Aura Energy Limited — Proxy Solicitation & Information Statement 2010

Dec 21, 2010

AURA ENERGY LIMITED ACN 115 927 681

NOTICE OF GENERAL MEETING

TIME : 10:30am (WST) DATE : 28 January 2011 PLACE : QV1 Conference Centre Level 2 250 St Georges Terrace PERTH WA 6000

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting. Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on (08) 9228 0711.

CONTENTS PAGE

Notice of General Meeting (setting out the proposed resolution) 3 Explanatory Statement (explaining the proposed resolution) 4 Proxy Form 6

TI ME AN D P LA CE OF ME E TING AN D HOW TO VOTE

VENUE

The General Meeting of the Shareholders of Aura Energy Limited to which this Notice of Meeting relates will be held at 10:30am (WST) on 28 January 2011 at:

QV1 Conference Centre, Level 2, 250 St Georges Terrace, Perth WA 6000

YOUR VOTE IS IMPORTANT

The business of the General Meeting affects your shareholding and your vote is important.

VOTING IN PERSON

To vote in person, attend the General Meeting on the date and at the place set out above.

VOTING BY PROXY

To vote by proxy, please complete and sign the proxy form enclosed and send the proxy form:

(a) by post to Aura Energy Limited, Unit 6, 34 York Street, North Perth, Western Australia; or

(b) by facsimile to the Company on facsimile number (08) 9228 0704,

so that it is received not later than 10:30am (WST) on 26 January 2011.

Proxy forms received later than this time will be invalid.

2

NOTICE OF GENERAL MEETING

Notice is given that the General Meeting of Shareholders of Aura Energy Limited will be held at 10:30am (WST) on 28 January 2011 at QV1 Conference Centre, Level 2, 250 St Georges Terrace, Perth, Western Australia.

The Explanatory Statement to this Notice of Meeting provides additional information on matters to be considered at the General Meeting. The Explanatory Statement and the proxy form are part of this Notice of Meeting.

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the General Meeting are those who are registered Shareholders of the Company at the close of business on 26 January 2011.

Terms and abbreviations used in this Notice of Meeting and Explanatory Statement are defined in the Glossary.

AGENDA

1. RESOLUTION 1 – RATIFICATION OF PLACEMENT SHARES

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, for the purpose of ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify the allotment and issue of 17,229,000 Shares on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by a person who participated in the issue and any of their associates. However, the Company need not disregard a vote if 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 proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

DATED: 22 December 2010

BY ORDER OF THE BOARD

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AURA ENERGY LIMITED JAY STEPHENSON COMPANY SECRETARY

3

E X P L A N A TO R Y S T A TE M E N T

This Explanatory Statement has been prepared for the information of the Shareholders of the Company in connection with the business to be conducted at the General Meeting to be held at Level 2, 250 St Georges Terrace, Perth, Western Australia at 10:30am (WST) on 28 January 2011.

This purpose of this Explanatory Statement is to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolution in the Notice of Meeting.

2 . R E S O LU T IO N 1 – RA T I F IC A TIO N O F P LA C E M EN T S HA R ES

2.1 General

On or around 20 December 2010, The Company issued 17,229,000 Shares at an issue price of $0.23 per Share to raise approximately $3.96 million ( Placement ).

None of the subscribers pursuant to the Placement were related parties of the Company.

The funds raised from the placement will be used to further the development of the Company’s Swedish and Mauritanian projects.

Resolution Error! Reference source not found. seeks Shareholder ratification pursuant to ASX Listing Rule 7.4 for the issue of those Shares ( Share Ratification ).

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue during any 12 month period any equity securities, or other securities with rights to conversion to equity (such as an option), if the number of those securities exceeds 15% of the number of securities in the same class on issue at the commencement of that 12 month period.

ASX Listing Rule 7.4 sets out an exception to ASX Listing Rule 7.1. It provides that where a company in a general meeting ratifies the previous issue of securities made pursuant to ASX Listing Rule 7.1 (and provided that the previous issue did not breach ASX Listing Rule 7.1) those securities will be deemed to have been made with shareholder approval for the purpose of ASX Listing Rule 7.1.

Following this approval, the Company will again be able to issue new securities in such number up to 15% of the existing issued capital without the prior approval of shareholders. The Board believes that providing this flexibility is a prudent decision to make and is in the best interests of shareholders and the Company as a whole.

2.2 Technical Information Required by ASX Listing Rule 7.5

Pursuant to and in accordance with ASX Listing Rule 7.5, the following information is provided in relation to the Share Ratification:

• (a) 17,229,000 Shares were allotted and issued pursuant to the Placement;

• (b) the issue price was $0.23 per Share;

• (c) the Shares issued were all fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;

• (d) the Shares were allotted and issued to professional or sophisticated investors and was arranged by Shaw Corporate Finance Pty Limited. None of the allottees were related parties of the Company; and

• (e) the Company intends to use the funds raised from the issue of the Shares for the development of its projects and for working capital.

4

Glossary

$ means Australian dollars.

ASIC means the Australian Securities and Investments Commission.

ASX means ASX Limited.

ASX Listing Rules means the Listing Rules of ASX.

Board means the current board of directors of the Company.

Business Days means any day other than a Saturday, Sunday or public holiday in the State of Western Australia.

Company means Aura Energy Limited (ACN 115 927 681).

Constitution means the Company’s constitution.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

Explanatory Statement means the explanatory statement accompanying the Notice of Meeting.

General Meeting means the meeting convened by the Notice of Meeting.

Notice of Meeting or Notice of Annual General Meeting means this notice of annual general meeting including the Explanatory Statement.

Resolution means the resolution set out in the Notice of Meeting, or any one of them, as the context requires.

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

Shareholder means a holder of a Share.

WST means Western Standard Time as observed in Perth, Western Australia.

5

PROXY FORM

APPOINTMENT OF PROXY AURA ENERGY LIMITED ACN 115 927 681

GENERAL MEETING

I/We being a Member of Aura Energy Limited entitled to attend and vote at the Meeting, hereby Appoint Name of proxy OR Mark this box if you wish to appoint the Chairman of the Meeting as your proxy

or failing the person so named or, if no person is named, the Chairman of the Meeting or the Chairman’s nominee, to vote in accordance with the following directions or, if no directions have been given, as the proxy sees fit at the General Meeting to be held at 10:30am (WST), on 28 January 2011 at QV1 Conference Centre, Level 2, 250 St Georges Terrace, Perth, Western Australia and at any adjournment thereof. If no directions are given, the Chairman will vote in favour of all the resolutions.

Voting on Business of the Annual General Meeting
	FOR	AGAINST	ABSTAIN
Resolution 1 – Ratification of Issue of Placement Shares

OR

In relation to this Resolution, if the Chairman is to be your proxy and you do not wish to direct your proxy how to vote on this Resolution, please place a mark in this box

By marking this box, you acknowledge that the Chairman of the meeting may exercise your proxy even if he has an interest in the outcome of the resolution and votes cast by him 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 Chairman of the meeting will not cast your votes on this Resolution and your votes will not be counted in computing the required majority if a poll is called on this Resolution. The Chairman intends to vote in favour of this Resolution.

IF THE CHAIRMAN IS TO BE YOUR PROXY IN RELATION TO RESOLUTION 1 YOU MUST EITHER MARK THE BOXES DIRECTING YOUR PROXY HOW TO VOTE OR MARK THE BOX INDICATING THAT YOU DO NOT WISH TO DIRECT YOUR PROXY HOW TO VOTE, OTHERWISE THIS APPOINTMENT OF PROXY IN RELATION TO RESOLUTION 1 WILL BE DISREGARDED.

If you mark the abstain box for a particular item, you are directing your proxy not to vote on that item on a show of hands or on a poll and that your shares are not to be counted in computing the required majority on a poll.

If two proxies are being appointed, the proportion of voting rights this proxy represents is

%

Signed this day of 2011

By:

By:	By:	By:
Individuals and joint holders Companies (affix common seal if appropriate)
Signature		Director
Signature		Director/Company Secretary
Signature		Sole Director and Sole Company Secretary

AURA ENERGY LIMITED ACN 115 927 681

Instructions for Completing ‘Appointment of Proxy’ Form

1.

A member entitled to attend and vote at a Meeting is entitled to appoint not more than two proxies to attend and vote on their behalf. Where more than one proxy is appointed, such proxy must be allocated a proportion of the member’s voting rights. If the shareholder appoints two proxies and the appointment does not specify this proportion, each proxy may exercise half the votes.

1. A duly appointed proxy need not be a member of the Company. In the case of joint holders, all must sign.

2. Corporate shareholders should comply with the execution requirements set out on the Proxy Form or otherwise with the provisions of Section 127 of the Corporations Act. Section 127 of the Corporations Act provides that a company may execute a document without using its common seal if the document is signed by:

3. 2 directors of the company;

4. a director and a company secretary of the company; or

5. for a proprietary company that has a sole director who is also the sole company secretary – that director.

For the Company to rely on the assumptions set out in Section 129(5) and (6) of the Corporations Act, a document must appear to have been executed in accordance with Section 127(1) or (2). This effectively means that the status of the persons signing the document or witnessing the affixing of the seal must be set out and conform to the requirements of Section 127(1) or (2) as applicable. In particular, a person who witnesses the affixing of a common seal and who is the sole director and sole company secretary of the company must state that next to his or her signature.

1. Completion of a Proxy Form will not prevent individual shareholders from attending the Meeting in person if they wish. Where a shareholder completes and lodges a valid proxy form and attends the Meeting in person, then the proxy’s authority to speak and vote for that shareholder is suspended while the shareholder is present at the Meeting.

2. Where a Proxy Form or form of appointment of corporate representative is lodged and is executed under power of attorney, the power of attorney must be lodged in like manner as this proxy.