BANNERMAN ENERGY LTD - Proxy Solicitation & Information Statement 2009

ABN 34 113 017 128

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11 March 2009

Dear Shareholder

Notice of Meeting and Explanatory Statement

I am pleased to enclose a Notice of Meeting and Explanatory Statement for a General Meeting to be held on Thursday 16 April 2009 in relation to a number of recent initiatives which strengthen your Company.

As you know, in November 2008 we were fortunate to secure funding support from Resource Capital Funds (“RCF”), a mining-focused private equity fund, in the form of a Convertible Note Facility of up to A$20 million. The facility comprises an Initial Tranche of A$10 million, which has already been drawn, and a Standby Tranche of A$10 million. This was completed in what was, and still is, a very difficult market for raising funds. A number of the resolutions to be considered at the General Meeting seek approval from shareholders to facilitate issues of shares to RCF under the terms of the facility, and must be passed for the Standby Tranche to become available.

You will see that in the Explanatory Statement the Independent Expert, PKF Corporate Finance, concludes that the RCF proposal is “ not fair but reasonable ” to non-associated shareholders. I want to take the opportunity to explain why your Board unanimously recommends that you vote in favour of the resolutions :

(i) Financing availability – You will no doubt be acutely aware of the adverse impact of the global economic crisis on the availability of funding for companies. Bannerman has not been immune from this crisis and indeed, as a junior company in the pre-development phase of operations, has borne the brunt of it. At the time the RCF facility was successfully negotiated, Bannerman was rapidly eroding its cash reserves in an environment where conventional debt and equity markets were effectively “closed” to small companies, the Bannerman share price was at historical lows, and any issue of shares would have been at a substantial discount to market, leading to severe dilution for shareholders.
(ii) Consequence of non-approval - Approval by shareholders of the relevant resolutions will ensure that the Company has maximum flexibility to utilise the RCF facility in a manner of its choosing. Your Directors note that if that approval is not obtained, it is very likely that the Company will be forced to immediately defer its exploration and feasibility study activities, and will be forced to raise additional capital from other sources. As conditions in the financial markets remain exceptionally difficult, it is quite possible that any such capital raising will be on less attractive terms than the RCF facility.
(iii) Premium to prevailing share price and minimisation of shareholder dilution - The opportunity to raise funds via the RCF facility, effectively at a material premium to the share price, was considered by the Board to be very attractive. It is notable that the Bannerman share price has firmed materially since this funding was secured. You should note that the conclusion of the Independent Expert is based on an assessment of the net tangible assets of Bannerman before and after the transaction. While this is relevant information, your Board believes that in current market conditions, the need to secure the financial position of the Company in a manner that minimises dilution to shareholders should be the overriding concern.

Your Board has no doubt that the RCF facility was the best funding proposal available at the time and continues to be very attractive.

Level 2, 22 Oxford Close, West Leederville, Western Australia, 6007. PO Box 1681, West Perth, WA, 6872 Phone: +618 9381 1436 Fax: +618 9381 1068 email: [email protected]

You will also see that the Board is seeking pre-approval to provide the Company with the flexibility to issue additional shares to raise, in addition to the 15% placement capacity available under the ASX Listing Rules, up to a further A$30 million in new capital. We are seeking this approval so that, in the instance of an improvement in market conditions, the Company has the option of raising funds to aggressively advance its exploration and feasibility study activities, and to potentially avoid the need to draw on the Standby Tranche of the RCF facility. It would also supplement the Company’s working capital requirements following the recent settlement of the Savanna litigation.

The Notice of Meeting also contains resolutions seeking approval to the issue of shares as part of the recent Savanna legal settlement, and the issue of options to our new CEO Len Jubber. In his relatively short time at the helm, Len has already taken the Company forward several strides, including settlement of the Savanna litigation, the issue of a material upgrade to the Etango resource estimate and the addition of a number of qualified personnel to the management team.

In conclusion, the Board urges you to vote in favour of all the resolutions proposed at the General Meeting.

I look forward to meeting with as many shareholders as possible in April.

Yours sincerely

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GEOFF STANLEY Chairman

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ABN 34 113 017 128

Notice of Meeting

and

Information Circular/Explanatory Statement

in respect of a

MEETING OF SHAREHOLDERS

to be held on APRIL 16, 2009

9:30 am (WST)

Dated March 11, 2009

IMPORTANT INFORMATION

This is an important document that should be read in its entirety. If you do not understand it you should consult your professional advisers without delay.

If you wish to discuss any aspects of this document with the Company, you may contact the Company Secretary on (+61) 8 9381 1436.

NOTICE OF MEETING

FOR THE MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 16 , 2009

TO THE SHAREHOLDERS:

NOTICE IS HEREBY GIVEN that a Meeting (the Meeting ) of Shareholders of Bannerman Resources Limited ( Bannerman or the Company ) will be held at the Duxton Hotel Perth, 1 St Georges Terrace, Perth, Western Australia, 6000 on Thursday, April 16, 2009 at 9:30 am WST. The Information Circular and Explanatory Statement provide additional information on matters to be considered at the Meeting and forms part of this Notice of Meeting.

AGENDA

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

1 Resolution 1 – Ratification of issue of convertible note and 500,000 shares to RCF under the Convertible Note Facility Agreement

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

“That for the purposes of Listing Rule 7.4 and for all other purposes, the Shareholders ratify and approve:

(a) the issue of a convertible note for the First Tranche A$10,000,000 cash advance by RCF in accordance with the Convertible Note Facility Agreement at a conversion price per Share of A$0.612; and
(b) the issue of 500,000 Shares to RCF on provision of the First Tranche cash advance as part of the fee for the provision of the Facility,

irrespective of whether RCF and its Associates’ entitlement to Shares changes between the date of the notice calling this Meeting and the date of this Meeting.”

Voting Exclusion Statement

The Company will disregard any votes cast on a resolution by RCF and any of its 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.

2 Resolution 2 – Approval of acquisition of Shares by RCF upon conversion of the Standby Tranche

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

“That for the purposes of item 7 of section 611 of the Corporations Act, and for all other purposes, the Shareholders approve and authorise:

(a) the conversion to Shares, whether by one or more allotments, of the Standby Tranche, being a A$10,000,000 cash advance that may be made available by RCF to the Company in accordance with the Convertible Note Facility Agreement at a conversion price per Share of a minimum of A$0.45, being a total of 22,222,222 Shares; and
(b) the acquisition by RCF and its Associates of relevant interests in the Shares as more particularly set out in the Explanatory Statement,

irrespective of whether RCF and its Associates’ entitlement to Shares in the Company changes between the date of the notice calling this Meeting and the date of this Meeting.”

Voting Exclusion Statement

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3 Resolution 3 – Approval of acquisition of Shares by RCF upon exercise of Prepayment Options if Company elects to prepay the First Tranche or the Standby Tranche

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

“ That for the purposes of item 7 of section 611 of the Corporations Act, and for all other purposes, the Shareholders authorise and approve:

(a) the exercise by RCF of up to 38,562,091 options at an exercise price of up to A$0.612 each, exercisable on or before December 16, 2011 as described in the Explanatory Statement; and
(b) the acquisition by RCF and its Associates of relevant interests in the Shares as more particularly set out in the Explanatory Statement,

irrespective of whether RCF and its Associates’ entitlement to Shares changes between the date of the notice calling this Meeting and the date of this Meeting ”.

Voting Exclusion Statement

4 Resolution 4 – Approval of acquisition of Shares by RCF if the Company elects to satisfy interest obligations under the Convertible Note Facility Agreement by the issue of Shares

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

“ That for the purposes of item 7 of section 611 of the Corporations Act, and for all other purposes, the Shareholders authorise and approve:

(a) the issue of Shares to RCF if the Company elects to satisfy the interest obligations of the Company under the Convertible Note Facility Agreement by the issue of Shares as described in the Explanatory Statement; and
(b) the acquisition by RCF and its Associates of relevant interests in the Shares as more particularly set out in the Explanatory Statement,

irrespective of whether RCF and its Associates’ entitlement to Shares changes between the date of the notice calling this Meeting and the date of this Meeting ”.

Voting Exclusion Statement

5 Resolution 5 – Equity capital raising

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

“That for the purposes of Listing Rule 7.1 and for all other purposes, the Shareholders approve the allotment and issue, within 90 days of the date of this resolution, of such number of:

(a) Shares as the Directors shall determine, at a price which is at least 80% of the average market price for shares in that class (which average is calculated over the last 5 days on which sales in the shares were recorded before the day on which the issue was made or, if there is a prospectus, Product Disclosure Statement or offer information statement relating to the issue, over the last 5 days on which sales in the shares were recorded before the date of the prospectus, Product Disclosure Statement or offer information is signed); and
(b) the Warrants as the Directors may determine on the terms set out in the Explanatory Statement accompanying this Notice of Meeting

in order to raise an amount of up to A$30 million.

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Voting Exclusion Statement

The Company will disregard any votes cast on a resolution by any person who may participate in the proposed issue and any person who may obtain a benefit in the capacity as holder of ordinary shares or an Associate of such person. 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.

6 Resolution 6 – Approval of the issue of 5,500,000 Options to Mr Len Jubber

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

“That for the purposes of Listing Rule 10.11 and section 208 of the Corporations Act and for all other purposes, the Shareholders approve the issue of 5,500,000 Options by the Company to Mr Len Jubber, on the terms and conditions set out in the Explanatory Statement accompanying this Notice of Meeting.”

Voting Exclusion Statement

The Company will disregard any votes cast on a resolution by Mr Jubber and any Associate of Mr Jubber. 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.

7 Resolution 7 – Ratification of issue of 5,500,000 of Shares to Savanna

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

“That for the purposes of Listing Rule 7.4 and for all other purposes, the Shareholders ratify and approve the allotment and issue of 5,500,000 Shares to Savanna, pursuant to the terms of the Settlement Agreement.”

Voting Exclusion Statement

The Company will disregard any votes cast on a resolution by Savanna and any of its Associates. However, the Company need not disregard a vote if it is cast by a person as a proxy appointed in writing that specifies how the proxy is to vote on the proposed resolution and it is not cast on behalf of a related party or Associate of the kind referred to above.

8 Resolution 8 – Approval of the allotment and Issue of 4,000,000 Shares to Savanna

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

“That for the purposes of Listing Rule 7.1 and for all other purposes, the Shareholders approve the allotment and issue, on or about the date the Mining Licence is granted, of 4,000,000 Shares to Savanna, pursuant to the terms of the Settlement Agreement.”

Voting Exclusion Statement

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HOW TO VOTE

You may vote by attending the Meeting in person, by proxy or by authorised corporate representative.

Voting in person

To vote in person, attend the Meeting on the date and at the time and place set out above. The Meeting will commence at 9:30 am WST.

Voting by corporate representative

A corporation may elect to appoint a representative to attend and vote at the Meeting, in accordance with the Corporations Act, in which case the Company will require a Certificate of Appointment of Corporate Representative, executed in accordance with the Corporations Act and lodged with the Company prior to the Meeting or at the registration desk on the day of the Meeting.

Voting by proxy

Please note that:

(a) a Shareholder entitled to attend and vote at the Meeting is entitled to appoint a proxy;
(b) a proxy need not be a Shareholder; and

(c) a Shareholder entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise, but where the proportion or number is not specified, each proxy may exercise half the votes.

If you are a Registered Shareholder of the Company and are unable to attend the Meeting in person, please date and execute the accompanying form of proxy and return it not less than 48 hours before the Meeting to:

Australia The Company Secretary Level 2, 22 Oxford Close, West Leederville, Western Australia, 6007 Facsimile: +61 8 9381 1068 or	Canada Computershare Investor Services Inc. 100 University Avenue, 9th Floor Toronto, Ontario M5J 2Y1 Facsimile: +1(416) 263-9524 (outside North America) Facsimile: 1-866 249-7775 (inside North America)

If you are a Beneficial Shareholder of the Company and receive these materials through your broker or through another intermediary, please complete and return the form of proxy in accordance with the instructions provided to you by your broker or by the other intermediary.

The Information Circular and enclosed proxy form provides further details on appointing proxies and lodging proxy forms.

NOTES

The directors of the Company have fixed 9:30 am (WST) on April 14, 2009 as the record date which entitles Shareholders to vote at the Meeting ( Voting Record Date ) pursuant to Regulation 7.11.37 of the Corporations Regulations and March 13, 2009 as the record date which entitles Shareholders on record at the close of business on March 13, 2009 to receive the Notice of Meeting ( Notice Record Date ). Canadians who become Registered Shareholders of the Company by acquiring Shares between the Notice Record Date and the Voting Record Date and wish to vote at the Meeting by proxy should contact Computershare Investor Services Inc. for further information. Canadians who become Beneficial Shareholders of the Company by acquiring Shares between the Notice Record Date and the Voting Record Date and wish to vote at the Meeting, by proxy or by attending, should contact their broker or intermediary for instructions on how to do so.

BY ORDER OF THE BOARD OF DIRECTORS

Len Jubber Chief Executive Officer West Leederville, Western Australia, March 11, 2009

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INFORMATION CIRCULAR

FOR THE MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 16 , 2009

The Company is a reporting issuer in certain provinces of Canada. Accordingly, pursuant to the requirements of National Instrument 51102 - Continuous Disclosure Obligations , the following disclosure is required to be included with this Notice of Meeting and Explanatory Statement.

Shareholders are specifically referred to the Glossary in Schedule 1 to the Explanatory Statement which contains definitions of capitalised terms used in this Notice of Meeting, the Information Circular and the Explanatory Statement.

PURPOSE OF SOLICITATION

This Information Circular is furnished in connection with the solicitation of proxies by the management of the Company for use at the Meeting of the Shareholders of the Company . The Meeting will be held at the Duxton Hotel Perth, 1 St Georges Terrace, Perth, Western Australia on Thursday, April 16, 2009 at 9:30 am (WST), for the purposes set forth in the Notice of Meeting accompanying this Information Circular. The Directors recommend that Shareholders read in full this Information Circular and the Explanatory Statement in conjunction with the accompanying Notice of Meeting.

Solicitation of proxies will be primarily by mail but may also be by telephone, facsimile or in person by directors, officers and employees of the Company who will not be additionally compensated therefor. Brokers, nominees or other persons holding Shares in their names for others shall be reimbursed for their reasonable charges and expenses in forwarding proxies and proxy material to the beneficial owners of such shares. The costs of soliciting proxies will be borne by the Company.

APPOINTMENT AND REVOCATION OF PROXIES

Enclosed herewith is a form of proxy for use at the Meeting. The enclosed form of proxy provides for the appointment of the Chairman of the Meeting (who may be a director or officer of the Company) if no person is named in the form of proxy, or if the appointment of a person named in the proxy fails. A Shareholder submitting a proxy has the right to appoint a nominee (who need not be a Shareholder) to represent him at the Meeting other than the Chairman of the Meeting by inserting the name of his chosen nominee in the space provided for that purpose on the form of proxy. A Shareholder entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise, but where the proportion or number is not specified, each proxy may exercise half the votes.

A proxy will not be valid for the Meeting unless it is signed by the Shareholder or by the Shareholder's attorney duly authorized in writing or, if the Shareholder is a company, executed by a duly authorized officer or attorney thereof. The proxy, to be acted upon, must be deposited not less than 48 hours before the Meeting together with an original or certified copy of any power of attorney or other authority under which the proxy was signed (if any) with:

Australia The Company Secretary Level 2, 22 Oxford Close, West Leederville, Western Australia, 6007 Facsimile: +61 8 9381 1068 or	Canada Computershare Investor Services Inc. 100 University Avenue, 9thFloor Toronto, Ontario M5J 2Y1 Facsimile: +1(416) 263-9524 (outside North America) Facsimile: 1-866 249-7775 (inside North America)

A Shareholder who has deposited a proxy may revoke it prior to its use, by instrument in writing executed by the Shareholder or by his attorney duly authorized in writing or, if the Shareholder is a company, executed by a duly authorized officer or attorney thereof in compliance with applicable law, and deposited at the office of Computershare Investor Services Inc. at any time up to and including the last business day preceding the day of the Meeting or with the Company at any time up to prior to the commencement of the Meeting or with the Chairman of the Meeting on the day of, and prior to the start of, the Meeting.

ADVICE TO BENEFICIAL SHAREHOLDERS

Beneficial Shareholders should note that only proxies deposited by Shareholders whose names appear on the records of the Company as the registered holders of Shares in the capital of the Company can be recognized and acted upon at the Meeting. If Shares are listed in an account statement provided to a Shareholder by a broker, then, in almost all cases, those Shares will not be registered in the Shareholder's name on the records of the Company. Such Shares will more likely be registered under the names of the Shareholder's broker or an agent of that broker. In Canada, the vast majority of such shares are registered under the name of CDS Clearing and Depository Services Inc. or its nominee CDS & Co., which acts as nominee for many Canadian brokerage firms. Shares held by brokers or their agents or nominees can only be voted (for, against or abstain for resolutions) upon the instructions of the Beneficial Shareholder. Without specific instructions, brokers and their agents and nominees are prohibited from voting Shares for the broker's clients.

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Therefore, Beneficial Shareholders should ensure that instructions respecting the voting of their Shares are communicated to the appropriate person.

Applicable regulatory policy requires intermediaries/brokers to seek voting instructions from Beneficial Shareholders in advance of shareholders' meetings. Every intermediary/broker has its own mailing procedures and provides its own return instructions to clients, which should be carefully followed by Beneficial Shareholders in order to ensure that their Shares are voted at the Meeting. The form of proxy supplied to a Beneficial Shareholder by its broker (or the agent of the broker) is similar to the form of proxy provided to Registered Shareholders by the Company. However, its purpose is limited to instructing the Registered Shareholder (the broker or agent of the broker) how to vote on behalf of the Beneficial Shareholder. The majority of brokers in Canada now delegate responsibility for obtaining instructions from clients to Broadridge Financial Solutions, Inc. ( Broadridge ). Broadridge typically asks Beneficial Shareholders to return the proxy forms to Broadridge. Broadridge then tabulates the results of all instructions received and provides appropriate instructions respecting the voting of Shares to be represented at the Meeting. A Beneficial Shareholder receiving a Broadridge proxy cannot use that proxy to vote Shares directly at the Meeting. The Broadridge proxy must be returned to Broadridge well in advance of the Meeting in order to have the Shares voted.

Although a Beneficial Shareholder may not be recognized directly at the Meeting for the purposes of voting Shares registered in the name of his broker (or agent of the broker), a Beneficial Shareholder may attend at the Meeting as proxyholder for the Registered Shareholder and vote the Shares in that capacity. Beneficial Shareholders who wish to attend at the Meeting and indirectly vote their Shares as proxyholder for the Registered Shareholder should enter their own names in the blank space on the form of proxy provided to them and return the same to their broker (or the broker's agent) in accordance with the instructions provided by such broker (or agent), well in advance of the Meeting.

People who become Beneficial Shareholders of the Company by acquiring Shares between the Notice Record Date and the Voting Record Date and wish to vote at the Meeting, by proxy or by attending, should contact their broker or intermediary for instructions on how to do so.

VOTING OF PROXIES

All Shares represented at the Meeting by properly executed proxies appointing the Chairman of the Meeting (whether by appointment or default) will be voted on any ballot that may be called for and, where a choice with respect to any matter to be acted upon has been specified in the accompanying form of proxy, the Shares represented by the proxy will be voted in accordance with such instructions.

THE CHAIRMAN OF THE MEETING INTENDS TO VOTE ALL UNDIRECTED PROXIES IN FAVOUR OF ALL OF THE RESOLUTIONS.

The enclosed form of proxy confers discretionary authority upon the persons named therein. If any other business or amendments or variations to matters identified in the Notice of Meeting properly comes before the Meeting, then discretionary authority is conferred upon the person appointed in the proxy to vote in the manner they see fit, in accordance with their best judgement.

At the time of the printing of this Information Circular, the management of the Company knows of no such amendment, variation or other matter to come before the Meeting other than the matters referred to in the Notice of Meeting.

Further instructions in relation to completing the proxy form are included in the proxy form.

INFORMATION CONCERNING THE COMPANY

Voting Shares and Principal Holders Thereof

The Directors have fixed, (i) March 13, 2009 as the record date which entitles Shareholders on record at the close of business on March 13, 2009 to receive the Notice of Meeting, and (ii) 9:30 am (WST) on April 14, 2009 as the record date which entitles Shareholders to vote at the Meeting pursuant to Regulation 7.11.37 of the Corporations Regulations on the basis of one vote for each Share held.

As at the date of this Information Circular, 156,775,036 Shares were issued and outstanding as fully paid.

To the knowledge of the Directors and executive officers of the Company, no person or company beneficially owns, directly or indirectly, or exercises control or direction over, Shares carrying in aggregate 10% or more of the votes attached to all of the issued and outstanding Shares.

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EXECUTIVE COMPENSATION

The following is an extract of the executive compensation disclosure in the Information Circular of the Company dated October 22, 2008 of compensation earned by certain executive officers of the Company and Directors in connection with their office or employment with the Company made in accordance with the requirements of the Canadian Securities Administrators’ National Instrument 51-102 - Continuous Disclosure Obligations . Disclosure is required to be made in relation to Named Executive Officers, being those individuals who served as the Chief Executive Officer, Chief Financial Officer and each of the Company's three most highly compensated executive officers, other than the Chief Executive Officer and Chief Financial Officer, who were serving as executive officers at the end of the most recently completed financial year and whose salary and bonus exceeded C$150,000.

Summary Compensation Table

The following tables and the notes thereto summarize the compensation of the Managing Director, Chief Financial Officer of the Company for the financial years ended June 30, 2008 and June 30, 2007 (the “ Named Executive Officers ”) as required pursuant to Canadian securities laws. Mike Robbins has been the Chief Financial Officer since October 8, 2007 and Peter Batten was the Managing Director from February 13, 2006 until August 26, 2008. There were no other executive officers of the Company or its subsidiaries serving as at the year ended June 30, 2008 whose total salary and bonus exceeded C$150,000 per annum in that financial year.

Name and Principal Position Financial Year	Annual Compensation	Long-Term Compensation Awards Payouts Shares Under Options/SARs Granted (#) Restricted Shares or Restricted Share Units (A$) Long Term Incentive Plan Payouts (A$) All Other Compensation (A$)
	Salary (A$) Bonus (A$) Other Annual Compensation (A$) [1]
Peter Batten Managing Director 2008 2007 Mike Robbins Chief Financial Officer 2008 2007	224,583 152,906 - - 23,928 13,761 108,117 - - - 9,730 -	1,500,000 1,050,000 - - - - - - 150,000 - - - - - - -

[1] Employer statutory 9% superannuation obligations

Option Grants During the Most Recently Completed Financial Year

The following sets out information concerning options granted during the Company’s most recently completed financial year to Named Executive Officers.

				Market Value of
				Shares Underlying
		% of Total	Exercise or	Options/SARs on the
	Shares Under	Options/SARs Granted	Base Price	Date of Grant
	Options/SARs	to Employees in	(per Share)	(per Share)
Name and Principal Position	Granted (#)	Financial Year	(A$)	(A$)	Expiration Date
Peter Batten Managing Director	750,000[1]	14	6.50	3.40	30 November 2010
	750,000[1]	14	7.50	3.40	30 November 2011
Mike Robbins	150,000[2]	3	3.64	2.90	25 January 2013
Chief Financial Officer

[1] Options vest immediately and are exercisable at any time up to the expiry date.

[2] Options issued under the Bannerman Employee Incentive Scheme vest immediately, the terms of the ( Scheme ) are set out in Annexure A to the Notice of Meeting and Information Circular of the Company dated October 22, 2008 and available on SEDAR.

Aggregated Option Exercises During the Most Recently Completed Financial Year and Financial Year-End Option Values

The following table summarizes the number and value of options exercised by each of the Named Executive Officers during the Company’s most recently completed financial year and the number and current value of unexercised options for each of the Named Executive Officers on June 30, 2008.

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Name Securities Acquired on Exercise (#) Aggregate Value Realized (A$)	Unexercised Options/SARs at June 30, 2008	Value of Unexercised in-the-Money Options/SARs at June 30, 2008
	Exercisable (#) Unexercisable (#)	Exercisable (A$) Unexercisable (A$)
Peter Batten Managing Director 1,050,000 1,974,000 Mike Robbins Chief Financial Officer - -	1,500,000 - - 150,000	- - - -

Securities Authorized for Issuance Under Equity Compensation Plans

The following table provides an aggregate summary of all equity compensation plans previously approved by Shareholders. The Company does not have any equity compensation plans not previously approved by Shareholders.

Plan Category Equity compensation plans approved by securityholders Equity compensation plans not approved by securityholders Total	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) 17,312,500 - 17,312,500	Weighted-average exercise price of outstanding options, warrants and rights (b) A$2.52 - A$2.52	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
			6,863,752 - 6,863,752

Equity Compensation Plans

The Company has established a Scheme, the terms of which were set out in Annexure A to the Notice of Meeting and Information Circular of the Company dated October 22, 2008 which is available on SEDAR (www.sedar.com). At an Annual Meeting of Shareholders held November 30, 2007, Shareholders approved the issue of options under the scheme ( Scheme Options ).

A summary of the significant terms of the Scheme are as follows:

a) The maximum number of Scheme Options that can be issued under the Scheme is that number which equals 5% of the then current number of Shares on issue.
b) Directors, employees and consultants of the Company will be eligible to participate in the Scheme. Subject to the Listing Rules, the Board of Directors shall determine the number of Scheme Options (if any) to be allocated to the various Directors, employees and consultants of the Company.
c) Directors of the Company will be entitled to participate in the Scheme subject to all necessary approvals pursuant to the Corporations Act and the Listing Rules being obtained.
d) The issue price of each Scheme Option will be nil.
e) The exercise price of each Scheme Option will be:
a. 125% of the market value (as defined in the Scheme) of the Company’s Shares on the date on which the Scheme Options are issued,
b. A$0.20, or
c. Any greater price determined by the Board,

whichever is greatest.

f) Each Scheme Option entitles the Option holder to subscribe for and be allotted one Share.
g) All Scheme Options have an expiry date determined by the Board and ay any time between 2 and 5 years after the date of grant of the Scheme Options.

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Compensation of Directors

The compensation for former director, Mr. Batten during the 2008 financial year is set out in the Summary Compensation Table above. With respect to payments made to non-executive directors other than the Chairman, each receives A$50,000 per annum, plus 10% goods and services tax. The Chairman receives A$100,000 per annum. Should the non-executive directors provide services over and above those expected of such a position, the Company will provide reasonable remuneration for those services. During the 2008 financial year, A$15,000 was paid to Mr. Jones and A$16,250 was paid to Mr. Tucker for such services.

The directors do not receive additional fees for serving on committees.

Termination of Employment, Change in Responsibilities and Employment Contracts

During the most recently completed financial year, the Company was party to an employment contract with Mr. Batten. The employment contract commenced on February 13, 2006 and expired on termination of Mr. Batten’s employment on August 26, 2008.

The Company is party to an employment contract with Mr. Robbins. The employment contract commenced on October 8, 2007 and expires on termination of Mr. Robbins employment. Mr. Robbins receives $171,675 per annum under the contract. The employment may be terminated by the Company or Mr. Robbins by giving the other 4 weeks written notice. Alternatively, the employment may be terminated by the Company by providing compensation in lieu of the notice period. Termination payments are not payable on resignation or dismissal for serious misconduct. On the occurrence of serious misconduct, the Company may terminate employment at any time. Any options issued as remuneration not exercised before or on the date of termination will lapse.

Please refer to the tables above under the heading “Executive Compensation” for further details.

Composition of the Remuneration Committee

The entire board of directors performs the function of the Remuneration Committee. Mr. Batten was an officer of the Company during the previously completed financial year and a member of the Remuneration Committee during such time. Mr. Jones is a member of the Remuneration Committee and was Managing Director of the Company from August 26, 2008 until November 17, 2008. Mr. Jones also serves as a director of Cazaly Resources Limited.

Report on Executive Compensation

The Company is committed to remunerating its senior executives in a manner that is market competitive and consistent with the best practice as well as supporting the interests of shareholders. Consequently, under the Company’s Senior Executive Remuneration Policy, the remuneration of senior executives may be comprised of the following:

fixed salary that is determined from a review of the market and reflects core performance requirements and expectations;
a performance bonus designed to reward actual achievement by the individual of performance objectives and for materially improved Company performance;
participation in any share/option scheme with thresholds approved by shareholders;
statutory superannuation.

By remunerating senior executives through performance and long-term incentive plans in addition to their fixed remuneration the Company aims to align the interests of senior executives with those of shareholders and increase Company performance. The board of directors may use its discretion with respect to the payment of bonuses, stock options and other incentive payments.

To ensure the retention of high quality people, the Remuneration Committee assesses the appropriateness of the nature and amount of emoluments on a periodic basis by reference to relevant employment market conditions. The Remuneration Committee links the nature and amount of executive emoluments with the Company’s financial and operational performance. In determining competitive remuneration rates, the Remuneration Committee seeks, where appropriate, independent advice on local and international trends and conditions among comparative companies and the industry generally.

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PERFORMANCE GRAPH

The following graph compares the yearly change in the cumulative shareholder return on the Company’s Ordinary Shares with the total cumulative return of both the S&P/TSX Composite Index and the ASX All Ordinaries Index since the Company’s listing on the ASX, assuming A$100 was invested on April 26, 2005. No dividends have been declared on the Ordinary Shares. The Ordinary Share price as set out in the graph does not indicate future performance.

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BMN-AU TSX ASX
$5,500
$4,500
$3,500
$2,500
$1,500
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April 05 July 05 October 05January 06April 06 July 06 October 06January 07April 07 July 07 October 07January 08April 08 July 08
Cumulative Return ($)
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INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED ON

Other than as set forth below, no Director or executive officer of the Company since July 1, 2007 nor any Associate or affiliate of the foregoing persons has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in matters to be acted upon at the Meeting.

Director and Chief Executive Officer, Len Jubber, has an interest in Resolution 6 which relates to compensation payable to him. Neither Len Jubber nor any of his Associates are permitted to vote on Resolution 6.
Director, James McClements has an interest in Resolutions 1, 2, 3 and 4 which relate to convertible notes, shares and options issued or to be issued to RCF. Neither James McClements nor any of his Associates are permitted to vote on Resolutions 1, 2, 3 and 4.

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

Management of the Company is not aware of any material interest, direct or indirect, of any informed person of the Company or any Associate or affiliate of any informed person in any transaction since the commencement of the last completed financial year of the Company, or in any proposed transaction, which has materially affected or will materially affect the Company or any of its subsidiaries.

AUDITOR

The auditor of the Company is Ernst & Young of 11 Mounts Bay Road, Perth, Western Australia, 6000, Australia who was appointed as auditor of the Company effective November 30, 2007.

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EXPLANATORY STATEMENT

FOR THE MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 16 , 2009

The Directors recommend that Shareholders read in full this Explanatory Statement in conjunction with the accompanying Notice of Meeting and Information Circular.

Explanatory Statement

This Explanatory Statement has been prepared for the information of Shareholders of the Company in relation to the business to be conducted at the Meeting. The purpose of this Explanatory Statement is to provide Shareholders with all information known to the Company which is material to a decision on how to vote on the Resolutions in the accompanying Notice of Meeting and Information Circular.

1 Company overview

The Company is an Australian based uranium exploration and mine development company with interests in two properties in Namibia and a number of properties in Botswana and Australia. Its principal and most significant asset is its 80% interest (held via BMRN, being an 80% subsidiary of the Company) in the Etango Anomaly A Prospect in the Etango Exclusive Prospecting Licence Area ("EPL 3345") located in Namibia ( Etango Project Tenement ).

The Company’s shares are listed for trading on the ASX, the TSX and the NSX.

The current Directors of the Company are:

Mr Geoffrey Stanley - Non-executive Chairman Mr Len Jubber - Chief executive Officer Mr David Tucker - Non-executive Director Mr Clive Jones - Non-executive Director Mr Alastair Clayton - Non-executive Director Mr James McClements - Non-executive Director

2 Background

2.1 Overview of RCF Transaction

On November 28, 2008, the Company entered into a Convertible Note Facility Agreement with RCF ( Convertible Note Facility Agreement ) for the provision by RCF of a convertible note facility of up to A$20,000,000 (the Facility ). The purpose of the Facility is fund the feasibility study of the Company’s Etango Project and for general working capital requirements. Subsequent to entry into the Convertible Note Facility Agreement, RCF has agreed to permit a variation of the use of part of the funds to enable the Company to settle the cash portion of the Savanna litigation (referred to in section 2.3 of this Explanatory Statement).

The Facility is secured by a fixed and floating charge granted by the Company over its assets and undertaking and a share pledge and cession over the Company’s 80% shareholding in BMRN.

The key commercial terms of the Facility are summarised below:

(a) The Facility may be drawn in 2 tranches of A$10 million each (being called the First Tranche and the Standby Tranche respectively).
(b) The First Tranche was drawn on December 16, 2008 ( First Tranche Drawdown Date ). The drawdown of the Standby Tranche is subject to, and conditional upon, among other things, Shareholders approving the issue to RCF of the maximum number of Shares that RCF would be entitled to receive consequent upon the exercise by RCF of certain of

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its conversion rights under the Convertible Note Facility Agreement, including an approval under item 7 of section 611 of the Corporations Act.

(c) The Company is required to issue 500,000 Shares ( Establishment Fee Shares ) to RCF for the establishment of the Facility as a condition precedent to the drawdown of the First Tranche. Those Shares were issued to RCF on December 16, 2008.
(d) The Facility is to be used for the purposes described above.
(e) Interest is payable on the Principal Outstanding at a fixed coupon rate of 8% per annum payable quarterly in arrears on each Quarterly Date and on the Maturity Date ( Interest Payment Date ).
(f) The Principal Outstanding under the Facility is repayable in cash 3 years from the date of drawdown of the First Tranche ( Maturity Date ).
(g) RCF may, at any time prior to the Maturity Date, elect to convert all or part of the Principal Outstanding in respect of the First Tranche ( First Tranche Principal Outstanding ) to Shares at a conversion price of A$0.612 per Share ( First Tranche Conversion Price ).
(h) RCF may, at any time prior to the Maturity Date, elect to convert all or part of the Principal Outstanding in respect of the Standby Tranche ( Standby Tranche Principal Outstanding ) to Shares at a conversion price that is the lower of A$0.612 per Share and the amount that represents a 20% premium to the 30 day volume weighted average price ( VWAP ) of Shares at the time of the drawdown of the Standby Tranche, subject to a floor price of A$0.45 ( Standby Tranche Conversion Price ).
(i) The Company may, at any time after the first anniversary of the First Tranche Drawdown Date, elect to convert all of the First Tranche Principal Outstanding to Shares at an issue price per Share equal to the First Tranche Conversion Price provided that:
(i) the rolling 20 day VWAP is equal to, or more than, 3 times the amount of the First Tranche Conversion Price; and
(ii) the average daily volume of Shares traded on ASX during that 20 day period is not less than 2% of the total number of Shares to be issued to RCF upon such a conversion.
(j) The Company may, at any time after the First Tranche Drawdown Date, elect to convert all of the Standby Tranche Principal Outstanding to Shares at an issue price per Share equal to the Standby Tranche Conversion Price provided that:
(i) the rolling 20 day VWAP is equal to, or more than, 3 times the amount of the Standby Tranche Conversion Price; and
(ii) the average daily volume of Shares traded on ASX during that 20 day period is not less than 2% of the total number of Shares to be issued to RCF upon such a conversion.
(k) The Company may elect to prepay all of the First Tranche Principal Outstanding and the Standby Tranche Principal Outstanding at any time up to 60 days prior to the Maturity Date. If the Company elects to make that prepayment, then it is also required to issue to RCF a number of Options determined as follows:
(i) with respect to the prepayment of the First Tranche Principal Outstanding, the number of Options determined by dividing the First Tranche Principal Outstanding by the First Tranche Conversion Price; and
(ii) with respect to the prepayment of the Standby Tranche Principal Outstanding, the number of Options determined by dividing the Standby Tranche Principal Outstanding by the Standby Tranche Conversion Price,

( Prepayment Options ). The terms of the Prepayment Options and an estimate of their value are set out in Schedule 2 and Schedule 3.

(l) The Company may elect to satisfy its obligation to pay interest under the Facility by issuing Shares to RCF. If the Company elects to exercise this option, the number of Shares to be issued is equal to the amount of interest due on the applicable Interest Payment Date, divided by an issue price equal to the 5 day VWAP on the Trading Day immediately preceding that Interest Payment Date ( Interest Conversion Price ).

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The table below describes the percentage relevant interest which RCF would acquire in Bannerman (assuming full drawdown of A$20 million and on the basis of the other assumptions set out in the notes) as a result of the various transactions contemplated by the Convertible Note Facility Agreement.

	Existing Capital Structure	Existing Capital Structure		Post Transaction	Post Transaction
	Number of Shares	Shareholding%	Number of Shares	Shareholding%	Shareholding Fully Diluted
Existing shareholders RCF’s existingshares	149,675,036 7,100,000	95.47% 4.53%	149,675,036 7,100,000	74.20% 3.52%	76.43% 3.22%
RCF’s shares from interest receivedvia theissue ofshares1			6,384,977	3.16%	2.89%
RCF’s shares uponconversion2			38,562,091	19.12%	17. 46%
Total Undiluted Shares	156,775,036	100%	201,722,104	100%	100%
Options held by parties other than RCF3 Optionsheld byRCF	19,112,500 -		19,112,500 -
Total Diluted Shares3	175,887,536		220,834,604

Notes:

The Interest element assumes that Bannerman elects to satisfy its interest obligations on both the First Tranche and the Standby Tranche through the issue of shares for the full term of the Facility. The number of shares has been calculated based on the 5-day VWAP up to February 20, 2009 (A$0.71), an 8% coupon rate on the full amount of the Facility (A$20 million), with interest payments for the First Tranche being paid quarterly over 3 years, and interest payments for the Standby Tranche being paid quarterly over 2 years and 8 months (assuming shareholders approve Resolution 4).
The conversion element assumes that the Facility is held for the full 3-year term and the conversion option is elected to convert the full principal outstanding of the Facility to shares, resulting in RCF receiving 16,339,869 shares under the First Tranche at the conversion price of A$0.612 per share, and then receiving 22,222,222 shares being the maximum number of shares available using the floor conversion price of A$0.45 per share under the Standby Tranche.
Does not include 5,500,000 options which are the subject of Resolution 6.

As can be seen from the table, on the basis of the assumptions used in that table, the total percentage interest that would be acquired by RCF would be 25.80%. As RCF’s percentage holding may exceed 20%, Resolution 2 seeks shareholder approval of the Convertible Note Facility Agreement under the takeover provisions of the Corporations Act.

It should be noted that the Company’s share price at the time it elects (if at all) to meet interest obligations by the issue of shares, will impact on the number of shares to be issued to RCF and therefore the percentage relevant interest held by RCF in the Company.

RCF is not a related party.

2.2 Independent Expert’s Report

The Company has obtained an independent expert’s report ( Independent Expert’s Report ) from PKF Corporate Advisory Services (WA) Pty Ltd ( Independent Expert ), a copy of which is included at Annexure A to this document. The Independent Expert’s Report considers Resolution 2 in relation to the transaction described above with RCF. The Company urges Shareholders to carefully read and consider the Independent Expert’s Report to understand the scope of the report, the methodology applied and sources of information and assumptions made.

In summary, the Independent Expert’s Report concluded the proposed issue of the Shares is not fair but reasonable to the nonassociated shareholders of the Company.

2.3 Overview of Settlement Agreement

As previously announced, the Company and BMRN entered into a settlement agreement with Savanna and associated parties of Savanna on December 17, 2008 ( Settlement Agreement ) in relation to proceedings bought by Savanna in respect of the Etango Project Tenement.

Under the Settlement Agreement, in consideration for the termination of the proceedings Savanna is entitled to receive A$9.2 million (A$3.5 million cash and 9,500,000 fully paid ordinary Shares in the Company, with a value of A$5.7 million using a share price of A$0.60).

The Shares will be issued in two tranches:

(a) The first tranche of 5,500,000 Shares were issued to Savanna on January 12, 2009 on completion of the Settlement Deed (Savanna filed a notice of discontinuance and withdrawal with the High Court of Namibia in respect of the

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proceedings, and withdrew other applications in respect of EPL 3045 and related areas). On January 12, 2009, the first cash instalment of A$3 million was also paid.

(b) The second tranche of 4,000,000 Shares will be issued to Savanna on the issue to BMRN of a Mining Licence in relation to the Etango Project Tenement ( Mining Licence ). At that time, the second cash instalment of A$500,000 also becomes payable.

The issue of the second tranche of Shares is subject to the approval of the Company’s Shareholders (as provided in Resolution 8). If Shareholder approval is not obtained, then the Company and BMRN are obliged to pay Savannah a compensatory amount in cash, assessed by reference to the market value (on a volume weighted basis) of 4,000,000 Shares, on the grant of the Mining Licence ( Compensation Payment ).

The Compensation Payment together with the second cash instalment of A$500,000 is also required to be made if:

(c) BMRN sells or otherwise disposes of the Etango Project Tenement; or
(d) there is a change in control (being more than 50% of the issue shares) of the Company or BMRN,

prior to the grant of the Mining Licence.

The settlement of the Savanna legal proceedings gives certainty with respect to BMRN’s title to the Etango Project Tenement and will enable the Company to progress development and funding options for the Etango Project without the overhang of those proceedings. Consequently, the Directors unanimously recommend that Shareholders vote in favour of Resolution 8.

3 Resolution 1 – Ratification of the issue of a convertible note (First Tranche) and Establishment Fee Shares

3.1 General

Listing Rule 7.1 requires the prior approval of Shareholders for an issue of Equity Securities if the Equity Securities will, when aggregated with all Equity Securities issued by the Company during the previous 12 months, exceed 15% of the number of Shares on issue at the commencement of that 12 month period.

Listing Rule 7.4 provides that an issue of Equity Securities made without approval under Listing Rule 7.1 will be treated as having been made with approval for the purpose of Listing Rule 7.1 if the issue did not breach Listing Rule 7.1 and the Shareholders subsequently approve it and therefore restore the Company’s ability to issue Equity Securities within the 15% annual limit under Listing Rule 7.1.

The First Tranche cash advance made by RCF has been provided to the Company on the basis that it is convertible at a conversion price per share of A$0.612, within the Company’s existing 15% annual limit under Listing Rule 7.1.

3.2 Resolution 1

Resolution 1 requires Shareholders to ratify and approve the issue of the following Equity Securities under the Convertible Note Facility Agreement:

(a) the arrangements contemplated in the Convertible Note Facility Agreement that give RCF or the Company, as applicable, the right to convert the First Tranche cash advance to Shares; and
(b) the Establishment Fee Shares for the provision of the Facility.

In accordance with Listing Rule 7.5, the following information is provided in relation to the issue of the Equity Securities described above:

(a) Conversion of the First Tranche cash advance by RCF or the Company

(i) Number of securities allotted

Up to an aggregate of 16,339,869 Shares (in one or a series of allotments).

(ii) Price at which the securities will be issued
0.612 per Share.

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(iii) Terms of the securities

The Shares issued upon the exercise of the conversion rights by RCF or the Company will be fully paid ordinary shares of the Company ranking equally with all other Shares of the Company.

(iv) Names of the allottees or the basis on which allottees were determined

All Shares will be issued to RCF.

(v) Use (or intended use) of the funds raised

The Facility is to be used to fund the completion of a bankable feasibility study in relation to the Etango Project, to fund the cash portion of the settlement of the Savanna litigation and for the Company’s general working capital requirements.

(vi) Voting exclusion statement

A voting exclusion statement for Resolution 1 is included in the Notice of Meeting.

(b) Establishment Fee Shares
(i) Number of securities allotted

500,000 Shares.

(ii) Price at which the securities were issued

The Establishment Fee Shares were issued as consideration for the provision of the Facility.

(iii) Terms of the securities

The Establishment Fee Shares are fully paid ordinary shares of the Company ranking equally with all other ordinary shares of the Company.

(iv) Names of the allottees or the basis on which allottees were determined

The Establishment Fee Shares were issued to RCF.

(v) Use (or intended use) of the funds raised

The Establishment Fee Shares were issued as consideration for the provision of the Facility which is to be used to fund the bankable feasibility study in relation to the Etango Project, to fund the cash portion of the settlement of the Savanna litigation and for the Company’s general working capital requirements.

(vi) Voting exclusion statement

A voting exclusion statement for Resolution 1 is included in the Notice of Meeting.

4 Resolution 2 – Approval of acquisition of Shares by RCF upon conversion of the Standby Tranche

4.1 General

Resolution 2 requires Shareholder approval under item 7 of section 611 of the Corporations Act for the issue of Shares exceeding 20% of the Company’s Share Capital to RCF. It is a condition precedent of the provision of the Standby Tranche of A$10,000,000 under the Convertible Note Facility Agreement that the approval contemplated by this resolution is obtained.

4.2 Corporations Act item 7 section 611 approval

Section 606(1) of the Corporations Act prohibits the acquisition by a person of a relevant interest in issued voting shares if that person’s or someone else’s voting power in the Company increases from 20% or below to more than 20%.

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If RCF, or the Company, exercises some or all of its conversion rights under the Convertible Note Facility Agreement, RCF’s interest in issued voting shares in the Company may exceed 20% of the Share Capital.

Section 611 contains a list of acquisitions which are exempt from the prohibition in section 606(1). Item 7 provides that an acquisition which is approved previously by a resolution passed at a Meeting of the company in which the acquisition is made and complies with the specified requirements, which are set out below, is exempt from the prohibition.

(a) No votes are cast in favour of the resolution by the person proposing to make the acquisition and their Associates or the persons (if any) from whom the acquisition is to be made and their Associates .

A voting exclusion statement for Resolution 2 is included in the Notice of Meeting to this effect.

(b) The Shareholders were given all information known to the person proposing to make the acquisition or their Associates, or known to 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

All Shares will be issued to RCF.

(ii) The maximum extent of the increase in that person’s voting power in the Company that would result from the acquisition

The maximum number of Shares that may be issued on conversion of the Standby Tranche cash advance, is 22,222,222 Shares at A$0.45 per Share. It should be noted that the number of Shares that may be issued to RCF will reduce as the conversion price increases.

(iii) The voting power that person would have as a result of the acquisition

At the date of this notice of meeting, RCF’s voting power is 4.53%, representing 7,100,000 Shares.

If RCF, or the Company, as applicable elects to convert the First Tranche and the Standby Tranche, the maximum number of Shares that RCF may be entitled to is 38,562,091 (assuming the Standby Tranche conversion price is the minimum A$0.45 per Share).

The percentage which this shareholding represents will vary depending on a number of assumptions – see the table in section 2.1 for further details – and may exceed 20%.

(iv) The maximum extent of the increase in the voting power of each of that person’s Associates that would result from the acquisition

No Associates of RCF will acquire voting power as a result of the acquisition.

(v) The voting power that each of the that person’s Associates would have as a result of the acquisition

No Associates of RCF will acquire voting power as a result of the acquisition.

4.3 ASIC Regulatory Guide 74

ASIC Regulatory Guide 74 states that shareholders of a company are entitled, as a minimum, to the information in paragraph 4.2 above and the following additional information:

(a) The identity of the allottee or purchaser and any person who will have a relevant interest in the Shares to be allotted or purchased

RCF.

(b) Full particulars (including the number and percentage) of the Shares in the Company to which the allottee or purchaser is or will be entitled immediately before and after the proposed acquisition

Please refer to paragraph 4.2(b)(ii) above.

(c) The identity, associations (with the allottee, purchaser or vendor, and with any of their Associates) and qualifications of any person who it is intended will become a Director if Shareholders agree to the allotment or purchase

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Mr James McClements, being RCF’s nominee, has been appointed as a director of the Company.

(d) A statement of the allottee’s or purchaser’s intention regarding the future of the Company and if Shareholders agree to the allotment or purchase, and in particular:
(i) any intention to change the business of the Company

RCF has no intention to change the business of the Company or its subsidiaries.

(ii) any intention to inject further capital into the Company, and if so how

At this stage, RCF has no intention to inject any further capital into the Company.

(iii) the future employment of the present employees of the Company

RCF does not intend to make any particular decisions with regard to employees of the Company and its subsidiaries. It is envisaged that the Company and its subsidiaries will employ persons as necessary to meet the needs of the Company and its subsidiaries.

(iv) any proposal whereby any property will be transferred between the Company and the allottee, vendor or purchaser or any person associated with any of them

There are no proposals to transfer any property between the Company and RCF.

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

There is no intention to redeploy the fixed assets of the Company.

(e) Particulars of the terms of the proposed allotment or purchase and any other contract or proposed contract between the allottee or purchaser and the Company or vendor or any of their Associates which is conditional upon, or directly or indirectly dependent on, Shareholders’ agreement to the allotment or purchase

RCF is not obliged to provide the Standby Tranche until the conditions precedent to the drawdown of that Tranche have been satisfied, which include the Shareholders’ approval which is the subject of Resolution 2.

(f) When the allotment is to be made or the purchase is to be completed

The allotment is to be made in accordance with the terms and conditions of the Convertible Note Facility Agreement.

(g) An explanation of the reasons for any proposed allotment

The reasons for the proposed allotments are set out in the Convertible Note Facility Agreement and the commercial arrangements agreed between the Company and RCF are summarised in paragraph 2.1 above.

(h) The interests of the Directors in the Resolution

Mr McClements holds a management position with RCF. Other than that position, Mr McClements is not directly interested in the resolution.

(i) The identity of the Directors who approved or voted against the proposal to put the Resolution to Shareholders

All Directors voted in favour of the Resolution save for Mr McClements who abstained from voting due to his interest in the Resolution.

(j) The recommendation or otherwise of each Director as to whether non-associated Shareholders should agree to the acquisition, and the reasons for that recommendation or otherwise

The Directors (excluding Mr McClements) unanimously recommend that non-associated Shareholders vote in favour of the Resolution.

(k) Any intention of the acquirer to change significantly the financial or dividend policies of the Company

RCF has no present intention of significantly changing the financial or dividend policies of the Company.

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(l) An analysis of whether the proposal is fair and reasonable when considered in the context of the interests of, the Shareholders other than those involved in the proposed allotment or purchase or associated with such persons

An analysis is contained in the Independent Expert’s Report in which the Independent Expert has concluded that the acquisition of shares by RCF under the Convertible Note Facility Agreement is not fair but reasonable to the nonassociated shareholders of Bannerman.

5 Resolution 3 – Approval of acquisition of Shares by RCF upon exercise of Prepayment Options, if Company elects to prepay the First Tranche or the Standby Tranche

Resolution 3 deals with the circumstance where the Company elects to prepay the Facility early. If this does not occur, the options referred to in Resolution 3 will not be issued.

The Convertible Note Facility Agreement provides that the Company may prepay the First Tranche and/or the Standby Tranche by giving 10 business days prior notice to RCF. If the Company elects to prepay an amount, it is required to give RCF, by way of a prepayment fee, a number of unlisted options to subscribe for Shares (the Prepayment Options, as referred to in paragraph 2.1(k)), equivalent to the number of Shares that would have been issued to RCF if RCF had converted the amount prepaid by the Company in accordance with RCF’s rights of conversion. The exercise price of the Prepayment Options will be equal to the applicable conversion price for the amount prepaid, for a term of up to December 16, 2011 (being the balance of the term of the Facility if it had not been prepaid).

The intention of the prepayment fee is to ensure that RCF is compensated for undertaking the risks associated with financing the creation of the feasibility study and such compensation is not removed as a consequence of an election by the Company to prepay the Facility, in circumstances that provide the Company with the flexibility that should it either elect to refinance or repay the Facility, it may do so. The Company believes that the arrangements reached in relation to the payment of the prepayment fee provide the Company with sufficient flexibility whilst giving RCF appropriate compensation for facilitating the preparation of the feasibility study.

The maximum number of Prepayment Options that may be issued to RCF is 38,562,091. Of these, 16,339,869 Options will have an exercise price of A$0.612 per Share and the balance will have an exercise price equal to the conversion price applicable to the Standby Tranche.

The terms of the Prepayment Options and an estimate of their value are set out in Schedule 2 and Schedule 3.

If RCF exercises all of the Prepayment Options, it could obtain the same relevant interest contemplated by Resolution 2. Therefore, the information applicable to the acquisition of a relevant interest set out with respect to Resolution 2 should also be considered as relevant to the issue of the Prepayment Options.

6 Resolution 4 – Approval of acquisition of Shares by RCF, if the Company elects to satisfy interest obligations under the Convertible Note Facility Agreement by the issue of Shares

The Convertible Note Facility Agreement provides that interest is calculated at 8% per annum fixed during the term of the Facility. The maximum amount of interest payable is therefore A$4,800,000 during the term assuming the Facility is fully drawn to A$20,000,000. As at the date of this Notice of Meeting, the Standby Tranche has not been drawn and drawdown remains at the element of Bannerman.

Resolution 4 seeks approval from the shareholders to enable the Company to issue Shares to RCF to satisfy its interest obligations under the Convertible Note Facility Agreement. Shares will be issued at the 5 day VWAP per Share ending on the applicable Interest Payment Date. The Company has undertaken not to announce or commence any buy-back or other market activity during that 5 day period and RCF has undertaken not to trade during that period.

Given the Company does not presently generate cashflow, having the option to satisfy the interest obligations under the Convertible Note Facility Agreement by issuing Shares will enable the Company to apply its cash reserves towards the preparation of the feasibility study for the Etango Project, to fund the cash portion of the Savanna Settlement and for general working capital purposes.

The information applicable to the acquisition of a relevant interest set out with respect to Resolution 2 should also be considered as relevant to the issue of Shares to satisfy interest obligations under the Convertible Note Facility Agreement.

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7 Resolution 5 – Equity capital raising

7.1 General

The Company may wish to undertake an equity capital raising to raise further funds, although no decision has yet been made. In order to maintain maximum flexibility to do so, and to preserve the Company’s ability to issue Equity Securities within the 15% annual limit under Listing Rule 7.1, the Company seeks Shareholder approval under Listing Rule 7.1 for a proposed equity capital raising involving the issue of Shares and, at the discretion of the Company, Warrants. The number of Equity Warrants that may be issued shall not exceed the number of Shares issued and will be on the terms set out in Schedule 6.

This raising will provide the Company with increased financial flexibility. In particular, it would give the Company the option of not drawing on the Standby Tranche of the RCF Facility and would enable the Company to more aggressively pursue extensional resource and exploration drilling programs. It would also supplement the Company’s working capital requirements following the recent litigation settlement with Savanna.

7.2 Listing Rule 7.1 approval

Listing Rule 7.1 requires the Company to obtain Shareholder approval in order to issue Equity Securities representing more than 15% of the Company’s Shares on issue (unless one of the exceptions in Listing Rule 7.2 applies). The Company’s proposed equity capital raising falls within this requirement (none of the exceptions apply).

Under Listing Rule 7.3, the notice of meeting to approve the issue of the Equity Securities must include certain information, which information is set out below.

(a) The maximum number of Equity Securities the entity is to issue (if known) or the formula for calculating the number of Shares the entity is to issue:

The maximum number of Shares to be allotted will be an amount which is sufficient to raise up to A$30 million based on the price per Share determined by the Directors.

Warrants

The maximum number of Warrants to be allotted will not exceed the number of Shares to be allotted, as contemplated in Resolution 5.

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

It is anticipated that, subject to Shareholder approval, the Shares and Warrants will be issued on one date and in any event no later than 90 days after the date of the Meeting, or such later date as approved by ASX by way of ASX granting a waiver under the Listing Rules.

The issue price of the Equity Securities, which must be either a fixed price or a minimum price

Under Listing Rule 7.3.3, the minimum price may be fixed or a stated percentage that is at least 80% of the average market price for securities in that class. The average is calculated over the last 5 days on which sales in the securities were recorded before the day on which the issue was made or, if there is a prospectus, Product Disclosure Statement or offer information statement relating to the issue, over the last 5 days on which sales in the securities were recorded before the date the prospectus, Product Disclosure Statement or offer information is signed.

The price at which the Shares and Warrants will be issued will be determined by the Directors based on market conditions at the time of issue. Because of the current volatility in market conditions it is not possible for the Directors to determine the issue price as at the date of this Explanatory Statement being circulated to Shareholders.

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

Investors who participate in a placement or a rights issue by the Company, or a combination of those persons.

(e) The terms of the Equity Securities

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The Shares will rank equally in all respects with existing Shares on issue.

The Warrants shall be issued for a maximum of two years from their date of issue, and the exercise price of the Warrants shall not be less than the issue price of the Shares, the subject of Resolution 5. The detailed terms of the Warrants are set out in Schedule 6.

(f) The intended use of the funds raised

The funds are to be raised by the Company for the following purposes:

(i) Feasibility and development work associated with the Etango uranium project;
(ii) Exploration expenditure
(iii) Acquisition opportunities that may arise from time to time (although none are currently in the contemplation of the Company) and
(iv) general working capital requirements of the Company..
(g) The dates of allotment or a statement that allotment will occur progressively

See paragraph 7.2(b).

(h) A voting exclusion statement

A voting exclusion statement for Resolution 5 is included in the Notice of Meeting.

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

Not applicable

8 Resolution 6 – Issue of Options to Mr Len Jubber

8.1 General

Resolution 6 requires Shareholder approval for the issue of up to 5,500,000 Options to Mr Len Jubber, the Chief Executive Officer of the Company on the terms and conditions set out in Schedule 4 to this Explanatory Memorandum and in accordance with:

(a) Listing Rule 10.11; and
(b) section 208 of the Corporations Act.

As announced by the Company on November 17, 2008, Mr Len Jubber has recently been appointed the Chief Executive Officer and Managing Director of the Company.

Mr Jubber’s remuneration package consists of fixed remuneration of A$400,000 per annum (inclusive of GST and superannuation), increasing to $462,500 (inclusive of GST and superannuation) on completion of a positive BFS and increasing to $525,000 (inclusive of GST and superannuation) upon completion of development financing. In addition to fixed remuneration, the Company proposes to grant to Mr Jubber up to 5,500,000 Options to subscribe for Shares, on the following basis:

(c) 2,500,000 Options vesting 1 year from Mr Jubber’s commencement of employment with the Company, but subject to finalisation of a pre-feasibility study for the Etango Project, with an exercise price of A$0.434 (being 125% of the 30 day VWAP of A$0.347 per Share on November 14, 2008) ( Tranche 1 Exercise Price );
(d) 1,500,000 Options vesting 2 years from Mr Jubber’s commencement of employment with the Company, but subject to the board of Directors of the Company approving a positive bankable feasibility study for the Etango Project, with an exercise price of A$0.543 (being 125% of the Tranche 1 Exercise Price) ( Tranche 2 Exercise Price ); and

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(e) 1,500,000 Options vesting 3 years from Mr Jubber’s commencement of employment with the Company, but subject to the Company finalising project development finance for the Etango Project, with an exercise price of A$0.678 (being 125% of the Tranche 2 Exercise Price) ( Trance 3 Exercise Price ).

All Options issued to Mr Jubber will expire 3 years from the date of vesting.

8.2 Listing Rule 10.11 approval

Listing Rule 10.11 requires the Company to obtain Shareholder approval in order to issue Options to a related party (unless an exception applies). Mr Jubber, being a director of the Company, is a related party for the purposes of Listing Rule 10.11.

Listing Rule 7.1 also requires the Company to obtain Shareholder approval in order to issue Equity Securities representing more than 15% of the Company’s Shares on issue (unless one of the exceptions in Listing Rule 7.2 applies). Exception 14 in Listing Rule 7.2 is an issue made with Shareholder approval under Listing Rule 10.11 and provides that if approval is given under Listing Rule 10.11, approval is not required under Listing Rule 7.1.

Under Listing Rule 10.13, the notice of meeting to approve the issue of the Options must include certain information, which information is set out below.

(a) The name of the person

Mr Len Jubber.

(b) The maximum number of Options to be issued (if known) or the formula for calculating the number of Options to be issued to the person

An aggregate of 5,500,000 Options in the Company.

(c) The date by which the Company will issue the Options, which must not be more than 1 month after the date of the meeting

The Company intends to issue the Options within 1 month after the date of the Meeting.

(d) If the person is not a Director, a statement of the relationship between the person and the Director that requires that requires the approval to be obtained

Mr Jubber is a director of the Company.

(e)
The issue price of the Options and a statement of the terms of the issue

The Company will issue the Options to Mr Jubber at no cost. The Options have the following vesting dates, exercise prices per Share and conditions:

(i) 2,500,000 Options vesting 1 year from Mr Jubber’s commencement of employment with the Company, but subject to finalisation of a pre-feasibility study for the Etango Project, with an exercise price of A$0.434 (being 125% of the 30 day VWAP of A$0.347 per Share on November 14, 2008) ( Tranche 1 Exercise Price );
(ii) 1,500,000 Options vesting 2 years from Mr Jubber’s commencement of employment with the Company, but subject to the board of directors of the Company approving a positive bankable feasibility study for the Etango Project, with an exercise price of A$0.543 (being 125% of the Tranche 1 Exercise Price) ( Tranche 2 Exercise Price ); and
(iii) 1,500,000 Options vesting 3 years from Mr Jubber’s commencement of employment with the Company, but subject to the Company finalising project development finance for the Etango Project, with an exercise price of A$0.678 (being 125% of the Tranche 2 Exercise Price) ( Tranche 2 Exercise Price) .

All Options issued to Mr Jubber expire 3 years from the date of vesting.

(f) A voting exclusion statement

A voting exclusion statement for Resolution 6 is included in the Notice of Meeting.

(g) The intended use of the funds raised The general working capital requirements of the Company.

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8.3 Corporations Act section 208 approval

Section 208 of the Corporations Act requires the Company to obtain Shareholder approval to give a financial benefit to a related party (unless an exception applies), which benefit must be given within 15 months after the approval. Mr Jubber, being a director of the Company, is a related party for the purposes of the Corporations Act. The issue of Options to Mr Jubber is a benefit conferred on Mr Jubber and requires approval under section 208 of the Corporations Act.

Under section 218(1)(b) of the Corporations Act, an explanatory statement satisfying section 219 of the Corporations Act must be lodged at least 14 days before the notice of meeting is given. Under section 219 of the Corporations Act, the explanatory statement must include certain information, which information is set out below.

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

Mr Len Jubber.

(b) The nature of the financial benefits

The issue of 5,500,000 Options as more particularly described in paragraph 8.2(e) above.

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

The Board has concluded that the totality of Mr Jubber’s remuneration package, including the equity component of 5,500,000 Options now to be considered for approval by Shareholders, is fair and reasonable in the circumstances of the Company, in light of Mr Jubber’s management experience and knowledge of the mineral resource industry. The Directors recommend the Shareholders vote in favour of this resolution.

The Directors making a recommendation to Shareholders do not have a material personal interest in the outcome of Resolution 6. Mr Jubber abstains from making a recommendation as he has a material personal interest in the outcome of the Resolution 6.

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

Each Director (other than Mr Jubber) does not have an interest in the outcome of the proposed resolution.

Mr Jubber has a material personal interest in the outcome of the proposed resolution.

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

Section 219(2) of the Corporations Act states that an example of this kind of information is information about what, from an economic and commercial view, are the true potential costs and detriments of, or resulting from, giving financial benefits as permitted by the proposed resolution, including opportunity costs, taxation consequences (such as liability to fringe benefits tax) and benefits forgone by whoever would give the benefits.

(i) The Company will disregard any votes cast on Resolution 6 by Mr Jubber and any Associate of Mr Jubber. However, the Company need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form or it is cast by a 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.
(ii) The Company will not loan Mr Jubber money in relation to the issue of the Options.
(iii) Mr Jubber’s fixed remuneration package is A$400,000 per annum (inclusive of GST and superannuation), which will increase in accordance with the achievement of certain specified milestones.
(iv) An estimate of the value of the Options is set out in Schedule 5 to this Explanatory Memorandum
(v) Mr Jubber currently holds 100,000 Shares and Nil Options.
(vi) Should Mr Jubber exercise the Options issued in accordance with Resolution 6, his interest in the Company will increase to 3.57% (assuming no prior exercise of conversion rights by RCF or the Company). In turn, the

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remaining Shareholders will have their existing interests diluted in proportion to the additional 5,500,000 Shares that will be issued on exercise of these Options.

(vii) The amount that would be raised by the exercise of all Options by Mr Jubber is set out as follows:

(vii) The amount that would be raised by the exercise of all Options b	y Mr Jubber is set out as follow	s:
Options	Number of Shares upon exercise of all Options	Amount raised
2,500,000 Options at exercise price of A$0.434	2,500,000	A$1,085,000
1,500,000 Options at exercise price of A$0.543 (being 125% of A$0.434)	1,500,000	A$814,500
1,500,000 Options at exercise price of A$0.678 (being 125% of A$0.542)	1,500,000	A$1,017,000
TOTAL	5,500,000	A$2,916,500

9 Resolution 7 – Ratification of issue of first tranche of Shares to Savanna

9.1 General

9.2 Resolution 7

Resolution 7 requires Shareholders to ratify and approve the issue of 5,500,000 Shares in the Company to Savanna, pursuant to the terms of the Settlement Agreement.

This is to ensure that Listing Rule 7.1 does not limit the Company’s ability to issue further Equity Securities in the next 12 months, and to restore the Company’s ability to issue Equity Securities within the 15% annual limit under Listing Rule 7.1.

In accordance with Listing Rule 7.5, the following information is provided in relation to the issue of the Shares described above.

(a) Number of securities allotted

5,500,000 Shares.

(b) Price at which the securities were issued

The Shares were issued as consideration for the performance by Savanna of certain obligations as provided in the Settlement Agreement (see paragraph 2.3(a) of this Explanatory Statement).

The value ascribed to all of the Shares being issued to Savanna pursuant to the Settlement Agreement (being 9,500,000 Shares) is A$5,700,000 based on a share price of A$0.60 at the time the Company entered into negotiations with Savanna .

The Shares are fully paid ordinary shares of the Company ranking equally with all other ordinary shares of the Company.

(d) Names of the allottees or the basis on which allottees were determined

The Shares were issued to Savanna.

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(e) Use (or intended use) of the funds raised

As stated above, the Shares were issued as consideration for the performance by Savanna of certain obligations as provided in the Settlement Agreement (see paragraph 2.3(a) of this Explanatory Statement).

(f) Voting exclusion statement

A voting exclusion statement for Resolution 7 is included in the Notice of Meeting.

10 Resolution 8 – Issue of second tranche of Shares to Savanna

10.1 General

Resolution 8 seeks Shareholder approval under Listing Rule 7.1 for the issue of Shares representing more than 15% of the Company’s shares on issue.

10.2 Listing Rule 7.1 approval

Listing Rule 7.1 requires the Company to obtain Shareholder approval in order to issue Shares representing more than 15% of the Company’s Shares on issue (unless one of the exceptions in Listing Rule 7.2 applies). The Company’s proposed issue of 4,000,000 Shares in the Company to Savanna, pursuant to the terms of the Settlement Agreement, falls within this requirement (none of the exceptions apply).

Under Listing Rule 7.3, the notice of meeting to approve the issue of the Shares must include certain information, which information is set out below.

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

Pursuant to the Settlement Agreement, the maximum number of Shares to be allotted will be 4,000,000.

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

Pursuant to the Settlement Agreement, the Shares will be issued on or about the date the Mining Licence is granted. As it is likely that this date may be more than 3 months after the date of the meeting, the Company has obtained a waiver from ASX extending the 3 month period to 12 months.

The Shares are being issued as consideration for the performance by Savanna of certain obligations as provided in the Settlement Agreement (see paragraph 2.3(b) of this Explanatory Statement).

The value ascribed to all of the Shares being issued to Savanna pursuant to the Settlement Agreement (being 9,500,000 Shares) is A$5.7 million based on a share price of A$0.60 at the time the Company entered into negotiations with Savanna.

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

The Shares will be issued to Savanna.

(e) The terms of the Shares

The Shares will rank equally in all respects with existing Shares on issue.

(f) The intended use of the funds raised

As stated above, the Shares are being issued as consideration for the performance by Savanna of certain obligations as provided in the Settlement Agreement (see paragraph 2.3(b) of this Explanatory Statement).

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

As stated above, the Shares will be issued on or about the date the Mining Licence is granted.

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(h) A voting exclusion statement

A voting exclusion statement for Resolution 8 is included in the Notice of Meeting.

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

Not applicable.

ADDITIONAL INFORMATION

Additional information relating to the Company is on SEDAR at www.sedar.com, on the website of the Australian Securities Exchange at www.asx.com.au and on the website of the Company at www.bannermanresources.com. Financial information is provided in the Company's comparative financial statements for the year ended June 30, 2008. Shareholders may contact the Company to request copies of the Company's financial statements at Level 2, 22 Oxford Close, West Leederville, Western Australia, 6007.

Should any Shareholder be in doubt as to how they should vote on the Resolutions described herein and/or as to how such Resolutions may affect them, they should seek advice from their stockbroker, accountant, solicitor or other professional adviser as soon as possible. Queries as to the lodgement of proxies and other formalities in relation to the Meeting should be directed to (i) in Australia, to the Company Secretary at (+61) 8 9381 1436, or (ii) in Canada, to Computershare at +1 (416) 263-9524.

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SCHEDULE 1

Glossary

In the Notice of Meeting, Information Circular and this Explanatory Statement, the following terms have the following meanings unless the context otherwise requires:

“ A$ ” means the lawful currency of Australia.

“ ASIC ” means Australian Securities and Investments Commission.

“ Associate ” has the meaning given in the Corporations Act.

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

“Bannerman” means Bannerman Resources Limited ABN 34 113 017 128

“ Beneficial Shareholder ” means a holder of Ordinary Shares in the Company who does not hold their Ordinary Shares in their own name.

“ BFS ” means bankable feasibility study.

“ BMRN ” means Bannerman Mining Resources (Namibia) (Pty) Ltd.

“ Company ” means Bannerman Resources Limited ABN 34 113 017 128.

“ Compensation Payment ” is defined in paragraph 2.3 of the Explanatory Statement.

“ Convertible Note Facility Agreement ” is defined in paragraph 2.1 of the Explanatory Statement.

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

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

“ Directors ” means the directors of the Company.

“ Equity Securities ” is defined in the Listing Rules and includes, among other things, a share, a right to a share or option, an option, and a convertible security.

“ Establishment Fee Shares ” is defined in paragraph 2.1(c) of the Explanatory Statement.

“ Etango Project ” means the uranium project located on the in the Republic of Namibia.

“ Etango Project Tenement ” is defined in paragraph 1 of the Explanatory Statement.

“ Explanatory Statement ” means the explanatory statement to this Notice of Meeting.

“ Facility ” is defined in paragraph 2.1 of the Explanatory Statement.

“ First Tranche ” is defined in paragraph 2.1(a) of the Explanatory Statement.

“ First Tranche Conversion Price ” is defined in paragraph 2.1(g) of the Explanatory Statement.

“ First Tranche Drawdown Date ” is defined in paragraph 2.1(b) of the Explanatory Statement.

“ First Tranche Principal Outstanding ” is defined in paragraph 2.1(g) of the Explanatory Statement.

“ Independent Expert ” is defined in paragraph 2.2 of the Explanatory Statement

“ Independent Expert’s Report ” is defined in paragraph 2.2 of the Explanatory Statement and contained in Annexure A to this document.

“ Interest Conversion Price ” is defined in paragraph 2.1(l) of the Explanatory Statement.

“ Interest Payment Date ” is defined in paragraph 2.1(e) of the Explanatory Statement.

“ Interest Payment Obligation ” means the Company’s obligation to pay interest on any Interest Payment Date under the Convertible Note Facility Agreement.

“Listing Rules” means the listing rules of ASX.

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“ Maturity Date ” is defined in paragraph 2.1(f) of the Explanatory Statement.

“ Meeting ” means a Meeting of Shareholders.

“ Mining Licence ” is defined in paragraph 2.3(b) of the Explanatory Statement.

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

“ NSX ” means the Namibian Stock Exchange.

“ Option ” means an American call option to subscribe for a Share in the Company.

“ PFS ” means pre-feasibility study.

“ Prepayment Options ” is defined in paragraph 2.1(k) of the Explanatory Statement.

“ Principal Outstanding ” at any time, means the sum of the principal outstanding under the First Tranche and the Standby Tranche.

“ Quarterly Date ” means each of March 31, June 30, September 30 and December 31 each year.

“ RCF ” means Resource Capital Fund IV L.P., a Cayman Islands Limited Partnership.

“ Registered Shareholder ” means a holder, in their own name, of Ordinary Shares of the Company.

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

“ Savanna ” means Savanna Marble Close Corporation of 1-3 Kerby Street, Windhoek, Namibia.

“ Scheme ” means the Employee Incentive Option Scheme of the Company.

“ Scheme Options ” means options of the Company issued pursuant to the Scheme.

“ Settlement Agreement ” is defined in paragraph 2.3 of the Explanatory Statement.

“ Share ” means a fully paid ordinary share of the Company ranking equally with all other ordinary shares of the Company.

“ Share Capital ” means the issued share capital of the Company from time to time.

“ Shareholder ” means a holder of Ordinary Shares of the Company.

“ Standby Tranche ” is defined in paragraph 2.1(a) of the Explanatory Statement.

“ Standby Tranche Conversion Price ” is defined in paragraph 2.1(h) of the Explanatory Statement.

“ Standby Tranche Principal Outstanding ” is defined in paragraph 2.1(h) of the Explanatory Statement.

“ Trading Day ” has the same meaning as in the Listing Rules.

“ Tranche 1 Exercise Price ” is defined in paragraphs and 8.2(e) of the Explanatory Statement.

“ Tranche 2 Exercise Price ” is defined in paragraphs 8.2(e) of the Explanatory Statement.

“ Tranche 3 Exercise Price ” is defined in paragraphs 8.2(e) of the Explanatory Statement.

“ TSX ” means the Toronto Stock Exchange.

“Voting Record Date” means the record date which entitles Shareholders to vote at the Meeting pursuant to Regulation 7.11.37 of the Corporations Regulations, being 9:30 am (WST) on April 14, 2009.

“Notice Record Date” means the record date which entitles Shareholders on record at the close of business on March 13, 2009 to receive the Notice of Meeting.

“ VWAP ” is defined in paragraph 2.1(h) of the Explanatory Statement.

“ Warrants ” means warrants exercisable into Shares in accordance with Schedule 6.

“ WST ” means Australian Western Standard Time.

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SCHEDULE 2

Terms and Conditions of Prepayment Options

The terms and conditions of 38,562,091 Prepayment Options (“Options”) proposed to be allotted and issued and the subject of proposed Resolution 3 are as follows:

a) Upon the valid exercise of the Options and payment of the exercise price, the Borrower will issue the Option Shares, which will be fully paid ordinary shares ranking pari passu with the then issued ordinary shares of the Borrower.
b) The Prepayment Options expiry dates and exercise prices are listed in the table below:

T r a n c h e	# of Options	Exercise Price	Expiry Date
First Tranche	16,339,869	A$0.612	December 16, 2011
Standby Tranche	22,222,222	A$0.45(1)	December 16, 2011

(1) The Standby Tranche Options will have an exercise price equal to the lower of:

(a) the First Tranche Conversion Price ; and

(b) an amount that represents a 20% premium to the 30 day VWAP as at the date of drawdown of the Standby Tranche,

subject to a floor price of A$0.45, as adjusted from time to time in accordance with this agreement.

c) In the event of any reconstruction (including consolidation, subdivision, reduction or return) of the issued capital of the Borrower:
the number of Options, the exercise price of the Options, or both will be reconstructed (as appropriate) in a manner consistent with the Listing Rules, but with the intention that such reconstruction will not result in any benefits being conferred on the holders of the options which are not conferred on shareholders; and
subject to the provisions with respect to rounding of entitlements as sanctioned by a meeting of shareholders approving a reconstruction of capital, in all other respects the terms for the exercise of the Options will remain unchanged.
d) If there is a pro rata issue (except a bonus issue), the exercise price of an Option may be reduced according to the following formula:

==> picture [105 x 28] intentionally omitted <==

Where:

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

e) The Options will not be listed but the Borrower shall apply for listing of the Option Shares.
f) If there is a bonus issue to the holders of shares in the Borrower, the number of shares over which the Option is exercisable may be increased by the number of shares which the Option holder would have received if the Option had been exercised before the record date for the bonus issue.
g) While the Borrower is admitted to the ASX, the terms of the Options shall only be amended in accordance with the Listing Rules.

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SCHEDULE 3

Estimate of the Value of the Prepayment Options

An estimate of the value of the Prepayment Options that are proposed to be granted on the terms set out in Schedule 2 (pursuant to the passing of Resolution 3) using the Black Scholes Option Pricing Model has been calculated as set out belo w:

Number of Options	Terms of Options	Estimated Value A$
16,339,869	First Tranche - A$0.612 expiring December 16, 2011	$6,434,498
22,222,222	Standby Tranche - A$0.45 expiring December 16, 2011	$9,791,966
38,562,091		$16,226,464

The estimated value of the Options was calculated using the following assumptions:

the date of the valuation is March 2, 2009;
the risk free rate is approximately 5.00% (continuously compounded risk free rate);
share price of A$0.68 (which represents the last trading price per share on the ASX on March 2, 2009);
dividend yield of 0%;
forecast volatility of 85%. The volatility rate based on the range to which the shares have been trading on the ASX and other comparable company volatilities.
The Options’ expiry dates and exercise prices are listed in the table below:

Options	Expiry Date and Time	Exercise Price
16,339,869	December 16, 2011 at 5.00pm (WST)	A$0.612
22,222,222	December 16, 2011 at 5.00pm (WST)	A$0.45(1)

(1) The Standby Tranche Options will have an exercise price equal to the lower of:

(a) the First Tranche Conversion Price ; and
(b) an amount that represents a 20% premium to the 30 day VWAP as at the date of drawdown of the Standby Tranche,

subject to a floor price of A$0.45, as adjusted from time to time in accordance with this agreement.

The above calculations have been externally prepared by Gresham Advisory Partners Limited on March 2, 2009.

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SCHEDULE 4

Terms and Conditions of Director Options

The terms and conditions of 5,500,000 Options (“Options”) proposed to be allotted and issued and the subject of proposed Resolution 6 are as follows:

a) Each Director Option entitles the holder, on exercise, to one Share. b) The Director Options expiry dates, exercise prices and vesting conditions are listed in the table below:

T r a n c h e	# of Options	Exercise Price(1)	Vesting Date(2)	Expiry Date	Performance Hurdle
1	2,500,000	A$0.434	November 17, 2009	November 17 ,2012	Board approval of positive PFS
2	1,500,000	A$0.543	November 17, 2010	November 17, 2013	Board approval of positive BFS
3	1,500,000	A$0.678	November 17, 2011	November 17, 2014	Finalised project development financing
Total	5,500,000

(1) Tranche 1 exercise price is equal to 125% of the ASX 30 day volume weighted average market price of $A0.347 per share on November 14,

2008; Tranche 2 is 125% of the Tranche 1 Exercise Price and Tranche 3 is 125% of the Tranche 2 Exercise Price (2) Hurdle needs to be achieved prior to vesting.

c) Subject to paragraph (d) below, Vested Director Options are exercisable at any time on or prior to the Expiry Date at 5.00pm (WST) by completing an Option exercise form and delivering it together with the payment for the number of Shares in respect of which the Options are exercised to the registered office of the Company.
d) An Option Holder may exercise some of that person's Options, which does not affect that holder's right to exercise the remainder of their Options
by the Expiry Date in paragraph (b) above. Options must be exercised in multiples of 100 at a time, unless the Option Holder exercises all Options able to be exercised at that time.
e) The Options are non transferable save for the provisions of clause (f) hereof.
f) Subject to the Corporations Act, the ASX Listing Rules and the Company's Constitution, the Options are transferable to a nominee of the Option Holder. Application will not be made to ASX for official quotation of the Options.
g) All Shares issued upon exercise of the Options will, from the date they are issued, rank pari passu in all respects with the Company’s then issued
Shares. The Company will apply for official quotation by ASX of all Shares issued upon exercise of the Options.
h) Option Holders cannot participate in new issues of capital offered to Shareholders of the Company during the currency of the Options without exercising the Options. However, the Company will ensure that for the purpose of determining entitlements to any such issue, the books closing
date will be at least 10 business days after the issue is announced. This will give Option Holders the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue.
i) Subject to paragraph (j), if the Company makes a bonus share issue, a rights issue or any other similar issue of rights or entitlements, there will be no adjustment to the exercise price, the number of Shares per Option or any other terms of those Options.
j) In the event of any reorganisation (including consolidation, subdivision, reduction or return) of the issued capital of the Company prior to the
expiry dates of the Director Options, the rights of Option Holders, including the number of Options or the exercise price of the Options or both will
be changed to the extent necessary to comply with the ASX Listing Rules applying to a reorganisation of capital at the time of the reorganisation.
k) Option Holders will be sent all communications sent to Shareholders of the Company, but Options do not confer any rights to attend or vote at meetings of Shareholders of the Company. Notice may be given by the Company to Option holders in the manner provided by the Company's Constitution for the giving of notices to shareholders, and the relevant provisions of the Company's Constitution apply with all necessary modification to notices to Option Holders.
l) If the Option Holder ceases to be an Employee;
a) 2 years or more after Options are issued in relation to the Option Holder; or
b) because of Retirement, Total and Permanent Disablement, Redundancy, death or any other circumstances approved by the Board, the options may be exercised within 30 days (or 3 months, in the case of death) after ceasing to be an Employee or any longer period permitted by the Board. If not exercised within that period, the Options lapse.
m) If the Option Holder ceases to be an Employee and clause (l) does not apply, Options issued in relation to the Option Holder lapse.
n) If the Board determines that:
a) the Option Holder has acted fraudulently, dishonestly or in breach of the Option Holder's obligations to any company in the Group; and
b) Options issued in relation to the Option Holder are to be forfeited,
the Options will immediately lapse.
o) The provisions of the Bannerman Resources Limited Employee Incentive Scheme apply to the options under this document, save that where there is an inconsistency the provisions of this document shall prevail.
p) Notwithstanding the terms and conditions in this Schedule 4 the Options may only be issued or exercised within the limitations imposed by the Corporations Act 2001 and he Australian Stock Exchange Listing Rules.
q) Nothwithstanding paragraph (b), All Director Options may be exercised prior to their Vesting Date:
(a) in relation to a takeover bid in respect of the Shares, during the bid period, as defined in section 9 of the Corporations Act, provided that where a takeover bid is publicly announced prior to the service of a bidder’s statement on the Company in relation to that takeover bid, the bid period will be deemed to have commenced at the date of that announcement;
(b) at any time after, on an application under section 411 of the Corporations Act, a court orders a meeting to be held concerning a proposed compromise or arrangement for the purposes of, or in connect with, a scheme for the reconstruction of the Company, or its amalgamation with any other company.

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SCHEDULE 5

Estimate of the Value of Director Options

An estimate of the value of the Director Options that are proposed to be granted to Len Jubber on the terms set out in Schedule 4 (pursuant to the passing of Resolution 6) using the Black Scholes Option Pricing Model has been calculated as set out belo w:

Number of Options	Terms of Options	Estimated Value A$
2,500,000	Tranche 1 - $0.434 expiring November 17, 2012	$1,105,995
1,500,000	Tranche 2 - $0.543 expiring November 17, 2013	$681,108
1,500,000	Tranche 3 - $0.678 expiring November 17, 2014	$697,843
5,500,000		$2,484,946

The estimated value of the Options was calculated using the following assumptions:

the date of the valuation is March 2, 2009;
the risk free rate is approximately 5.00% (continuously compounded risk free rate);
share price of A$0.68 (which represents the last trading price per share on the ASX on March 2, 2009);
dividend yield of 0%;
forecast volatility of 85%. The volatility rate based on the range to which the shares have been trading on the ASX and other comparable company volatilities.
The Options’ expiry dates and exercise prices are listed in the table below:

Options	Expiry Date and Time	Exercise Price
2,500,000	November 17, 2012 at 5.00pm (WST)	A$0.434
1,500,000	November 17, 2013 at 5.00pm (WST)	A$0.543
1,500,000	November 17, 2014 at 5.00pm (WST)	A$0.678

The above calculations have been externally prepared by Gresham Advisory Partners Limited on March 2, 2009.

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SCHEDULE 6

Terms and Conditions of Warrants

The terms and conditions of the Warrants to be allotted (pursuant to the passing of Resolution 5) and issued are as follows:

(a) Each Warrant entitles the holder, on exercise, to one Share.
(b) The exercise price of each Warrant is the amount contemplated in paragraph 7.2(e) of the Explanatory Statement.
(c) Warrants are exercisable at any time on or prior to 5.00pm (WST) on the date that occurs 2 years from their date of issue by completing a Warrant exercise form and delivering it together with the payment for the number of Shares in respect of which the Warrants are exercised to the registered office of the Company.
(d) A Warrant Holder may exercise some of that person's Warrants, which does not affect that holder's right to exercise the remainder of his/her Warrants by the deadline in paragraph (c) above. Warrants must be exercised in multiples of 100 at a time, unless the Warrant Holder exercises all Warrants able to be exercised at that time.
(e) Subject to the Corporations Act, the ASX Listing Rules and the Company's Constitution, the Warrants are transferable. Application will not be made to ASX for official quotation of the Warrants.
(f) All Shares issued upon exercise of the Warrants will, from the date they are issued, rank pari passu in all respects with the Company’s then issued Shares. The Company will apply for official quotation by ASX of all Shares issued upon exercise of the Warrants.
(g) Warrant Holders cannot participate in new issues of capital offered to Shareholders of the Company during the currency of the Warrants without exercising the Warrants. However, the Company will ensure that for the purpose of determining entitlements to any such issue, the books closing date will be at least 10 business days after the issue is announced. This will give Warrant Holders the opportunity to exercise their Warrants prior to the date for determining entitlements to participate in any such issue.
(h) Subject to paragraph (i), if the Company makes a bonus share issue, a rights issue or any other similar issue of rights or entitlements, there will be no adjustment to the exercise price, the number of Shares per Warrant or any other terms of those Warrants.
(i) In the event of any reorganisation (including consolidation, subdivision, reduction or return) of the issued capital of the Company prior to the expiry dates of the Warrants, the rights of Warrant Holders, including the number of Warrants or the exercise price of the Warrants or both will be changed to the extent necessary to comply with the ASX Listing Rules applying to a reorganisation of capital at the time of the reorganisation.
(j) Warrant Holders will be sent all communications sent to Shareholders of the Company, but Warrants do not confer any rights to attend or vote at meetings of Shareholders of the Company. Notice may be given by the Company to Warrant holders in the manner provided by the Company's Constitution for the giving of notices to shareholders, and the relevant provisions of the Company's Constitution apply with all necessary modification to notices to Warrant Holders.

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6 March 2009

The Directors Bannerman Resources Limited Level 2, 22 Oxford Close LEEDERVILLE WA 6005

Dear Sirs

INDEPENDENT EXPERT’S REPORT

1 INTRODUCTION AND SUMMARY OF OPINION

1.1 You have requested PKF Corporate Advisory Services (WA) Pty Ltd (“ PKFCA ”) to prepare an Independent Expert’s Report (“ IER ” or “ Report ”) to assist non-associated shareholders of Bannerman Resources Limited (“ Bannerman ” or “Company ”) in voting on the recently executed agreement with Resource Capital Fund IV L.P. (“ RCF IV ”). This is contemplated by Resolutions 2, 3 and 4 of the Notice of General Meeting (“ NOM ”) and Explanatory Statement (” ES ”) in relation to the General Meeting (“ GM ”) scheduled to be held on or around 14 April 2009.
1.2 Bannerman is an Australian based uranium exploration and mine development company listed on the Australian Securities Exchange (“ ASX ”), the Toronto Stock Exchange (“ TSX ”) and the Namibian Stock Exchange (“ NSX ”). RCF IV is an equity fund which holds a direct interest in 4.53% of Bannerman’s issued capital as at 24 February 2009.
1.3 Bannerman recently executed a Convertible Note Facility Agreement (“ Agreement ”) with RCF IV for a secured convertible note facility of up to $20 million ( “Facility ”). Under the Agreement, Bannerman has the ability to draw down the Facility via an initial tranche of $10 million (“ First Tranche ”) and a standby tranche of $10 million (“ Standby Tranche ”).
1.4 The Facility has been established to fund the completion of a bankable feasibility study in relation to the Etango Project, a project tenement in Namibia held via an 80% interest in a subsidiary company. In addition, the Facility will fund Bannerman’s corporate, exploration, and working capital requirements in accordance with its corporate budget.
1.5 Under Resolutions 2, 3 and 4 of the NOM to which this Report relates, Bannerman is seeking shareholders’ approval for the acquisition of all Bannerman shares acquired or to be acquired by RCF IV pursuant to the arrangements set out under the Agreement (“ Transaction ”). This includes approval to allow:
(i) the issue of shares, in relation to Resolution 2 of the NOM, upon the conversion of principal outstanding on the Standby Tranche of the Facility into Bannerman shares at the election of either RCF IV or the Company (“ Conversion ”);
(ii) to allow the issue of shares, in relation to Resolution 3 of the NOM, upon the exercise of options granted in the event of a prepayment of the Facility elected by the Company (“ Prepayment ”); and

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(iii) to allow the issue of shares, in relation to Resolution 4 of the NOM, if the Company elects to satisfy its interest obligations of the Facility under the terms of the Agreement (“ Interest ”).
1.6 The IER is required pursuant to Section 611 (Item 7) of the Corporations Act 2001 (“ Corporations Act ”) which deals with the approval of an allotment of shares otherwise prohibited by Section 606 of the Corporations Act. Section 606 prohibits a person from acquiring a relevant interest in the issued voting shares if the person’s voting power in the company exceeds or will exceed 20%.
1.7 Shareholders’ approval is being sought by Bannerman for the acquisition of its shares by RCF IV pursuant to the Agreement. Acquisition of shares by RCF IV through the exercise of some or all of RCF IV’s or the Company’s conversion rights under the Agreement, may result in RCF IV’s interest in issued voting shares in Bannerman exceeding 20% of its share capital. Approval is to be sought for all possible courses of action by way of a resolution passed at the Company’s GM at which no votes are to be cast by persons associated with the Facility.
1.8 We understand that the Report will be distributed to Bannerman shareholders together with the NOM and ES setting out the details of the Facility in order to assist non-associated shareholders in voting at the GM of Bannerman scheduled to be held on or around 14 April 2009.
1.9 All amounts referred to are in Australian dollars unless otherwise indicated.

Summary of Opinion

1.10 We have considered the terms of the Facility as detailed in the NOM and EM and conclude that the acquisition of shares by RCF IV under the Conversion element, in relation to Resolution 2 of the NOM, is not fair but reasonable to the non-associated shareholders of Bannerman.
1.11 We have considered the terms of the Facility as detailed in the NOM and EM and conclude that the acquisition of shares by RCF IV under the Prepayment element, in relation to Resolution 3 of the NOM, is not fair but reasonable to the non-associated shareholders of Bannerman.
1.12 We have considered the terms of the Facility as detailed in the NOM and EM and conclude that the acquisition of shares by RCF IV under the Interest element, in relation to Resolution 4 of the NOM, is not fair but reasonable to the non-associated shareholders of Bannerman.
1.13 In our opinion, the Transaction is considered to be not fair but reasonable.

Assessment of Fairness

1.14 The Australian Securities and Investment Commission (“ ASIC ”) Regulatory Guide 111 “Content of Expert Reports” (“ RG 111 ”) states, as a criteria to analysing the fairness of a transaction, that an offer is ‘fair’ if the value of the offer price or consideration is equal to or greater than the value of the securities the subject of the offer.
1.15 In this case, the assessment of fairness should be made between the value of the securities being offered (allowing for a minority discount) – being the post-Transaction value of Bannerman – and the value of the target entity’s securities (pre-Transaction), assuming 100% of the securities are available for sale,
1.16 Based on our assessment, the Transaction is ‘not fair’ as the notional NRV per share of Bannerman, at an expected range of $0.625 to $0.644 post-Transaction, is expected to be lower than the assessed pre-Transaction mid-point fair value of $0.765 per share.
1.17 In our opinion, the Conversion element of the Facility is ‘not fair’ as the value of the consideration to be received in the form of the conversion price under the Facility being in the range of $0.45 to $0.612, is lower than the mid-point fair market value of Bannerman shares of $0.765 per share determined under the net realisable value of assets (“ NRV ”) approach based

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on the Company’s unaudited net assets as at 31 December 2008 adjusted for material changes subsequent to that date.

1.18 In our opinion, the Prepayment element of the Facility is ‘not fair’ as the value of the consideration to be received in the form of the exercise price of the options issued, being in the range of $0.45 to $0.612 is lower than the mid-point fair market value of Bannerman shares of $0.765 per share determined under the NRV approach based on the Company’s unaudited net assets as at 31 December 2008 adjusted for material changes subsequent to that date.
1.19 In our opinion, the Interest element of the Facility is ‘not fair’ as the value of the consideration to be received in the form of a share issue price based on the 5-day Daily Volume Weighted Average Price (“ VWAP ”) as at 20 February 2009 of $0.71 is lower than the mid-point fair market value of Bannerman shares of $0.765 per share determined under the NRV approach based on the Company’s unaudited net assets as at 31 December 2008 adjusted for material changes subsequent to that date. As the 5-day VWAP can only be determined at a future point in time, we have used 20 February 2009 as an indicative date for the purpose of analysing the Interest element of the Facility.

Assessment of Reasonableness

1.20 RG 111 states, as a criteria to analysing transactions whereby as a consequence of a company issuing securities to an allottee, that allottee acquires over 20% of the company, that an offer is ‘reasonable’ if it is fair.
1.21 In accordance with RG 111, although the Transaction is ‘not fair’, the Transaction is reasonable as it is supported by other considerations and additional reasons for the shareholders to vote in favour of the Transaction.
1.22 In accordance with RG 111, although the terms of the Conversion element are ‘not fair’, they are reasonable as they are supported by other considerations and additional reasons detailed below, for the non-associated shareholders to vote in favour of the Conversion element.
1.23 In accordance with RG 111, although the terms of the Prepayment element are ‘not fair’, they are reasonable as they are supported by other considerations and additional reasons as detailed below, for the non-associated shareholders to vote in favour of the Prepayment element.
1.24 In accordance with RG 111, although the terms of the Interest element are ‘not fair’, they are reasonable as they are supported by other considerations and additional reasons as detailed below, for the non-associated shareholders to vote in favour of the Interest element.

Other Considerations

1.25 The Transaction would result in a maximum dilution of 21.27% to non-associated shareholders from an initial shareholding of 95.47% to a post-Transaction shareholding of 74.20%, if RCF IV acquires the maximum number of Bannerman shares pursuant to the arrangements set out in the Agreement.
1.26 Bannerman noted in its 2008 Annual Report that the Company and the consolidated entity will be required to meet various operational outlays which require funds that are above and beyond the working capital of the Company and the consolidated entity at 30 June 2008. Whilst further funding may still be required in the long-term, the Facility provided by RCF IV will result in a significant improvement in Bannerman’s cash position in the short-term. Therefore, the Facility and the necessary approvals of the Transaction are an important factor in determining the going concern position of the Company.
1.27 The current economic climate and state of the current financial markets have significantly impacted the ability to raise funds via debt or equity. The Facility provides Bannerman with both funding and the flexibility to repay the debt facility through the issue of shares. Approving

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the Transaction will assist the Company to continue as a going concern in the short term (in accordance with paragraph 6.10 of this Report) and also enables the Company to finalise a bankable feasibility study in relation to its major project, the Etango Project, thereby allowing Bannerman to exploit further business opportunities from the project.

1.28 We are aware that the litigation brought against the Minister of Mines and Energy in Namibia (of which Bannerman is second respondent), by Savanna Marble Close Corporation and certain associated parties, has been settled via an out of court agreement between the two parties. Under the terms of the agreement, Savanna Marble Close Corporation is entitled to receive up to $3.5 million in cash and 9.5 million ordinary shares in Bannerman to be issued in two tranches. The first payment of cash of $3.0 million and first tranche of 5.5 million shares was issued on 12 January 2009, including $1.38 million of value added tax (“ VAT ”) on the settlement.
1.29 Following the drawdown of the Facility, the Conversion element allows the Company to reduce debt through the issue of shares, thereby reducing the financial risk of the Company. Depending on the overall debt position of the Company, increases in debt levels generally increase the financial and bankruptcy risks of the Company and vice versa.
1.30 Depending on whether RCF IV or Bannerman exercises its rights, the Transaction nevertheless provides Bannerman with the alternative to prepay or repay the debt principal and to satisfy its interest obligations through the issue of shares, thereby reducing pressure on the Company’s cash position.
1.31 Consideration has been given to the secured nature of the Agreement via a fixed and floating charge. We note that Bannerman has agreed to charge the whole of its 80% holding in Bannerman Mining Resources Namibia (Pty) Ltd (“ BMRN ”) to RCF IV under the terms of the Agreement. BMRN owns a 100% interest in the Etango Project in Namibia. Under the terms of the Agreement, in the event of default by Bannerman, RCF IV will rightfully take ownership of the 80% interest in BMRN held by Bannerman. The Conversion, Prepayment and Interest elements provide for the satisfaction of the financial debt of the Facility, thereby reducing the risk of default and of the Etango Project being seized by the lender.
1.32 The increased financial strength of Bannerman, upon the acquisition of shares by RCF IV under the Transaction, may make the Company a more attractive investment target and may improve the Company’s longer term access to funding particularly if the feasibility study shows positive results.
1.33 We note that the Company is also likely to require additional funding by way of debt, equity or a combination of both to fund further operations in the future. This is especially so if the feasibility study provides a positive result and the Company progresses to the development and production phases.

Purpose of the Report

1.34 This Report has been prepared solely for the purpose of assisting the non-associated shareholders of Bannerman in considering the Transaction, being the acquisition of all the Bannerman shares acquired by RCF IV pursuant to the arrangements set out under the Agreement as executed by the Directors of Bannerman. This Report has not been prepared to provide information to parties considering the purchase or sale of any equity or other security in Bannerman. Accordingly, we do not assume any responsibility or liability for any losses suffered as a result of the use of this Report contrary to the provisions of this paragraph.
1.35 The acquisition of the maximum number of shares by RCF IV pursuant to the arrangements set out in the Agreement would take RCF IV’s shareholding in Bannerman from a pre-transaction interest of 4.53% to a post-transaction interest of 25.80% (subject to certain assumptions regarding the share price of Bannerman at various times during the term of the Facility – specifically, in relation to shares issued to satisfy the interest obligation) therefore requiring non-associated shareholder’s approval under s611 of the Corporations Act.

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1.36 This Report will accompany the NOM and ES, which will be distributed to shareholders of Bannerman to assist non-associated shareholders in voting at the GM of Bannerman.

Our Approach and Basis of Assessment

1.37 Although the expression “fair and reasonable” is not defined under the Corporations Act, guidance is provided by ASIC Regulatory Guides (“ RG ”) which establish certain guidelines in respect of independent expert’s reports required under the Corporations Act.
1.38 In particular, RG 74 “Acquisitions Agreed to by Shareholders”, RG 111 “Content of Expert Reports”, and RG 112 “Independence of Expert’s Reports” have been considered.
1.39 RG 74 relates to acquisitions agreed to by shareholders and requires an analysis of whether the proposal is fair and reasonable when considered in the context of the interests of the nonassociated shareholders.
1.40 RG 111 “Content of Expert Reports” establishes certain guidelines in respect of the content of expert reports prepared for transactions under Chapters 5, 6 and 6A of the Act, whether the reports are required by the Act or are commissioned voluntarily.
1.41 RG 111 includes guidance prepared for the purposes of Section 611 of the Corporations Act and comments on other control transactions where an issue of shares by a company is otherwise prohibited under Section 606 of the Corporations Act may be approved under item 7 of Section 611 of the Corporations Act and the effect on the company’s shareholding is comparable to a takeover bid. In these circumstances, ASIC expects the form of analysis to be undertaken as if it was a takeover bid under Chapter 6 of the Corporations Act.
1.42 RG 111 argues in paragraph RG 111.21 that if a company issues securities in exchange for cash and, as a consequence, the allottee acquires over 20% of the company, the allottee could have achieved the same or a similar outcome by using a cash-rich entity to make a scrip takeover bid for the company.
1.43 In this circumstance, the acquisition of the maximum number of shares by RCF IV pursuant to the arrangements set out under the Agreement may result in RCF IV’s shareholding to exceed 20%. Accordingly, our approach to the analysis of the terms of the Transaction is to consider the meaning of “fair and reasonable” in the context of a takeover bid.
1.44 The regulatory guides reflect ASIC’s underlying philosophy that the premium for control of a company be shared by all members of that company. This and other matters have been taken into account in considering the fairness and reasonableness of the terms of the Transaction.
1.45 For the purpose of our opinion, the term “fair market value” is defined as the price that would be negotiated in an open and unrestricted market between a knowledgeable, willing, but not anxious purchaser and a knowledgeable, willing, but not anxious vendor, acting at arm’s length.
1.46 The substance of the Transaction suggests that although Bannerman is receiving cash under the Facility, the non-associated shareholders of the Company are not exchanging their shares for cash and will continue to hold shares in the post-Transaction entity of Bannerman. Therefore, for the purpose of this fairness assessment, we are required to compare the value of the securities being offered (allowing for a minority discount) – in this case the post-Transaction value of Bannerman – and the value of the target entity’s securities (pre-Transaction), assuming 100% of the securities are available for sale, as guided under paragraphs RG 111.27 and RG 111.28 of RG 111.
1.47 Accordingly, we have compared the notional NRV per share values of Bannerman preTransaction (assuming 100% ownership) and post-Transaction (after allowing for a minority discount) to assess the fairness of the Transaction on the whole.
1.48 Having consideration to the individual elements to which approval is being sought under Resolutions 2, 3 and 4, we have also had regard to the individual elements from which RCF IV could increase their shareholding to above 20%.

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1.49 In our analysis of the Conversion element, we compared the conversion price of the Facility with the fair market value per share of Bannerman shares determined under the NRV approach based on the Company’s unaudited net assets as at 31 December 2008 adjusted for material changes subsequent to that date.
1.50 In our analysis of the Prepayment element, we compared the exercise price of the options to be granted under the prepayment terms of the Facility, with the fair market value per share of Bannerman shares determined under the NRV approach based on the Company’s unaudited net assets as at 31 December 2008 adjusted for material changes subsequent to that date.
1.51 In our analysis of the Interest element, we compared the 5-day VWAP of Bannerman shares as at the indicative date of 20 February 2009 with the fair market value per share of Bannerman shares determined under the NRV approach based on the Company’s unaudited net assets as at 31 December 2008 adjusted for material changes subsequent to that date.
1.52 The individual value considerations and the pre and post Transaction analysis are only one element of our assessment. We have also considered other significant factors that are relevant to the decision by the non-associated shareholders to assist in determining the reasonableness of the Transaction.

Reliance on Information

1.53 This Report is based upon financial and other information provided by Bannerman. PKFCA has considered and relied upon this information. PKFCA believes the information provided to be reliable, complete and not misleading, and has no reason to believe that any material facts have been withheld. The information provided was evaluated through analysis, inquiry and review for the purpose of forming an opinion as to whether the Transaction is fair and reasonable.
1.54 PKFCA does not warrant that its inquiries have identified or verified all of the matters which an audit, extensive examination or full scope “due diligence” investigation might disclose. In any event, an opinion as to whether a transaction is fair and reasonable is in the nature of an overall opinion rather than an audit or detailed investigation. Preparation of this Report does not imply that PKFCA has audited or in any way verified the financial accounts or other records of Bannerman.
1.55 It is understood that the accounting information of Bannerman provided to PKFCA was prepared in accordance with generally accepted accounting principles, Australian Accounting Standards and, except where noted, prepared in a manner consistent with the method of accounting used by Bannerman in previous accounting periods, including the adoption of International Financial Reporting Standards (“ IFRS ”).
1.56 An important part of the information base used in forming an opinion of the kind expressed in this Report is the opinion, judgement and representations of management. This type of information was also evaluated through analysis, inquiry and review to the extent practical. However, such information is often not capable of external verification or validation.
1.57 Bannerman has agreed to indemnify PKFCA, PKF WA Partnership, and the directors, partners and employees of PKFCA, PKF WA Partnership and any related entity against any claim arising out of misstatements or omissions in any material supplied by the Company, its subsidiaries, its directors or employees, on which PKFCA has relied for the purposes of this Report.

Reliance on Technical Expert

1.58 We have engaged Al Maynard and Associates (“ Al Maynard ”) to provide a technical expert’s report to assist us in the preparation of our IER. We have instructed Al Maynard to assess the fair market value of the mineral assets of Bannerman.

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1.59 The Al Maynard report is attached at Appendix 3 to our Report and should be read in conjunction with our Report. We are satisfied that:
Al Maynard has appropriate qualifications, industry experience and competence to conduct its assessments;
Al Maynard is independent to Bannerman;
The methodologies used in its valuations are consistent with generally accepted industry practice; and
The Al Maynard report contains sufficient information to support the conclusions made.

Current Market Conditions

1.60 Our opinion is based on economic, market and other conditions prevailing at the date of this Report. Such conditions can change significantly over relatively short periods of time.

Individual Circumstances

1.61 PKFCA has not considered the effects of the Transaction on the particular circumstances of individual shareholders. Some individual shareholders may place a different emphasis on various aspects of the Transaction from that adopted in our Report. Accordingly, individuals may reach different conclusions on whether or not the Transaction is fair and reasonable. Nonassociated shareholders should consider the opinion of PKFCA in the context of their own circumstances and preferences.
1.62 This Report has been prepared and included in the NOM to provide shareholders with general information only and does not take into account the objectives, financial situation or needs of any specific investor. It is not intended to take the place of professional advice and investors should not make specific investment decisions in reliance on the information contained in this Report. Before acting or relying on any information, an investor should consider whether it is appropriate for their circumstances, having regard to their objectives, financial situation or needs. Shareholders who are in doubt should consult their own professional adviser.
1.63 PKFCA holds an Australian Financial Services Licence. As a holder of an Australian Financial Services Licence we are required to provide a Financial Services Guide in situations where we may be taken as providing financial product advice to retail clients. A copy of the PKFCA Financial Services Guide is set out in Appendix 2 of this Report.

Scope

1.64 This Report has been prepared solely for the purpose of assisting non-associated shareholders of Bannerman in voting under Resolutions 2, 3 and 4 of the NOM to which this Report is attached, which relates specifically to the acquisition of Bannerman shares by RCF IV pursuant to the arrangements set out under the Agreement and encompassing the Conversion, Prepayment, and Interest elements of the Facility. This Report has not been prepared to provide information to parties considering the purchase or sale of any equity or other security in Bannerman. Accordingly we do not assume any responsibility or liability for any losses suffered as a result of the use of this Report contrary to the provisions of this paragraph.
1.65 The NOM to which this Report is attached, contains other resolutions for shareholders’ approval, specifically Resolutions 1, 5, 6, 7 and 8 which are outside the scope of this Report.

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2 AGREEMENT DETAILS

2.1 On 28 November 2008, Bannerman executed the Agreement with RCF IV for a secured convertible note facility with a total commitment of up to $20 million. Under the Agreement, Bannerman has the ability to draw down the Facility via an initial First Tranche of $10 million and a Standby Tranche of $10 million. The First Tranche was drawn on 16 December 2008.

Use of funds

2.2 The Agreement mandates the use of proceeds of each tranche by way of a cash advance from RCF IV to Bannerman as follows:
(iv) to fund the completion of a bankable feasibility study in relation to the Etango Project;
(v) to fund Bannerman’s corporate, exploration, and working capital requirements in accordance with the Corporate Budget; and
(vi) for any other purpose that RCF IV approves in writing from time to time.

Key terms of the Agreement

2.3 The key terms of the Agreement are as follows:
(i) the Facility matures within 36 months of the date of the drawdown of the First Tranche to fund the completion of a bankable feasibility study in relation to the Etango Project;
(ii) the conversion price for the First Tranche under the facility is $0.612 per share;
(iii) the conversion price for the Standby Tranche under the facility would be the lower of $0.612 per share and a 20% premium to the 30 day VWAP of Bannerman shares at the time of the drawdown of that tranche, subject to a minimum conversion price of $0.45;
(iv) RCF IV may at any time prior to maturity date elect to convert all or part of the principal outstanding applicable to the respective tranche to which those convertible notes relate;
(v) Bannerman may elect to pre-pay the Facility at any time up to 60 days prior to the maturity date subject to:
1. repayment of the whole principal outstanding together with all accrued but unpaid interest up to the date of repayment;
2. the issue to RCF IV of American call options in an amount equal to the then;
  - a. First Tranche principal outstanding divided by the First Tranche conversion price with an exercise price equal to the First Tranche conversion price exercisable from the date of issue up to maturity of the Facility;
  - b. Standby Tranche principal outstanding divided by the Standby Tranche conversion price with an exercise price equal to the Standby Tranche conversion price exercisable from the date of issue up to maturity of the Facility;
(vi) a coupon rate of 8% per annum is payable quarterly and in arrears as interest on the facility. Bannerman can elect to pay the coupon in the form of Bannerman shares rather than cash, at an issue price equal to the 5-day VWAP of Bannerman shares on the ASX calculated on the day prior to the applicable interest payment;
(vii) at Bannerman’s option, if, at any time after the first anniversary of the drawdown of the First Tranche and prior to maturity date:

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the rolling 20 day VWAP of Bannerman shares on the ASX is equal to, or more than, three times the amount of the First Tranche conversion price; and
the average daily volume of Bannerman shares traded on the ASX during that 20 day period is not less than 2% of the total number of Bannerman shares to be issued to RCF IV under the Facility,

the principal outstanding amount of the First Tranche will be convertible in whole or in part to Bannerman shares at an issue price per share equal to the First Tranche conversion price; and

(viii) at Bannerman’s option, if, at any time after the first anniversary of the drawdown of the First Tranche and prior to maturity date:
the rolling 20 day VWAP of Bannerman shares on the ASX is equal to, or more than, three times the amount of the Standby Tranche conversion price; and
the average daily volume of Bannerman shares traded on the ASX during that 20 day period is not less than 2% of the total number of Bannerman shares to be issued to RCF IV under the Facility,

the principal outstanding amount of the Standby Tranche will be convertible in whole or in part to Bannerman shares at an issue price per share equal to the Standby Tranche conversion price.

Conditions precedent of the Standby Tranche

2.4 Under the Agreement RCF IV is not obliged to provide any funds in relation to the Standby Tranche until evidence has been provided to satisfy the following conditions precedent:
(i) non-associated shareholder approval has been received in relation to the Conversion Approval of the Agreement; and
(ii) the Minister of Mines & Energy in Namibia, or an authorised delegate on his behalf, has consented to the grant of Bannerman’s 80% shareholding in BMRN as mortgaged security against the Agreement.

3 BANNERMAN

History and Background

3.1 Bannerman is an Australian based uranium exploration and mine development company listed on the ASX, TSX and NSX. It currently holds exploration tenements in Namibia and Botswana with an interest in a licence in Australia. The Company’s major focus is on the exploration and development of the Etango uranium project in Namibia.
3.2 During the financial year ended 30 June 2008, Bannerman obtained dual listing, undertaking listings on the TSX and the NSX.

Namibian Projects

3.3 Bannerman Resources Limited holds through its 80% interest in BMRN, an 80% interest in two Exclusive Prospecting Licences (“ EPL ”) in the Erongo Region on the western coast of Namibia. The principal asset is the Etango Anomaly A uranium deposit formerly known as Goanikontes Anomaly A.
3.4 Details of the two Namibian licences targeting uranium mineralisation are EPL 3345 and EPL 3346 described as follows:

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3.5 EPL 3345, which includes the Etango Project, is located 35 km east of Swakopmund in the central-western coastal region of Namibia and approximately 40km’s north-east of the Walvis Bay port. The licence is approximately 50,000 hectares in size with access to the deposit via well established roads and a rail line to the Port.
3.6 The Etango Project consists of the following prospects: Anomaly A, Ompo, Oshiveli, Ombepo, Onkelo, Rossingburg, Ombuga, and Anomaly B.
3.7 As at the date of Bannerman’s 2008 Annual Report the Company had completed 505 holes at EPL 3345 for 140,558m comprising 456 RC holes and 49 Diamond Core holes over a 2.5km strike extent.
3.8 In September 2007 the Company announced the completion of a scoping study which considered the potential economic development of the Etango A uranium deposit. The main considerations in the initial scoping were scale, mining and throughput rate, project life, mineralogy, metallurgy and community and environmental considerations. The study is considered a base case as the project may have further upside through processing enhancements and the likely discovery of further similar deposits in the immediate region.
3.9 The study concluded that given the potential resource size, a 15 M tpa mining and milling operation could potentially be developed with the ability to produce over 6Mlbs UзO8 per annum.
3.10 EPL 3346 known as the Swakop River Project and located to the east of EPL 3345 contains an extensive palaeodrainage channel target with uranium documented in calcretised sediments at Elspe and at Bloedkoppie. Results from ground radiometric surveys completed over the area have confirmed the prospectivity of the targets which represent well defined, immediate exploration targets.

Botswana Projects

3.11 Within Botswana, Bannerman controls three Prospecting Licences (“ PL ”) for uranium, precious metals, base metals, and platinum group minerals.
3.12 These licences are known as the Serule South (PL 132/2005), the Serule North (PL 131/2005), and the Dukwe (PL 133/2005) and are located in the Foley and Sua Pan regions in Botswana.
3.13 Preliminary drilling at both the Serule and Dukwe Projects has commenced over uranium and copper anomalies produced from a previously conducted soil programme.

Australian Licence

3.14 Bannerman owns a 35% interest in the Exploration Licence EO8/1559, known as the White Ring project which covers an area 132km² in size. The project is situated 157km south-west of Onslow in the Ashburton mineral field in Western Australia and holds exploration potential for calcrete and hydrothermal associated uranium mineralisation.

Board of directors – Bannerman

3.15 The board of directors of Bannerman comprises the following 6 directors (collectively referred to as “ the Directors ”).
3.16 Mr Geoff Stanley – Non-Executive Chairman. Mr Stanley is a qualified geologist whose career in the mining industry spans over 25 years. Spending the first six years of his career in Australia as an exploration geologist with Billiton, Mr Stanley then worked as a mining analyst with Jacksons Ltd, Jardine Fleming, and the Warburg Group. Following this Mr Stanley spent 15 years in New York’s financial centre as a Managing Director, Senior Mining Analyst, and Portfolio Manager, most recently with BMO Capital Markets and Platinum Partners.
3.17 Mr Len Jubber – Chief Executive Officer and Managing Director. Mr Jubber is a mining engineer with a post graduate degree in business administration. He has more than 20 years experience in the minerals industry in both Australia and overseas. He was Managing Director

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and Chief Executive Officer of Perilya Limited from May 2005 to March 2008, during a period of record profitability for the base metals miner. He also worked for seven years with Oceana Gold Limited, ultimately becoming Chief Operating Officer and an Executive Director of the Company. Prior to Oceana Gold, Mr Jubber spent eight years in southern Africa with Rössing Uranium Limited, a subsidiary of Rio Tinto and operator of the Rössing Uranium mine, which is located less than 20 kms to the north-east of Bannerman’s Etango Project.

3.18 Mr Clive Jones – Non-Executive Director. Mr Jones has been involved in mineral exploration for over 22 years and has worked on the exploration for a range of commodities including gold, base metals, mineral sands, uranium and iron ore. Mr Jones has proven exploration success as a director of Mount Burgess Mining Ltd and at Hamill Resources Ltd where he was a founding director. Mr Jones is also currently joint Managing Director of Cazaly Resources Ltd, a director of Graynic Metals Ltd, and Chairman of Cortona Resources Ltd, all ASX listed companies.
3.19 Mr David Tucker – Non-Executive Director. Mr Tucker has been involved in the mining industry for over 39 years and holds a Master’s of Science degree in Mining and Exploration Geology. Mr Tucker first spent 20 years working as an exploration geologist, the first 10 years of which were in the uranium sector with various companies. Following this his career moved into executive positions in business development, public affairs and investor relations for Homestake Gold. After the completion of the corporate acquisition of Homestake by Barrick Gold, he eventually became Director of Corporate Affairs for Barrick Australia Pacific and led the management of the business unit’s government and community relations until his retirement in December 2007. During the last 10 years, Mr Tucker served on the Board of Directors for Homestake’s Australian Subsidiaries, Barrick Mining Company, and Barrick Gold of Australia.
3.20 Mr Alastair Clayton – Non-Executive Director. Mr Clayton is a qualified geologist with a post graduate diploma in Finance and Economics from the Securities Institute of Australia. Mr Clayton has over 10 years experience in the mining and resources sector and has worked in Australia, Africa, Asia and Europe in both technical and corporate capacity. Now residing in the UK, Alastair is the principal of Synthesis Capital Resources, a London based advisory business. Mr Clayton is also a non-executive director of Universal Coal PLC, an AIM listed company with interests in South Africa.
3.21 Mr James McClements – Non-Executive Director. Mr McClements is a co-founder of Resource Capital Funds, which he has led since inception, and is responsible for the implementation of the Fund’s investment strategy. Mr McClements has extensive experience in the resources industry, particularly in the field of resource financing and investing in junior mining companies globally. Prior to the launch of RCF IV in 1998, he was, for a period of four years, Senior Vice President and Director of N.M. Rothschild & Sons (Denver), and was responsible for the North American Resources banking. Prior to this, Mr McClements worked with Rothschild Australia Limited in Sydney, specialising in the financing of mining companies. Mr McClements is also a non-executive director of ASX-listed Murchison Metals Limited and Rey Resources Ltd. He holds an honours degree in Economics from the University of Western Australia.

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4 RESOURCE CAPITAL FUND

Background

4.1 RCF Management LL.C. (“ Resource Capital Funds ”) has its principal office in Denver, Colorado and an additional office in Perth, Australia. RCF IV is one of several private equity funds Resource Capital Funds has established with a mandate to make investments in mining companies and projects across a diversified range of commodities and geographic regions.
4.2 Resource Capital Funds’ funds employ a range of investment styles including provision of development capital and buyout or distressed investing. These funds have their own discretion to structure transactions to reflect the risks and opportunities associated with each individual investment.
4.3 Resource Capital Funds’ funds comprise one concluded and three active private equity funds that represent US$890 million in committed capital sourced primarily from US based institutional investors.
4.4 RCF IV is currently one of Bannerman’s major shareholders with a total direct interest in 7,100,000 ordinary shares or 4.53% of the total issued capital of Bannerman as at 24 February 2009.

5 INDUSTRY OVERVIEW – URANIUM EXPLORATION AND DEVELOPMENT

Overview

5.1 Bannerman operates in the mining industry, focused on the exploration and development of uranium projects.
5.2 Growing demand for nuclear power as a result of new climate change policy action and security of supply considerations is driving an increase in demand for uranium which is the primary fuel source for nuclear power generation.
5.3 As at October 2007, the World Nuclear Association reported there are currently 439 nuclear power reactors in operation globally, spread across 30 countries and supplying approximately 16% of total world energy demand. Currently, however, demand is heavily concentrated in the United States of America and Europe. Looking forward, demand is expected to diversify into Asia, with significant expansions in nuclear power expected in China.
5.4 Although Australia has the largest known uranium resources, it is ranked second amongst top uranium producing countries in the world, with Canada being the largest producer of uranium with 25% global market share. Supply of uranium is highly concentrated around a small number of major producers as it is typically dominated by a small number of large deposits. According to the Organisation for Economic Co-operation and Development as at 1 January 2005, Australia ranks top by known recoverable uranium resources and Namibia ranks sixth.
5.5 Historic oversupply of uranium has kept long term contract prices low in real terms, at less than US$20 per pound. However, the recent shift in demand/supply balance has driven a significant recovery in the spot price for uranium oxide to more than US$80 per pound in January 2008 and February 2008, but more recently resettling at approximately US$45 per pound.

(Source: Deloitte Insight Economics and the Australian Uranium Association (2008) Outlook for the Uranium Industry April 2008, http://aua.org.au/page.php?pid=388&category=27, www.uxc.com )

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6 FINANCIAL INFORMATION

6.1 Set out below is a summary of the audited income statements and balance sheets of the consolidated entity of Bannerman for the years ended 30 June 2007 (“ FY07 ”) and 30 June 2008 (“ FY08 ”) as extracted from Bannerman’s 2008 Annual Report. Also included is a summary of the unaudited balance sheet of the consolidated entity of Bannerman for the six months ended 31 December 2008.

	Consolidated Audited 30 June 2007 $	Consolidated Audited 30 June 2008 $	Consolidated Unaudited 31 Dec 2008 $
Income Statement




Revenue from continuing operations
Other revenue	135,540	661,658	325,709
Other income	255,996	21,804	2,144
Expenses
Other expenses	447,869	2,152,651	1,507,397
Employee benefits expense	243,121	1,768,294	667,805
Borrowing costs expense	3,411	10,802	6,221
Compliance and regulatory expenses	161,054	554,409	191,784
Directors’ fees	152,571	131,702	111,667
Directors’ share options expense	925,000	6,865,121	301,610
Depreciation expense	25,398	136,761	142,240
Exploration expenditure written off	192,721	16,019	-
Interest Payable	-	-	49,657
Impairment of Available for Sale Financial Assets	-	-	43,535
Loss from continuing operations before tax	1,759,609	10,952,297	2,694,063
Income tax expense	-	-	-
Net loss for the year	1,759,609	10,952,297	2,694,063

Source:Audited and unaudited financial statements of Bannerman

6.2 Other revenue relating to interest received increased by over $500,000 during FY08 whilst other expenses increased significantly due to a large increase in administration expenses during the same period.

6.3 The significant increase in the Directors’ share option expense for FY08 has had a substantial impact on the net profit / (loss) result of Bannerman. Five million options were issued to Directors and officers during FY08 as part of their remuneration.

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Balance Sheet	Consolidated Audited 30 June 2007 $	Consolidated Audited 30 June 2008 $	Consolidated Unaudited 31 Dec 2008 $

Current Assets
Cash & cash equivalents	11,372,832	13,639,963	13,196,260
Other receivables	106,227	995,605	2,346,247
Other	7,063	140,693	52,675
Total Current Assets	11,486,122	14,776,261	15,595,182
Non-Current Assets
Available for sale financial Assets	162,108	51,623	8,080
Property, plant and equipment	197,269	726,468	1,599,648
Exploration, evaluation and development expenditure	24,694,726	45,550,409	69,689,469
Total Non-Current Assets	25,054,103	46,328,500	71,297,197
Total Assets	36,540,225	61,104,761	86,892,379
Current Liabilities
Trade & other payables	739,642	1,076,920	6,117,139
Provisions	12,093	56,356	55,177
Total Current Liabilities	751,735	1,133,276	6,172,316
Non-Current Liabilities
Deferred Tax Liability	-	-	402,682
Convertible Note	-	-	7,616,905
Total Non-Current Liabilities	-	-	8,019,587
Total Liabilities	751,735	1,133,276	14,191,903
Net Assets	35,788,490	59,971,485	72,700,476
Equity
Issued Capital	19,690,066	41,797,705	48,277,705
Reserves	19,962,084	32,989,737	41,932,791
Accumulated losses	(3,863,660)	(14,815,957)	(17,510,020)
Total Equity	35,788,490	59,971,485	72,700,476
Source:Audited and unaudited financial statements of Bannerman

6.4 Issued capital increased significantly in conjunction with a capital raising (by over $20 million) during FY08. The cash raised was utilised on exploration, evaluation and development expenditure. This expenditure relates to the Company’s continuing exploration of its areas of interests. The increase in cash and cash equivalents reflects the balance of funds remaining from the capital raised that was not spent on exploration, evaluation and development expenditure.

6.5 During the six months between 30 June 2008 and 31 December 2008, Bannerman made an intercompany loan to its subsidiary, BMRN, of approximately $10 million.

6.6 On 16 December 2008, Bannerman drew down $10 million from the First Tranche of the Facility, raising $8.96 million after capital raising costs. This resulted in an increase of $7.62

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million in debt, $0.40 million in deferred tax liability and the balance of $0.94 million as an increase in equity.
6.7 We note an increase of $24.14 million in capitalised exploration, evaluation and development expenditure between 30 June 2008 and 31 December 2008. The Company has advised that, of the increase, $9.35 million is attributed to actual cash spent on exploration, evaluation and development activities whilst the balance of $14.79 million is attributed to non-cash movements due to foreign exchange movements relating to revaluation of the intercompany loan and in its investment in BMRN.
6.8 The significant increase in net assets is due to the increase in reserves and issued capital including the exercise of options. The reserve balance reported includes gains or losses from foreign currency translation movements.
6.9 Accumulated losses increased by almost $11 million during FY08 and by an additional $2.7 million based on Bannerman’s unaudited balance sheet position as at 31 December 2008, reflecting continuing operations in exploration activities with minimal revenue generated during the financial year.

Ability to Continue as a Going Concern

6.10 Bannerman noted in its 2008 Financial Report that the Company and consolidated entity will be required to meet various operational outlays which require funds that are above and beyond the working capital of the Company and the consolidated entity at 30 June 2008. The 30 June 2008 accounts indicate short-term commitments of $6.435 million relating to exploration expenditure requirements up until expiry of leases. These obligations are subject to renegotiation upon expiry of the leases. We were informed by Bannerman that in light of its expectations for the approach to feasibility work, the bulk of these obligations are no longer current.

Bannerman Capital Structure and Ownership

6.11 Based on the shareholders’ register as at 24 February 2009, Bannerman had on issue 156,775,036 fully paid ordinary shares, with the major shareholders set out in the table below.

Shareholder	Number of Shares % of Issued Capital	Number of Shares % of Issued Capital
Widerange Corporation Pty Ltd Canadian Control A/c Mr Peter Batten National Nominees Ltd Resource Capital Fund IV LP Savanna Marble Close Corporation JP Morgan Nominees Australia Brewin Nominees Citicorp Nominees Pty Limited ANZ Nominees Limited HSBC Custody Nominees Other minority holders Total	12,587,500 8,038,345 7,500,000 7,494,354 7,100,000 5,500,000 5,229,236 3,800,000 3,060,029 3,019,433 2,903,816 90,542,323	8.03% 5.13% 4.78% 4.78% 4.53% 3.51% 3.34% 2.42% 1.95% 1.93% 1.85% 57.75%
	156,775,036	100.00%

Source:Bannerman’s share register as at 24 February 2009

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6.12 As at 24 February 2009, Bannerman had 19,112,500 unlisted options on issue:
4,612,500 unlisted options exercisable at $0.20 on or before 28 May 2010;
200,000 unlisted options exercisable at $2.40 on or before 27 December 2011;
75,000 unlisted options exercisable at $3.70 on or before 21 June 2012;
2,250,000 unlisted options exercisable at $6.50 on or before 30 November 2010;
2,250,000 unlisted options exercisable at $7.50 on or before 30 November 2011;
4,725,000 unlisted options exercisable at $0.20 on or before 13 December 2010;
100,000 unlisted options exercisable at CAD$4.12 on or before 1 November 2012;
350,000 unlisted options exercisable at $3.64 on or before 28 January 2013;
250,000 unlisted options exercisable at $2.80 on or before 3 June 2013;
250,000 unlisted options exercisable at $2.44 on or before 1 September 2011;
1,000,000 unlisted options exercisable at $2.51 on or before 1 September 2011;
1,000,000 unlisted options exercisable at $3.00 on or before 1 September 2012;
250,000 unlisted options exercisable at $4.00 on or before 1 September 2012;
600,000 unlisted options exercisable at $0.91 on or before 2 February 2013;
600,000 unlisted options exercisable at $1.14 on or before 2 February 2014; and
600,000 unlisted options exercisable at $1.43 on or before 2 February 2015.
We note that RCF IV does not hold any of the existing options on issue.
6.13 The table below shows the maximum extent of the increase in RCF IV’s voting power in the Company that would result from the Transaction:

	Existing Capital Structure	Existing Capital Structure	Post Transaction	Post Transaction	Post Transaction
	Number of Shares	Shareholding %	Number of Shares	Shareholding %	Shareholding FullyDiluted

Existing shareholders RCF IV’s existing shares	149,675,036 7,100,000	95.47% 4.53%	149,675,036 7,100,000	74.20% 3.52%	76.43% 3.22%
RCF IV’s shares from interest received via the issue of shares 1			6,384,977	3.16%	2.89%
RCF IV’s shares upon conversion 2			38,562,091	19.12%	17.46%
Total Undiluted Shares	156,775,036	100%	201,722,104	100%	100%
Options held by parties other than RCF IV Options held by RCF IV	19,112,500 -		19,112,500 -
Total Diluted Shares	175,887,536		220,834,604
Source:PKFCA analysis

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Notes

1. The Interest element assumes that Bannerman elects to satisfy its interest obligations on both the First Tranche and the Standby Tranche through the issue of shares for the full term of the Facility. The number of shares has been calculated based on the 5-day VWAP up to 20 February 2009 ($0.71 rounded to the nearest cent as required under the Agreement), an 8% coupon rate on the full amount of the Facility ($20 million), with interest payments for the First Tranche being paid quarterly over 3 years, and interest payments for the Standby Tranche being paid quarterly over 2 years and 8 months assuming shareholder approval is obtained at the GM in April 2009.

2. The Conversion element assumes that the Facility is held for the full 3-year term and the conversion option is elected to convert the full principal outstanding of the Facility to shares, resulting in RCF IV receiving 16,339,869 shares under the First Tranche at the conversion price per share of $0.612, and then receiving 22,222,222 shares being the maximum number of shares available using the floor conversion price of $0.45 per share under the Standby Tranche.

6.14 We note that (based on the assumptions detailed in 6.13 above) RCF IV’s total shareholding in Bannerman post-transaction may, on conversion increase to 52,047,068 shares representing 25.80% of the Company’s issued capital on an undiluted basis. This results in a dilution of 21.27% to non-associated shareholders from an initial shareholding of 95.47% to a postTransaction of 74.20%, As RCF IV does not hold any of the existing unlisted options, this represents the maximum dilution effect on the non-associated shareholders. On a fully diluted basis, RCF IV’s resultant shareholding is expected to increase to 23.57% assuming the conversion of all existing options on issue.

7 VALUATION OF BANNERMAN

Valuation Methodology

7.1 In conducting our assessment of the fair market value of Bannerman, we considered the generally accepted valuation methods as set out in Appendix 1.
7.2 We have used the NRV approach as our primary approach on the basis that Bannerman is primarily involved in mineral exploration and has a track record of negative earnings.
7.3 We also considered the market trading (“ Market ”) approach, which estimates fair market value by relying on prices from recent sales of the comparable assets, or shares in a company as a guide to current value. This approach includes the use of current share prices for companies that are listed on the ASX.
7.4 The discounted cash flow method discounts future cash flows of a business asset at a discount rate that reflects the riskiness of those cash flows to present value. The discounted cash flow method is not appropriate in this instance as Bannerman is not in a production stage and there is uncertainty around the future cash flows of Bannerman’s areas of interest. In addition, the development of these assets is likely to require further cash injection. Therefore, the preparation of forecast cash flows and accordingly, the application of the discount cash flow method is inappropriate at this stage of Bannerman’s operations.
7.5 The capitalisation of future maintainable earnings approach was also deemed inappropriate, given that Bannerman is an exploration company with a history of negative earnings.

Valuation of Mineral Assets

7.6 In assessing a value for Bannerman’s mineral assets, we have relied upon the report prepared by an independent technical expert, Al Maynard, which is attached in Appendix 3 of this Report. Al Maynard has arrived at a fair value range of $87 million to $134 million with a preferred value of $117 million.

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7.7 We note that Bannerman’s uranium assets in Namibia are the primary mineral assets owned by the Company. The valuation of these assets applying the Empirical Approach (as defined in Al Maynard’s report) as at 24 February 2009 is summarised in the following table.

Valuation	Lower Range $M	Upper Range $M	Preferred Value $M

Indicated and Inferred Resources	126.6 Mlbs	126.6 Mlbs	126.6 Mlbs
Percentage of U @ A$66per tonne	1.52%	2.00%	1.76%
Total value	126.6	167.1	146.9
Bannerman’s 80% holding	101.3	133.7	117.5
Rounded:	101	134	117

7.8 We also note Al Maynard arrived at a value of $87 million to $99 million using the Multiple of Exploration Expenditure method based on an assessed multiple of 3.5 to 4.0 on direct onground exploration expenditure of approximately $31 million.

7.9 On this basis, Al Maynard ascribed the value of Bannerman’s 80% holding of the Etango Uranium Project at $117 million from a range of $87 million to $134 million.

Application of the NRV approach

7.10 Asset based valuations involve the determination of the fair market value of a business based on the net realisable value of the assets used in the business. Whilst commonly used for businesses that are close to liquidation, it can also be used to value the net assets of a company on a going concern basis without taking into account any realisation costs. In which case, adjustments may need to be made to the book value of assets and liabilities to reflect their going concern value.

7.11 We outline the notional consolidated assets and liabilities of Bannerman as at 31 December 2008, adjusted for the fair value of mineral assets provided by an independent technical expert, Al Maynard and material changes subsequent to that date, in the table below:

	Notional Consolidated 31 Dec 2008	Notional Consolidated 31 Dec 2008	Notional Consolidated 31 Dec 2008	Notional Consolidated 31 Dec 2008
Assets Cash 1 Current receivables 2 Mineral assets 3 Property plant & equipment 4 Other miscellaneous assets 5 Total Assets Liabilities Current payables 6 Provisions 7 Convertible Note 8 Other liabilities 9 Total Liabilities Net Asset Value		Low $m 8.82 2.34 87.0 1.60 0.06 99.82 1.74 0.05 7.62 0.40 9.81 90.01	Mid $m 8.82 2.34 117.0 1.60 0.06 129.82 1.74 0.05 7.62 0.40 9.81 120.01	High $m 8.82 2.34 134.0 1.60 0.06 146.82 1.74 0.05 7.62 0.40 9.81 137.01
Source:Unaudited financial statements of Bannerman as at 31 Dec 2008 and subsequent adjustments by PKFCA

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Notes:

1. Cash balance as at 31 December 2008 adjusted for $3 million cash settlement plus $1.38 million VAT payment made to Savanna Marble Close Corporation on 12 January 2009. We are not aware of any other material movement in cash balance between 31 December 2008 and the date of our Report.

2. GST / VAT recoverables and other receivables as at 31 December 2008.

3. Valuation of Bannerman’s mineral assets as reported by an independent technical expert, Al Maynard as per 7.7 above. These values replace the capitalised exploration and evaluation expenditure recorded at cost in Bannerman’s balance sheet as at 31 December 2008.

4. Property plant & equipment book value as at 31 December 2008.

5. Aggregate balance as at 31 December 2008 of Other Assets and Available for Sale Financial Assets.

6. Trade and other payables as at 31 December 2008, adjusted for a reduction in accruals of $4.38 million reflecting the cash payment made to Savanna Marble Close Corporation on 12 January 2009.

7. Employee Annual Leave Provision as at 31 December 2008.

8. Debt component of the First Tranche drawdown of the Facility after capital raising costs as at 31 December 2008.

9. Other liabilities relate to the deferred tax liability arising from the First Tranche of the Facility as at 31 December 2008.

10. We note the recent settlement of the Savanna Marble Close Corporation litigation involving an agreement for the Company to pay $3.5 million in cash and 9.5 million ordinary shares via two tranches. For the purpose of our valuation we have only recognised the first tranche payment of $3.million in cash and the issue of 5.5 million shares to Savanna Marble Close Corporation which occurred on 12 January 2009 including $1.38 million of VAT on the settlement. The second tranche of this settlement of 4 million shares and $500,000 cash is contingent on the granting of the mining licence under the settlement. This contingent liability may have the effect of decreasing net assets but this has not been reflected in our calculation.

7.12 The equity value of Bannerman based on the NRV approach is in the range of $90 million to $137 million with a mid-point value of approximately $120 million. Based on the total number of Bannerman shares of 156,775,036 outstanding as at the date of this Report, this equates to a per share value in the range of $0.574 and $0.874 with a mid-point value of $0.765 per share.

Application of the Market approach

7.13 In order to assess the reliability of using the traded market price of Bannerman’s shares as a basis for valuing the Company, we have had regard to:

the liquidity of Bannerman shares over the trading period;
the ‘spread’ of ordinary shareholders and the total number of ordinary shares that they hold in the Company, taking into account any trading or other restrictions applicable to the quoted ordinary shares;
the level of trading activity of the quoted ordinary shares in the Company (i.e. the volume of trades of the quoted ordinary shares in the market as a percentage of the total quoted ordinary shares, and the frequency of the trades);
the number and frequency of ‘unusual’ and/or ‘abnormal’ trading that takes place in the Company’s quoted ordinary shares;
the presence of any factors that may indicate that trading in the shares is the result of significant speculative trading; and

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the level of knowledge that the ‘willing’ buyers and sellers have in respect of the Company and the market in which it operates.
7.14 We analysed the 12-month share price and volume history to 20 February 2009 as follows:

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BMN 12-month Price History
Source : IRESS
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7.15 We note that as at 20 February 2009, Bannerman had a market capitalisation of approximately $109.74 million based on the closing share price of $0.70.
7.16
We note the following major movements in the Company’s share price and volume:
the Company’s share price has fallen significantly during the past 12 months, from $2.15 on 21 February 2008 to $0.70 on 20 February 2009;
a significant increase in the volume of shares traded on 2 April 2008 was noted. Two days prior to 2 April 2008, the Company requested its shares be placed in pre-open, effecting a trading halt on Bannerman shares. It was announced on 2 April that the Company became aware that entities associated with Director (at the time), Mr Nathan McMahon and other shareholders of the Company had margin lending arrangements with Opes Prime Group Limited which had been put into receivership by the ANZ Bank. This announcement had the effect of bringing about a 8.6% fall in the Company’s share price on that day;
an increase in the volume of shares traded on 26 August 2008 was noted. At this time the market was notified that the Managing Director, Mr Peter Batten would be leaving the Company effective immediately and that Mr Clive Jones would be acting as interim Managing Director until a replacement could be found; and

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an increase in the volume of shares traded on 16 September 2008 was noted. On this date, the market was notified that the Director, Mr Alistair Clayton was purchasing 100,000 Bannerman shares on market. Also on this date the market was notified of the results of the General Meeting held on 17 September 2008.
7.17
We note the following in regards to Bannerman’s market liquidity and trading activity:
annual turnover of the Company’s shares on a one-year rolling period up to 20 February 2009 was over 188 million shares, which is equivalent to approximately 120% of the total number of shares on issue at that time;
the average daily volume of trades ranged from 352,768 per day in the one month period prior to 20 February 2009 up to 793,094 per day in the six month period prior to 20 February 2009. Details of the average daily trading volume of the Company’s shares are set out in paragraph 7.20;
we observed 251 active trading days during the selected 12-month period out of a total of 262 trading days, indicating that the market is sufficiently active for the Company’s shares; and
the top 10 shareholders (excluding the Canadian Control A/c) of the Company make up approximately 37% of the total number of shares outstanding.
7.18 From the above analysis, we conclude that the volume of trading activity in Bannerman shares is considered to be strong and the market is sufficiently active and liquid to provide a fair reflection of the market value of Bannerman shares.
7.19 We also reviewed the following relating to the trading activity of Bannerman’s shares on the ASX:
the daily high, low and closing share price;
the daily volume of share trading; and
the VWAP.
7.20 The following table summarises the VWAP analysis of Bannerman’s share prices between 21 February 2008 and 20 February 2009:

				Average daily volume
	High	Low	VWAP

As at 20 February 2009 1 month to 20 February 2009 3 months to 20 February 2009 6 months to 20 February 2009 12 months to 20 February 2009	0.7300 0.8500 1.0400 1.0400 2.5900	0.7000 0.5550 0.4100 0.2250 0.2250	0.7111 0.6609 0.6930 0.6129 1.2266	154,905 352,768 540,119 793,094 750,594
Source: IRESS and PKFCA analysis

7.21 The VWAP of the Company’s shares incorporates the averaging of share prices based on the daily volume weighted value of trades during the selected period.

7.22 We note the following with respect to the share price of Bannerman between 21 February 2008 and 20 February 2009:
Bannerman’s closing share price on 20 February 2009 was $0.70;
Bannerman’s shares traded between $0.225 and $2.590 during the 12 month period; and

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the VWAP decreased over the 12-month period from $1.2266 to $0.7111.

Comparison of values under the NRV approach and the Market approach

7.23 The equity value of Bannerman obtained under the NRV approach is in the range of $0.574 per share and $0.874 per share with a mid-point value of $0.765 per share.
7.24 Based on the VWAP analysis conducted above, the Market approach provided a range of equity values for Bannerman in the range of $0.6129 to $1.2266. As traded share prices reflect a minority portfolio interest, a control premium of approximately 30% may be applied to obtain an equivalent controlling interest value of between $0.80 and $1.59 per share for the purpose of our comparison with the values obtained under the NRV approach.
7.25 We note that the Market approach provides a higher value than the NRV approach and the difference in the values derived from each approach is attributable to the following:
the NRV approach generally provides the lowest value for the business;
the NRV approach does not necessarily take into account the potential future cash flows of the business, in particular, the potential value of the minerals explored in this instance;
the Market approach encapsulates some value in a listed company which is not taken into consideration in the NRV approach; and
the NRV approach is affected by accounting policies that may not capture the true value of Bannerman’s assets and liabilities.

The difference in values obtained under the Market approach and the NRV approach is typically attributed to goodwill.

7.26 However, we also note that the value obtained under the Market approach is subject to investor sentiment, the volatility of the financial markets and the state of the global economy at different points in time. Hence the wide ranging equity values obtained under the Market approach.
7.27 We have assessed the fair market value of Bannerman’s shares to be in the range of $0.574 per share and $0.874 per share with a mid-point value of $0.765 per share based on the NRV approach for the following reasons:
the highlighted going concern issue relating to the Company;
the NRV is a closer indication of the Company’s break-up value in relation to the going concern issue;
the Agreement was struck when the market was depressed where the 2-month VWAP was $0.42 and share prices were trading below the NRV for a number of consecutive periods and reaching a low of $0.225 prior to the signing of the Agreement on 28 November 2008; and
the Company is an exploration company with limited revenue, and applying an NRV approach is not unreasonable for the nature of this business.

Control Premium

7.28 RG 111 states that an offer is ‘fair’ if the value of the offer price or consideration is equal to or greater than the value of the securities the subject of the offer. This comparison should be made assuming 100% ownership of the ‘target’ and irrespective of whether the consideration is scrip or cash. Accordingly, in valuing securities in the company, it is inappropriate to apply a discount on the basis that the shares being acquired represent a minority or ‘portfolio’ parcel of shares.

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7.29 Whilst valuations obtained using the Market approach relates to minority interest shareholding value, valuations obtained using the NRV approach relates to a controlling interest shareholder value. As we have determined the fair market value of Bannerman using the NRV approach, we have not adjusted the pre-Transaction value of Bannerman for a control premium.
7.30 We have further evaluated the Company on a post-Transaction basis, taking into account any control that the in-coming shareholder may hold, before concluding if the offer is ‘fair’ to nonassociated shareholders.
7.31 If some control is determined, a minority discount needs to be applied to the value of Bannerman’s securities post-Transaction, on the basis that existing non-associated shareholders are likely to hold minority interests in the post-Transaction entity.

Proforma NRV post-Transaction

7.32 The following table sets out the range of the notional post-Transaction NRV per share of Bannerman assuming full conversion of the Facility to Bannerman shares at the lower and upper limits of the conversion price, in comparison with the assessed mid-point value derived from 7.27 above.

Per Share Net Asset value	Pre-Transaction	Post-Transaction	Post-Transaction
	Assessed mid-point fair value	Lower limit	Upper limit
Shares on issue	156,775,036	201,722,104¹	195,839,751 2
Net Assets	$120,011,007	$140,011,007 3	$140,011,007 3
NRV per share (unadjusted)	$0.765	$0.694	$0.715
Minority Discount		10%	10%
Adjusted NRV per share		$0.625	$0.644
Note:The nominal post Transaction net asset position indicated has been prepared for valuation purposes and may not reflect the actual IFRS compliant net asset position post Transaction.

Notes:

1. This assumes RCF IV converts all of the First Tranche at the First Tranche conversion price ($0.612), and converts all of the Standby Tranche at the floor conversion price of the Standby Tranche (i.e. $0.45). It also assumes that Bannerman elects to pay all interest via the issue of shares thereby providing the maximum number of shares that RCF IV can acquire under the Facility.

2. This assumes RCF IV converts all of the First Tranche at the First Tranche conversion price ($0.612), and converts all of the Standby Tranche at the upper limit conversion price of the Standby Tranche (i.e. $0.612), It also assumes that Bannerman elects to pay all interest via the issue of shares thereby providing the maximum number of shares that RCF IV can acquire under the Facility.

Upon full conversion of the Facility and the conversion of Bannerman’s interest obligation into shares, the net asset position is expected to increase by $20 million.
7.33 Assuming full conversion of the Facility and the conversion of Bannerman’s interest obligation into shares, RCF is expected to become the major shareholder of Bannerman with a maximum shareholding interest of 25.80%, a shareholding that is significantly larger than the next largest shareholder (Widerange Corporation Pty Ltd at approximately 6% post-Transaction). Therefore, we expect RCF IV to have some significant influence over Bannerman.
7.34 In addition, the Agreement entitles RCF IV to appoint a nominee to the Board of Directors of Bannerman during the currency of the Agreement. If RCF chooses not to do this but holds 5%

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or more of the shares on a fully diluted basis at any time, Bannerman must consult with RCF in relation to its policies and future direction.

7.35 Accordingly, we have applied a minority discount of 10% to the post-Transaction value of Bannerman to reflect some extent of influence that RCF IV could have over the Company.
7.36 Therefore, the post-Transaction NRV per share, assuming full conversion of the Facility at the lower and upper limits of the conversion price, and after applying a minority discount of 10% is expected to range from $0.625 to $0.644.
7.37 The above analysis shows that the NRV per share is expected to decrease from an assessed mid-point fair value of $0.765 pre-Transaction to an expected notional range of $0.625 to $0.644 post-Transaction.

8 CONSIDERATIONS IN ASSESSING THE APPROVALS

Notional Post-Transaction Analysis

8.1 The substance of the Transaction suggests that although Bannerman is receiving cash under the Facility, the non-associated shareholders of the Company are not exchanging their shares for cash and will continue to hold shares in the post-Transaction entity of Bannerman.
8.2 Therefore, for the purpose of this fairness assessment, we are required to compare the value of the securities being offered (allowing for a minority discount) – in this case the post-Transaction value of Bannerman – and the value of the target entity’s securities (pre-Transaction), assuming 100% of the securities are available for sale.
8.3 The Transaction is ‘fair’ if the notional NRV per share of Bannerman post-Transaction is expected to be higher than the fair market value per share of Bannerman’s shares preTransaction.

Conversion approval

8.4 The value of consideration received by Bannerman under the Conversion element is the conversion price under the Facility. The conversion price under the First Tranche is fixed at $0.612 per share. The conversion price under the Standby Tranche is in the range of $0.45 per share to $0.612 per share, given that it is stated to be the lower of $0.612 per share and a 20% premium to the 30 day VWAP of Bannerman shares at the time of the drawdown of the Standby Tranche, subject to a minimum conversion price of $0.45 per share.
8.5 Given these terms, the minimum conversion price of the Facility will be $0.45 (equating to the conversion into a maximum number of 22,222,222 shares) and the maximum conversion price of the Facility will be $0.612 (equating to the conversion into a minimum number of 16,339,869 shares).
8.6 The conversion price is compared with the fair market value per share of Bannerman’s shares, determined by the NRV approach, to evaluate the fairness of the Conversion element of the Transaction. The Conversion element of the Transaction is ‘fair’ if the value of consideration received by Bannerman is higher than the fair market value per share of Bannerman’s shares.

Prepayment approval

8.7 The value of consideration received by Bannerman under the Prepayment element is the exercise price of the options granted to RCF IV should Bannerman elect to prepay the Facility

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prior to its maturity. The exercise price of the options, as determined by a formula specified in the Agreement is in the range of $0.45 per share to $0.612 per share.

8.8 Given these terms, the minimum exercise price of $0.45 (equating to the acquisition of a maximum number of 22,222,222 shares), and the maximum exercise price of the $0.612 (equating to the acquisition of a minimum number of 16,339,869 shares).
8.9 The exercise price is compared with the fair market value per share of Bannerman’s shares, determined by the NRV approach, to evaluate the fairness of the Prepayment element of the Transaction. The Prepayment element of the Transaction is ‘fair’ if the value of consideration received by Bannerman is higher than the fair market value per share of Bannerman’s shares.

Interest approval

8.10 The value of consideration received by Bannerman under the Interest element is the issue price of the shares to RCF IV should Bannerman elect to pay the interest in the form of Bannerman shares rather than cash. The issue price is determined based on the 5-day VWAP of Bannerman shares on the ASX calculated on the day prior to the applicable interest payment.
8.11 As the 5-day VWAP can only be determined at a future point in time, we have used 20 February 2009 as an indicative date for the purpose of analysing the Interest element of the Facility. The 5-day VWAP as at 20 February has been calculated to be $0.71 per share rounded to the nearest cent as required under the Agreement.
8.12 The issue price is compared with the fair market value per share of Bannerman’s shares, determined by the NRV approach, to evaluate the fairness of the Interest element of the Transaction. The Interest element of the Transaction is ‘fair’ if the value of consideration received by Bannerman is higher than the fair market value per share of Bannerman’s shares.

9 ASSESSMENT OF FAIRNESS

9.1 RG 111 states, as a criteria to analysing the fairness of a Transaction, that an offer is ‘fair’ if the value of the offer price or consideration is equal to or greater than the value of the securities the subject of the offer.
9.2 In this case, the assessment of fairness should be made between the value of the securities being offered (allowing for a minority discount) – being the post-Transaction value of Bannerman – and the value of the target entity’s securities (pre-Transaction), assuming 100% of the securities are available for sale,
9.3 Based on our assessment, the Transaction is ‘not fair’ as the notional NRV per share of Bannerman, at an expected range of $0.625 to $0.644 post-Transaction, is expected to be lower than the assessed pre-Transaction mid-point fair value of $0.765 per share.
9.4 In our opinion, the Conversion element of the Facility is ‘not fair’ as the value of the consideration to be received in the form of the conversion price under the Facility being in the range of $0.45 to $0.612, is lower than the mid-point fair market value of Bannerman shares of $0.765 per share determined under the NRV approach based on the Company’s unaudited net assets as at 31 December 2008 adjusted for material changes subsequent to that date.
9.5 In our opinion, the Prepayment element of the Facility is ‘not fair’ as the value of the consideration to be received in the form of the exercise price of the options issued, being in the range of $0.45 to $0.612 is lower than the mid-point fair market value of Bannerman shares of $0.765 per share determined under the NRV approach based on the Company’s unaudited net assets as at 31 December 2008 adjusted for material changes subsequent to that date
9.6 In our opinion, the Interest element of the Facility is ‘not fair’ as the value of the consideration to be received in the form of a share issue price based on the 5-day VWAP as at 20 February

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2009 of $0.71 is lower than the mid-point fair market value of Bannerman shares of $0.765 per share determined under the NRV approach based on the Company’s unaudited net assets as at 31 December 2008 adjusted for material changes subsequent to that date.

10 ASSESSMENT OF REASONABLENESS

10.1 RG 111 states, as a criteria to analysing the reasonableness of the Agreement whereby as a consequence of a company issuing securities to an allottee, that allottee acquires over 20% of the company, that an offer is ‘reasonable’ if it is fair.
10.2 In accordance with RG 111, although the Transaction is ‘not fair’, the Transaction is reasonable as it is supported by other considerations and additional reasons for the shareholders to vote in favour of the Transaction.
10.3 In accordance with RG 111, although the terms of the Conversion element are ‘not fair’, they are reasonable as they are supported by other considerations and additional reasons for the shareholders to vote in favour of the Conversion element.
10.4 In accordance with RG 111, although the terms of the Prepayment element are ‘not fair’, they are reasonable as they are supported by other considerations and additional reasons for the shareholders to vote in favour of the Prepayment element.
10.5 In accordance with RG 111, although the terms of the Interest element are ‘not fair’, they are reasonable as they are supported by other considerations and additional reasons for the shareholders to vote in favour of the Interest element.

Other considerations

10.6 The Transaction would result in a maximum dilution of 21.27% to non-associated shareholders from an initial shareholding of 95.47% to a post-Transaction of 74.20%, if RCF IV acquires the maximum number of Bannerman shares pursuant to the arrangements set out in the Agreement.
10.7 Bannerman noted in its 2008 Annual Report that the Company and the consolidated entity will be required to meet various operational outlays which require funds that are above and beyond the working capital of the Company and the consolidated entity at 30 June 2008. Whilst further funding may still be required in the long-term, the Facility provided by RCF IV will result in a significant improvement in Bannerman’s cash capital position in the short-term. Therefore, the Facility and the necessary approvals of the Transaction are an important factor in determining the going concern position of the Company.
10.8 The current economic climate and state of the current financial markets have significantly impacted the ability to raise funds via debt or equity. The Facility provides Bannerman with both funding and the flexibility to repay the debt facility through the issue of shares. Approving the Transaction allows the Company to continue as a going concern in the short term and also enables the Company to finalise a bankable feasibility study in relation to its major project, the Etango Project, thereby allowing Bannerman to exploit further business opportunities from the project.
10.9 We are aware that the litigation brought against the Minister of Mines and Energy in Namibia (of which Bannerman is second respondent), by Savanna Marble Close Corporation and certain associated parties, has been settled via an out of court agreement between the two parties. Under the terms of the agreement, Savanna Marble Close Corporation is entitled to receive up to $3.5 million in cash and 9.5 million ordinary shares in Bannerman to be issued in two tranches. The first payment of cash of $3.0 million and first tranche of 5.5 million shares was issued on 12 January 2009, including $1.38 million of VAT on the settlement.
10.10 Following the drawdown of the Facility, the Conversion element allows the Company to reduce debt through the issue of shares, thereby reducing the financial risk of the Company.

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Depending on the overall debt position of the Company, increases in debt levels generally increase the financial and bankruptcy risks of the Company and vice versa.

10.11 Depending on whether RCF IV or Bannerman exercises its rights, the Transaction nevertheless provides Bannerman with the alternative to prepay or repay the debt principal and to satisfy its interest obligations through the issue of shares, thereby reducing the pressure on its cash position.
10.12 Consideration has been given to the secured nature of the Agreement. We note that Bannerman has agreed to charge the whole of its 80% holding in BMRN to RCF IV under the terms of the Agreement. BMRN owns a 100% interest in the Etango Anomaly A project in Namibia, Bannerman’s major project. Under the terms of the Agreement, in an event of default by Bannerman, RCF IV will rightfully take ownership of the 80% interest in BMRN held by Bannerman. The Conversion, Prepayment and Interest elements provide for the satisfaction of the financial debt of the Facility, thereby reducing the risk of the Etango Project being seized by the lender.
10.13 The increased financial strength of Bannerman, upon the acquisition of shares by RCF IV under the Transaction, is likely to make the Company a more attractive investment target and may improve the Company’s longer term access to funding particularly if the feasibility studies show positive results.
10.14 We note that the Company is also likely to require additional funding by way of debt, equity or a combination of both to fund further operations in the future. This is especially so if the feasibility study provides a positive result and the Company progresses to the development and production phases.
11

CONCLUSION

11.1 We have considered the terms of the Facility as detailed in the NOM and EM and conclude that the acquisition of shares by RCF IV under the Conversion element, in relation to Resolution 2 of the NOM, is not fair but reasonable to the non-associated shareholders of Bannerman.
11.2 We have considered the terms of the Facility as detailed in the NOM and EM and conclude that the acquisition of shares by RCF IV under the Prepayment element, in relation to Resolution 3 of the NOM, is not fair but reasonable to the non-associated shareholders of Bannerman.
11.3 We have considered the terms of the Facility as detailed in the NOM and EM and conclude that the acquisition of shares by RCF IV under the Interest element, in relation to Resolution 4 of the NOM, is not fair but reasonable to the non-associated shareholders of Bannerman.
11.4 In our opinion, the Transaction is considered to be not fair but reasonable.

12 SOURCES OF INFORMATION

12.1 In preparing this report we have had access to and have relied upon the following primary sources of information:

Bannerman’s Notice of Extraordinary General Meeting scheduled for on or around 14 April 2009;
The Convertible Note Facility Agreement executed between Bannerman and RCF IV;
The Deed of Charge executed between Bannerman and RCF IV;
The Deed of Consent and Waiver executed between Bannerman, BMRN, Clive Bruce Jones, Nathan McMahon, and RCF IV;
The Pledge and Cession in Security executed between Bannerman and RCF IV;

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Valuation of Bannernan’s mineral assets prepared by Al Maynard;
Bannerman’s 2008 Financial Report containing audited financial accounts for Bannerman as a consolidated entity for the years ended 30 June 2007 and 30 June 2008;
Unaudited consolidated accounts of Bannerman for the year ended 31 December 2008;
Shareholder and option registers of Bannerman as at 24 February 2009;
Correspondences including electronic mail, telephone conversations and meetings with key personnel from Bannerman; and
Other sources of publicly available information such as IRESS, ASIC, ASX, Internet, Company Websites, newspaper publications etc.

13 DECLARATIONS

Qualifications

13.1 PKFCA is corporate advisory company owned by partners of PKF Chartered Accountants, Western Australian Partnership (“ PKF ”). PKFCA has extensive experience in the provision of corporate financial advice, particularly in respect of independent expert’s reports and valuations.
13.2 The nature of this Report is such that it should be given by an entity that holds an Australian Financial Services Licence under the Financial Services Reform Act 2001. PKFCA holds the appropriate Australian Financial Service Licence. PKFCA’s Financial Services Guide is included in Appendix 2.
13.3 The person specifically involved in preparing this Report, Mr Neil Smith, is a Partner of PKF and a Director of PKFCA and has the necessary experience and qualifications appropriate to the advice being offered.
13.4 Other PKFCA and PKF staff have been consulted in the preparation of this Report where appropriate.

Independence

13.5 PKFCA is not aware of any matter or circumstance that would preclude it from preparing this Report on the grounds of independence either under regulatory or professional requirements. In particular, we have had regard to the provisions of applicable pronouncements and other guidance statements relating to professional independence issued by Australian professional accounting bodies and ASIC RG 112.
13.6 Neither PKFCA, PKF, nor the signatory of this Report, Mr Neil Smith, has had within the past two years any relationship with the Company.
13.7 We have held discussions with the management of Bannerman regarding the factual accuracy of the information contained in this Report. We did not change the methodology used in our assessment as a result of these discussions and our independence has not been impinged in any way.

Disclaimer

13.8 This Report has been prepared at the request of the Directors of Bannerman specifically for the non-associated shareholders of Bannerman. It is not intended that this Report be used for any other purpose other than to accompany the NOM be sent to Bannerman shareholders.

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13.9 In particular it is not intended that this Report should be used for any other purpose than as an expression of our opinion on whether the Transaction is fair and reasonable to the shareholders of the Company.
13.10 Accordingly, this Report and the information contained herein may not be relied upon by anyone other than the non-associated shareholders of Bannerman without the written consent of PKFCA.
13.11 Neither PKFCA, nor PKF, nor any member or employee thereof undertakes responsibility to any person, other than the non-associated shareholders of Bannerman, in respect of this Report, including any error or omissions howsoever caused.
13.12 In the preparation of this Report we have considered the information and explanations given to us. We emphasise that we have not carried out an independent confirmation of the information nor have we conducted anything in the nature of an audit or full scope due diligence review. We do not imply, nor should it be construed that our assessment has revealed all the matters which an audit or more detailed examination might disclose.
13.13 We have however evaluated information provided to us by Bannerman, as well as other parties through inquiry, analysis and review and nothing has come to our attention to indicate the information provided was materially misstated or did not afford reasonable grounds upon which to base our opinion. We have no reason to believe that any information relied on by us is incorrect.
13.14 The statements and opinions contained in this Report are given in good faith and are based upon PKFCA’s consideration and assessment of information provided by the Directors, executives and management of Bannerman as well as other parties from whom the Directors have instructed to provide information, and is believed to be reliable and accurate. We have no reason to believe that any information has been withheld from us.

Consents

13.15 PKFCA hereby consents to this Report accompanying the NOM, in the form and content in which it is included, to be sent to Bannerman shareholders. Apart from such use, neither the whole, nor any part of this Report, nor any reference thereto may be included in or with, or attached to any document, circular, resolution, statement or letter without the prior written consent of PKFCA.

Other

13.16 PKFCA is entitled to receive a fee of approximately $45,000 (excluding GST) for the preparation of this Report. PKFCA will not be entitled to any other pecuniary or other benefit, whether direct or indirect, in connection with the making of this Report.

Yours faithfully

Neil Smith

Director

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APPENDIX 1: VALUATION APPROACHES CONSIDERED

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Valuation Approaches Considered

Various commonly used business valuation methods have been considered as follows:

Discounted Cash Flow (“ DCF ”);
Capitalisation of Future Maintainable Earnings (“ CFME ”);
Net Realisable Value of Assets (“ NRV ”); and
Market Trading (“ Market ”).

DCF Approach

The DCF method is based on the premise that the value of a business or any asset is represented by the present value of its future cash flows. It requires two essential elements:

the forecast of future cash flows of the business asset for a number of years (usually five to ten years); and
the discount rate that reflects the riskiness of those cash flows used to discount the forecast cash flows back to net present value (“NPV”).

DCF is appropriate where:

the businesses’ earnings are capable of being forecast for a reasonable period (preferably 5 to 10 years) with reasonable accuracy;
earnings or cash flows are expected to fluctuate significantly from year to year;
the business or asset has a finite or defined life such as a mine or property development;
the business is in a 'start up' or in early stages of development;
the business has irregular capital expenditure requirements;
the business involves infrastructure projects with major capital expenditure requirements; or
the business is currently making losses but is expected to generate profits in the future.

CFME Approach

The CFME method involves the capitalisation of estimated future maintainable earnings by an appropriate multiple as a basis for determining the value of the business. Maintainable earnings are the assessed sustainable profits that can be derived by a business and excludes any one off profits or losses. An appropriate earnings multiple is assessed by reference to market evidence of the earnings multiples of comparable companies. The business value is then added to the realisable value of any surplus assets and net debt to arrive at the value of the Company.

This method is suitable for the valuation of profitable businesses with indefinite trading lives and recurring revenue streams and where earnings are relatively stable or a reliable trend in earnings is evident.

Net Realisable Value of Assets

Asset based valuations involve the determination of the fair market value of a business based on the net realisable value of the assets used in the business.

Valuation of net realisable assets involves:

separating the business or entity into components which can be readily sold, such as individual business units or collection of individual items of plant and equipment and other net assets; and

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ascribing a value to each based on the net amount that could be obtained for this asset if sold.

The net realisable value of the assets can be determined on the basis of:

orderly realisation : this method estimates fair market value by determining the net assets of the underlying business including an allowance for the reasonable costs of carrying out the sale of assets, taxation charges and the time value of money assuming the business is wound up in an orderly manner. This is not a valuation on the basis of a forced sale where the assets might be sold at values materially different from their fair market value;
liquidation : this is a valuation on the basis of a forced sale where the assets might be sold at values materially different from their fair market value; or
going concern : the net assets on a going concern basis estimates the market value of the net assets but does not take into account any realisation costs. This method is often considered appropriate for the valuation of an investment or property holding company. Adjustments may need to be made to the book value of assets and liabilities to reflect their going concern value.

The net realisable value of a trading company’s assets will generally provide the lowest possible value for the business. The difference between the value of the company’s identifiable net assets (including identifiable intangibles) and the value obtained by capitalising earnings is attributable to goodwill.

The net realisable value of assets is relevant where a company is making sustained losses or profits but at a level less than the required rate of return, where it is close to liquidation, where it is a holding company, or where all its assets are liquid. It is also relevant to businesses which are being segmented and divested and to value assets that are surplus to the core operating business. The net realisable assets methodology is also used as a check for the value derived using other methods.

These approaches ignore the possibility that the company’s value could exceed the realisable value of its assets.

Market Trading Approach

Market valuations rely on prices from recent sales of the comparable assets, or shares in a company as a guide to current value. This approach includes the use of current share prices for companies that are listed on the ASX. The application of the price that a company’s shares trade on the ASX is an appropriate basis for valuation where:

the shares trade in an efficient market place where ‘willing’ buyers and sellers readily trade the company’s shares; and
the market for the company’s shares is active and liquid.

The Market approach generally provides a fair guide to value a company based on actual exchanges between willing and able buyers and willing and able sellers at arm’s length.

Bannerman Resources Limited – Independent Expert’s Report

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APPENDIX 2: FINANCIAL SERVICES GUIDE

Bannerman Resources Limited – Independent Expert’s Report

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Financial Services Guide

Issue date: 6 March 2009

Financial Services Guide

What is a Financial Services Guide?

The purpose of the Financial Services Guide (“FSG”) is to assist you in deciding whether to use any of the general financial product advice provided by PKF Corporate Advisory Services (WA) Pty Ltd (“PKFCA”) (ABN 68 009 423 152). PKFCA is a holder of an Australian Financial Services Licence (“AFSL”) No. 240566. The contents of this FSG include:

who PKFCA is and how we can be contacted;
what services PKFCA is authorised to provide under our AFSL;
how PKFCA (and any other relevant parties) is remunerated in relation to any general financial product advice PKFCA may provide;
details of any potential conflicts of interest; and
details of PKFCA’s internal and external dispute resolution systems and how you can access them.

Information About Us

We have been engaged by the Directors of Bannerman Resources Limited (“the Company”) to give general financial product advice in the form of a report to be provided to you in connection with our Independent Expert’s Report. A copy of this report is included in the Notice of Meeting prepared by the Company. You are not the party or parties who engaged PKFCA to prepare the report.

PKFCA is a corporate advisory company owned by the partners of the Western Australian partnership of PKF Chartered Accountants and Business Advisers (“PKF”). The directors of PKFCA may also be partners in the Western Australian partnership of PKF.

The Western Australian partnership of PKF and its related entities provide services primarily in the areas of external audit, internal audit, tax, consulting and through PKFCA, corporate advisory services.

The financial product advice in our report is provided by PKFCA and not by the West Australian partnership of PKF or its related entities.

We do not have any formal associations or relationships with any other entities that are issuers or sellers of financial products, other than PKF Financial Services Pty Ltd. However, you should note that PKFCA and the West Australian partnership of PKF (and its related bodies corporate) may from time to time provide professional services to financial product issuers or sellers in the ordinary course of business.

What financial services are we licensed to provide?

The AFSL that we hold authorises us to provide financial product advice in respect of securities only in the capacity of providing reports, for the purposes of acting for and on behalf of clients in relation to proposed or actual mergers, acquisitions, takeovers, corporate restructures or share issues.

Bannerman Resources Limited – Independent Expert’s Report

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Information about the general financial product advice we provide

The financial product advice provided in our report is known as “general advice” because it does not take into account your personal objectives, financial situation or needs. You should consider whether the general advice contained in our report is appropriate for you, having regard to your own personal objectives, financial situation or needs.

If our advice is being provided to you in connection with the acquisition or potential acquisition of a financial product issued or sold by another party, we recommend you obtain and read carefully the relevant offer document provided by the issuer or seller of the financial product. The purpose of the offer document is to help you make an informed decision about the acquisition of a financial product. The contents of the offer document will include details such as the risks, benefits and costs of acquiring the particular financial product.

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Our fees are usually determined on an hourly basis; however they may be a fixed amount or derived using another basis. We may also seek reimbursement of any out of pocket expenses incurred in providing the services.

Fee arrangements are agreed with the party or parties who actually engage us, and we confirm our remuneration in a written letter of engagement to the party or parties who engage us.

Neither PKFCA nor its Directors and officers, nor any related bodies corporate or associates and their Directors and officers, receives any commissions or other benefits, except for the fees for the services rendered to the party or parties who engage us. You have a right to request further information with regards to remuneration received by PKFCA or its representatives.

All of our employees receive a salary. Our employees are eligible for annual salary increases and bonuses based on overall performance but do not receive any commissions or other benefits arising directly from services provided by you. The remuneration paid to our Directors reflects their individual contribution to the company and covers all aspects of performance. Our Directors do not receive any commissions or other benefits in connection with our advice.

We do not pay commissions or provide other benefits to other parties for referring prospective clients to us.

Responsibility

The liability of PKFCA is limited to the contents of this FSG and the report referred to in this FSG.

Distribution

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What should you do if you have a complaint?

If you have any concerns regarding this report, you may wish to advise us. Our internal complaints handling process is designed to respond to your concerns promptly and equitably. Please address your complaint in writing to:

The Complaints Officer PO Box Z5066 St George’s Terrace PERTH WA 6831

Bannerman Resources Limited – Independent Expert’s Report

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If you are not satisfied with the steps we have taken to resolve your complaint, you may contact the Financial Ombudsman Service (“FOS”). FOS provides free advice and assistance to consumers to help them resolve complaints relating to members of the financial services industry. Complaints may be submitted to FOS at:

Financial Ombudsman Service Limited GPO Box 3 MELBOURNE VIC 3001 Telephone: 1300 780 808 Fax: +61 (03) 9613 6399

If your complaint relates to the professional conduct of a person who is a Chartered Accountant, you may wish to lodge a complaint in writing with the Institute of Chartered Accountants in Australia (“ICAA”). The ICAA is the professional body responsible for setting and upholding the professional, ethical and technical standards of Chartered Accountants and can be contacted at:

The Institute of Chartered Accountants GPO Box Z5385 St Georges Terrace PERTH WA 6831 Telephone (08) 9420 0400 Fax (08) 9321 5141

Specific contact details for lodging a complaint with the ICAA can be obtained from their website at:

http://www.icaa.org.au/about/index.cfm

The Australian Securities and Investment Commission (“ASIC”) regulates Australian companies, financial markets, financial services organisations and professionals who deal and advise in investments, superannuation, insurance, deposit taking and credit. Their website contains information on lodging complaints about companies and individual persons and sets out the types of complaints handled by ASIC. You may contact ASIC as follows:

Info Line: 1300 300 630 Email: [email protected] Internet: http://www.asic.gov.au/asic/asic.nsf

Bannerman Resources Limited – Independent Expert’s Report

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APPENDIX 3: INDEPENDENT VALUATION REPORT BY AL MAYNARD & ASSOCIATES

Bannerman Resources Limited – Independent Expert’s Report

AL MAYNARD & ASSOCIATES Pty Ltd Consulting Geologists

www.geological.com.au

www.geological.com.au ABN 75 120 492 435 9/280 Hay Street, Tel: (+618) 9388 1000 Mob: 04 0304 9449 SUBIACO, WA, 6008 Fax: (+618) 9388 1768 A/h: (618) 9443 3333 Australia [email protected] Australian & International Exploration & Evaluation of Mineral Properties

INDEPENDENT VALUATION

OF

ETANGO URANIUM PROJECT, NAMIBIA

HELD BY

BANNERMAN RESOURCES LTD

PREPARED FOR

PKF CORPORATE ADVISORY SERVICES (WA) PTY LTD

Author:

Company; Date

Allen J Maynard BAppSc(Geol), MAIG, MAusIMM Al Maynard & Associates Pty Ltd 3[rd] March, 2009

Bannerman Exploration Assets, Namibia – Independent Valuation – AM&A

EXECUTIVE SUMMARY

This independent valuation has been prepared by Al Maynard & Associates (“AM&A”) at the request of Ms. E. Tan, Principal of PKF Corporate Advisory Services (WA) Pty Ltd (“PKFCA”) who has commissioned this valuation of the exploration assets held by Bannerman Resources Ltd (“Bannerman”).

The “Etango Uranium Project” located in Namibia is the prime asset held by Bannerman and for the purpose of this valuation is considered the only asset of value held by Bannerman.

This report concludes that the current cash value of Bannerman’s 80% interest in the Etango Uranium Project is ascribed at A$117 million from within the range of A$101M to A$134M.

Technical information has been provided by Bannerman and Coffey Mining Pty Ltd (for Bannerman) and in particular Coffey senior geologist Mr N Inwood who supervised and compiled the report referred to in the references which includes the Mineral Resource Estimates quoted below. AM&A are quite comfortable regarding the reasonableness and quality of the estimates provided and have discussed this with Mr Inwood.

Etango Uranium Project – Independent Valuation Executive Summary

Bannerman Exploration Assets, Namibia – Independent Valuation – AM&A

1.0	Introduction................................................................................................ 1
1.1	Scope and Limitations...........................................................................................................1
1.2	Statement of Competence....................................................................................................3
2.0	Valuation of the Mineral Assets – Methods and Guides .......................... 3
2.1	General Valuation Methods ..................................................................................................3
2.2	Discounted Cash Flow/Net Present Value...........................................................................4
2.3	Joint Venture Terms..............................................................................................................4
2.4	Similar Transactions..............................................................................................................4
2.5	Multiple of Exploration Expenditure......................................................................................4
2.6	Ratings System of Prospectivity (Kilburn)............................................................................4
2.7	Empirical Methods (Yardstick – Real Estate) ......................................................................5
2.8	General Comments...............................................................................................................5
2.9	Environmental implications...................................................................................................5
2.10	Indigenous Title Claims........................................................................................................5
2.11	Commodities-Metal prices ....................................................................................................6
2.12	Resource/Reserve Summary ...............................................................................................6
2.13	Previous Valuations...............................................................................................................6
2.14	Encumbrances/Royalty.........................................................................................................6
3.0	Background Information............................................................................. 6
3.1	Introduction............................................................................................................................6
3.2	Specific Valuation Methods ..................................................................................................6
4.0	Etango Project............................................................................................ 7
4.1	Introduction............................................................................................................................7
4.2	Tenure ....................................................................................................................................7
4.3	Resources and Potential.......................................................................................................8
4.4	Project Summary...................................................................................................................8
5.0	Valuation of the Project.............................................................................. 9
5.1	Selection of Valuation Methods............................................................................................9
5.2	Empirical Method................................................................................................................10
5.3	MEE Method.......................................................................................................................10
5.4	Market Capitalisation Enterprise Value..............................................................................10
5.5	Valuation Conclusions........................................................................................................11
6.0	References............................................................................................... 11

List of Figures

Figure 1: Location Map of the Etango Project....................................................................7 Figure 2: Resource Target Map for the Etango Project.....................................................8

List of Tables

Table 1: Tenement Information Summary.........................................................................7 Table 2: Empirical Method Valuation Summary..............................................................10 Table 3: Summary Range of Values. ..............................................................................11

Etango Uranium Project – Independent Valuation Contents

Bannerman Exploration Assets, Namibia – Independent Valuation – AM&A

The Directors, 3[rd] March, 2009 PKF Corporate Advisory Services (WA) Pty Ltd Level 7, BGC Centre 28 The Esplanade Perth, WA, 6000

Dear Directors,

1.0 Introduction

This report has been prepared by AM&A at your request to provide an independent valuation of the current cash value of the exploration assets held by Bannerman. The assets of value held by Bannerman are its 80% interest in the Etango Uranium Project located in Namibia.

1.1 Scope and Limitations

This valuation has been prepared in accordance with the requirements of the Valmin code (1999) as adopted by the Australian Institute of Geoscientists (‘AIG’) and the Australasian Institute of Mining and Metallurgy (‘AusIMM’).

This valuation is valid as of 3[rd] March,, 2009 which is the date of the latest review of the data and technical information. This valuation can be expected to change over time having regard to political, economic, market and legal factors. The valuation can also vary due to the success or otherwise of any mineral exploration that is conducted either on the properties concerned or by other explorers on prospects in the near environs. The valuation could also be affected by the consideration of other exploration data, not in the public domain, affecting the properties which have not been made available to the writer.

In order to form an opinion as to the value of any property, it is necessary to make assumptions as to certain future events, which might include economic and political factors and the likely exploration success. The writers have taken all reasonable care in formulating these assumptions to ensure that they are appropriate to the case. These assumptions are based on the writers’ technical training and experience in the mining industry. Whilst the opinions expressed represent the writers’ fair and reasonable professional opinion at the time of this report, these opinions are not however, forecasts as it is never possible to predict accurately the many variable factors that need to be considered in forming an opinion as to the value of any mineral property.

The valuation methodology of mineral properties is exceptionally subjective. If an economic reserve is subsequently identified then this valuation will be dramatically low relative to any later valuations, or alternatively if further exploration is unsuccessful it is likely to decrease the value of the tenements.

The values obtained are estimates of the amount of money, or cash equivalent,

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Bannerman Exploration Assets, Namibia – Independent Valuation – AM&A

which would be likely to change hands between a willing buyer and a willing seller in an arms length transaction, wherein each party had acted knowledgeably, prudently and without compulsion. This is the required basis for the estimation to be in accordance with the provisions of the Valmin Code.

There are a number of generally accepted procedures for establishing the value of mineral properties with the method employed depending upon the circumstances of the property. When relevant, AM&A uses the appropriate methods to enable a balanced analysis. Values are presented as a range and the preferred value is identified.

The readers should therefore form their own opinion as to the reasonableness of the assumptions made and the consequent likelihood of the values being achieved.

The information presented in this report is based on technical reports provided by Bannerman supplemented by our own inquiries. At the request of AM&A copies of relevant technical reports and agreements were made available.

PKFCA will be invoiced and expected to pay a fee for the preparation of this report. This fee comprises a normal, commercial daily rate plus expenses. Payment is not contingent of the results of this report or the success of any subsequent public fundraising. Except for these fees, neither the writers nor their families nor associates have any interest in PKFCA nor the properties reported upon nor in Bannerman . Bannerman has confirmed in writing that all technical data known to the public domain is available to the writers.

The valuation presented in this document is restricted to a statement of the fair value of the tenement package. The Valmin Code defines fair value as “The estimated amount of money, or the cash equivalent of some other consideration, for which, in the opinion of the Expert reached in accordance with the provisions of the Valmin Code, the mineral asset or security shall change hands on the Valuation date between a willing buyer and a willing seller in an arms length transaction, wherein each party had acted knowledgeably, prudently and without compulsion”.

It should be noted that in all cases, the fair valuation of the mineral properties presented is analogous with the concept of “valuation in use” commonly applied to other commercial valuations. This concept holds that the properties have a particular value only in the context of the usual business of the company as a going concern. This value will invariably be significantly higher than the disposal value, where, there is not a willing seller. Disposal values for mineral assets may be a small fraction of going concern values.

In accordance with the Valmin Code, we have prepared the “Range of Values” as shown in Table 3, section 5.5. Regarding the project it is considered that sufficient geotechnical data has been provided from the reports covering the previous exploration of the area to enable an understanding of the geology. This, coupled with knowledge of the area provides sufficient information to form an opinion as to the current value of the mineral assets.

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Bannerman Exploration Assets, Namibia – Independent Valuation – AM&A

1.2 Statement of Competence

This report has been prepared by Allen J. Maynard BApp.Sc(Geol) MAusIMM and Member of AIG, a geologist with 30 years in the industry and 25 years in mineral asset valuation. The writers hold the appropriate qualifications, experience and independence to qualify as independent “Experts” under the definitions of the Valmin Code.

2.0 Valuation of the Mineral Assets – Methods and Guides

Without proven ore reserves it is not possible to place a singular dollar value on any mining tenement. However, with due regard to the guidelines for assessment and valuation of mineral assets and mineral securities as adopted by the AusIMM Mineral Valuation Committee on 17 February 1995 – the Valmin Code (updated 1999 & 2004) – we have derived the estimates listed below using the appropriate method for the current technical value of the mineral exploration properties as described.

The following ASIC publications have also been duly referred to and considered in relation to the valuation procedure: Practice Note (“PN”) 42 on Independence of Expert’s Reports which is read in conjunction with Practice Note 43 (Valuation Report and Profit Forecasts), Policy Statement (“PS”) 74 (Acquisitions agreed to by shareholders) and Policy Statement 75 (Independent Expert Reports to Shareholders). These PNs & PSs were replaced by ‘Regulatory Guidelines’ 111 & 112 on 30[th] October, 2007.

The subjective nature of the valuation task is kept as objective as possible by the application of the guideline criteria of a “fair value”. This is a value that an informed, willing, but not anxious, arms length purchaser will pay for a mining (or other) property in a transaction devoid of “forced sale” circumstances.

2.1 General Valuation Methods

The Valmin Code identified various methods of valuing mineral assets, including:-

Discounted cash flow,
Capitalisation of earnings,
Joint Venture and farm-in terms for arms length transactions,
Precedents from similar asset sales/valuations,
Multiples of exploration expenditure,
Ratings systems related to perceived prospectivity,
Real estate value and,
Rule of thumb or yardstick approach.

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Bannerman Exploration Assets, Namibia – Independent Valuation – AM&A

2.2 Discounted Cash Flow/Net Present Value

This method provides an indication of the value of a property with identified reserves. It utilises an economic model based upon known resources, capital and operating costs, commodity prices and a discount for risk estimated to be inherent in the project. The discount is very subjective but it is common to use 5% of measured resources, 1.5% of indicated resources and 0.5% of inferred resources. Alternatively a value can be assigned on a royalty basis commensurate with the in situ contained metal value.

Net present value (‘NPV’) is determined from discounted cash flow (‘DCF’) analysis where reasonable mining and processing parameters can be applied to an identified ore reserve. It is a process that allows perceived capital costs, operating costs, royalties, taxes and project financing requirements to be analysed in conjunction with a discount rate to reflect the perceived technical and financial risks and the depleting value of the mineral asset over time. The NPV method relies on reasonable estimates of capital requirements, mining and processing costs.

2.3 Joint Venture Terms

The terms of a proposed joint venture agreement may be used to provide a market value based upon the amount an incoming partner is prepared to spend to earn an interest in part or all of the property. This pre-supposes some form of subjectivity on the part of the incoming party when grass roots properties are involved.

2.4 Similar Transactions

When commercial transactions concerning properties in similar circumstances have recently occurred, the market value precedent may be applied in part or in full to the property under consideration.

2.5 Multiple of Exploration Expenditure

The multiple of exploration expenditure method (‘MEE’) is used whereby a subjective factor (also called the prospectivity enhancement multiplier or ‘PEM’) is based on previous expenditure on a tenement with or without future committed exploration expenditure and is used to establish a base value from which the effectiveness of exploration can be assessed. Where exploration has produced documented positive results a MEE multiplier can be selected that takes into account the valuer's judgment of the prospectivity of the tenement and the value of the database. MEEs can typically range between 0 to 3.0 and occasionally up to 5.0 where very favourable exploration results have been achieved, applied to previous exploration expenditure to derive a dollar value.

2.6 Ratings System of Prospectivity (Kilburn)

The most readily accepted method of this type is the modified Kilburn Geological Engineering/Geoscience Method and is a rating method based on the basic acquisition cost (‘BAC’) of the tenement that applies incremental, fractional or integer ratings to a BAC cost with respect to various prospectivity factors to derive a value. Under the Kilburn method the valuer is required to systematically

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Bannerman Exploration Assets, Namibia – Independent Valuation – AM&A

assess four key technical factors which enhance, downgrade or have no impact on the value of the property. The factors are then applied serially to the BAC of each tenement in order to derive a value for the property. The factors used are; off-property attributes on-property attributes, anomalies and geology. A fifth factor that may be applied is the current state of the market.

2.7 Empirical Methods (Yardstick – Real Estate)

The market value determinations may be made according to the independent expert’s knowledge of the particular property. This can include a discount applied to values arrived at by considering conceptual target models for the area. The market value may also be rated in terms of a dollar value per unit area or dollar value per unit of resource in the ground. This includes the range of values that can be estimated for an exploration property based on current market prices for equivalent properties, existing or previous joint venture and sale agreements, the geological potential of the properties, regarding possible potential resources, and the probability of present value being derived from individual recognised areas of mineralisation. This method is termed a “Yardstick” or a “Real Estate” approach. Both methods are inherently subjective according to technical considerations and the informed opinion of the valuer.

2.8 General Comments

The aims of the various methods are to provide an independent opinion of a “fair value” for the property under consideration and to provide as much detail as possible of the manner in which the value is reached. It is necessarily subjective according to the degree of risk perceived by the property valuer in addition to all other commercial considerations. Efforts to construct a transparent valuation using sophisticated financial models are still hindered by the nature of the original assumptions where a known resource exists and are not applicable to properties without an identified resource.

The values derived for this report have been concluded after taking into account:• The general geological environment of the property under consideration is taken into account to determine the exploration potential;
Current market values for properties in similar or analogous locations;
Current commodity prices: Uranium Oxide at A$66/lb.

2.9 Environmental implications

Information to date indicates that the project area contains no fauna or flora species regarded as being rare, threatened or endangered.

2.10 Indigenous Title Claims

The tenements may be subject of Indigenous Claims and would be dealt with through the local normal administrative process. AM&A is not aware of any such claims within the tenements.

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Bannerman Exploration Assets, Namibia – Independent Valuation – AM&A

2.11 Commodities-Metal prices

Where appropriate current metal prices are used sourced from the usual metal market publications. In this valuation current uranium prices from www.uxc.com were considered during the valuation.

2.12 Resource/Reserve Summary

A JORC compliant resource has been identified and further substantial infill drilling for conversion to resources or reserves is required plus further exploration work is warranted along numerous anomalous zones.

2.13 Previous Valuations

No previous valuations have been declared within the last two years.

2.14 Encumbrances/Royalty

Bannerman has rights to 80% of the project area. There may be statutory Government royalties of 3% due on all production (subject to confirmation); however this does not impinge upon this current valuation.

3.0 Background Information

3.1 Introduction

This valuation has been provided by way of a detailed study of information provided by Bannerman for the tenements.

The area under review comprises two exploration licences that have the potential to host uranium resources .

3.2 Specific Valuation Methods

There are several methods available for the valuation of a mineral prospect ranging from the most favoured DCF analysis of identified Proved & Probable Reserves to the more subjective rule-of-thumb assessment when no Reserves have yet been calculated but Resources may exist. These are discussed above in Section 2.0.

For these Namibian tenements an empirical method is employed whereby an extensive discount is applied to the theoretical value of the mineral resources to determine a current value range.

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Bannerman Exploration Assets, Namibia – Independent Valuation – AM&A

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Figure 1: Location Map of the Etango Project. (from Bannerman Annual report, 2008).

4.0 Etango Project

4.1 Introduction

The Etango tenements are located in central western Namibia about 40km east of Swakopmund (Figure 1). The Exclusive Prospecting Licences (EPLs) are granted initially for a three year period.

4.2 Tenure

Ten ID	Granted	Area Km2	Expiry	Required Expenditure
				(3 years)
EPL3345	27/04/2006	50	26/04/2009	A$509,000
EPL3346	27/04/2006	81	26/04/2009	A$500,000

Table 1: Tenement Information Summary.

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Bannerman Exploration Assets, Namibia – Independent Valuation – AM&A

4.3 Resources and Potential

The current Mineral Resource Estimates for the Etango project available at this time of writing (March, 2009) are stated at:

Indicated Resources : 195.5 million tonnes (‘Mt’) at 207 g/t U3O8 (using a lower cut-off grade of 100g/t U3O8) for 89.2 million pounds (‘Mlbs’) U3O8 plus Inferred Resources of 87.0Mt at 195g/t U3O8 for 37.4Mlbs of U3O8.

There is considerable demonstrated potential for further resources to be outlined as many anomalous zones have not yet been drill-tested.

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Figure 2: Resource Target Map for the Etango Project.

(From Bannerman Qtr Rep Dec. 2008).

4.4 Project Summary

The EPLs are located within the northeast trending Central Zone of the Neoproterozic Pan-African Damara Orogenic Belt. Primary mineralisation within the Orogeny includes uranium, tin, gold, copper and lithium. Uraniferous alaskite bodies (granitic rocks) are considered the primary source of mineralisation for the project area. (Inwood, 2008).

The uranium mineralisation at Etango Anomaly A zone is referred to as “Rossing Type” after the famous Rossing mine that Rio Tinto has been mining for several decades.

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Bannerman Exploration Assets, Namibia – Independent Valuation – AM&A

As depicted above in figure 2 there are numerous anomalous zones that warrant investigation by more drilling and Bannerman is actively conducting exploration in parallel with organising a pre-feasibility study on the main Anomaly A zone.

The Etango Uranium Project has considerable merit as illustrated by the results achieved to date, including Mineral Resource Estimates stated above and demonstrated potential for further discoveries as shown on the resource target map (Figure 2).

No production has occurred to date.

5.0 Valuation of the Project

To arrive at a fair market value several aspects need to be considered.

The consideration for any relevant recent comparable transactions. Values from comparable transactions are mentioned below in Sec. 5.1.
The various risk factors taken into account to determine a suitable discount to be applied to the project. These include exploration risk, geological risk, mining risk, commodity price variations, currency variations, environmental and sovereign risk.

5.1 Selection of Valuation Methods

Although Mineral Resources have been identified. JORC Proved and Probable Reserves are not available so the Discounted Cash Flow method is not considered applicable here. The Kilburn method is considered to provide a range of values that is so wide that it is not realistic. There are no outside joint ventures in place.

Recent comparable transactions provide an “Enterprise Value” per uranium pound in the ground (Ev/lb U3O8) ranging from A$5.91 (Mega Uranium – Lake Maitland) to $22.00 (Areva’s Trekkopje project in Namibia, two years ago) which are considered to be very high for the stage that Etango is presently elevated to with Inferred and Indicated Resources but no Measured Resources or Reserves defined as yet.

The Multiple of Exploration Expenditure method is considered to reasonably reflect the value the project and details are provided below. The Empirical Method is considered to also provide a logical approach by allowing for the many forms of risk attached to this and any other mineral exploration asset.

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Bannerman Exploration Assets, Namibia – Independent Valuation – AM&A

Thus, the writer considers that the Empirical method and MEE methods are most applicable. The Enterprise Value based on Bannerman’s adjusted market capitalisation is also shown for comparative purposes.

5.2 Empirical Method

A table of value ranges is compiled using a discount range from 98% to 98.5% of the uranium price (A$66.00/lb) to allow for the multitude of risk factors that can impinge upon the project. By using the stated discount range the dollar value per resource pound of uranium is effectively priced at a range from A$0.99 to $1.32.

Value Range	Combined Resources Mlbs U3O8	% of U @ A$66-lb	Value of Combined Resources A$M	BMN 80%
Low	126.6	1.52	126.6	101.3
Mid	126.6	1.76	146.9	117.5
High	126.6	2.00	167.1	133.7

Table 2: Empirical Method Valuation Summary.

5.3 MEE Method

The amount of direct, on-ground, exploration expenditure by Bannerman on the project amounts to a rounded total of A$31 million. This does not include all other costs incurred such as acquisition, accommodation, infrastructure, legal and accounting fees, administration and such-like. Because of the successful exploration resulting in ‘value-adding’ (now have a resource where there was not one before), the exploration has provided to the project the upper end of the typical MEE factor range of up to 5.0 is deemed appropriate.

So, applying a multiplier factor range from 3.5 to 4.0 to the previous expenditure derives a current value range from A$109 million to $124 million. The 80% share of this is subsequently from $87M to $99M.

5.4 Market Capitalisation Enterprise Value

A calculation of the Ev/lb U3O8 for Bannerman using adjusted market capitalisation (for cash + debt) and the 80% ownership (101Mlbs) ranges from A$1.09 to $1.14 per pound of uranium the company has in the combined Inferred and Indicated Resource categories, as the share price has varied from 70c to 73c within the last three weeks. This results in an EV/lb U3O8 of A$1.14 at the share price of $0.73 and $1.09 at the current share price of $0.70.

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Bannerman Exploration Assets, Namibia – Independent Valuation – AM&A

5.5 Valuation Conclusions

The valuation ranges from low to high are derived from the several methods described above and range from a low of $87M (MEE method) to a high of $134M (Empirical method). The market capitalisation EV/lb U3O8 of $1.09 to $1.14 is within the two ranges from both methods. Table 3 is a summary of the various value ranges.

Method	Low	High	Preferred
MEE	87	99	93
Empirical	101	134	117
Ev/lb U	111	115	N/A

Table 3: Summary Range of Values.

It is considered appropriate to ascribe the current cash valuation range derived by the empirical method as representative of all methods as the mid-point of this $117M occurs within the various extremes and thus the most likely or preferred current cash value for Bannerman’s 80% holding of the Etango Uranium Project exploration assets is ascribed at A$117 million from within the range of A$87 million to A$134 million.

Yours faithfully,

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Allen J Maynard
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BAppSc(Geol), MAIG, MAusIMM.

6.0 References

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

AusIMM. (2005): "Code for the Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Expert Reports (the VALMIN Code)" 2005 Edition. AusIMM, (1998): "Valmin 94 - Mineral Valuation Methodologies". Conference Proceedings.

Etango Uranium Project – Independent Valuation Page 11

Bannerman Exploration Assets, Namibia – Independent Valuation – AM&A

Canadian Institute Of Mining, Metallurgy And Petroleum, (2000), "ClM Standards on Mineral Resources and Reserves-Definitions and Guidelines". Prepared by the CIM Standing Committee On Reserve Definitions. Adopted by CIM Council August 20, 2000.

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

ClM, (2003): - "Standards and Guidelines for Valuation of Mineral Properties. Final Version, February 2003". Special Committee of the Canadian Institute of Mining, Metallurgy and Petroleum on Valuation of Mineral Properties (CIMV AL).

Bannerman Resources Ltd: Annual reports 2008. Quarterly Report Dec. 2008.

Inwood, N. 2008: Anomaly A – August, 2008 – Resource Update. Prepared by Coffey Mining Pty Ltd for Bannerman Resources Ltd.

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

Rudenno, (1998): "The Mining Valuation Handbook".

www.uxc.com/review/ - Source for uranium spot & long term prices.

Etango Uranium Project – Independent Valuation Page 12

PROXY FORM

APPOINTMENT OF PROXY BANNERMAN RESOURCES LTD ABN 34 113 017 128

The Company Secretary Bannerman Resources Ltd Level 2 22 Oxford Close West Leederville WA 6007 Ph +61 8 9381 1436 Fax +61 8 9381 1068

Share Registry Website: www.advancedshare.com.au

I/We

being a shareholder of Bannerman Resources Ltd entitled to attend and vote at the General Meeting, hereby

Appoint

Name of proxy

or failing the person so named or, if no person is named, the Chairman of the Meeting, as my/our proxy to act generally for me/us and to vote in accordance with the following directions or, if no directions have been given, as the proxy sees fit at the General Meeting of Bannerman Resources Ltd to be held at The Duxton Hotel Perth, Lower Lobby, 1 St Georges Terrace, Perth, Western Australia at 9.30 am WST on Thursday April 16, 2009 and at any adjournment thereof. If no directions are given, the Chairman of the Meeting will vote in favour of all of the resolutions.

FOR AGAINST ABSTAIN

Resolution	1	Ratification of issue of convertible note and 500,000 shares to RCF under the Convertible
		Note Facility Agreement
Resolution	2	Approval of acquisition of Shares by RCF upon conversion of Standby Tranche
Resolution	3	Approval of acquisition of Shares by RCF upon exercise of Prepayment Options if
		Company elects to prepay the First Tranche or Standby Tranche
Resolution	4	Approval of acquisition of Shares by RCF if the Company elects to satisfy interest
		obligations under the Convertible Note Facility Agreement by the issue of Shares
Resolution	5	Equity capital raising
Resolution	6	Approval of the issue of 5,500,000 Options to Mr Len Jubber
Resolution	7	Ratification of issue of 5,500,000 Shares to Savanna
Resolution	8	Approval of the allotment and issue of 4,000,000 Shares to Savanna

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.

Signed this day of 2009

By:

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

Individuals and joint holders

BANNERMAN RESOURCES LTD ABN 34 113 017 128

Instructions for Completing “Appointment of Proxy” Form

A shareholder 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 shareholder’s voting rights. If the shareholder appoints two proxies and the appointment does not specify this proportion, each proxy may exercise half the votes. Where more than one proxy is to be appointed or voting intentions cannot be adequately expressed using this form an additional form of proxy is available from the Company or you may copy this form.
A duly appointed proxy need not be a shareholder of the Company. In the case of joint holders, all should sign.
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:
2 Directors of the company;
a Director and a company secretary of the company; or
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.

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.
Where a proxy form or form of appointment of corporate representative is lodged and is executed under power of attorney, an original or certified copy of the power of attorney must be lodged in like manner as this proxy.
To vote by proxy, please complete and sign the proxy form enclosed and return by:
(a) post to Bannerman Resources Ltd, Level 2, 22 Oxford Close, West Leederville, Western Australia 6007; or
(b) facsimile to the Company on facsimile number +61 8 9381 1068,

so that it is received not later than 9.30 am WST on April 14, 2009.

Proxy forms received later than this time will be invalid.

AI assistant

BANNERMAN ENERGY LTD — Proxy Solicitation & Information Statement 2009

64542_rns_2009-03-12_ea346411-709c-4722-b893-48bb012905be.pdf

11 March 2009

Notice of Meeting and Explanatory Statement

In conclusion, the Board urges you to vote in favour of all the resolutions proposed at the General Meeting.

IMPORTANT INFORMATION

FOR THE MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 16 , 2009

TO THE SHAREHOLDERS:

AGENDA

Voting Exclusion Statement

Voting Exclusion Statement

Voting Exclusion Statement

Voting Exclusion Statement

5 Resolution 5 – Equity capital raising

Voting Exclusion Statement

6 Resolution 6 – Approval of the issue of 5,500,000 Options to Mr Len Jubber

Voting Exclusion Statement

7 Resolution 7 – Ratification of issue of 5,500,000 of Shares to Savanna

Voting Exclusion Statement

8 Resolution 8 – Approval of the allotment and Issue of 4,000,000 Shares to Savanna

Voting Exclusion Statement

HOW TO VOTE

Voting in person

Voting by corporate representative

Voting by proxy

NOTES

BY ORDER OF THE BOARD OF DIRECTORS

INFORMATION CIRCULAR

FOR THE MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 16 , 2009

PURPOSE OF SOLICITATION

APPOINTMENT AND REVOCATION OF PROXIES

ADVICE TO BENEFICIAL SHAREHOLDERS

VOTING OF PROXIES

THE CHAIRMAN OF THE MEETING INTENDS TO VOTE ALL UNDIRECTED PROXIES IN FAVOUR OF ALL OF THE RESOLUTIONS.

INFORMATION CONCERNING THE COMPANY

Voting Shares and Principal Holders Thereof

EXECUTIVE COMPENSATION

Summary Compensation Table

Option Grants During the Most Recently Completed Financial Year

Aggregated Option Exercises During the Most Recently Completed Financial Year and Financial Year-End Option Values

Securities Authorized for Issuance Under Equity Compensation Plans

Equity Compensation Plans

Compensation of Directors

Termination of Employment, Change in Responsibilities and Employment Contracts

Composition of the Remuneration Committee

Report on Executive Compensation

PERFORMANCE GRAPH

INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED ON

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

AUDITOR

EXPLANATORY STATEMENT

FOR THE MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 16 , 2009

Explanatory Statement

1 Company overview

2 Background

2.1 Overview of RCF Transaction

2.2

Independent Expert’s Report

2.3 Overview of Settlement Agreement

3 Resolution 1 – Ratification of the issue of a convertible note (First Tranche) and Establishment Fee Shares

3.1 General

3.2 Resolution 1

(a) Conversion of the First Tranche cash advance by RCF or the Company

(iii) Terms of the securities

(iii) Terms of the securities

(vi) Voting exclusion statement

4 Resolution 2 – Approval of acquisition of Shares by RCF upon conversion of the Standby Tranche

4.1 General

4.2 Corporations Act item 7 section 611 approval

4.3 ASIC Regulatory Guide 74

7 Resolution 5 – Equity capital raising

7.1 General

7.2 Listing Rule 7.1 approval

Warrants

8 Resolution 6 – Issue of Options to Mr Len Jubber

8.1 General

8.2 Listing Rule 10.11 approval

8.3 Corporations Act section 208 approval

9 Resolution 7 – Ratification of issue of first tranche of Shares to Savanna

BANNERMAN ENERGY LTD Proxy Solicitation & Information Statement 2009