YELLOW ROCK RESOURCES LIMITED ACN 116 221 740 (Company)

SECURITIES TRADING POLICY

YELLOW ROCK RESOURCES LIMITED

SECURITIES TRADING POLICY

The Company’s securities trading policy regulates dealings by directors, officers and employees in securities issued by the Company. In certain circumstances this policy also applies to contractors and consultants.

This policy imposes basic trading restrictions on all employees of the Company and its related companies who possess inside information and additional trading restrictions on Key Management Personnel , being those persons having authority and responsibility for planning, directing and controlling the activities of the entity, including any director (whether executive or otherwise). The Company considers its Key Management Personnel to include:

(a) all directors;
(b) all executives reporting directly to the Managing Director; and
(c) any other employees of the Company considered to be Key Management Personnel by the Managing Director and Company Secretary from time to time.

GENERAL RESTRICTIONS WHEN IN POSSESSION OF INSIDE INFORMATION

Insider trading laws

Insider trading laws cover all directors and employees of the Company. If a person is in possession of any unpublished price-sensitive information, it is a criminal offence to take advantage for personal gain or that of an associate. It may also result in civil liability.

Price-sensitive information is any information which if it were generally available, a reasonable person would expect it to have a material effect on the price or value of the Company’s securities, or would be likely to influence a person in deciding whether to buy or sell the Company’s securities.

Employees and directors must not sell or purchase securities while there exists any matter which constitutes unpublished price-sensitive information in relation to the Company’s securities.

Examples

To illustrate the prohibition described above, the following are possible examples of price sensitive information which, if made available to the market, may be likely to materially affect the price of the Company’s securities:

(a) the Company considering a major acquisition;
(b) the threat of major litigation against the Company;
(c) the Company’s revenue and profit or loss results materially exceeding (or falling short of) the market’s expectations;
(d) a material change in debt, liquidity or cash flow;
(e) a significant new development proposal (e.g. new product or technology);
(f) the grant or loss or a major contract;

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(g) a management or business restructuring proposal;
(h) a share issue proposal;
(i) an agreement or option to acquire an interest in a mining tenement, or to enter into a joint venture or farm-in or farm-out arrangement in relation to a mining tenement; and
(j) significant discoveries, exploration results, or changes in reserve/resource estimates from mining tenements in which the Company has an interest.

Confidential information

Employees and directors also have a duty of confidentiality to the Company. A person must not reveal any confidential information concerning the Company, use that information in any way which may cause loss to the Company, or use that information to gain an advantage for themselves or anyone else.

Limiting Risk

Employees, directors and officers must not enter into transactions or arrangements which operate to limit the economic risk of their security holding in the Company without first seeking and obtaining written acknowledgement from the Chairman.

ADDITIONAL TRADING RESTRICTIONS FOR KEY MANAGEMENT PERSONNEL

In accordance with ASX Listing Rules, additional restrictions on trading in the Company’s securities apply to the Company’s Key Management Personnel.

Key Management Personnel generally hold positions where it can be assumed that they will have inside information regarding the Company. Accordingly, additional requirements apply for any proposed trading in securities by Key Management Personnel.

Prohibited Periods

Key Management Personnel must not trade in the Company’s securities, or in financial products issued or created over or in respect of the Company’s securities, during a Prohibited Period .

A Prohibited Period means any Closed Period (see definition below) or additional period when Key Management Personnel are prohibited from trading, which are imposed by the Company from time to time when the Company is considering matters which are subject to Listing Rule 3.1A.

Closed Period means:

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the period of 10 business days prior, to 2 business days after, the publication of the Company’s annual results (or, if shorter, the period from its financial year end to the time of publication);
the period of 10 business days prior, to 2 business days after, the publication of the Company’s half year results (or, if shorter, the period from its half year end to the time of publication); and
the period of 10 business days prior, to 2 business days after, the release of the Company’s quarterly reports (or, if shorter, the period from the relevant financial period end up to and including the time of the announcement).

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The Company may at its discretion vary this rule in relation to a particular Prohibited Period by general announcement to all Directors or Key Management Personnel either before or during the Prohibited Period. However, if a Director or Key Management Personnel of the Company is in possession of price sensitive information which is not generally available to the market, then he or she must not deal in the Company’s securities at any time.

Exceptional Circumstances

In exceptional circumstances (and where a restricted person is not in possession of inside information in relation to the Company), the Chairman (or the Managing Director/CEO where applicable) may provide written clearance to Key Management Personnel to trade in a Prohibited Period if:

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the sale of the Company’s securities is necessary to alleviate severe financial hardship;
the Key Management Personnel has entered into a binding commitment prior to the Company being in a Prohibited Period where it was not reasonably foreseeable at the time the commitment was made that a Prohibited Period was likely;
the Key Management Personnel is required by a court order, or there are court enforceable undertakings to transfer or sell the securities of the Company or there is some other overriding legal or regulatory requirement for him or her to do so;
there are other circumstances which have not been identified in this Securities Trading Policy, that are deemed exceptional by the Chairman, or the Managing Director/CEO where the Chairman is involved, and the proposed sale or disposal of the relevant securities is the only reasonable course of action available.

Requirements before trading

Before trading, or giving instructions for trading in the Company’s securities, a director must:

(a) notify the Chairman in writing of his intention to trade;
(b) confirm that he does not hold any inside information;
(c) if he is seeking clearance to trade in exceptional circumstances, provide full disclosure of such circumstances;
(d) have been notified in writing by the Chairman (such response to be provided as soon as practicable upon receipt of notification but in any event no more than 48 hours after receipt of notification) that there is no reason to preclude him from trading in the Company’s securities as notified; and
(e) comply with any conditions on trading imposed by the Chairman (including, for example, any time limits applicable to the clearance).

Where the Chairman intends to trade in the Company’s securities, he must notify and obtain clearance in the abovementioned manner from at least one other director before trading, or giving instructions for trading.

In the case of any other Key Management Personnel, they must notify and obtain clearance from the Company Secretary before trading, or giving instructions for trading.

Written notification under this Securities Trading Policy via email is acceptable.

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Trading not subject to the Trading Policy

The following is excluded from the operation of this Trading Policy:

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transfers of securities of the Company already held into a superannuation fund or other saving scheme in which the restricted person is a beneficiary;
an investment in, or trading in units of, a fund or other scheme (other than a scheme only investing in the securities of the Company) where the assets of the fund or other scheme are invested at the discretion of a third party;
where a restricted person is a trustee, trading in the securities of the Company by that trust provided that the restricted person is not a beneficiary of the trust and any decision to trade during a Closed Period is taken by the other trustees or by the investment managers independently of the restricted person;
undertakings to accept, or the acceptance of, a takeover offer;
trading under an offer or invitation made to all or most of the security holders, such as, a rights issue, a security purchase plan, a dividend or distribution reinvestment plan and an equal access buy back, where the plan that determines the timing and structure of the offer has been approved by the Board. This includes decisions relating to whether or not to take up the entitlements and the sale of entitlements required to provide for the take-up of the balance of entitlements under a renounceable pro rate issue;
disposal of securities of the Company that is the result of a secured lender exercising their rights, for example, under a margin lending arrangement;
the exercise (but not the sale of securities following exercise) of an option or a right under an employee incentive scheme, or the conversion of a convertible security, where the final date for the exercise of the option or right, or the conversion of the security, falls during a Closed Period;
trading under a non-discretionary trading plan for which prior written clearance has been provided in accordance with procedures set out in this trading policy and where:
the restricted person did not enter the plan or amend the plan during a Closed Period;
the trading plan does not permit the restricted person to exercise any influence or discretion over how, when or whether to trade; and
the trading plan cannot be cancelled during a Closed Period except in exceptional circumstances.

No short-term trading in the Company’s securities

Directors or Key Management Personnel should never engage in short-term trading of the Company’s securities except for the exercise of options where the shares will be sold shortly thereafter.

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Securities in other companies

Buying and selling securities of other companies with which the Company may be dealing is prohibited where an individual possesses information which is not generally available to the market and is ‘price sensitive’. For example, where an individual is aware that the Company is about to sign a major agreement with another company, they should not deal in the securities of either the Company or the other company.

Director Notification of trading and other disclosures

Directors must notify the Company Secretary of any dealings in the Company’s securities immediately any such dealings occur. The Directors appoint the Company as their agent for the purposes of compliance with the disclosure requirement on Directors share trading contained in ASX Listing Rule 3.19. Directors shall be responsible for providing information to the Company Secretary in order for him/her to ensure compliance with Listing Rule 3.19.

If the Director engaged in trading during a Closed Period, the Director must confirm to the Company Secretary that written clearance to trade was provided by the Chairman and the date on which this was provided.

All directors must notify the Company Secretary of any margin loan or similar funding arrangement entered into in relation to the Company’s securities and any variations to such arrangements, including the number of securities involved, the circumstances in which the lender can make margin calls, and the right of the lender to dispose of securities.

BREACHES OF POLICY

Strict compliance with this policy is a condition of employment.

GENERAL

The requirements imposed by this policy are separate from and additional to, the legal prohibitions in the Corporations Act on insider trading.

This policy is reviewed annually .

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AI assistant

AUSTRALIAN VANADIUM LIMITED Governance Information 2010

64471_rns_2010-12-22_b1dec875-5fe8-48ad-8ca4-91b7855be9b6.pdf

YELLOW ROCK RESOURCES LIMITED ACN 116 221 740 (Company)

SECURITIES TRADING POLICY