallurgy, Carlton, Australia.

Kilburn, LC, 1990, “Valuation of Mineral Properties which do not contain Exploitable Reserves” CIM Bulletin, August 1990.

McKibben J A J., Snowden P A. July 2007. Updated independent valuation of the mineral assets of Territory Resources Ltd. www.territoryresources.com.au

Lawrence, M.J, 2007. Valuation methodology for Iron Ore Mineral Properties – thoughts of an Old Valuer: Iron ore Conference, Perth WA, 20 – 22 August 2007

Rudenno, (1998), “The Mining Valuation Handbook”

Independent Valuation – Camel Hills Project. Page 20

AI assistant

ANAX METALS LIMITED — Proxy Solicitation & Information Statement 2010

64389_rns_2010-05-10_82405b56-7ec9-4c93-b4de-8390c1fa0f86.pdf

Extraordinary General Meeting

Notice of Extraordinary General Meeting

1. Resolution 1- Approve the Company entering into a Joint Venture to farm out a 51%, 70% or 75% interest in the Camel Hills Project to Desert Energy Limited.

Voting Exclusion Statement

2. Resolution 2 - Approve the Company giving Financial Benefits to Related Parties.

Voting Exclusion Statement

3. Resolution 3 - Approve Desert Energy giving Financial Benefits to Related Parties.

Voting Exclusion Statement

4. Resolution 4 - Issue of Options to Wajarri Yamatji Native Title Claimants

Voting Exclusion Statement

5 . Resolution 5 - Issue of Aurora Consultant Options to Mr John Jordan, Chief Operating Officer

Voting Exclusion Statement

PROXIES

ENTITLEMENT TO VOTE

BY ORDER OF THE BOARD

P C RUTTLEDGE

Notice of Extraordinary General Meeting

Explanatory Memorandum

1. Company overview

Directors

RESOLUTIONS ONE, TWO AND THREE

2. Background to the Resolutions

2.1 Overview of transaction

2.2 Reports

3.

Project Information

Details of Aurora Resources Pty Ltd’s holdings in the Camel Hills Project are as follows:

4. Transaction Agreements

5. Resolution 1- Approve Aurora Resources Pty Ltd entering into the Camel Hills JVA.

5.1 General

5.2 Listing Rule 10.1 approval

The Independent Expert’s Report concludes that the Transaction is not fair but reasonable to Shareholders whose votes are not to be disregarded.

6. Resolution 2- Approve Aurora Resources Pty Ltd giving Financial Benefits to Related Parties as a consequence of the Camel Hills JVA.

(a) The related parties to whom proposed resolution 2 would permit financial benefits to be given.

(b) The Nature of the Financial Benefits

(b) The Nature of the Financial Benefits

(d) In relation to each such Director, whether the Director had an interest in the outcome of the proposed resolution (and if so, what it was).

8. Resolution 4 - Issue of Options to the Nominee of the Wajarri Yamatji Native Title Claimants

8.1 Background

8.2 Listing Rule 7.1 approval

(f) The intended use of the funds raised

9. Resolution 5 – Issue of Aurora Options to Mr John Jordan, Chief Operating Officer

Additional information

Glossary

“Corporations Act” means the Corporations Act 2001 (Cth).

“Director’s Entities” means:

APPENDIX 1

Desert Energy Options

Terms and Conditions of the 10 Million Desert Options to be Issued to Aurora Minerals Limited under Under Resolution 1

(a) Exercise price

(b) Expiry date

(c) Certificate

(d) Options not listed

(e) Exercise

(f) New share issue

(g) Bonus Issue

(h) Reorganisations

(i) Change of Option's exercise price or the number of underlying securities

O' = O - E[P - (S + D)]

(j) Dividends

(k) Options Transferable

(l) Interpretation

APPENDIX 2

Terms and Conditions of Wajarri Options to be offered by Aurora Minerals Limited

(a) Issue price

(b) Exercise price

(c) Expiry date

(d) Certificate

(e) Wajarri Options not listed

(f) Wajarri Options not transferable

(g) Exercise

(h) New share issue

(i) Bonus Issue

(j)

Reorganisations

(k) Change of Wajarri Option's exercise price or the number of underlying securities

(l)

ANAX METALS LIMITED Proxy Solicitation & Information Statement 2010