MGT Resources Limited ACN 131 715 645

Notice of General Meeting to be held on 19 January 2017

and

Explanatory Memorandum for the Notice of General Meeting

and

Independent Expert’s Report

THE INDEPENDENT EXPERT'S REPORT PREPARED BY NEXIA COURT FINANCIAL SOLUTIONS PTY LTD CONCLUDES THAT THE ADVANTAGES OF THE SHARE ACQUISITIONS OUTWEIGH THE DISADVANTAGES OF THE SHARE ACQUISITIONS. PLEASE REFER TO THE INDEPENDENT EXPERT’S REPORT SET OUT IN Section E OF THIS NOTICE.

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. IF YOU ARE IN ANY DOUBT ABOUT THE ACTION YOU SHOULD TAKE PLEASE CONSULT YOUR STOCKBROKER, SOLICITOR, ACCOUNTANT OR OTHER PROFESSIONAL ADVISER.

NOTICE OF THE GENERAL MEETING TO BE HELD AT AT COMPUTERSHARE PTY LTD, LEVEL 4, 60 CARRINGTON STREET, SYDNEY, 2000 AT 10:00AM SYDNEY TIME ON 19 JANUARY 2017

TO BE VALID, FORMS OF PROXY FOR USE AT THE GENERAL MEETING MUST BE COMPLETED AND RETURNED TO THE COMPANY NO LATER THAN

10:00AM SYDNEY TIME ON 17 JANUARY 2017

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Section A Chairman’s Letter	Section A Chairman’s Letter	1
Section B Glossary		3
1.	Definitions	3
2.	Interpretation	5
Section C Notice of General Meeting		7
1.	Resolutions	7
2.	Voting exclusion statements	8
3.	Determination of membership and voting entitlement	10
4.	Votes of members	10
5.	Proxies	10
Section D Explanatory Memorandum		12
1.	Introduction	12
2.	Resolution 1 - Change to scale of activities	12
3.	Resolutions 2 and 3 – Approval of issue of Series A Options and
	Series B Options to Paladin or its nominee	23
4.	Resolution 4 - Change of name of Company	25
5.	Resolution 5 – Approval for the Share Acquisitions by
	Joseph Energy	26
Section E Independent Expert's Report		33

Section A Chairman’s Letter

15[th] December 2016

Dear Shareholder

The Directors of MGT Resources Limited ACN 131 715 645 ( Company ) have convened the General Meeting of Shareholders to be held on 19 January 2017 at Computershare Pty Ltd, Level 4, 60 Carrington Street, Sydney, 2000 to obtain the approval of Shareholders in relation to the resolutions summarised below.

As announced to the market on 24 March 2016, the Company has commenced pursuing a strategy of investment in uranium mining assets. The Company is of the view that the uranium industry can be expected to deliver significant value to investors as the global civil nuclear power industry grows rapidly. In line with the Company's strategy, the Company wishes to change its name to "Avira Energy Limited".

On 30 June 2016, shareholders of the Company approved the issue of 60,606,061 fully paid ordinary shares in order to facilitate the Company making an investment of $2 million in Cauldron Energy Limited (ASX:CXU), the holder of uranium assets.

As announced to the market on 15 November 2016, the Company entered into the conditional Sale of Tenements Agreements - Manyingee Uranium Project with Paladin Energy Limited (ASX: PDN) ( Paladin ) over Manyingee Mining Leases (M08/86, M08/87 and M08/88) in North Western Australia ( Proposed Transaction ). Paladin is an internationally diversified uranium company that owns 100% of uranium deposits and prospects at Manyingee in North Western Australia. On completion of the Proposed Transaction, the Company will acquire a 30% initial interest in Manyingee for US$10 million and the Company intends to form an unincorporated joint venture over the project with Paladin ( Manyingee JV ). The Company may, at its option, acquire an additional 45% interest in the Manyingee JV from Paladin for an additional US$20 million.

It is also proposed that, through a series of share transfers, the Company's largest Shareholder, Auskong International Mining Investment Co., Limited (Hong Kong Company Number 2178046), transfer 16,160,607 Shares to third parties who ultimately transfer 16,160,607 Shares to Joseph Energy (Hong Kong) Limited, a subsidiary of Joseph Capital (Hong Kong) Limited (the Company's third largest Shareholder). It is also proposed that Joseph Capital (Hong Kong) Limited transfer all of its Shares being 3,030,303 Shares to Joseph Energy (Hong Kong) Limited thus resulting in Joseph Energy (Hong Kong) Limited becoming the largest Shareholder of the Company. The parties have entered into conditional agreements for the transfer of a total of 19,190,910 Shares to Joseph Energy (Hong Kong) Limited resulting in Joseph Energy (Hong Kong) Limited holding a major shareholding in the Company of 39.73% ( Share Acquisitions ).

The Directors are putting the following resolutions to Shareholders:

Resolution 1: to the change in scale of the Company's investment in uranium assets relating to the Proposed Transaction under Listing Rule 11.1.2;
Resolution 2: to issue Paladin or its nominee with 2,683,750 Series A Options and issue the Shares that may be required to be issued on exercise of the Series A Options in accordance with the Sale of Tenements Agreement;

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Resolution 3: to issue Paladin or its nominee with 2,683,750 Series B Options and issue the Shares that may be required to be issued on exercise of the Series B Options in accordance with the Sale of Tenements Agreement;
Resolution 4 : to change the Company's name to "Avira Energy Limited"; and
Resolution 5: the Share Acquisitions in accordance with section 611, item 7 of the Corporations Act.

The issue of the Series A Options and Series B Options under the Sale of Tenements Agreement are conditional on Shareholders approving the change in scale of the Company's investment in uranium assets relating to the Proposed Transaction under Listing Rule 11.1.2. Accordingly, Resolutions 1, 2 and 3 are interdependent.

Notice of General Meeting and accompanying documents

This letter is accompanied by a Notice of General Meeting (Section C ), an Explanatory Memorandum (Section D ) and an Independent Expert’s Report (Section E ). The Notice of General Meeting sets out the Resolutions that Shareholders are to consider. The Explanatory Memorandum explains in greater detail the background to the proposed Resolutions.

The Directors appointed Nexia Court Financial Solutions Pty Ltd as the Independent Expert to report on the fairness and reasonableness of the Share Acquisitions to the non-associated shareholders of the Company. The Independent Expert has concluded that the advantages of the Share Acquisitions outweigh the disadvantages of the Share Acquisitions. The Independent Expert's Report is contained in Section E .

The Directors support the Resolutions contained in the Notice of General Meeting.

Shareholders are encouraged to read the enclosed Explanatory Memorandum and Independent Expert’s Report closely and in their entirety and to attend the General Meeting and vote on the Resolutions. A proxy form is enclosed to enable any Shareholder who is unable to attend the General Meeting to vote at the meeting.

Yours faithfully

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Jonathan Back Chairman

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Section B Glossary

1. Definitions

The following definitions are used in the Chairman’s Letter, the Notice of General Meeting and the Explanatory Memorandum:

ASIC means the Australian Securities & Investments Commission. Associate has the meaning given to that term in sections 10 to 17 of the Corporations Act. ASX means ASX Limited ACN 008 624 691 or the securities exchange market operated by the ASX, as the context requires. ASX Listing Rules means the official listing rules issued and enforced by the ASX, as or Listing Rules amended from time to time. Auskong means Auskong International Mining Investment Co., Limited (Hong Kong Company Number 2178046) of Room 1617-18 Star House, 3 Salisbury Road, Tsim Sha Tsui KL. Board or Board of means the board of Directors of the Company. Directors Business Day means a day which is not a Saturday, Sunday or public holiday in Sydney. Chairman means the chairman of the Company, who is currently Mr Jonathan Back.

Company or MGT means MGT Resources Limited ACN 131 715 645. Completion means completion of the sale and purchase of the 30% interest in the Tenements under the Sale of Tenements Agreement. Constitution means the constitution of the Company, as amended from time to time. Corporations Act means Corporations Act 2001 (Cth). Directors means the directors of the Company.

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Explanatory	means the explanatory memorandum set out in Section D of this
Memorandum	document.
General Meeting	means the general meeting of the Company to be held on
	19 January 2017 at 10:00am at Computershare Pty Ltd, Level 4, 60
	Carrington Street, Sydney, 2000 pursuant to the Notice of General
	Meeting.
Independent	means Nexia Court Financial Solutions Pty Ltd of Level 16,
Expert	1 Market Street, Sydney NSW 2000.
Independent	means the expert report prepared by the Independent Expert and set
Expert's Report	out in Section E of this document.
Joseph Capital	means Joseph Capital (Hong Kong) Limited (Hong Kong Company
	Number 2271550) of Flat/RM 06 3/F, Bonham Trade Centre, 50
	Bonham Strand, Sheungwan, Hong Kong.
Joseph Energy	means Joseph Energy (Hong Kong) Limited (Hong Kong Company
	Number 2410772) of Flat/RM 06 3/F, Bonham Trade Centre, 50
	Bonham Strand, Sheung Wan, Hong Kong.
MGT	means the share consolidation of the issued capital of the Company on
Consolidation	that basis that every 10 Shares be consolidated into 1 Share pursuant
	to Resolution 7 of the Notice of Annual General Meeting dated
	28 October 2016 and approved by Shareholders on
	30 November 2016.
Notice of General	means the notice of General Meeting set out in Section C of this
MeetingorNotice	document.
Officially Quoted	means, in relation to a Share, officially quoted by the ASX.
andOfficial
Quotation
Paladin	means Paladin Energy Limited ACN 061 681 098 (ASX: PDN).
Proposed	has the meaning given in the Chairman's Letter.
Transaction
Resolution	means a resolution passed by the requisite majority of Shareholders of
	the Company on a show of hands or by the requisite majority of votes
	given on a poll.
Sales of	means the conditional Sales and Tenements Agreement - Manyingee
Tenements	Uranium Project between Paladin Energy Minerals NL ACN 073 700
	393, Paladin Energy Limited ACN 061 681 098, Paladin Nuclear

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Agreement Limited ACN 125 124 156 , MGT Energy Pty Ltd ACN 614 610 990 and the Company dated 14 November 2016. Series A Options means 2,683,750 options issuable to Paladin exercisable at 60 cents per Share post MGT Consolidation on or before 12 months from completion of the Proposed Transaction. Series B Options means 2,683,750 options issuable to Paladin exercisable at 80 cents per Share post MGT Consolidation on or before 24 months from completion of the Proposed Transaction. Share means a fully paid ordinary share in the issued capital of the Company and Shares means any two or more of them. Share has the meaning given to that term in the Chairman's Letter. Acquisitions Shareholder means a holder of a Share. Special means a resolution that requires approval of 75% of the votes cast by Resolution Shareholders present and eligible to vote (in person, by proxy, by attorney or, in the case of a corporate Shareholder, by a corporate representative). Tenements means Manyingee Mining Leases M08/86, M08/87 and M08/88 in North Western Australia registered in the name of Paladin.

2. Interpretation

For the purposes of interpreting the Chairman’s Letter, the Explanatory Memorandum and the Notice of General Meeting:

(a) the singular includes the plural and vice versa;
(b) words importing any gender include both genders;
(c) reference to any statute, ordinance, regulation, rule or other law includes all regulations and other instruments and all consolidations, amendments, re-enactments or replacements for the time being in force;
(d) all headings, bold typing and italics (if any) have been inserted for convenience of reference only and do not define limit or affect the meaning or interpretation of the Chairman’s Letter, the Explanatory Memorandum and the Notice of General Meeting;
(e) reference to persons includes bodies corporate and government authorities and in each and every case, includes a reference to the person’s executors, administrators,

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successors, substitutes (including without limitation persons taking by novation and assignment); and

(f) reference to A$, AU$, Australian Dollars or dollars is a reference to the lawful tender for the time being and from time to time of the Commonwealth of Australia.

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Section C Notice of General Meeting

NOTICE IS HEREBY GIVEN that the General Meeting of the Shareholders of MGT Resources Limited ACN 131 715 645 ( MGT or the Company ) will be held at Computershare Pty Ltd, Level 4, 60 Carrington Street, Sydney, 2000 on Thursday, 19 January 2017 at 10:00am Sydney time.

Defined terms used in this Notice of General Meeting have the meanings given to them in the Glossary accompanying this Notice of General Meeting.

1. Resolutions

1.1 Resolution 1: Change to scale of activities

To consider and, if thought fit, to pass the following ordinary Resolution :

“That, conditional on Resolutions 2 and 3 being passed in accordance with their terms and Completion occurring, in accordance with ASX Listing Rule 11.1.2, and for all other purposes, the Company be permitted and authorised to make a change to the scale of its activities by entering into and performing its obligations in accordance with the provisions of the Sale of Tenements Agreement, as described in the Explanatory Memorandum (Section D ).”

1.2 Resolution 2: Approval of issue of Series A Options to Paladin or its nominee

To consider and, if thought fit, to pass the following ordinary Resolution :

“ That, conditional on Resolutions 1 and 3 being passed, in accordance with Listing Rule 7.1, and for all other purposes, the Company be permitted and authorised to:

(i) issue 2,683,750 Series A Options to Paladin or its nominee; and
(ii) issue the maximum number of Shares that may be required to be issued on exercise of the 2,683,750 Series A Options, namely 2,683,750 Shares,

in accordance with the Sales of Tenement Agreement, as described in the Explanatory Memorandum (Section D )."

1.3 Resolution 3: Approval of issue of Series B Options to Paladin or its nominee

To consider and, if thought fit, to pass the following ordinary Resolution :

“That, conditional on Resolutions 1 and 2 being passed, in accordance with Listing Rule 7.1, and for all other purposes, the Company be permitted and authorised to:

(i) issue 2,683,750 Series B Options to Paladin or its nominee; and
(ii) issue the maximum number of Shares that may be required to be issued on exercise of the 2,683,750 Series B Options, namely 2,683,750 Shares,

in accordance with the Sales of Tenement Agreement, as described in the Explanatory Memorandum (Section D )."

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1.4 Resolution 4: Change of name of the Company

To consider and, if thought fit, to pass the following Resolution as a Special Resolution :

" That, in accordance with Section 157 of the Corporations Act 2001 (Cth), the Company adopts the new name "Avira Energy Limited" and Shareholders approve the Company changing its name to "Avira Energy Limited" with the effect from the day on which the Australian Securities and Investments Commission alters the details of the Company’s registration.”

1.5 Resolution 5: Approval of Share Acquisitions

To consider and, if thought fit, to pass the following ordinary Resolution :

“ That, in accordance with section 611, item 7 of the Corporations Act, and for all other purposes, approval be given for Joseph Energy to acquire a total of 19,190,910 Shares at $0.042 pre MGT Consolidation per Share from Auskong ($0.42 post MGT Consolidation) and nil consideration from Joseph Capital and otherwise on the terms and conditions set out in the Explanatory Memorandum (Section D ).”

Note: Shareholders should carefully consider the Independent Expert's Report prepared by Nexia Court Financial Solutions Pty Ltd for the purposes of the Shareholder approval required under section 611, item 7 of the Corporations Act. The Independent Expert's Report comments on the fairness and reasonableness of the Proposed Transactions to the non-associated Shareholders. The Independent Expert has determined that the advantages of the Share Acquisitions outweigh the disadvantages of the Share Acquisitions.

2. Voting exclusion statements

2.1 Resolution 1

In accordance with the notice requirements of ASX Listing Rule 11.1.2 and ASX Listing Rule 14.11.1, the Company will disregard any votes cast on Resolution 1 by:

(a) a person who might obtain a benefit, except a benefit solely in the capacity of a Shareholder, if the Resolution is passed; and
(b) any Associate of a person referred to in paragraph 2.1(a) above.

However, the Company will not disregard a vote if:

(c) 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
(d) 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.

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2.2 Resolution 2

In accordance with the notice requirements of ASX Listing Rule 7.1 and ASX Listing Rule 14.11.1, the Company will disregard any votes cast on Resolution 2 by:

(a) Paladin and a person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a Shareholder, if Resolution 2 is passed; and
(b) any Associate of a person referred to in paragraph 2.2(a) above.

However, the Company will not disregard a vote if:

(c) 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
(d) 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.

2.3 Resolution 3

In accordance with the notice requirements of ASX Listing Rule 7.1 and ASX Listing Rule 14.11.1, the Company will disregard any votes cast on Resolution 3 by:

(a) Paladin and a person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a Shareholder, if Resolution 3 is passed; and
(b) any Associate of a person referred to in paragraph 2.3(a) above.

However, the Company will not disregard a vote if:

(c) 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
(d) 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.

2.4 Resolution 4

There are no voting exclusions for Resolution 4.

2.5 Resolution 5

In accordance with the voting restrictions of item 7 section 611 of the Corporations Act, no votes are cast in favour of Resolution 5, by:

(a) the person proposing to make the acquisition, (namely, Auskong and Joseph Energy) and its Associates; and
(b) the persons (if any) from whom the acquisition is to be made (Auskong and Joseph Capital) and their Associates.

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3. Determination of membership and voting entitlement

The Company has determined, in accordance with regulation 7.11.37 of the Corporations Regulations 2001 (Cth), that for a person’s entitlement to vote at the General Meeting, a person will be recognised as a member of the Company and the holder of Shares if that person is registered as a holder of those Shares by 10:00am Sydney time on Tuesday, 17 January 2017.

4. Votes of members

On a show of hands, each member present in person or by proxy (or, in the case of a body corporate, by a representative) at the General Meeting shall have one vote.

On a poll, every member present in person or by attorney or by proxy (or, in the case of a body corporate, by a representative) shall have one vote for each Share held by him, her or it, provided that all Shares are fully paid.

5. Proxies

Please note that:

(a) a member entitled to attend and vote at the General Meeting is entitled to appoint no more than two proxies;
(b) an instrument appointing a proxy must be in the form of the proxy form attached to this Notice of General Meeting;
(c) where more than one proxy is appointed, each proxy must be appointed to represent a specified proportion of the member's voting rights. If a member appoints two proxies, neither person may vote on a show of hands and on a poll, each person may only exercise the voting rights for the portion of votes the person holds;
(d) a proxy may be a member of the Company;
(e) a proxy need not be a member of the Company;
(f) a proxy form may specify the manner in which the proxy is to vote in respect of a particular Resolution and, where a proxy form so provides, the proxy is not entitled to vote on the Resolution except as specified in the proxy form;
(g) a proxy has the authority to vote on the member's behalf as he or she thinks fit, on any motion to adjourn the General Meeting, or any other procedural motion, unless the member gives a direction to the contrary;
(h) a valid proxy form will be deemed to confer authority to demand or join in demanding a poll;
(i) to be valid, a proxy form must be signed by the member or the member's attorney or, if the member is a corporation, executed in accordance with the corporation's constitution and the Corporations Act (and may be signed on behalf of the corporation by its attorney); and

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(j) to be valid, a proxy form and the power of attorney or other authority (if any) under which it is signed (or an attested copy of it) must be received by no later than 10am Sydney time on Tuesday, 17 January 2017.

by the Company’s share registry:

Computershare Investor Services Pty Limited - by mail: GPO Box 242 Melbourne

Victoria 3001 Australia

(within Australia) 1800 783 447 or - by facsimile: (outside Australia) +61 3 9473 2555 or - online https://www.investorvote.com.au/Login

By order of the Board:

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Jacqueline Butler Company Secretary

Dated: 15[th] December 2016 Sydney

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Section D Explanatory Memorandum

1. Introduction

This Explanatory Memorandum contains the information needed for the Shareholders to assess Resolutions 1 through 5 to be put to them at the General Meeting of MGT on 19 January 2017. A Notice of General Meeting accompanies this document.

In addition, the Independent Expert's Report has been provided which contains an analysis of whether the Share Acquisitions pursuant to Resolution 5 are fair and reasonable to the nonassociated Shareholders. The Independent Expert has concluded that the advantages of the Share Acquisitions outweigh the disadvantages of the Share Acquisitions. A full copy of the Independent Expert's Report is set out in Section E of this Report.

This Explanatory Memorandum, as well as the Notice of General Meeting and Independent Expert's Report, should be read carefully and in their entirety.

Resolutions 1 to 3 are interdependent.

2. Resolution 1 - Change to scale of activities

2.1 Background

On 24 March 2016, the Company announced to the market that the Company has commenced pursuing a strategy of investment in uranium mining assets.

As announced to the market on 15 November 2016, the Company entered into the Sale of Tenements Agreement with Paladin Energy Limited (ASX: PDN) ( Paladin ) over Manyingee Mining Leases (M08/86, M08/87 and M08/88) in North Western Australia ( Proposed Transaction ). Paladin is an internationally diversified uranium company that owns 100% of uranium deposits and prospects at Manyingee in North Western Australia. On completion of the Proposed Transaction, the Company will acquire a 30% initial interest in Manyingee for US$10 million and the Company intends to form an unincorporated joint venture over the project with Paladin ( Manyingee JV ). The Tenements were granted to the Seller on 18 May 1989 and expire on 17 May 2031.

The Company may, at its option, acquire an additional 45% interest in the Manyingee JV from Paladin for US$20 million. The Company and its wholly owned subsidiary, MGT Energy Pty Ltd ACN 614 610 990 ( Buyer ), propose to enter into the Sales of Tenements Agreement with Paladin Energy Minerals NL ACN 073 700 393 ( Seller ), Paladin and Paladin Nuclear Limited ACN 125 124 156 ( Paladin Nuclear ) . The Seller and Paladin Nuclear are subsidiaries of Paladin.

At Completion, the Company will enter into the Joint Venture Agreement - Manyingee Joint Venture, Sales Agency and Marketing Services Agreement and the Technical Services Agreement.

Completion is due to occur on or about 31 March 2017.

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The Company is seeking the approval of Shareholders in relation to the proposed change in the scale of the Company’s activities.

2.2 ASX Listing Rule requirements

ASX Listing Rule 11.1 provides that if an entity proposes to make a significant change, either directly or indirectly, to the nature or scale of its activities, it must provide full details to the ASX as soon as practicable and comply with the following:

(a) provide the ASX with information regarding the change and its effect on future potential earnings, and any information that the ASX asks for;
(b) if the ASX requires, obtain the approval of holders of its shares and must comply with any requirements of the ASX in relation to the notice of meeting. The notice of meeting must include a voting exclusion statement; and
(c) if the ASX requires, meet the requirements in Chapters 1 and 2 of the ASX Listing Rules as if the entity were applying for admission to the official list of the ASX.

The Company is of the view that the Proposed Transaction is a change in scale of its well telegraphed strategy of investing in uranium assets, but not a change in nature. The ASX has indicated to the Company that given the proposed change in the scale of the Company’s activities, it requires that the Company obtain Shareholder approval in accordance with ASX Listing Rule 11.1.2. A voting exclusion statement is included at paragraph 2.1 of the Notice of General Meeting (Section C ).

2.3 Sale of Tenements Agreement

The principal terms of the Share Purchase Agreement are as follows:

Consideration

On Completion of the Sale of Tenements Agreement:

(a) MSG will pay the sum of US$10,000,000 to the Seller;
(b) Paladin must issue the following options in the fully paid ordinary shares of Paladin ( Paladin Shares ) to the Buyer or its nominee:
(i) 35,680,000 options exercisable at $0.35 per Paladin Share on or before 12 months from completion of the Proposed Transaction; and
(ii) 35,680,000 options exercisable at $0.45 per Paladin Share on or before 24 months from completion of the Proposed Transaction; and
(c) MGS must issue 2,683,750 Series A Options and 2,683,750 Series B Options to the Seller or its nominee.

Conditions Precedent

Completion of the Sales of Tenements Agreement is conditional on the following conditions precedent ( Conditions Precedent ):

(a) a notice in writing is issued by or on behalf of the Treasurer of the Commonwealth of Australia stating that the Commonwealth Government does not object to the proposed acquisition of an interest of up to 75% in the Tenements by the Buyer either unconditionally or on terms reasonably accepted to the Buyer (or a notice of that the Treasurer of the Commonwealth is precluded from making an order under the Foreign

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Acquisitions and Takeovers Act 1975 (Cth) in respect of the proposed acquisition of an interest in the Tenements);

(b) the Company obtaining all necessary shareholder approval to enable completion of the Proposed Transaction;
(c) the Company completing a capital raising (renounceable rights issue) of a minimum of $18 million;
(d) the Seller obtaining in principle approval of the Minister responsible for administration of the Mining Act 1978 (WA) under the Mining Act 1978 (WA) to the transfer of the 30% interest in the Tenements (it being sufficient if approval is given subject to the lodgement of registrable and duly stamped instruments of transfer); and
(e) the Seller and the Buyer entering into a priority deed with Electricité de France, a company incorporated in France, setting out the priority in favour of the Buyer in respect of its rights under the Joint Venture Agreement.

FLT Milestone

From Completion, Paladin and the Seller must each use their reasonable endeavours to satisfy the following milestones as soon as reasonably practicable ( FLT Milestones ):

(a) approval of the Department of Mines and Petroleum to conduct a field leach trial to test the in-situ recovery method of uranium extraction on the Tenements; and
(b) Paladin providing the Seller and the Buyer with a work plan and budget for conducting the field leach trial referred to in the above paragraph (a).

All expenditure incurred in order to conduct a field leach trial to test the in-situ recovery method of uranium extraction on the Tenements in accordance with the approved work plan and budget must be borne and paid for by the Buyer (MGT Energy Pty Ltd) and the Seller (Paladin Energy Minerals NL) severally in proportion to their interest, i.e. 30% by the Buyer and 70% by the Seller.

Stage 2 Options

In consideration of entering into the Sale of Tenements Agreement, the Seller grants to the Buyer, on and from the date of satisfaction of the FLT Milestones ( Option Commencement Date ), the irrevocable and exclusive option ( Stage 2 Option ) to acquire a further 45% interest in the Tenements and the Joint Venture Agreement to take the Buyer's interest in the Tenements and the Joint Venture Agreement to 75% ( Stage 2 Interest ).

The Stage 2 Option is exercisable by the Buyer on or before 12 months from the Option Commencement Date.

Upon the exercise of the Stage 2 Option, the Seller agrees to sell and the Buyer agrees to buy the Stage 2 Interest for US$20,000,000.

Warranties and limitations on claims

The parties have provided warranties which are customary in an agreement of this nature. The parties have provided mutual warranties regarding power, authority and entry into the Sale of Tenements Agreement.

The Seller has provided title warranties in respect of its title to the Tenements, and the currency and validity of the Tenements. The Seller has not provided any warranties in

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relation to native title, the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth), the Aboriginal Heritage Act 1972 (WA), environmental liabilities or the ability to exploit any uranium.

Governing law

The Sale of Tenements Agreement is governed by the laws of Western Australia.

2.4 Joint Venture Agreement

At Completion of the Proposed Transaction, the Seller (Paladin Energy Minerals NL ACN 073 700 393), the Buyer (MGT Energy Pty Ltd ACN 614 610 990) and Paladin will enter into a joint venture agreement ( Joint Venture Agreement ) pursuant to which the Seller and the Buyer agree to establish an unincorporated joint venture to explore for and exploit minerals within the area of the Tenements ( Joint Venture ).

Under the Joint Venture Agreement, Paladin has agreed to act as the initial manager of the Joint Venture, and the Buyer will act as the manager of the Joint Venture upon its acquisition of the Stage 2 Interest.

If the Seller or the Buyer fails to pay any monies due for payment under the Joint Venture Agreement on or before the due date ( Defaulting Joint Venturer ) and this default is not remedied within 10 business days of the issue of an unpaid monies default notice, the other party may give notice stating that it wishes to acquire the whole of the Defaulting Joint Venturer's interest in the Joint Venture.

All expenditure incurred under the Joint Venture in accordance with the approved programme and budget must be borne and paid for by the Buyer (MGT Energy Pty Ltd) and the Seller (Paladin Energy Minerals NL) severally in proportion to their interest, i.e. 30% by the Buyer and 70% by the Seller.

The Joint Venture Agreement is governed by the laws of Western Australia.

2.5 Technical Services Agreement

On and from the appointment of the Buyer or a related body corporate of the Buyer as the manager of the Joint Venture, the Buyer and Paladin will enter into a technical services agreement ( Technical Services Agreement ) pursuant to which the Buyer engages Paladin on an exclusive basis to provide mining related services in respect of the Joint Venture ( Services ).

The term of the Technical Services Agreement is 5 years from the date of appointment of the Buyer as the manager of the Joint Venture. Paladin may extend the term of the Technical Services Agreement for a further term of 5 years in accordance with the terms of the Technical Services Agreement.

In consideration of the Services provided by Paladin, the Buyer will pay a service fee to Paladin, comprising the following:

(a) the costs and expenses incurred by Paladin in carrying out the Services; plus

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(b) a mark-up fee of 5% on all costs and expenses incurred by Paladin in carrying out the Services, other than disbursements for any Services provided by third party contractors.

The Technical Services Agreement may be terminated immediately by MGT if Paladin's interest (including Paladin's related body corporate) in the Joint Venture reduces below 25%.

The Technical Services Agreement is governed by the laws of Western Australia.

2.6 Sales Agency and Marketing Services Agreement

At Completion of the Proposed Transaction, the Buyer and Paladin Nuclear Limited ACN 125 124 156 ( Paladin Nuclear ) will enter into a sales agency and marketing services agreement ( Sales Agency and Marketing Services Agreement ) pursuant to which the Buyer engages Paladin Nuclear to act as its exclusive world-wide sales agent in relation to the Buyer's interest in any uranium oxide in concentrates produced under the Joint Venture ( MGT Uranium Product ), and to provide marketing services in relation to the MGT Uranium Product.

The term of the Sales Agency and Marketing Services Agreement is 30 years from the date of the Sales Agency and Marketing Services Agreement. Paladin Nuclear may extend the term of the Sales Agency and Marketing Services Agreement for a further term of 30 years in accordance with the terms of the Sales Agency and Marketing Services Agreement.

The Buyer agrees to pay Paladin Nuclear a commission of 3% of the gross sales receipts of any sales of the MGT Uranium Product.

The Sales Agency and Marketing Services Agreement may be terminated immediately by MGT if Paladin ceases to have an interest in the Joint Venture of at least 25%.

The Sales Agency and Marketing Services Agreement is governed by the laws of Western Australia.

2.7 Tenement Mortgage

The Seller is proposing to grant a tenement mortgage in favour of Electricité de France ( Mortgagee ), a company incorporated in France under number 552 081 317, over the Seller's interest in the Tenements, as security for all debts and monetary liabilities of the Seller to the Mortgagee. It is a condition of Completion that any such tenement mortgage is subordinated to the Company's interest by way of a priority deed.

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2.8 Capital structure

The existing capital structure of the Company is set out in the table below.

Existing Capital Structure of MGS (as at the date of this Notice)	Amount
Listed Shares	48,306,614
Unlisted fully paid convertible redeemable preference shares	18,181,818
Unlisted Options	7,377,728
Convertible Notes *	$2,000,000

*The Convertible Notes comprise:

(a) unsecured convertible notes issued to Armstrong Industries HK Limited to the value of $1,500,000 convertible into 1,714,286 Shares at $0.875 per Share (post MGT Consolidation) pursuant to an unsecured convertible note deed between the Company and Armstrong Industries HK Limited dated 1 October 2013 and subsequent variation to the unsecured convertible note deed; and
(b) unsecured convertible notes issued to Joseph Capital to the value of $500,000 convertible into 1,515,152 Shares at $0.33 per Share (post MGT Consolidation) pursuant to the unsecured convertible note deed between the Company and Joseph Capital dated 19 October 2016.

Following Completion (the issue of the Series A Options and Series B Options contemplated by Resolutions 2 and 3), the capital structure of the Company will be as set out below.

Capital Structure of MGS after Completion of the Proposed Transaction	Amount
Listed Shares	48,306,614
Unlisted fully paid convertible redeemable preference shares	18,181,818
Unlisted Options	12,745,228
Convertible Notes	$2,000,000

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	Number of Shares	Percentage of the issued capital of the Company held (%)
Shares held by Paladin as at date of this Notice	Nil	N/A
After issue of Shares to Paladin on exercise of Series A Options and Series BOptions	5,367,500	10%*

* Calculated on an undiluted basis and assuming no Shares are issued in the interim.

2.9 Indicative timetable

The indicative timetable for the proposed transaction is set out below. Please note that these dates are indicative only and may be subject to change at the discretion of the Directors.

Date	Event
15 December 2016	Dispatch of Notice of General Meeting and Explanatory
	Memorandum to Shareholders
19 January 2017	General Meeting
19 January 2017	Notification to ASX of results of General Meeting
By 31 March 2017	Completion of the Sale of Tenements Agreement

2.10 Advantages of the proposed transaction

The Directors are of the view that the following non-exhaustive list of advantages may be relevant to a Shareholder’s decision on how to vote on the proposed Resolutions:

(a) the terms of the Proposed Transaction were negotiated on an arm's length basis;
(b) by changing the scale of its activities, there will be no confusion in the market as to the intentions of the Company;
(c) the potential increase in market capitalisation of MGS may lead to increased coverage from capital market analysts, improved access to equity capital market opportunities and increased liquidity in its share trading; and
(d) the Board currently comprises (and following Completion will continue to comprise) an experienced and skilled set of directors to guide the growth and development of the Company.

2.11 Potential disadvantages of the proposed transaction

The Directors are of the view that the following non-exhaustive list of disadvantages may be relevant to a Shareholder’s decision on how to vote on the Proposed Transaction:

(a) the Company will be changing the scale of its activities which may not be consistent with the objectives of Shareholders;

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(b) the issue of the Series A Options and Series B Options to Paladin or its nominee and upon exercise of the Series A Options and Series B Options into Shares, will have a dilutive effect on the current holdings of Shareholders; and
(c) there are many risks associated with the change in the scale of the Company’s activities contemplated by Resolution 1. A summary of these risk factors are set out in paragraph 2.12 below.

The Board takes the view that the advantages of the transaction substantially outweigh any disadvantages and unanimously recommend that Shareholders vote in favour of this Resolution.

2.12 Risks

There are a number of risks associated with the acquisition of the Tenements, including risks specific to MGS and its industry.

Shareholders should recognise that there are a number of general and specific risks that the Company may face, which may materially and adversely impact the future operating and financial performance of the Company and the value of the Shares. As many of these risks are outside the control of MGS and/or its Directors, if Shareholders approve this transaction, there can be no guarantee that MGS can achieve their objectives.

The following is not intended to be an exhaustive list of the risk factors to which MGS are exposed.

(a) Financing

The Company must raise at least $18 million as a condition of Completion. The Company intends to raise this by way of an issue of new Shares via a renounceable rights issue, which will likely be significantly dilutionary for Shareholders unless all Shareholders take up their entitlements under the proposed renounceable rights issue.

Any additional equity financing will be dilutive to shareholders, and debt financing, if available, may involve restrictions on financing and operating activities. If the Company is unable to obtain additional funding as needed, it may not be able to take advantage of opportunities or develop projects. Further, the Company may default on its obligations under the Joint Venture to contribute to the costs of exploring and developing the Tenements. In addition, the Company may be required to reduce the scope of its operations or anticipated expansion and it may affect the Company’s ability to continue as a going concern.

(b) Uncertainty of exploration and development programs

Exploration for minerals is highly speculative in nature, involves many risks and is frequently unsuccessful. Among the many uncertainties inherent in any exploration and development program are the location of ore bodies, the development of appropriate extraction processes, the receipt of necessary governmental permits, access to permits and the construction of mining and processing facilities. Assuming the discovery of an economic deposit, several years may lapse from the initial phases

of drilling until commercial operations commence and, during such time, the economic feasibility of production may change. Accordingly, the Company’s exploration and development program may not result in any new economically viable mining operations.

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(c) Uranium exploration and mining

Amongst other minerals, the Company intends to continue exploration activities for uranium. Uranium mining is subject to extensive regulation by Commonwealth, State and Territory Governments in relation to exploration, development, production and export. As such, the Company’s interests in uranium operations are subject to more stringent approvals regimes than other minerals and this will increase the costs of the uranium operations the Company has interest in. Uranium export is only permitted by the Australian Government in accordance with strict international agreements intended to prevent proliferation of nuclear materials. The licensing regime around uranium export is tightly controlled.

(d) Exploration and mining risk

The business of mineral exploration and mining involves risks and hazards. For example, in an exploration context no assurance can be given that ore bodies will be detected with preferred or desirable tonnages or grades. High risk and substantial expense can be incurred without the requisite or expected degree of reward. Even if commercial quantities of ore are discovered unforeseen risks can arise in the development and production phase including mining or processing issues, environmental hazards, industrial accidents, labour force disruption, the unavailability of materials and equipment, unusual or unexpected geological formation, pit failures, changes in the regulatory environment and weather conditions. Such occurrences could result in damage to, or destruction of, mineral properties or production facilities, personal injury or death, environmental damage, delays in mining, monetary losses and possible legal liability.

(e) Compliance risk

Title to the Tenements is subject to Paladin, as tenement holder on behalf of the Joint Venture , complying with the terms and conditions of each tenement, including the minimum annual expenditure commitments. There is a risk that if Paladin does not comply with the terms and conditions of each Tenement, the Company may lose its interest in the Tenements.

(f) Environmental

The Joint Venture activities are subject to the environmental risks inherent in the mining industry. The Company is subject to environmental laws and regulations in connection with operations it may pursue in the mining industry. The Joint Venture intends to conduct its activities in an environmentally responsible manner and in accordance with all applicable laws. However, the Joint Venture may be the subject of accidents or unforeseen circumstances that could subject the Company to extensive liability.

Further, the Joint Venture may require approval from the relevant authorities before it can undertake activities likely to impact the environment. Failure to obtain such approvals will prevent the Joint Venture from undertaking its desired activities.

(g) Growth

The Company will continue to seek to grow the Company both organically and through new investment opportunities. There are always risks that the benefits or synergies expected from such investments or growth may take longer than expected to be achieved or may not be achieved at all. Any investments pursued could have a material adverse effect on the Company.

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Growth also brings substantial demands on management. The Board applies its experience to the evaluation and financing of new opportunities to determine whether the expected risks and rewards of these opportunities meets the Company’s requirements and its strategies for diversification of risk and for capital. The operating results of the Company will largely depend on the ability of the Board to make sound investment decisions.

2.13 Financial effect of the Proposed Transaction on the Company

An unaudited pro forma balance sheet of the Company following Completion of the Proposed Transaction is set out below. The pro forma statement balance sheet of the Company takes into account the Company's proposed capital raising (renounceable rights issue) of a minimum of $20 million and a maximum of $25 million.

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PRO-FORMA BALANCE SHEETS BASED	ON MINIMUM AND MAXIMUM CAPITAL RAISINGS	ON MINIMUM AND MAXIMUM CAPITAL RAISINGS


	MGT Resources Ltd Audited Group Consolidation 30/6/2016 Capital Raising net of costs (Minimum) Unaudited pro forma Net Minimum Subscription Capital Raising net of costs (Maximum) Unaudited pro forma Net Maximum Subscription
	A$ A$ 149,060 18,433,330 134,339 283,399 1,539,550 1,831,345 1,120,254 4,491,149 4,774,548 549,544 7,487,596 1,500,000 100,114 9,637,254 114,509 114,509 9,751,763 (4,977,215) 19,095,000 18,433,330	A$ A$ 18,582,390 23,086,930 134,339 18,716,729 1,539,550 1,831,345 1,120,254 4,491,149 23,207,878 549,544 7,487,596 1,500,000 100,114 9,637,254 114,509 114,509 9,751,763 13,456,115 37,528,330 23,086,930	A$ 23,235,990 134,339
ASSETS
Current assets
Cash and cash equivalents
Other assets
Total current assets			23,370,329 1,539,550 1,831,345 1,120,254

Non-current assets
Plant & Equipment
Exploration and evaluation expenditure
Other non current asset
Total non-current assets			4,491,149 27,861,478 549,544 7,487,596 1,500,000 100,114

TOTAL ASSETS

LIABILITIES
Current liabilities
Trade and otherpayables
Unsecured Borrowings
Secured Borrowings
Provisions
			9,637,254 114,509 114,509
Total current liabilities

Non-Current liabilities
Provisions

Total Non-Current liabilities

TOTAL LIABILITIES			9,751,763

NET(LIABILITIES)/ASSETS			18,109,715
			42,181,930
EQUITY
Issued Capital
Reserves	(119,242) (23,341,252) (611,721) (4,977,215)	(119,242) (23,341,252) (611,721) 13,456,115	-119,242 -23,341,252 -611,721
Accumulated losses
Non-controllinginterest
TOTAL EQUITY			18,109,715

2.14 Modification of the business model as a result of the Proposed Transaction

Following completion of the Proposed Transaction, the Company will still act as the holding company for uranium, tin and gold assets. As previously highlighted, the focus for the Company moving forward will be on uranium exploration. The Joint Venture with Paladin will be managed by Paladin until MGT exercises its option to purchase 75% of the Tenements.

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2.15 Changes to the board and senior management

Mr Rui Zhang has been appointed by the Board as a Non-Executive Director of the Company on 6 December 2016. Mr. Zhang possesses 12 years of global experience in natural resources exploration, development, mergers and acquisitions and over ten years of experience working on uranium related projects.

Other than Mr Zhang's appointment, the Board does not propose any changes to its board or senior management as a result of the Proposed Transaction.

3. Resolutions 2 and 3 – Approval of issue of Series A Options and Series B Options to Paladin or its nominee

3.1 ASX Listing Rule 7.1

ASX Listing Rule 7.1 provides that a company must not issue equity securities, or agree to issue equity securities (which includes options) without the approval of shareholders if the number of equity securities to be issued in any 12 month period (including equity securities issued on the exercise of any convertible securities) exceeds 15% of the issued capital of the company preceding the issue.

3.2 Terms of the Series A Options and Series B Options

Pursuant to the Sale of Tenements Agreement, the Series A Options and Series B Options have the following material terms and conditions:

(a) each option entitles the holder to one Share;
(b) the exercise price of each Series A Option is 6 cents or 60 cents if Shareholders approved the MGT Consolidation and each Series B Option is 8 cents or 80 cents if Shareholders approved the MGT Consolidation;
(c) the Series A Options are exercisable at any time prior to 5.00 pm WST 12 months from the Completion Date and the Series B Options are exercisable at any time prior to 5.00 pm WST 24 months from the Completion Date;
(d) the options are freely transferable. No application will be made for the options to be quoted;
(e) upon the exercise of an option and receipt of all relevant documents and payment, the holder will be issued a Share ranking equally with the then issued Shares;
(f) there will be no participating rights or entitlements inherent in the options and the holders will not be entitled to participate in new issues of capital which may be offered to Shareholders during the currency of the options. However, MGT will ensure that the option holder will be notified of a proposed issue after the issue is announced. This will give an option holder the opportunity to exercise its options prior to the date for determining entitlements to participate in any such issue;
(g) if there is a bonus issue ( Bonus Issue ) to Shareholders, the number of Shares over which an option is exercisable will be increased by the number of Shares which the holder would have received if the option had been exercised before the record date for the Bonus Issue ( Bonus Shares ). The Bonus Shares must be paid up by MGT

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out of profits or reserves (as the case may be) in the same manner as was applied in the Bonus Issue, and upon issue will rank equally in all respects with the other Shares on issue as at the date of issue of the Bonus Shares; and

(h) in the event of any reconstruction (including consolidation, sub-division, reduction or return) of the issued capital of MGT, all rights of an option holder are to be changed in a manner consistent with the ASX Listing Rules.

3.3 Information under ASX Listing Rule 7.3

Pursuant to ASX Listing Rule 7.3, the following information is provided regarding ASX Listing Rule 7.1 approval in relation to the Resolution 2 :

(a) ASX Listing Rule 7.3.1: Maximum number of securities to be issued pursuant to Resolution 2

2,683,750 Series A Options which on exercise, 2,683,750 Shares will be issued.

(b) ASX Listing Rules 7.3.2 and 7.3.7: Date by which securities will be issued and allotted

If Shareholder approval is obtained for Resolutions 1, 2 and 3, the issue and allotment of the Series A Options to Paladin or its nominee will occur at Completion but in any case no later than three months after the date of this General Meeting or such later time as deemed appropriate by an ASX waiver.

The issue price for the Series A Options is nil as the Series A Options comprise part of the consideration under the Proposed Transaction. However, the exercise price of each Series A Option is 60 cents per Share (post the MGT Consolidation).

(d) ASX Listing Rule 7.3.4 : Names of allottees

Paladin Energy Limited.

(e) ASX Listing Rule 7.3.5 : Terms of securities

A summary of the terms of the Series A Options is set out in paragraph 3.2.

(f) ASX Listing Rule 7.3.6: Intended use of the funds

There will be no funds raised as a result of the issue of the Series A Options to Paladin or its nominee. Funds raised as a result of the exercise of any Series A Options will be used for working capital of the Company, Joint Venture expenditure costs and future growth opportunities.

(g) ASX Listing Rule 7.3.8: A voting exclusion statement

Voting exclusion statements are included at paragraph 2.2 of the Notice of General Meeting (Section D ).

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Pursuant to ASX Listing Rule 7.3, the following information is provided regarding ASX Listing Rule 7.1 approval in relation to Resolution 3 :

(a) ASX Listing Rule 7.3.1: Maximum number of securities to be issued pursuant to Resolution 3

2,683,750 Series B Options which on exercise, 2,683,750 Shares will be issued.

(b) ASX Listing Rules 7.3.2 and 7.3.7: Date by which securities will be issued and allotted

If Shareholder approval is obtained for Resolutions 1, 2 and 3, the issue and allotment of the Series B Options to Paladin or its nominee will occur at Completion but in any case no later than three months after the date of this General Meeting or such later time as deemed appropriate by an ASX waiver.

The issue price for the Series B Options is nil as the Series B Options comprise part of the consideration under the Proposed Transaction. However, the exercise price of each Series B Option is 80 cents per Share (post the MGT Consolidation).

(d) ASX Listing Rule 7.3.4 : Names of allottees

Paladin Energy Limited

(e) ASX Listing Rule 7.3.5 : Terms of securities

A summary of the terms of the Series B Options is set out in paragraph 3.2.

(f) ASX Listing Rule 7.3.6: Intended use of the funds

There will be no funds raised as a result of the issue of the Series BOptions to Paladin or its nominee. Funds raised as a result of the exercise of any Series B Options will be used for working capital of the Company, Joint Venture expenditure costs and future growth opportunities.

(g) ASX Listing Rule 7.3.8: A voting exclusion statement

Voting exclusion statements are included at paragraph 2.3 of the Notice of General Meeting (Section D ).

4. Resolution 4 - Change of name of Company

4.1 Background

Resolution 4 seeks Shareholder approval to change the name of the Company to Avira Energy Limited.

Resolution 4 is a special resolution and therefore requires approval of 75% of the votes cast by Shareholders present and eligible to vote (in person, by proxy, by attorney or, in the case of a corporate Shareholder, by a corporate representative).

The adoption of the new name under Resolution 4 is to be approved by Shareholders under section 157(1) of the Corporations Act.

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The Company proposes to change its name to Avira Energy Limited to more accurately reflect its proposed activities. The change of name of the Company will take effect on the day that ASIC approves the change of name. There will be a change in the Company’s ASX listing code from ‘MGS' to 'AVW'.

Each of the Directors recommends that Shareholders vote in favour of Resolution 4.

5. Resolution 5 – Approval for the Share Acquisitions by Joseph Energy

5.1 Background

It is proposed that, through a series of share transfers, the Company's largest Shareholder, Auskong International Mining Investment Co., Limited (Hong Kong Company Number 2178046), transfer 16,160,607 Shares to third parties who ultimately transfers those same 16,160,607 Shares to Joseph Energy (Hong Kong) Limited, a subsidiary of Joseph Capital (Hong Kong) Limited (the Company's third largest Shareholder). It is also proposed that Joseph Capital (Hong Kong) Limited transfer 3,030,303 Shares (100% Shareholding) to Joseph Energy (Hong Kong) Limited thus resulting in Joseph Energy (Hong Kong) Limited becoming the largest Shareholder of the Company. The parties have entered into conditional agreements for the transfer of a total of 19,190,910 Shares to Joseph Energy (Hong Kong) Limited resulting in Joseph Energy (Hong Kong) Limited holding a shareholding in the Company of 39.73% (on an undiluted basis) ( Share Acquisitions ).

Shareholders approval is sought pursuant to section 611 item 7 of the Corporations Act for the Share Acquisitions.

5.2 Terms of the Share Sale Agreements

The following Share Sale Agreements have been entered into:

(a) Share Sale Agreement between Auskong International Mining Investment Co., Limited and Xiaobing Lu for 80,803,031 Shares pre MGT Consolidation (i.e. 8,080,303 Shares post MGT Consolidation);
(b) Share Sale Agreement between Xiaobing Lu and Joseph Energy (Hong Kong) Limited for 80,803,031 Shares pre MGT Consolidation (i.e. 8,080,303 Shares post MGT Consolidation);
(c) Share Sale Agreement between Auskong International Mining Investment Co., Limited and Shen Hui 80,803,030 Shares pre MGT Consolidation (i.e. 8,080,303 Shares post MGT Consolidation);
(d) Share Sale Agreement between Shen Hui and Joseph Energy (Hong Kong) Limited for 80,803,030 Shares pre MGT Consolidation (i.e. 8,080,303 Shares post MGT Consolidation); and
(e) Share Sale Agreement between Joseph Capital (Hong Kong) Limited and Joseph Energy (Hong Kong) Limited for 30,303,030 Shares pre MGT Consolidation (i.e. 3,030,303 Shares post MGT Consolidation).

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Other than the vendor, purchaser and number of Shares, the terms of the above Share Sale Agreements are materially the same and are as follows:

Dates	Between 9 November 2016 and 15 November 2016
Consideration	The consideration payable is $0.042 per Share except the consideration for the transfer of Shares between Joseph Capital and Joseph Energy in paragraph 5.2(e) is nil consideration
Conditions	The share sale agreements are conditional on the following: (a) the transaction contemplated under the share sale agreement has been approved in a Shareholders meeting of the Company; and (b) all other consents necessary or relevant for the transaction contemplated under the share sale agreement to take place without breaching any statute or agreement are granted and received.
Warranties	The parties have provided warranties which are customary in an agreement of this nature.
Governing law	The share sale agreements are governed by the laws of New South Wales.
Other comments	The share sale agreements do not contain any other unusual or onerous covenants, undertakings or obligations.

5.3 Item 7 of section 611 of the Corporations Act

(a) Relevant interests

Pursuant to section 606(1) of the Corporations Act, a person must not acquire a relevant interest in issued voting shares in a company if the person acquiring the interest does so through a transaction in relation to securities entered into by or on behalf of the person and because of the transaction, that person’s or someone else’s voting power in the company increases:

(i) from 20% or below to more than 20%; or
(ii) from a starting point that is above 20% to below 90%.

The voting power of a person in a company is determined in accordance with section 610 of the Corporations Act. The calculation of a person’s voting power in a company involves determining the voting shares in the company in which the person and the person’s Associates have a relevant interest.

A person has a relevant interest in securities if they:

(i) are the holder of the securities;

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(ii) have the power to exercise, or control the exercise of, a right to vote attached to the securities; or
(iii) have the power to dispose of, or control the exercise of a power to dispose of, the securities.

It does not matter how remote the relevant interest is or how it arises. If two or more people can jointly exercise one of these powers, each of them is taken to have that power.

(b) Exception to the section 606 prohibition

Item 7 of section 611 of the Corporations Act provides an exception to the prohibition under section 606 of the Corporations Act. This exception provides that a person may acquire a relevant interest in a company’s voting shares with shareholder approval.

In order for the exemption of item 7 of section 611 of the Corporations Act to apply, shareholders must be given all information known to the person making the acquisition and their Associates or the Company, that was material to the decision on how to vote on the resolution, including:

(i) the identity of the person proposing to make the acquisition and their Associates;
(ii) the maximum extent of the increase in that person’s voting power in the company that would result from the acquisition;
(iii) the voting power that person would have as a result of the acquisition;
(iv) the maximum extent of the increase in the voting power of each of that person’s Associates that would result from the acquisition; and
(v) the voting power that each of that person’s Associates would have as a result of the acquisition.

For responses on these matters, see paragraph 2.7.

As at the date of this Notice, Joseph Energy does not hold any Shares in the Company. At the date of this Notice, the total issued share capital of the Company is 48,306,613 Shares, 18,181,820 unlisted fully paid convertible redeemable preference shares, 7,377,728 options and $2 million worth of convertible notes.

If Shareholder approval is given for the Share Acquisition, Joseph Energy would have a combined interest of 39.73% of the Shares then on issue (assuming no other Share issues take place, no preference shares are converted into ordinary shares of the Company, no Options are exercised and no convertible notes are converted into ordinary shares of the Company). Joseph Energy's relevant interest in the Company of more than 20% as a result of the Share Acquisitions is prohibited under section 606 of the Corporations Act. However, such issue would be permitted if prior Shareholder approval is granted for the Share Acquisitions.

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5.4 Information for Shareholders under item 7 of section 611 of the Corporations Act

The following information is provided to Shareholders for the purposes of the requirements under the Corporations Act in respect of obtaining Shareholder approval for item 7 of section 611 of the Corporations Act:

(a) Joseph Energy is the person proposing to make the Share Acquisitions (that is, the person who will be transferred the 19,190,910 Shares);
(b) the maximum extent of the increase in voting power of Joseph Energy in its own right is 39.73%;
(c) the voting power of Joseph Energy would have as a result of the Share Acquisitions is 39.73% assuming no Shares are issued under the Company's unsecured convertible note deeds with Joseph Capital and Armstrong Industries HK Limited;
(d) the maximum extent of the increase in voting power of Joseph Energy's Associate (Joseph Capital) that would result from the Share Acquisitions is 39.73% assuming no Shares are issued under the Company's unsecured convertible note deeds with Joseph Capital and Armstrong Industries HK Limited. If the Joseph Capital unsecured convertible note deed is converted in full, in the absence of any other changes, Joseph Capital would own 1,515,152 Shares or 3.04% of MGT's issued capital and Joseph Energy's voting power, having a relevant interest in Shares held by Joseph Capital, would increase to 41.56%; and
(e) the voting power of Joseph Energy's Associate (Joseph Capital) would have as a result of the Share Acquisitions is 39.73% assuming no Shares are issued under the Company's unsecured convertible note deeds with Joseph Capital and Armstrong Industries HK Limited. If the Joseph Capital unsecured convertible note deed is converted in full, in the absence of any other changes, Joseph Capital would own 1,515,152 Shares or 3.04% and Joseph Energy's voting power, having a relevant interest in Shares held by Joseph Capital, would increase to 41.56%.

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5.5 Effect on capital structure as a result of Resolution 5

The effect of Resolution 5 on the capital structure of the Company is as follows:

	Number of Shares to be held by Joseph Energy	Voting power as a %
*Auskong*
Number of Shares that will be held by Auskong as at the date of General Meeting	19,460,607	40.29%
Shares that will be held by Auskong with Resolution 5 passed	3,300,000	6.83%
*Joseph Energy*
Number of Shares that will be held by Joseph Energy as at the date of General Meeting	Nil	N/A
Shares that will be held by Joseph Energy with Resolution 5 passed	19,190,910	39.73%
*Joseph Capital*
Number of Shares that will be held by Joseph Capital as at the date of General Meeting	3,030,303	6.27%
Shares that will be held by Joseph Capital with Resolution 5 passed*	Nil	N/A

*Calculated on the basis that no Shares are issued under the Company's unsecured convertible note deeds with Joseph Capital and Armstrong Industries HK Limited. For further information on the convertible notes, please refer to paragraph 2.8.

5.6 Information for Shareholders required by RG 74

Further information required by ASIC Regulatory Guide 74 ( RG 74 ) is set out in the following paragraphs.

(a) an explanation of the reasons for the proposed acquisition

Joseph Capital wishes to become one of the largest uranium companies listed on a stock exchange in the world and has acquired several uranium assets overseas. The Share Acquisitions will place Joseph Capital in a strong position to achieve its aim as one of the largest uranium companies listed on a stock exchange in the world. With the Paladin transaction, the subject of Resolution 1, Joseph Capital considers the Company has a formidable opportunity and wishes to be part of the journey with the Company. Auskong and Joseph Capital are unrelated parties.

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(b) when the proposed acquisition is to occur

Completion of the Share Acquisitions is proposed to occur within 14 days after the date that Shareholder approval is obtained for the Share Acquisitions under this Resolution 5.

This information is set out in some detail in paragraphs 5.1 and 5.2.

(d) details of the terms of any other relevant agreement between the acquirer and the target entity or vendor (or any of their associates) that is conditional on (or directly or indirectly depends on) members’ approval of the proposed acquisition

This information is set out in some detail in paragraphs 5.1 an d 5.2.

Other than as set out above, there is no other contract or proposed contract between Auskong and Joseph Capital or any of their Associates and the Company which is conditional upon, or directly or indirectly dependent on Shareholders’ agreement to the Share Acquisitions.

(e) a statement of the acquirer’s intentions regarding the future of the target entity if members approve the acquisition and, in particular:
(i) any intention to change the business of the entity

Joseph Energy has no present intention to change the business of the Company.

(ii) any intention to inject further capital into the entity

As at the date of this Notice, Joseph Energy has an indicative and nonbinding intention to inject further capital into the Company or to provide further support to the Company .

In the event that the Share Acquisitions is not approved, Joseph Energy has indicated that it will not provide future funding to the Company

(iii) The Company needs significant further funding for the Joint Venture the subject of Resolution 1, which could, in part, be provided by Joseph Energy or one of the companies related to Joseph Energy. the future employment of present employees of the entity

Joseph Energy has no present intention to make any changes to the employment arrangements of the present employees of the Company.

(iv) any proposal where assets will be transferred between the entity and the acquirer or vendor or their associates

Joseph Energy has no present intention to transfer any assets between the Company and Joseph Capital or any person associated with them.

(v) any intention to otherwise redeploy the fixed assets of the entity

Joseph Energy has no present intention to redeploy the fixed assets of the Company.

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(f) any intention of the acquirer to significantly change the financial or dividend distribution policies of the entity

Joseph Energy has no present intention to change significantly the financial or dividend policies of the Company.

(g) the interests that any director has in the acquisition or any relevant agreement disclosed under RG 74.25(d)

None of the Directors are a related party or Associate of Joseph Energy, Auskong or Joseph Capital or have an interest in Resolution 5 (other than an interest as non-associated Shareholders).

(h) the following details about any person who is intended to become a director if members approve the acquisition:

There is no right to nominate a director.

5.7 Independent Expert's Report

In accordance with the requirements of RG 74, the Directors engaged the Independent Expert to prepare and provide the Independent Expert Report which contains an analysis of whether the proposed Share Acquisitions by Joseph Energy is fair and reasonable for non-associated Shareholders.

The Independent Expert has concluded that the advantages of the Share Acquisitions outweigh the disadvantages of the Share Acquisitions. For a summary of the Independent Expert's findings please refer to page 4 of the Independent Expert's Report.

The Independent Expert has given, and not before the date of the Notice withdrawn, its consent to the inclusion of the Independent Expert's Report in Section E of this document and to the references to the Independent Expert Report in this Explanatory Memorandum being made in the form and context in which each such reference is included.

5.8 Advantages and disadvantages

The advantages of the Shares Acquisitions are as follows:

(a) Joseph Energy has an indicative and non-binding intention to inject further capital or to provide further support to the Company; and
(b) the opportunity of receiving a takeover bid remains unchanged.

A disadvantage of the Shares Acquisitions is that Auskong will receive a significant control premium for its Shareholding as a result of the Share Acquisitions.

5.9 Recommendation of the Directors

The Directors recommend that Shareholders vote in favour of Resolution 5. In the view of the Directors, it is beneficial to the Company to be able to deal with a single large Shareholder from the perspective of raising capital to support the ongoing operations and investment activities of the Company. The Directors believe that Joseph Energy will be able to provide significant support to the Company in its future activities, including arranging access to capital for the expansion of our business.

Page 32

Section E Independent Expert's Report

Page 33

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AI assistant

AVIRA RESOURCES LTD — Proxy Solicitation & Information Statement 2016

64473_rns_2016-12-14_c5308746-b525-48b1-8c04-3812f77d8d8a.pdf

MGT Resources Limited ACN 131 715 645

Notice of General Meeting to be held on 19 January 2017

Explanatory Memorandum for the Notice of General Meeting

and

Independent Expert’s Report

Table of Contents

Section A Chairman’s Letter

15[th] December 2016

Dear Shareholder

Notice of General Meeting and accompanying documents

Section B Glossary

1. Definitions

2. Interpretation

Section C Notice of General Meeting

1. Resolutions

1.1 Resolution 1: Change to scale of activities

1.2 Resolution 2: Approval of issue of Series A Options to Paladin or its nominee

1.3 Resolution 3: Approval of issue of Series B Options to Paladin or its nominee

1.4 Resolution 4: Change of name of the Company

1.5 Resolution 5: Approval of Share Acquisitions

2. Voting exclusion statements

2.1 Resolution 1

2.2 Resolution 2

2.3 Resolution 3

2.4 Resolution 4

2.5 Resolution 5

3. Determination of membership and voting entitlement

4. Votes of members

5. Proxies

by the Company’s share registry:

By order of the Board:

Section D Explanatory Memorandum

1. Introduction

2. Resolution 1 - Change to scale of activities

2.1 Background

2.2

ASX Listing Rule requirements

2.3 Sale of Tenements Agreement

Consideration

Conditions Precedent

FLT Milestone

Stage 2 Options

Warranties and limitations on claims

Governing law

2.4 Joint Venture Agreement

2.5 Technical Services Agreement

2.6 Sales Agency and Marketing Services Agreement

2.7 Tenement Mortgage

2.8 Capital structure

2.9 Indicative timetable

2.10 Advantages of the proposed transaction

2.11 Potential disadvantages of the proposed transaction

2.12 Risks

(b) Uncertainty of exploration and development programs

(c) Uranium exploration and mining

(d) Exploration and mining risk

(e) Compliance risk

(f) Environmental

(g) Growth

2.13 Financial effect of the Proposed Transaction on the Company

2.14 Modification of the business model as a result of the Proposed Transaction

2.15 Changes to the board and senior management

3. Resolutions 2 and 3 – Approval of issue of Series A Options and Series B Options to Paladin or its nominee

3.1 ASX Listing Rule 7.1

3.2 Terms of the Series A Options and Series B Options

3.3 Information under ASX Listing Rule 7.3

(d) ASX Listing Rule 7.3.4 : Names of allottees

4. Resolution 4 - Change of name of Company

4.1 Background

5. Resolution 5 – Approval for the Share Acquisitions by Joseph Energy

5.1 Background

5.2 Terms of the Share Sale Agreements

5.3 Item 7 of section 611 of the Corporations Act

5.4 Information for Shareholders under item 7 of section 611 of the Corporations Act

5.5 Effect on capital structure as a result of Resolution 5

5.6 Information for Shareholders required by RG 74

5.7 Independent Expert's Report

AVIRA RESOURCES LTD Proxy Solicitation & Information Statement 2016

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