ABN�34�113�017�128�

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NOTICE�OF� EXTRAORDINARY�GENERAL�MEETING�

Date:�� 19�June�2014� Time:�� 9:00�am�(Perth�Time)� Place:� Level�2,�1�Altona�Street,�West�Perth,�Western�Australia�

If�you�are�attending�the�Extraordinary�General�Meeting�and�have�not�lodged�a�Proxy�Form,�please� bring�the�Proxy�Form�with�you�to�assist�with�registration.�

If�you�are�not�attending�the�Extraordinary�General�Meeting,�you�can�lodge�a�completed�Proxy�Form�by� returning�it�in�the�enclosed�envelope�or�alternatively�by�facsimile.�

Please�be�aware�that�the�Proxy�Form�needs�to�be�received�by�the�Bannerman�Share�Registrar�by�no� later�than�9:00�am�(Perth�time)�on� 17�June�2014 .�Further�details�on�how�to�lodge�your�Proxy�Form�can� be�found�on�the�reverse�side�of�the�Proxy�Form.�

The�Notice�of�Extraordinary�General�Meeting,�Explanatory�Memorandum�and�Independent� Expert’s�Report�should�be�read�in�their�entirety.��If�you�are�in�doubt�as�to�how�you�should�vote,� you�should�seek�advice�from�your�accountant,�solicitor�or�other�professional�adviser�prior�to� voting.

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting

CONTENTS��

	Page
Chairman’sletter	3
NoticeofExtraordinaryGeneralMeeting	5
ExplanatoryMemorandum	8
Glossary	19
Schedule1–KeytermsoftheExistingConvertibleNoteandNew	21
ConvertibleNote
Schedule2–ConvertibleNotePrepaymentOptionTerms	27
Schedule3–Effectofthevariousshareissuesonthevotingpower	28
oftheRelevantRCFEntitiesandtheirAssociates
AnnexureA–IndependentExpert’sReport	30
AnnexureB–ProxyForm	116

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting

7�May�2014�

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Dear�Shareholder�

Extraordinary�General�Meeting�of�Shareholders�

On�behalf�of�the�Board�of�Directors�of�Bannerman�Resources�Limited�( Bannerman �or� Company ),�I�am� pleased�to�enclose�the�Notice�of�Meeting�and�related�information�for�the�Extraordinary�General�Meeting� of�Shareholders�to�be�held�on�19�June�2014.�

Shareholders�will�be�asked�to�consider�a�resolution�to�approve�matters�associated�with�the�entry�into�a� new�A$4�million�convertible�note�facility�( New�Convertible�Note )�with�Resource�Capital�Fund�VI�L.P� ( RCFVI ),�as�announced�on�8�April�2014.��The�resolution�is�explained�in�detail�in�the�enclosed�Notice�of� Meeting�and�Explanatory�Memorandum.�

The�New�Convertible�Note�will�be�used�to�fund�the�construction�and�operation�of�a�pilot�plant�at�the� Company’s�Etango�project�and�to�meet�the�Company’s�corporate�working�capital�requirements.�The� Board�believes�that�the�pilot�plant�program�is�a�cost�effective�way�of�further�de�risking�the�Etango�project� by�confirming�key�definitive�feasibility�study�assumptions�and�should�demonstrate�the�viability�of�the� heap�leaching�concept�to�potential�development�partners�and�financiers.�It�should�also�progress�the� Etango�project�towards�the�detailed�engineering�stage�and�maintain�the�Etango�project’s�early�mover� advantage.��

The�continued�support�of�RCF�as�a�strategic�cornerstone�investor�in�Bannerman�is�a�beneficial�and�positive� progression�of�its�investment�in�the�Company.��The�pilot�plant�program�should�help�position�the�Etango� project�for�fast�track�development�in�a�strengthening�uranium�price�environment.�The�investment�by�the� recently�established�RCFVI�is�noteworthy�given�this�fund�is�expected�to�still�be�in�the�early�stages�of�its�life� cycle�when�the�financing�of�the�future�development�of�the�Etango�project�is�required.�

At�the�AGM�in�November�2013,�approval�was�given�for�the�roll�over�of�the�existing�A$8m�convertible�note� held�by�Resource�Capital�Fund�IV�L.P�( RCFIV )�and�in�doing�so�RCFIV�was�authorised�to�increase�its� shareholding�up�to�a�maximum�of�36.04%�by�converting�its�convertible�note�and�the�associated�share� issues�under�that�facility.��Approval�of�the�resolution�will�allow�RCFIV,�RCFVI�and�Resource�Capital�Funds� Management�Pty�Ltd�( RCF�Management )�to�increase�their�collective�voting�power�in�Bannerman�to�a� maximum�of�43.0%�by�conversion�of�the�convertible�notes,�the�related�share�issues�and�the�exercise�of� existing�options�held�by�RCF�Management.��

The�Board�considered�a�range�of�alternative�funding�options�and�concluded�that�the�New�Convertible� Note�was�the�most�achievable�and�advantageous�to�all�shareholders,�given�current�market�conditions�and� the�strategic�benefits�that�the�enhanced�relationship�with�RCF�brings.��

The�Board�engaged�BDO�Corporate�Finance�(WA)�Pty�Ltd�( BDO )�to�provide�an�Independent�Expert’s� Report,�which�is�included�with�the�Notice�of�Meeting.�The�Independent�Expert’s�Report�has�concluded� that�the�issue�of�shares�under�the�RCF�convertible�notes�and�the�options�held�by�RCF�Management� ( Financing�Transaction )�is�not�fair�but�reasonable,�and�the�grant�of�new�security�to�RCFVI�is�fair�and� reasonable,�to�the�Company’s�shareholders�(excluding�any�shareholder�associated�with�RCFIV,�RCFVI�or� RCF�Management).��

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting

Page�3

Under�ASIC�guidance,�in�essence,�the�‘fairness’�assessment�by�BDO�in�respect�of�the�Financing�Transaction� is�based�solely�on�a�financial�comparison�of�the�consideration�received�by�the�Company�against�the�value� of�shares�to�be�acquired,�while�an�assessment�of�‘reasonableness’�is�based�on�all�relevant�circumstances.�� In�concluding�that�the�Financing�Transaction�is�‘reasonable’,�BDO�has�reached�the�conclusion�that�the� New�Convertible�Note�would�have�significant�advantages�for�the�Company.�

The�Directors�(with�the�exception�of�Mr�Ian�Burvill,�a�Senior�Vice�President�of�RCF,�who�makes�no� recommendation)�recommend�that�Shareholders�vote�in�favour�of�the�resolution�at�the�upcoming� Extraordinary�General�Meeting.�

I�strongly�urge�you�to�read�carefully�the�attached�Notice�of�Meeting�and�Independent�Expert’s�Report�and� either�attend�the�Extraordinary�General�Meeting�in�person�or�lodge�your�vote�using�the�enclosed�proxy� form.��If�you�have�any�questions,�please�contact�the�Company�Secretary�of�Bannerman,�your�stockbroker� or�other�professional�adviser.

Yours�sincerely,�

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Ronnie�Beevor� Chairman

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting

Page�4�

NOTICE�OF�EXTRAORDINARY�GENERAL�MEETING�

The�Extraordinary�General�Meeting�of�Shareholders�of�Bannerman�Resources�Limited�( Bannerman �or�the� Company )�will�be�held�at�Level�2,�1�Altona�Street,�West�Perth,�Western�Australia�Western�Australia,�on� 19�June�2014�at�9:00�am�(Perth�time).�

Terms�used�in�this�Notice�and�Explanatory�Memorandum�are�defined�in�the�Glossary�on�page�19 of�this� document.��

The�Explanatory�Memorandum�which�accompanies�and�forms�part�of�this�Notice�describes�the�matters�to� be�considered�at�the�Extraordinary�General�Meeting.��

AGENDA�

Special�Business

1. Approval�of�the�New�Convertible�Note�and�the�grant�of�security�to�RCFVI�

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,�ASX�Listing�Rule�10.1,�and� for�all�other�purposes,�approval�is�given�for:�

(a) the�entry�into�the�New�Convertible�Note;�
(b) the�Company�to�issue�Shares�to�RCF�Management�on�the�valid�exercise�of�the�RCF�Options;�
(c) the�Company�to�issue�Shares�to�RCFVI�in�satisfaction�of�the�Establishment�Fee;�
(d) the�Company�to�issue�Shares�to�the�RCF�Funds�in�satisfaction�of�interest�payable�under�the�New� Convertible�Note�and/or�Existing�Convertible�Note�from�time�to�time;��
(e) the�Company�to�issue�Shares�to�the�RCF�Funds�upon�any�conversion�or�prepayment�of�the�New� Convertible�Note�and/or�Existing�Convertible�Note;��
(f) the�Company�to�grant�Prepayment�Options�to�the�RCF�Funds�upon�any�prepayment�of�the�New� Convertible�Note�and/or�Existing�Convertible�Note�and�to�issue�Shares�to�the�RCF�Funds�on�the� valid�exercise�of�those�Prepayment�Options;��
(g) the�Relevant�RCF�Entities�and�their�Associates�to�increase�their�voting�power�in�the�Company�to� a�maximum�of�43.0%;�and�
(h) the�Company�to�grant�new�security�in�favour�of�RCFVI�in�accordance�with�the�terms�and� conditions�of�the�New�Convertible�Note,�

on�the�terms�set�out�in�the�Explanatory�Memorandum.”�

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting�

Page�5

VOTING�EXCLUSION�STATEMENTS�

The�Company�will�disregard�any�votes�on�the�Resolution�cast�by�or�on�behalf�of�the�Relevant�RCF�Entities� and�any�of�their�Associates.�However,�the�Company�need�not�disregard�a�vote�cast�on�the�Resolution�if:�

(a) 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�
(b) it�is�cast�by�the�Chairman�of�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.�

VOTING�AT�THE�EXTRAORDINARY�GENERAL�MEETING�

Voting�entitlements�

The�Directors�have�determined�that,�for�the�purpose�of�voting�at�the�Meeting,�Shareholders�eligible�to:�

(a) receive�the�Notice�of�Meeting�are�those�persons�who�are�the�registered�holders�of�Shares� ( Registered�Shareholders )�on�7�May�2014�( Notice�Record�Date );�and�
(b) vote�at�the�Meeting�are�the�Registered�Shareholders�at�9:00�am�(Perth�time)�on�17�June�2014�( Voting� Record�Date ).�

Shareholders�who�become�Registered�Shareholders�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�on� +61�1300�850�505�for�further�information�and�to�request�a�Proxy�Form.�

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

How�to�vote�

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

Voting�in�person�

To�vote�in�person,�attend�the�Meeting�on�the�date�and�at�the�place�set�out�above.��Shareholders�are�asked� to�arrive�at�the�venue�30�minutes�prior�to�the�time�designated�for�the�Meeting,�if�possible,�so�that�the� Company�may�check�their�shareholdings�against�the�Company’s�share�register�and�note�attendances.�

Appointment�of�proxies�

Each�Shareholder�is�entitled�to�appoint�a�proxy.�The�proxy�does�not�need�to�be�a�Shareholder.�

A�Shareholder�that�is�entitled�to�cast�two�or�more�votes�may�appoint�two�proxies�and�may�specify�the� proportion�of�votes�each�proxy�is�entitled�to�exercise.�If�a�Shareholder�appoints�two�proxies,�each�proxy� may�exercise�half�of�the�Shareholder's votes�if�no�proportion�or�number�of�votes�is�specified.�

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting

Page�6�

Voting�by�proxy�

A�Shareholder�can�direct�its�proxy�to�vote�for,�against�or�abstain�from�voting�on�the�Resolution�by�marking� the�appropriate�box�in�the�Item�of�Business�section�of�the�proxy�form.��If�a�proxy�holder�votes,�they�must� cast�all�votes�as�directed.��Any�directed�proxies�that�are�not�voted�will�automatically�default�to�the� Chairman,�who�must�vote�the�proxies�as�directed.��

The�Chairman�will�vote�all�undirected�proxies�in�favour�of�the�Resolution.��

If�you�are�in�any�doubt�as�to�how�to�vote,�you�should�consult�your�professional�adviser.��

Corporate�representatives��

Any�corporate�Shareholder�wishing�to�appoint�a�person�to�act�as�its�representative�at�the�Meeting�may�do� so�by�providing�that�person�with:�

(a) a�letter�or�certificate�executed�in�accordance�with�the�Corporations�Act�authorising�that�person�to�act� as�the�corporate�Shareholder's�representative�at�the�Meeting;�or�
(b) a�copy�of�the�resolution�appointing�that�person�as�the�corporate�Shareholder's�representative�at�the� Meeting,�certified�by�a�secretary�or�director�of�the�corporate�Shareholder.�

The�appointment�of�a�corporate�representative�must�be�received�by�the�Company,�or�the�Company's� share�registrar,�Computershare,�before�the�Meeting�or�at�the�registration�desk�on�the�day�of�the�Meeting.� Certificates�of�appointment�of�corporate�representatives�are�available�at�www.computershare.com�or�on� request�by�calling�Computershare�on�+61�1300�850�505.�

Beneficial�Shareholders�

If�you�are�a�Beneficial�Shareholder and�have�received�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�other�intermediary.�

Key�dates�

Event	Date
Determinationofvotingeligibility	9:00am(Perthtime)onTuesday,17June2014
Deadlineforlodgementofproxyforms	9:00am(Perthtime)onTuesday,17June2014
ExtraordinaryGeneralMeeting	9:00am(Perthtime)onThursday,19June2014

Enquiries�

Shareholders�are�invited�to�contact�the�Company�Secretary�by�telephone�at�+61�8�9381�1436�or�by�email� at�[email protected] if�they�have�any�queries�in�respect�of�the�matters�set�out�in�these� documents.�

By�order�of�the�Board�

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Leigh�Ayn�Absolom� Company�Secretary� Dated�7�May�2014�

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting�

Page�7

EXPLANATORY�MEMORANDUM�

This�Explanatory�Memorandum�and�all�Schedules�and�Annexures�are�important�documents.��They�should� be�read�carefully.�If�you�have�any�questions�regarding�the�matters�set�out�in�this�Explanatory� Memorandum�or�the�preceding�Notice�of�Meeting,�please�contact�the�Company�Secretary�of�Bannerman� on�+61�8�9381�1436,�or�consult�your�stockbroker�or�other�professional�adviser.�

General�Information�

This�Explanatory�Memorandum�and�the�Independent�Expert’s�Report�have�been�prepared�for�the� Shareholders�in�connection�with�the�EGM�of�the�Company�to�be�held�on�19�June�2014.�The�Independent� Expert’s�Report�should�be�read�in�conjunction�with�this�Explanatory�Memorandum.�

The�purpose�of�this�Explanatory�Memorandum�is�to�provide�Shareholders�with�information�that�the�Board� believes�to�be�material�to�Shareholders�in�deciding�whether�or�not�to�approve�the�Resolution�detailed�in� the�Notice.��

The�trading�of�the�Company’s�ordinary�shares�in�terms�of�value�and�volume�principally�occurs�on�the�ASX,� accordingly�the�TSX�has�not�applied�its�standards�in�regards�to�the�matters�herein�as�provided�under�the� exemption�available�under�Section�602(g)�of�the�TSX�Company�Manual.�

Information�regarding�the�Resolution�

1.1 Background�

Shareholders�are�being�asked�to�consider�a�resolution�to�approve�matters�associated�with�the�entry�into�a� new�A$4�million�convertible�note�facility�( New�Convertible�Note )�with�Resource�Capital�Fund�VI�L.P� ( RCFVI ),�as�announced�on�8�April�2014.��

The�New�Convertible�Note�will�be�used�to�fund�the�construction�and�operation�of�a�pilot�plant�at�the� Company’s�Etango�Project�and�to�meet�the�Company’s�corporate�working�capital�requirements.�The�pilot� plant�program�should�progress�the�Etango�Project�towards�the�detailed�engineering�stage�and�maintain� the�Etango�Project’s�early�mover�advantage.��

The�continued�support�of�RCF�as�a�strategic�cornerstone�investor�in�Bannerman,�through�the�existing� investment�of�Resource�Capital�Fund�IV�L.P�( RCFIV )�and�proposed�new�investment�by�RCFVI,�is�a�beneficial� and�positive�progression�of�its�investment�in�the�Company.�The�pilot�plant�program�should�help�position� the�Etango�Project�for�fast�track�development�in�a�strengthening�uranium�price�environment.�RCFVI�is� expected�to�still�be�in�the�early�stages�of�its�life�cycle�when�the�financing�of�the�future�development�of�the� Etango�Project�is�required.�

The�Board�carefully�considered�a�range�of�alternative�funding�options�and�concluded�that�the�New� Convertible�Note�was�the�most�achievable�and�advantageous�to�all�Shareholders�given�current�market� circumstances�and�the�strategic�benefits�that�the�enhanced�relationship�with�RCF�brings.��

At�the�AGM�in�November�2013,�approval�was�given�for�the�roll�over�of�the�existing�A$8m�convertible�note� ( Existing�Convertible�Note )�held�by�RCFIV�until�30�September�2016�and�in�doing�so�RCFIV�was�authorised� to�increase�its�shareholding�in�Bannerman�up�to�a�maximum�of�36.04%�through�the�conversion�of�the� Existing�Convertible�Note�and�the�associated�share�issues�under�the�Existing�Convertible�Note.��

If�this�Resolution�is�not�approved,�RCFIV�will�still�be�able�to�increase�its�voting�power�up�to�a�maximum�of� 36.04%.�As�a�consequence�of�the�Shares�that�may�be�issued�to�RCFVI�under�the�New�Convertible�Note,� Shareholders�are�now�being�asked�to�approve�the�potential�for�the�Relevant�RCF�Entities�to�increase�their�

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting

Page�8�

combined�voting�power�in�Bannerman�shares�to�a�maximum�of�43.0%�( Maximum�Percentage )�by� conversion�of�the�Convertible�Notes,�the�related�share�issues�under�the�Convertible�Notes�and�the� exercise�of�the�RCF�Options.�

The�Maximum�Percentage�is�based�upon�several�assumptions�outlined�in� Schedule�3 ��the�actual�level�of� voting�power�that�may�be�obtained�by�the�Relevant�RCF�Entities�and�their�Associates�may�be�lower� depending�upon�the�prevailing�circumstances�and�future�share�prices.�

The�New�Convertible�Note�will�have�materially�the�same�terms�as�the�Existing�Convertible�Note,�with�the� following�key�terms:�

the�Company�must�pay�RCFVI�an�establishment�fee�of�A$120,000,�to�be�satisfied�through�the� issue�of�Shares�to�RCFVI�based�on�the�5�trading�day�VWAP�of�Bannerman’s�shares�at�close�of� trading�on�the�date�prior�to�the�date�of�drawdown�of�the�New�Convertible�Note;��
the�facility�will�have�a�total�commitment�of�A$4�million,�with�interest�at�a�fixed�coupon�rate�of� 8%�per�annum�paid�quarterly�in�arrears�(the�Company�may�satisfy�interest�payments�by�the� issue�of�Shares�or�in�cash);��
a�maturity�date�of�30�September�2016;��
obligations�under�the�New�Convertible�Note�will�be�secured�by�a�charge�over�all�the�Company’s� present�and�after�acquired�property,�interests�and�rights;�a�share�charge�over�the�Company’s� shares�in�Bannerman�UK;�a�mortgage�and�fixed�and�floating�charge�over�all�of�Bannerman�UK’s� assets;�and�a�pledge�over�the�shares�held�by�Bannerman�UK�in�Bannerman�Namibia;�and�
the�principal�outstanding�under�the�New�Convertible�Note�will�be�convertible�into�Shares�at�the� Conversion�Price,�calculated�based�on�a�VWAP�prior�to�drawdown�of�funds�under�the�facility,�but� will�be�between�A$0.06�and�A$0.095�per�share.�

Drawdown�under�the�New�Convertible�Note�will�be�subject�to�the�satisfaction�or�waiver�of�the�conditions� precedent�set�out�in� Schedule�1.� Additional�information�on�the�key�terms�of�the�New�Convertible�Note� and�Existing�Convertible�Note�is�also�set�out�in� Schedule�1 .�

1.2 Independent�Expert’s�Report�

To�assist�you�in�deciding�how�to�vote�on�the�Resolution,�the�Board�engaged�BDO�Corporate�Finance�(WA)� Pty�Ltd�( BDO )�to�prepare�the�Independent�Expert’s�Report�to�provide�an�opinion�on:�

whether�or�not�the�issue�of�Shares�under�the�Existing�Convertible�Note,�the�New�Convertible� Note�and�the�RCF�Options�( Financing�Transaction )�is�‘fair�and�reasonable’�to�the�Shareholders� who�are�not�associated�with�the�Relevant�RCF�Entities;�and��
whether�or�not�the�grant�of�new�security�to�RCFVI�in�connection�with�the�New�Convertible�Note� is�‘fair�and�reasonable’�to�the�Shareholders�who�are�not�associated�with�the�Relevant�RCF� Entities.��

As�part�of�the�process,�BDO�commissioned�Al�Maynard�&�Associates�to�carry�out�a�technical�valuation�of� the�Etango�Project�( Technical�Report ).�

The�Independent�Expert’s�Report�has�been�prepared�in�order�to�satisfy�the�requirements�for�Shareholder� approval�under�item�7�of�section�611�of�the�Corporations�Act�and�also�ASX�Listing�Rule�10.1.�

BDO�has�concluded�that�the�Financing�Transaction�is� not�fair�but�reasonable ,�and�the�grant�of�new� security�to�RCFVI�is� fair�and�reasonable ,�to�the�Company’s�shareholders�(excluding�any�Shareholder� associated�with�the�Relevant�RCF�Entities).��Under�ASIC�guidance,�in�essence,�the�‘fairness’�assessment�by� BDO�in�respect�of�the�Financing�Transaction�is�based�solely�on�a�financial�comparison�of�the�consideration�

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting�

Page�9

received�by�the�Company�against�the�value�of�shares�to�be�acquired,�while�an�assessment�of� ‘reasonableness’�is�based�on�all�relevant�circumstances.��In�concluding�that�the�Financing�Transaction�is� ‘reasonable’�BDO�has�reached�the�conclusion�that�the�New�Convertible�Note�would�have�significant� advantages�for�the�Company.�

A�complete�copy�of�the�Independent�Expert’s�Report�and�the�Technical�Report�is�provided�in� Annexure�A to� the� Notice� of� Meeting� and� is� also� available� on� the� Company’s� website� at� www.bannermanresources.com.�Shareholders�who�have�received�a�copy�of�this�notice�electronically�may� request�a�hard�copy�of�the�Independent�Expert’s�Report�and�the�Technical�Report�from�the�Company�at� no�cost�by�contacting�the�Company�by�telephone�on�+61�8�9381�1436.�

BDO�has�consented�to�the�use�of�their�Independent�Expert’s�Report,�and�the�opinion�which�it�contains,�in� the�form�and�context�used�in�the�Notice�of�Meeting�and�this�Explanatory�Memorandum.�

Al�Maynard�&�Associates�has�consented�to�the�use�of�their�Technical�Report�in�the�form�and�context�used� in�the�Notice�of�Meeting�and�this�Explanatory�Memorandum.�

1.3 Directors’�recommendation��

The�Board�(other�than�Mr�Burvill,�whose�employer�is�an�RCF�entity�and�has�therefore�decided�not�to�make� a�recommendation)�approved�the�proposal�to�put�this�Resolution�to�Shareholders,�and�also�recommend� that�Shareholders�vote�in�favour�of�the�Resolution.�

The�Board�has�made�this�recommendation�having�considered�a�range�of�alternative�funding�options�and� having�concluded�that�the�New�Convertible�Note�was�the�most�achievable�and�advantageous�to�all� Shareholders�given�current�market�conditions�and�the�strategic�benefits�that�the�enhanced�relationship� with�RCF�brings.�

1.4 Background�to�the�Existing�Convertible�Note��

On�28�November�2008,�Bannerman�entered�into�a�financing�agreement�with�RCFIV�for�A$20�million� through�the�Existing�Convertible�Note�facility�comprising�an�initial�tranche�of�A$10�million�( First�Tranche )� and�a�standby�tranche�of�A$10�million�available�within�6�months�from�drawdown�of�the�First�Tranche.�The� First�Tranche�had�a�three�year�term�and�was�drawn�down�on�16�December�2008.�The�standby�tranche�was� not�drawn�down.�

On�17�November�2011,�Shareholders�approved�an�amendment�of�the�terms�of�the�Existing�Convertible� Note�to�extend�the�maturity�date�from�16�December�2011�to�31�March�2012.�

On�13�March�2012,�Shareholders�approved�a�reduction�in�the�face�value�of�the�Existing�Convertible�Note� to�A$8�million�through�the�issue�of�A$2�million�in�Shares�and�an�extension�of�the�maturity�date�of�the� Existing�Convertible�Note�to�31�March�2014.��

On�22�November�2013,�Shareholders�approved�a�further�amendment�and�restatement�of�the�Existing� Convertible�Note�to�extend�the�maturity�date�from�31�March�2014�to�30�September�2016.�At�the�annual� general�meeting,�Shareholders�approved�the�issue�of�Shares�in�the�circumstances�described�in� section�1.5,� and�approved�an�increase�in�RCFIV’s�voting�power�up�to�a�maximum�percentage�of�36.04%�by�conversion� of�the�Existing�Convertible�Note�and�the�related�share�issues�under�it.�

1.5 The�issue�of�Shares�under�the�Convertible�Notes�

The�table�below�outlines�the�circumstances�under�which�the�Company�may�be�required�to�issue�additional� Shares�to�RCFIV�and�RCFVI�under�the�Existing�Convertible�Note�and�the�New�Convertible�Note,� respectively.��

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting

Page�10�

Share�issues�under�the�Existing�Convertible�Note�and�New�Convertible�Note�

	IssuetoRCFIVundertheExisting	IssuetoRCFVIundertheNew
	ConvertibleNote	ConvertibleNote
Fees	Nofurtherfeespayable.	TheCompanywillsatisfytheestablishment
		feeofA$120,000throughtheissueofShares.
		ThenumberofSharestobeissuedwilldepend
		onthe5tradingdayVWAPofBannerman’s
		SharesontheASXatcloseoftradingonthe
		tradingdaybeforedrawdownoftheNew
		ConvertibleNote.
Satisfactionof	TheCompanymustsatisfyinterestpayments	TheCompanymaysatisfyinterestpayments
interest	bytheissueofShares(exceptincertain	bytheissueofSharesorincash.
	limitedcircumstances).	ThenumberofSharestobeissuedwilldepend
	ThenumberofSharestobeissuedwilldepend	ontheamountofinterestpayableandthe5
	ontheamountofinterestpayableandthe5	dayVWAPofBannerman’sSharesontheASX
	dayVWAPofBannerman’sSharesontheASX	onthetradingdaybeforetherelevantinterest
	onthetradingdaybeforetherelevantinterest	paymentdate.
	paymentdate.
Upon	IftheconvertiblenoteisconvertedbyRCFIV	SameastheExistingConvertibleNote,other
conversion	atanytimeupuntiltheMaturityDate.	thantheConversionPricewhichwillbe
	ThenumberofSharestobeissuedwillbe	calculatedbasedontheVWAPofthe
	calculatedbydividingtheamountoutstanding undertheconvertiblenoteatthetimeof	Company’ssharesonASXatdrawdownofthe NewConvertibleNotebutwillbebetween
	conversionbyafixedConversionPriceof	A$0.06andA$0.095.
	A$0.095.	ThemethodofcalculationoftheConversion
		PriceissetoutinSchedule1.
Exerciseof	IftheCompanyelectstoprepaytheamounts	SameastheExistingConvertibleNote.
Prepayment	owingundertheconvertiblenote,thenitis
Options	alsorequiredtograntRCFthenumberof
	optionsthatisequaltotheprincipal
	outstandingundertheconvertiblenote
	dividedbytheConversionPrice(Prepayment
	Options).ThekeytermsofthePrepayment
	OptionsaresummarisedinSchedule2.
	ThenumberofSharestobeissuedwilldepend
	onthenumberofPrepaymentOptions
	exercisedbyRCFIV.

1.6 The�issue�of�Shares�under�the�RCF�Options�

The�RCF�Options�were�issued�to�Mr�Ian�Burvill�and�Mr�Mason�Hills�(current�and�previous�directors�of�the� Company,�respectively)�under�the�NEDSIP�for�services�provided�as�directors�of�the�Company.�Messrs� Burvill�and�Hills�directed�the�Company�to�issue�those�options�to�RCF�Management.�

Any�exercise�of�the�RCF�Options�will�result�in�RCF�Management�acquiring�a�relevant�interest�in�Shares,�

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting�

Page�11

increasing�the�voting�power�of�the�Relevant�RCF�Entities�on�the�basis�that�RCF�Management�is�associated� with�the�RCF�Funds�in�relation�to�the�Company.�

Shareholders�are�being�asked�to�approve�the�exercise�of�the�RCF�Options�by�RCF�Management�as�part�of� this�Resolution�for�the�purposes�of�item�7�of�section�611�of�the�Corporations�Act.�Any�Shares�issued�by�the� Company�in�respect�of�the�exercise�of�the�RCF�Options�would�count�towards�the�Maximum�Percentage� approved�by�Shareholders.�

1.7 The�grant�of�security�under�the�New�Convertible�Note�

The�Company�and�its�subsidiaries�(the� Group )�have�already�granted�security�to�RCFIV�to�secure�the� Company’s�obligations�under�the�Existing�Convertible�Note.�Shareholders�are�now�being�asked�to�approve� a�new�grant�of�security�by�the�Group�in�favour�of�RCFVI�to�secure�the�Company’s�obligations�under�the� New�Convertible�Note�on�similar�terms�as�the�existing�security�granted�in�favour�of�RCFIV�over�the�same� assets�of�the�Group.�This�Shareholder�approval�is�being�sought�under�part�(h)�of�the�Resolution�for�the� purposes�of�ASX�Listing�Rule�10.1�(see� section�1.13 �below�for�further�details).�The�new�security�will� comprise:�

a�charge�over�all�of�the�Company’s�present�and�after�acquired�property,�interests�and�rights;�
a�charge�over�the�Company’s�shares,�dividends�and�other�rights�in�respect�of�Bannerman� UK;�
a�mortgage�and�fixed�and�floating�charge�over�all�of�Bannerman�UK’s�assets�and� undertakings;�and�
a�pledge�over�the�rights,�title�and�interests�held�by�Bannerman�UK�in�the�shares�of� Bannerman�Namibia.�

Both�the�Existing�Convertible�Note�and�the�New�Convertible�Note�contain�provisions�to�regulate�the� priority�of�the�RCF�Funds’�interests�behind�any�project�finance�lender.�The�respective�priorities�as� between�RCFIV�and�RCFVI�will�be�regulated�by�separate�inter�creditor�arrangements.�

1.8 Advantages�if�the�Resolution�is�approved��

The�key�advantages�to�Shareholders�if�the�Resolution�is�approved�are:��

The�New�Convertible�Note�will�provide�the�Company�with�cash�resources�on�hand�to� construct�and�operate�the�pilot�plant�for�the�Etango�Project�and�meet�its�corporate� working�capital�requirements.�
The�continued�involvement�of�RCF�as�a�strategic�investor�in�the�Company�and�the�new� relationship�with�the�fully�capitalised�US$2.04�billion�RCFVI�is�important�to�building�a� project�finance�model�for�the�Etango�Project.�
The�Company�will�not�be�required�to�seek�alternative�sources�of�fundraising�in�the�short� term,�such�as�a�potentially�dilutive�capital�raising�or�the�sourcing�of�third�party�finance,� the�availability�of�which�would�not�be�guaranteed.�
The�conversion�of�the�Convertible�Notes�would�increase�the�RCF�Funds’�overall�interest� in�the�Company�which�would�generally�be�expected�to�further�incentivise�RCF�to�work� towards�the�future�success�of�Bannerman.��

1.9 Disadvantages�if�the�Resolution�is�approved��

The�Relevant�RCF�Entities�may�obtain�a�greater�level�of�control�in�respect�of�the�Company,�above�the�level� which�Shareholders�had�previously�approved.�As�a�consequence:�

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting

Page�12�

the�Relevant�RCF�Entities�may�have�a�greater�degree�of�influence�over�the�Board;
the�percentage�voting�power�of�Shareholders�which�are�not�associated�with�the�� Relevant�RCF�Entities�will�be�reduced�if�and�when�Shares�are�issued�in�accordance�with� the�Convertible�Notes�and�the�RCF�Options;�
the�Relevant�RCF�Entities’�significant�shareholding�may�reduce�any�takeover�premium� being�factored�into�the�price�of�Shares;�and
the�Relevant�RCF�Entities’�fully�diluted�equity�interest�may�discourage�other�investors� from�acquiring�further�Shares,�which�would�result�in�a�decrease�in�liquidity�of�Shares�on� ASX�and�TSX.�

1.10 Financial�impact�if�the�Resolution�is�approved��

If�the�Resolution�is�approved�by�Shareholders,�the�primary�financial�impact�will�be�an�increase�in�cash� assets�by�A$4�million�(excluding�transaction�costs)�and�a�corresponding�increase�of�A$4�million�in�the�non� current�liabilities�of�the�Company.�

1.11 Financial�impact�if�the�Resolution�is�not�approved��

The�Company�held�cash�reserves�of�approximately�A$1.85�million�as�at�31�March�2014�and�does�not� expect�to�derive�any�significant�cash�inflows�in�the�near�future.�If�the�Resolution�is�not�approved,�the� construction�of�the�pilot�plant�for�the�Etango�Project�will�be�put�on�hold�and�the�Company�will�need�to� seek�alternative�sources�of�finance�in�the�short�term�to�meet�its�working�capital�requirements.��

Alternative�sources�of�finance�may�include�a�potentially�dilutive�capital�raising�or�third�party�finance.� There�is�no�guarantee�that�the�Company would�be�able�to�raise�sufficient�funds�through�either�process.��

In�the�absence�of�a�capital�raising,�the�Company�would�also�likely�breach�its�covenant�in�the�Existing� Convertible�Note�to�maintain�a�minimum�cash�level�of�A$1.25�million.�

1.12 The�Relevant�RCF�Entities’�intentions�regarding�the�Company��

The�Relevant�RCF�Entities�have�confirmed�that�they�have�no�intention�to:�

make�any�change�to�the�business�of�the�Company;�
inject�any�further�capital�into�the�Company,�however�the�RCF�Funds�will�continue�to� monitor�the�financial�position�of�the�Company�and�reserve�the�right�to�inject�further� capital�into�the�Company�should�it�be�required;�
make�changes�to�the�Company’s�existing�employees;�
transfer�any�of�the�Company’s�assets�between�the�Company�and�the�Relevant�RCF� Entities�or�their�Associates;�
redeploy�any�of�the�Company’s�fixed�assets;�
change�the�Company’s�financial�or�dividend�distribution�policies;�or�
appoint�an�additional�director�to�the�Board�if�Shareholders�approve�the�Resolution� (although�RCFVI�reserves�its�contractual�right�to�do�so�under�the�New�Convertible�Note).� Mr�Burvill�will�therefore�remain�the�Relevant�RCF�Entities’�sole�representative�on�the� Board.

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting�

Page�13

The�statements�set�out�above�are�statements�of�the�Relevant�RCF�Entities’�current�intention�only�and�may� vary�as�new�information�becomes�available�or�circumstances�change.�The�Relevant�RCF�Entities�have� provided�the�Company�with�the�above�information�to�assist�it�to�meet�its�obligations�under�ASIC� Regulatory�Guide�74.��

The�Company�takes�no�responsibility�for�any�omission�from,�or�any�error�or�false�or�misleading�statement� in�this�section.�

1.13 Reasons�for�seeking�shareholder�approval�

Corporations�Act�

As�illustrated�in� section�1.14(b)� and �Schedule�3 �below,�the�Relevant�RCF�Entities’�voting�power�in�the� Company�may�increase�to�over�20%�pursuant�to�the�issue�of�Shares�under�the�Convertible�Notes�and�on� exercise�of�the�RCF�Options.�

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

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

Item�7�of�section�611�of�the�Corporations�Act�provides�an�exception�to�the�prohibition�in�section�606(1)�of� the�Corporations�Act.�The�exception�provides�that�a�person�may�acquire�a�relevant�interest�in�a� company’s�voting�shares�that�would�otherwise�breach�section�606(1)�of�the�Corporations�Act�if� shareholders�of�the�company�approve�the�transaction.�

The�Company�is�seeking�the�approval�of�Shareholders�under�the�Resolution�to�ensure�that�the�Company� may�issue�Shares�to�the�RCF�Funds�in�accordance�with�the�terms�of�the�New�Convertible�Note�and�Existing� Convertible�Note�and�issue�Shares�to�RCF�Management�upon�the�exercise�of�the�RCF�Options,�irrespective� of�whether�this�would�increase�the�Relevant�RCF�Entities’�voting�power�in�the�Company’s�above�the�20%� threshold.��

ASX�Listing�Rules�

(a) Reason�for�seeking�Shareholder�approval�under�ASX�Listing�Rule�10.1�

Under�part�(h)�of�the�Resolution,�Shareholders�are�being�asked�to�approve�the�grant�of�security�to�RCFVI� over�the�Group’s�assets�to�secure�the�Company’s�obligations�under�the�New�Convertible�Note.�Additional� information�on�the�grant�of�security�to�RCFVI�is�set�out�in� section�1.7.�

The�grant�of�security�will�constitute�the�disposal�of�a�‘substantial�asset’�to�a�‘substantial�holder’�under�ASX� Listing�Rule�10.1.�A�transaction�of�this�kind�is�prohibited�by�the�ASX�Listing�Rules,�unless�the�Company�has� obtained�Shareholder�approval.�Accordingly,�Shareholder�approval�is�being�sought�under�part�(h)�of�the� Resolution�for�the�purposes�of�ASX�Listing�Rule�10.1.�

(b) Substantial�holder�

ASX�Listing�Rule�10.1�provides�that�an�entity,�or�any�of�its�subsidiaries,�must�not�acquire�a�substantial� asset�from,�or�dispose�of�a�substantial�asset�to�a�‘substantial�holder’,�if�that�person�and�their�Associates�

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting

Page�14�

have�a�relevant�interest�(or�had�a�relevant�interest�at�any�time�in�the�six�months�before�the�transaction)�in� at�least�10%�of�the�total�votes�attaching�to�the�voting�securities.�

Given�that�RCFVI�is�an�Associate�of�RCFIV�and�RCF�Management�in�relation�to�the�Company,�which� together�held�a�relevant�interest�in�13.97%�of�the�Company’s�voting�securities�as�at�6�May�2014�(being�the� last�date�practicable�prior�to�finalising�this�Notice�of�Meeting),�RCFVI�constitutes�a�‘substantial�holder’�for� the�purposes�of�ASX�Listing�Rule�10.1.�

(c) Disposal�

Under�the�ASX�Listing�Rules,�‘dispose’�is�defined�as�meaning�to�dispose�of�something,�or�agree�to�dispose� of�something�by�any�means,�whether�directly�or�through�another�person,�and�includes�the�use�of�an�asset� as�collateral.�Accordingly,�the�granting�of�the�security�to�RCFVI�under�the�New�Convertible�Note�will�be� considered�a�disposal�of�an�asset�of�the�Company�for�the�purposes�of�ASX�Listing�Rule�10.1.�

(d) Substantial�Asset�

Pursuant�to�ASX�Listing�Rule�10.2,�an�asset�is�‘substantial’�if�its�value�is�5%�or�more�of�the�equity�interest� of�the�company�as�set�out�in�the�latest�accounts�given�to�ASX�under�the�ASX�Listing�Rules.�The�New� Convertible�Note�requires�as�a�condition�precedent�to�drawdown�the�execution�of�several�security� documents�including�a�charge�over�all�the�Company’s�present�and�future�assets�and�a�share�charge�over� the�Company’s�shares�in�Bannerman�UK.�On�this�basis,�the�grant�of�the�Security�will�be�considered�the� disposal�of�a�substantial�asset�for�the�purposes�of�ASX�Listing�Rule�10.1.�

1.14 Additional�information�required�by�the�Corporations�Act�and�ASIC�Regulatory�Guide

For�the�exemption�in�item�7�of�section�611�of�the�Corporations�Act�to�apply,�shareholders�must�be�given� all�information�known�to�the�person�proposing�to�make�the�acquisition�or�their�Associates,�or�known�to� the�company,�that�is�material�to�the�decision�of�how�to�vote�on�the�resolution.�In�ASIC�Regulatory�Guide� 74,�ASIC�has�indicated�what�additional�information�should�be�provided�to�Shareholders�in�these� circumstances.��

In�addition�to�the�information�already�outlined�above�and�the�Independent�Expert’s�Report,�the�following� information�is�provided�to�Shareholders�in�compliance�with�item�7�of�section�611�of�the�Corporations�Act� and�ASIC�Regulatory�Guide�74�in�relation�to�the�Resolution.��

(a) Details�regarding�RCF�

The�Company�will�issue�Shares�to�the�Relevant�RCF�Entities,�in�accordance�with�the�terms�of�the�Existing� Convertible�Note,�the�New�Convertible�Note�and�on�exercise�of�the�RCF�Options.�

Resource�Capital�Funds�( RCF )�are�private�equity�funds�with�mandates�to�make�investments�exclusively�in� the�mining�sector�across�a�diversified�range�of�hard�mineral�commodities�and�geographic�regions.��The� funds�are�managed�by�RCF�Management�L.L.C.�which�has�its�principal�office�in�Denver�and�additional� offices�in�Perth,�New�York�(Long�Island)�and�Toronto.��RCF�pioneered�the�concept�of�mining�focused� private�equity�funds�and�strives�to�produce�superior�returns�to�its�investors,�portfolio�companies�and� fellow�equity�investors.��Since�inception,�RCF�has�supported�120�mining�companies�(and�several�mining� services�companies)�involving�projects�located�in�40�countries�and�relating�to�28�commodities.��

RCF�has�experience�in�building�management�teams�specifically�suited�to�develop�and�or�operate�assets� and�has�the�resources�and�networks�to�draw�upon�top�talent�from�around�the�world.��In�addition�to� providing�financing,�RCF�has�the�in�house�technical�and�financial�expertise�to�actively�guide�a�mining� company’s�management�team�through�the�process�of�raising�capital�in�the�public�equity�and�project�

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting�

Page�15

financing�markets.��RCF’s�management�team�consists�of�individuals�with�extensive�commercial�and� technical�experience�in�the�mining�industry.��

RCF�is�currently�investing�its�sixth�fund,�Resource�Capital�Fund�VI�L.P.,�with�committed�capital�of�US$2.04� billion�and�currently�manages�three�other�active�private�equity�funds,�Resource�Capital�Fund�V�L.P.,� Resource�Capital�Fund�IV�L.P.�and�Resource�Capital�Fund�III�L.P..�The�Funds’�committed�capital�is�sourced� primarily�from�US�based�institutional�investors.��Further�information�about�RCF�can�be�found�on�its� website�www.resourcecapitalfunds.com.

RCFIV�is�represented�on�the�Board�by�Mr�Burvill�and�the�Company�understands�that�RCFVI�will�also�be� represented�by�him,�although�RCFVI�has�the�right�to�appoint�an�additional�director�under�the�New� Convertible�Note.�

For�the�purposes�of�the�Corporations�Act,�each�of�the�Relevant�RCF�Entities�are�Associates�of�one�another� in�relation�to�the�Company.�RCF�has�confirmed�that�the�Relevant�RCF�Entities�do�not�have�any�other� ‘Associates’�in�relation�to�the�Company.�

(b) Effect�on�the�voting�power�of�the�Relevant�RCF�Entities�and�their�Associates��

Schedule�3 �sets�out�the�indicative�number�of�Shares�that�the�Relevant�RCF�Entities�and�their�Associates� would�acquire�in�the�Company�and�the�corresponding�effect�on�their�voting�power�and�the�capital� structure�of�the�Company�(on�the�basis�of�the�assumptions�set�out�in�the�notes)�as�a�result�of�the�various� share�issues�contemplated�by�the�Existing�Convertible�Note,�New�Convertible�Note�(as�set�out�in� section� 1.5� above)�and�the�exercise�of�the�RCF�Options.�The�actual�number�of�Shares�and�Prepayment�Options�is� likely�to�vary�based�on�the�application�of�the�terms�of�the�Existing�Convertible�Note�and�New�Convertible� Note.�

Given�that�Relevant�RCF�Entities�are�Associates�of�each�other�in�relation�to�the�Company,�the�same� maximum�voting�power�outlined�in�this� section�1.14(b)� applies�to�all�RCF�Entities�and�their�Associates.�

By�way�of�summary�(please�refer�to� Schedule�3 �for�a�more�detailed�analysis):��

As�at�the�date�of�this�Explanatory�Memorandum,�the�Relevant�RCF�Entities�and�their�Associates�hold� 45,405,704�Shares�which�equates�to�voting�power�of�13.97%.�
Assuming�that�(i)�the�Conversion�Price�under�the�New�Convertible�Note�is�A$0.095�(the�Conversion� Price�will�not�be�finalised�until�drawdown)�and�(ii)�the�Bannerman�Share�price�were�to�remain� constant�at�A$0.067�(being�an�approximately�20%�discount�to�the�closing�5�day�VWAP�of�the� Company’s�shares�on�the�ASX�on�the�date�of�finalising�the�Independent�Expert’s�Report)�until�the� Maturity�Date,�the�voting�power�of�the�Relevant�RCF�Entities�and�their�Associates�could�increase�by� a�maximum�of�29.03%�by�conversion�of�the�Convertible�Notes,�the�related�share�issues�and�the� exercise�of�the�RCF�Options.�

Accordingly,�under�the�Resolution,�Shareholders�are�being�asked�to�approve�the�potential�for�the�Relevant� RCF�Entities�and�their�Associates�to�increase�their�voting�power�in�Bannerman�up�to�a�maximum�of�43.0%� ( Maximum�Percentage )�by�conversion�of�the�convertible�notes,�the�related�share�issues�and�exercise�of� the�RCF�Options.��

The�Convertible�Notes�are�issued�on�the�understanding�that�circumstances�may�change�between�the�date� of�issue�and�conversion;�irrespective�of�any�such�change�the�subsequent�conversion�by�the�relevant�RCF� Fund�of�the�relevant�Convertible�Note�will�be�valid,�provided�that�the�Relevant�RCF�Entities’�(and�their� Associates’)�voting�power�remains�below�the�Maximum�Percentage.�

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting

Page�16�

If�the�Relevant�RCF�Entities’�circumstances�change�and�the�Relevant�RCF�Entities’�(and�their�Associates’)� voting�interest�increases�as�a�result�of�an�acquisition�of�Shares�other�than�under�the�Existing�Convertible� Note�or�New�Convertible�Note�or�on�exercise�of�the�RCF�Options�(e.g.�by�way�of�taking�up�its�rights�under� a�rights�issue),�this�will�not�affect�the�Maximum�Percentage�that�the�Relevant�RCF�Entities�are�entitled�to� increase�their�voting�power�to�following�Shareholder�approval�under�the�Resolution.��

In�other�words,�the�Relevant�RCF�Entities’�(and�their�Associates’)�interest�must�not�exceed�the�Maximum� Percentage�(without�further�Shareholder�approval)�but�how�they�reach�the�Maximum�Percentage�is� irrelevant�–�it�can�be�through�Shares�issued�under�the�Existing�Convertible�Note,�the�New�Convertible� Note,�the�RCF�Options,�or�otherwise.��

If�the�Resolution�is�passed,�the�Company�will�include�a�statement�in�subsequent�Annual�Reports� reminding�Shareholders�of�the�approval�granted�to�the�Relevant�RCF�Entities�(and�their�Associates)�to� increase�their�voting�power�in�the�Company�to�the�Maximum�Percentage.�

(c) Details�of�other�relevant�agreements�between�the�Relevant�RCF�Entities�and�Bannerman�that� are�conditional�on�Shareholder�approval��

There�are�no�contracts�or�proposed�contracts�between�the�Relevant�RCF�Entities�(or�any�of�their� Associates)�and�the�Company�that�are�conditional�on,�or�directly�or�indirectly�dependent�on,�Shareholder� approval�of�the�issue�of�Shares�to�the�Relevant�RCF�Entities�under�the�Existing�Convertible�Note,�New� Convertible�Note�or�RCF�Options.�

(d) Interests�of�Directors�

Other�than�Mr�Burvill,�whose�employer�is�an�RCF�entity,�no�Director�has�any�interest�in�the�Existing� Convertible�Note�or�the�New�Convertible�Note,�or�the�acquisition�of�Shares�by�the�Relevant�RCF�Entities� under�the�terms�of�the�Existing�Convertible�Note,�the�New�Convertible�Note�or�the�RCF�Options.�

(e) Nominee�Directors�

The�RCF�Funds�currently�intend�that�Mr�Burvill�will�remain�their�sole�representative�on�the�Board.� However,�RCFVI�reserves�its�contractual�right�to�appoint�a�separate�nominee�director�under�the�New� Convertible�Note.�

Mr�Burvill�is�a�Senior�Vice�President�of�RCF�and�has�over�25�years�of�mining�industry�experience,�starting� as�a�mechanical�engineer�in�the�design�and�construction�of�mineral�process�plants.�In�representing�RCF,� Mr�Burvill�has�acted�as�a�non�executive�director�of�a�number�of�mining�companies�including�Pan� Australian�Resources�NL,�Highlands�Pacific�Limited�and�Murchison�Metals�Ltd.�Mr�Burvill�has�also�worked� as�an�Associate�Director�of�Rothschild�Australia�Limited,�providing�project�finance�for�mining�projects.�

Other�than�as�described�above,�Mr�Burvill�has�no�current�associations�with�the�Relevant�RCF�Entities,�the� Company�or�any�of�their�Associates�and�does�not�have�any�further�interest�in�the�Existing�Convertible� Note,�New�Convertible�Note,�RCF�Options�or�any�other�relevant�agreement.��

1.15 ASX�Listing�Rule�7.1

Subject�to�certain�exceptions,�ASX�Listing�Rule�7.1�provides�that�a�company�may�not�issue�more�than�15%� of�its�issued�capital�in�any�12�month�period�without�shareholder�approval.�ASX�Listing�Rule�7.2�provides� that�this�restriction�does�not�apply�in�certain�circumstances,�including�in�relation�to�an�issue�of�securities� approved�for�the�purposes�of�Item�7�of�section�611�of�the�Corporations�Act.�

As�Shareholder�approval�is�being�sought�for�the�issue�of�Shares�under�the�New�Convertible�Note�and�the� Existing�Convertible�Note�under�item�7�of�section�611�of�the�Corporations�Act,�if�Shareholders�pass�the�

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting�

Page�17

Resolution�then�separate�approval�will�not�be�required�under�ASX�Listing�Rule�7.1�and�as�such�the�issue�of� Shares�under�the�Existing�Convertible�Note�and/or�the�New�Convertible�Note�will�not�reduce�the� Company’s�capacity�to�issue�up�to�15%�of�its�issued�capital�in�any�12�month�period�without�shareholder� approval.�

1.16 ASIC�and�ASX’s�role�

The�fact�that�the�accompanying�Notice�of�Meeting,�this�Explanatory�Memorandum�and�other�relevant� documentation�has�been�received�by�ASX�and�ASIC�is�not�to�be�taken�as�an�indication�of�the�merits�of�the� Resolutions�or�the�Company.��ASIC,�ASX�and�their�respective�officers�take�no�responsibility�for�any� decision�a�Shareholder�may�make�in�reliance�on�any�of�that�documentation.��

Other�information

Neither�the�Company�nor�the�Directors�are�aware�of�any�additional�information�not�set�out�in�this� Explanatory�Memorandum�or�the�Independent�Expert’s�Report�that�would�be�relevant�to�Shareholders�in� deciding�how�to�vote�on�the�Resolution.�

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting

Page�18�

GLOSSARY

A$,�dollars�or�$� means�Australian�dollars.� Annexure� refers�to�an�Annexure�attached�to�this�Notice.� Associate�� has�the�meaning�given�to�it�in�section�12�of�the�Corporations�Act.� ASX� means�ASX�Limited�(ABN�98�008�624�691),�or�as�the�context�requires,� the�financial�market�operated�by�it. ASX�Listing�Rules� means�the�Listing�Rules�of�ASX. Bannerman�Namibia� means�Bannerman�Mining�Resources�(Namibia)�(Pty)�Ltd.� Bannerman�UK� means�Bannerman�Resources�Nominees�(UK)�Limited.� Beneficial�Shareholders� means�persons�who�are�or�become�holders�of�beneficial�interests�in� Shares,�either�directly�or�through�nominee�or�other�holders.�� Board� means�the�board�of�Directors�of�the�Company. Chairman� means�the�Chairman�of�the�Extraordinary�General�Meeting.� Company �or� Bannerman� means�Bannerman�Resources�Limited�(ACN�113�017�128). Computershare� means�Computershare�Investor�Services,�Bannerman’s�share�registrar.� Conditions�Precedent� means�the�conditions�which�must�be�satisfied�in�order�to�drawdown� under�the�New�Convertible�Note.� Conversion�Price� means�the�price�which�the�relevant�RCF�Fund�may�elect�to�convert�all�or� part�of�the�Principal�Outstanding�into�Shares.� Convertible�Notes� means�the�Existing�Convertible�Note�and�the�New�Convertible�Note.� Corporations�Act� means�the� Corporations�Act�2001 �(Cth). Director� means�a�director�of�the�Company. Establishment�Fee�� means�the�A$120,000�fee�payable�by�the�Company�to�RCFVI�on�the�date� of�drawdown�of�the�New�Convertible�Note.� Etango�Project�� means�the�uranium�project�of�the�Company�located�in�Namibia.� Existing�Convertible� means�the�convertible�note�with�a�face�value�of�A$8�million�provided�by� Note� RCFIV�to�the�Company.�� Existing�Facility� means�the�A$8,000,000�convertible�note�facility�provided�by�RCFIV.� Explanatory� means�the�Explanatory�Memorandum�attached�to�the�Notice�of� Memorandum� Meeting.� Extraordinary�General� means�the�Extraordinary�General�Meeting�of�Shareholders�of�the� Meeting �or� EGM �or� Company�to�be�held�at�Level�2,�1�Altona�Street,�West�Perth,�Western� Meeting� Australia,�on�19�June�2014�at�9:00�am�(Perth�time),�or�any�adjournment� thereof.� Group� means�Bannerman�and�its�subsidiaries.� Independent�Expert’s� means�the�Independent�Expert’s�Report�prepared�by�BDO�Corporate� Report� Finance�(WA)�Pty�Ltd�in�connection�with�the�Resolution�and�attached�to� this�Notice�at� Annexure�A .� Maximum�Percentage� means�the�Relevant�RCF�Entities’�maximum�potential�voting�power�in� Bannerman,�being�43.0%.� Mining�Licence� means�the�mining�licence�to�be�granted�by�the�Minister�of�Mines�and�

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting�

Page�19

	EnergyofNamibiainrespectoftheEtangoProjectwithinEPL3345.
MaturityDate	30September2016.
NEDSIP	meanstheNon�ExecutiveDirectorShareIncentivePlanasamended
	fromtimetotime.
NewConvertibleNoteor	meanstheproposedA$4,000,000convertiblenotefacilitytobe
NewFacility	providedbyRCFVI.
NoticeorNoticeof	meansthenoticeofMeetingandtheExplanatoryMemorandum.
Meeting
NoticeRecordDate	means7May2014.
PrepaymentOptions	meanstheOptionsthatbecomeissuablebytheCompanytothe
	relevantRCFFunduponprepaymentoftheExistingConvertibleNoteor
	NewConvertibleNote,withthetermsthereofsetoutintheSchedule2
	tothisNoticeofMeeting.
PrincipalOutstanding	meanstheamountoutstandingundertheNewConvertibleNoteto
	RCFVIand/orExistingConvertibleNotetoRCFIV(asapplicable)from
	timetotime.
ProxyForm	meanstheproxyformincludedwiththisNoticeatAnnexureB.
RCF	hasthemeaninggiventoitinsection1.14(a).
RCFFunds	meansRCFIVandRCFVI(eachaRCFFund).
RCFIV	meansResourceCapitalFundIVL.P.
RCFManagement	meansResourceCapitalFundsManagementPtyLtd.
RCFOptions	meansthe2,203,800optionstoacquireaShareissuedtoMrBurvilland
	MrHillsundertheNEDSIPandheldbyRCFManagement.
RCFVI	meansResourceCapitalFundVIL.P.
RegisteredShareholders	meansthosepersonswhoareregisteredholdersofSharesasatthe
	applicabledate.
RelevantRCFEntities	meansRCFManagementandtheRCFFunds.
Resolution	meanstheresolutionsetoutintheNoticeofMeeting.
Schedule	referstoaScheduleattheendofthisNoticeofMeeting.
Share	meansafullypaidordinaryshareinthecapitaloftheCompany.
Shareholder	meansaperson,corporationorbodyholdingaShareonthe
	Bannermanshareregister.
TechnicalReport	meansthetechnicalreportpreparedbyAlMaynard&Associatesin
	connectionwiththeResolutionandattachedtothisNoticeatAnnexure
	A.
TSX	meansTorontoStockExchange,orasthecontextrequires,thefinancial
	marketoperatedbyit.
VotingRecordDate	means9:00amon17June2014.
VWAP	meansVolumeWeightedAveragePrice.

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting

Page�20�

SCHEDULE�1��KEY�TERMS�OF�THE�EXISTING�CONVERTIBLE�NOTE�AND�NEW�CONVERTIBLE�NOTE�

The�key�commercial�terms�of�the�Existing�Convertible�Note�and�New�Convertible�Note�are�summarised� below.��Where�the�terms�of�the�New�Convertible�Note�are�stated�to�be�the�same�as�the�Existing� Convertible�Note,�this�indicates�that�that�the�specific�contractual�terms�are�the�same�except�for�the� difference�in�lenders�and�other�consequential�amendments.�

Term	ExistingConvertibleNote	NewConvertibleNote
Lender	RCFIV	RCFVI
Facility	Afacilitywithatotalcommitmentof	A facilitywithatotalcommitmentof
	A$8,000,000(ExistingFacility).	A$4,000,000(NewFacility).
Useoffunds	Bannermanwillnotreceiveanynewfundsas	MeetingtheCompany’sworkingcapital
	theExistingFacilityisalreadyfullydrawn	requirements,andtheconstructionand
	down.	operationoftheproposedpilotplantforthe
		EtangoProject.
Commencement	TheExistingConvertibleNotewasenteredinto	Drawdownwillbeavailableupon15business
Date	on28November2008.Theamendmentand	days’notice,withsuchnoticetobegiven
	restatementtotheExistingFacilitycommenced	within30daysaftersatisfactionofthe
	on31March2014.	conditionsprecedent(seebelow).
		IftheCompanydoesnotproceedwithadraw
		downoftheNewFacilitywhereallConditions
		Precedenthavebeensatisfied(andtheNew
		Facilityisavailablefordrawdown)orthe
		Companyhasnotactedingoodfaithinseeking
		tosatisfytheConditionsPrecedent,the
		CompanymustpaytoRCFManagementL.L.C.
		abreakfeeofA$120,000.
MaturityDate	30September2016orsuchlaterdateas	30September2016
	BannermanandRCFIVmayotherwiseagree.
Conditions	Allconditionsprecedenthavebeen satisfiedin	TheCompanymustsatisfythefollowing
Precedent	ordertogiveeffecttotheextensionofthe	ConditionsPrecedentinordertodrawdown
	maturitydateto30September2016.	undertheNewFacility:
		(a) customarydocumentaryconditions;
		(b) technical,legal,financialandpermitting
		duediligencereportinrespecttothe
		CompanyandtheEtangoProject,which
		issatisfactorytoRCFVI;
		(c) allnecessarygovernmental,RCFVI
		investmentcommitteeandregulatory
		approvalsandshareholderapprovalby
		theCompanyinrelationtotheNew
		Facility(includingnotificationsand
		consentrequirementsinNamibia);
		(d) theCompanyconfirmingthatitisin
		compliancewithrelevantsecurities
		regulations(includingtheNamibian
		StockExchange),andthatallmaterial
		informationhasbeenpubliclydisclosed;
		(e) executedformallegaldocumentation
		satisfactorytoRCFVI,includingevidence

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting�

Page�21

that�all�taxes�have�been�paid;

(f) granting�and�perfection�of�security�in� favour�of�RCFVI�(see�below);�
(g) all�necessary�consents�in�relation�to�the� granting�of�security�in�favour�of�RCFVI,� including�any�pre�emptive�rights;��
(h) all�necessary�consents�and,�if�applicable,� waivers�of�any�rights�of�pre�emption� required�to�enable�RCFVI�to�exercise�its� rights�under�the�security;�
(i) receipt�by�RCFVI�of�such�legal�opinions� from�its�counsel�as�it�may�require;�
(j) payment�of�all�fees�and�expenses,� including�legal�costs�and�the�issue�of�the� establishment�fee�shares;�
(k) no�material�adverse�change�in�the� Company’s�financial�condition�or� operations;��
(l) RCFVI�being�provided�with�a�copy�of�the� relevant�audited�financial�reports�of�the� Company;�
(m) evidence�of�good�title�to�the�Etango� Project�and�lodgment�of�title� documents�with�RCFVI;�
(n) RCFVI�being�satisfied�with�the�corporate� budget�of�the�Company;��
(o) no�event�of�default�having�occurred�that� remains�subsisting;�and�
(p) the�accuracy�of�customary� representations�and�warranties.�

Interest� Interest�is�payable�on�Principal�Outstanding at� a�fixed�coupon�rate�of�8%�per�annum�and�is� paid�quarterly�in�arrears.��

The�Company�must�satisfy�interest�payments� by�the�issue�of�Shares�to�RCFIV�except�in� certain�limited�circumstances�where� Bannerman�can�satisfy�interest�in�cash.��

The�number�of�Shares�to�be�issued�to�satisfy� interest�payments�is�equal�to�the�amount�of� interest�due�on�the�applicable�interest� payment�date,�divided�by�the�5�day�VWAP� ending�the�trading�day�immediately�preceding� the�relevant�interest�payment�date.��

The�Shares�to�be�issued�to�satisfy�interest� payments�will�be�issued�progressively�on�or� around�the�relevant�interest�payment�date.��If,� in�certain�circumstances,�Bannerman�is�unable�

Interest�is�payable�on�Principal�Outstanding�at� a�fixed�coupon�rate�of�8%�per�annum�and�is� paid�quarterly�in�arrears.��

The�Company�may�satisfy�interest�payments�by� the�issue�of�Shares�to�RCFVI�or�in�cash.��

If�the�Company�elects�to�satisfy�interest� payments�by�the�issue�of�Shares,�the�number� of�Shares�to�be�issued�is�equal�to�the�amount� of�interest�due�on�the�applicable�interest� payment�date,�divided�by�the�5�day�VWAP� ending�the�trading�day�immediately�preceding� the�relevant�interest�payment�date.��

The�Shares�to�be�issued�to�satisfy�interest� payments�will�be�issued�progressively�on�or� around�the�relevant�interest�payment�date.��

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting

Page�22�

to�issue�Shares�to�pay�interest,�then�it�can� satisfy�the�interest�in�cash.�

Bannerman	OntheMaturityDate,ifRCFIV hasnotelected	SameastheExistingConvertibleNote.	SameastheExistingConvertibleNote.
repaymentof	toconvertthePrincipalOutstandinginto
theConvertible	equity(seebelow),Bannermanwillrepayto
Notes	RCFIVthePrincipalOutstanding,accrued
	interestandanyotheramountswhichare
	securedandoutstandingincashunderthe
	relevantconvertiblenote.
RCFconversion	RCFIVmay,anytimepriortothe Maturity	SameastheExistingConvertibleNote,except
ofPrincipal	Date,electtoconvertallorpartofthe	thattheConversionPriceundertheNew
Outstanding	PrincipalOutstandingintoSharesatthe	ConvertibleNote	willbeequaltothehigherof:
	conversionprice(ConversionPrice).	1. thelowerof:
	TheConversionPriceundertheExisting ConvertibleNoteisA$0.095perShare.	a)	A$0.095;and
	TheShareswillbeissuedinonetrancheonor aroundthedateofconversion.	b)	150%ofthe60tradingday VWAPasatthedateof drawdownoftheNew
			Facility.
		2. A$0.06.
Bannerman	Bannermanmay,atanytimepriortothe	SameastheExistingConvertibleNote,except
conversionof	MaturityDate,electtoconvertallorpartof	thatBannermancannotelecttoconvertuntil
Principal	thePrincipalOutstandingtoSharesatanissue	afterthefirstanniversaryofthedrawdownof
Outstanding	priceperShareequaltotheConversionPrice	theNewFacility.
	providedthat:
	(a) therolling20dayVWAPisequalto,or
	morethan,threetimestheamountofthe
	relevantConversionPrice;and
	(b) theaveragedailyvolumeofSharestraded
	onASXduringthat20dayperiodisnot
	lessthan2%ofthetotalnumberofShares
	tobeissuedtoRCFIVuponsucha
	conversion.
	TherelevantShareswillbeissuedinone
	trancheonoraroundthedateofconversion.
Bannerman	Bannermanmayelecttoprepayallofthe	SametermsastheExistingConvertibleNote,
voluntary	PrincipalOutstanding(plusanyoutstanding	howeverthenumberofpotentialPrepayment
prepayment	interest)atanytimeupto60dayspriortothe	OptionsissuableundertheNewConvertible
	MaturityDate.	NotewilldifferduetothedifferentConversion
	IfBannermanelectstomakethatprepayment,	Priceandprincipalamountofloan.
	thenitisalsorequiredtogranttoRCFIVthe
	numberofoptionsthatisequaltothePrincipal
	OutstandingdividedbytheConversionPrice
	(PrepaymentOptions).ThePrepayment
	Optionswillbeissuedinonetrancheonor
	aroundthedateofprepayment.
	ThetermsofthePrepaymentOptionsareset
	outinSchedule2.
	ThePrepaymentOptionswillhaveanexercise
	priceequaltotherelevantConversionPrice,an
	expirydateoftheMaturityDateandotherwise
	beissuedonthetermssetoutintherelevant
	convertiblenote.

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting�

Page�23

	BasedontheConversionPriceandthecurrent
	PrincipalOutstandingofA$8,000,000,if
	Bannermanelectstomaketheprepayment,it
	willberequiredtoissue84,210,526
	PrepaymentOptions.
Security	Securedby:	Securityisgrantedonsimilartermstothe
		ExistingConvertibleNote,overthesameassets
	(a) achargeoveralloftheCompany’s	oftheGroupinfavourofRCFVI.Seesection1.7
	presentandafteracquiredproperty,	forfurtherinformation.
	interestsandrights;
	(b) achargeovertheCompany’sshares,
	dividendsandotherrightsinrespectof
	BannermanUK;
	(c) amortgageandfixedandfloatingcharge
	overallofBannermanUK’sassetsand
	undertakings;and
	(d) apledgeovertherights,titleand
	interestsheldbyBannermanUKinthe
	sharesofBannermanNamibia.
	Thenotecontainsprovisionstoregulatethe
	priorityofRCFIV’sinterestsbehindanyproject
	financelender.
Amendmentto	Intheeventofanyreorganisationof	SameastheExistingConvertibleNote.
theConversion	Bannerman’sissuedcapital,thenthe
Price	provisionsoftheconvertiblenotewillbe
	amendedinaccordancewiththeASXListing
	Rulessothattheholderoftheconvertiblenote
	willnotreceiveabenefitthatholdersof
	ordinarysecuritiesdonotreceive.
	TherelevantConversionPricewillbesubjectto
	anadjustmentunderananti�dilutionformula
	shouldBannermanraiseequityatlessthan
	80%ofarolling5�dayVWAP,inwhichcase
	therewillbeareductionintheConversion
	Pricewhichisproportionatetothedilutionin
	valueattributabletotheamountofequity
	raised.
Changeof	Itwillbearevieweventif:	SameastheExistingConvertibleNote.
control	(a) apersonobtainsarelevantinterestin50%
	ormoreofBannerman’ssecuritiesor
	Bannerman(otherthantheRCFFunds);or
	(b) BannermanNamibiaceasestohavean
	ownershipinterestofatleast50%inthe
	EtangoProjectwithoutRCFIV’sprior
	consent.
	Uponthehappeningofareviewevent,
	BannermanandRCFIVwillconsulteachother
	astotheeffectofthatevent,uponwhich
	RCFIVmayelectto:

(a) convert�all�amounts�outstanding�under�the�

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting

Page�24�

relevant�convertible�note�into�Shares;�or�

	(b) on120days’notice,requirethe
	repaymentofallamountsoutstanding
	undertherelevantconvertiblenote.
Bannerman’s	Bannermangivescustomaryrepresentations,	SameastheExistingConvertibleNote.
undertakings	warranties,undertakingsandindemnities.In
	addition,itwillalsogivewarrantiesand
	undertakingsinrespectof:
	(a) themaintenanceof:
	I. notlessthana50%interestinthe
	EtangoProject(eitherindirectly
	orthroughitsholdingin
	BannermanNamibia);and
	II. thetenementsoftheEtango
	Project;
	(b) ensuringthatanySharesissuedunderthe
	termsoftheconvertiblenote(eitherasa
	newissueorontheexerciseofthe
	PrepaymentOptions)arefreelytradeable
	onASX;and
	(c) themaintenanceofaminimumcash
	balanceofA$1.25million,whichwill
	includeA$0.5millioncashwhichthe
	CompanyhassetasidetopaySavannain
	theeventthattheMiningLicenceis
	granted(SavannaPayment).Ifthe
	SavannaPaymentismade,theminimum
	cashbalancewillreducetoA$750,000.
Default	IfBannermandefaults,andthedefault	SameastheExistingConvertibleNote.
	continues,thenBannermanrequiresRCFIV’s
	priorconsentinordertoexerciseitsrightsto
	convertthePrincipalOutstandingand/or
	interesttoShares.
	Inaddition,upontheoccurrenceofaneventof
	default,allamountsowingundertherelevant
	convertiblenotewouldbecomeimmediately
	dueandpayable.
	Therewillalsobecertaincustomaryeventsof
	default,including:
	(a) failurebyBannermantopayorrepayany
	amountsoutstandingundertheExisting
	ConvertibleNoteandBannermannot
	remedyingthatfailurewithintwobusiness
	daysoftheduedate;
	(b) breachoftheExistingConvertibleNote,
	includingwherespecifiedsecurity
	documentsorconsentsora
	representation,warrantyorstatementis
	orprovestobeincorrectinamaterial
	respect,andthebreachisnotrectified
	withinsevendays;
	(c) Bannerman,BannermanUKorBannerman
	Namibiaimplementamerger,demergeror

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting�

Page�25

scheme�of�arrangement�without�RCFIV’s� approval;��

(d) the�Etango�Project�is�abandoned;��
(e) any�event�or�series�of�events,�whether� related�or�not,�occurs�which�has�or�is�likely� to�have�a�material�adverse�effect�on� Bannerman;��
(f) Bannerman’s�securities�are�suspended� from�trading�on�ASX�for�an�aggregate� period�in�excess�of�five�days�over�any� rolling�12�month�period;�and��
(g) any�material�part�of�the�Etango�Project�or� the�relevant�tenements�is�nationalised,� confiscated�or�requisitioned.��

Approvals�� Bannerman�is�required�to�use�reasonable� Same�as�the�Existing�Convertible�Note. endeavours�to�obtain�a�Mining�Licence�in� respect�of�the�Etango�Project�before�the� Maturity�Date.�

Bannerman�must�ensure�that�it�has�all�required� Shareholder�approvals�(if�any)�before�it�issues� any�Shares�or�Prepayment�Options�under�the� relevant�convertible�note.��

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting

Page�26�

SCHEDULE�2�–�CONVERTIBLE�NOTE�PREPAYMENT�OPTION�TERMS�

The�valid�exercise�of�each�Prepayment�Option�will�entitle�the�holder�to�one�Share.�
Upon�the�valid�exercise�of�the�Prepayment�Options�and�payment�of�the�exercise�price,�Bannerman� will�issue�Shares,�which�will�be�fully�paid�ordinary�shares�ranking�pari�passu�with�the�then�issued� ordinary�shares�of�Bannerman.�
In�the�event�of�any�reorganisation�of�the�issued�capital�of�Bannerman�the�rights�of�the�option�holder� will�be�changed�to�comply�with�the�ASX�Listing�Rules�applying�to�a�reorganisation�of�capital�at�the� time�of�the�reorganisation.�
If�there�is�a�pro�rata�issue�(except�a�bonus�issue),�the�exercise�price�of�a�Prepayment�Option�may�be� reduced�according�to�the�following�formula:�

O’�=�O�–�E[P�(S+D)]

��N+1�

Where:�

O’�=� the�new�exercise�price�of�the�Prepayment�Options;�
O�=�� the�old�exercise�price�of�the�Prepayment�Options;�
E�=� the�number�of�underlying�securities�into�which�one�Prepayment�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.�
The�Prepayment�Options�will�not�be�listed�but�Bannerman�must�apply�for�listing�of�the�Shares�issued� upon�exercise�of�the�Prepayment�Options.�
If�there�is�a�bonus�issue�to�the�holders�of�Shares,�the�number�of�Shares�over�which�the�Prepayment� Options�are�exercisable�may�be�increased�by�the�number�of�Shares�which�the�Prepayment�Options� holder�would�have�received�if�the�Prepayment�Options�had�been�exercised�before�the�record�date�for� the�bonus�issue.�
While�Bannerman�is�admitted�to�the�ASX,�the�terms�of�the�Prepayment�Options�must�only�be� amended�in�accordance�with�ASX�Listing�Rules.�
The�optionholder�does�not�have�the�right�to�participate�in�bonus�issues�or�new�issues�of�securities� offered�to�Shareholders�until�Shares�are�allotted�to�the�holder�pursuant�to�the�exercise�of�the� relevant�Prepayment�Options.��

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting�

Page�27

SCHEDULE�3�–�EFFECT�OF�THE�VARIOUS�SHARE�ISSUES�ON�THE�VOTING�POWER�OF�THE� RELEVANT�RCF�ENTITIES�AND�THEIR�ASSOCIATES�

The�table�below�illustrates�how�the�Relevant�RCF�Entities�and�their�Associates�may�reach�the�Maximum� Percentage�of�43.0%,�which�Shareholders�are�being�asked�to�approve,�by�conversion�of�both�Convertible� Notes,�the�related�share�issues�under�them�and�the�exercise�of�the�RCF�Options.�However,�this�table�is� based�upon�several�variables�and�assumptions�(listed�in�the�explanatory�notes�and�assumptions�below)� which�in�practice�may�not�remain�constant�throughout�the�life�of�the�Convertible�Notes.�Accordingly,�the� actual�number�of�Shares�that�may�be�issued�to�RCFIV�and�RCFVI�under�the�Convertible�Notes�may�differ� from�the�numbers�set�out�below.�However,�the�Maximum�Percentage�voting�power�that�the�Relevant�RCF� Entities�(and�their�Associates)�can�reach�will�remain�fixed�despite�any�variation�from�assumed�figures�and� circumstances.��

As�at�the�date�of�this�Explanatory�Memorandum:�

RCFIV�had�a�relevant�interest�in�45,405,704�Shares,�representing��13.97%�of�the�issued�share� capital�of�the�Company;��
RCF�Management�had�no�relevant�interest�in�Shares,�representing�nil�percent�of�the�issued�share� capital�of�the�Company;�and�
RCFVI�had�no�relevant�interest�in�Shares,�representing�nil�percent�of�the�issued�share�capital�of� the�Company.�

	NumberofShares
ShareholdingofRCFIV
SharesheldbyRCFIVasatthedateofthisExplanatoryMemorandum1	45,405,704
PaymentofallinterestontheExistingConvertibleNote(upuntil30September2016)3	23,880,597
UponconversionofthePrincipalOutstandingunderExistingConvertibleNote5,8	84,210,526
RelevantinterestinSharesheldbyRCFIVasatMaturityDate	153,496,827
VotingpowerofRCFIVasatMaturityDate10	31.4%
ShareholdingofRCFManagement
SharesheldbyRCFManagementasatthedateofthisExplanatoryMemorandum1	0
SharesissuableundertheRCFOptionscurrentlyheldbyRCFManagement2	2,203,800
RelevantinterestinSharesheldbyRCFManagementasatMaturityDate	2,203,800
VotingpowerofRCFManagementasatMaturityDate10	0.5%
ShareholdingofRCFVI
SharesheldbyRCFVIasatthedateofthisExplanatoryMemorandum1	0
SatisfactionoftheEstablishmentFeeofA$120,0006	1,791,045
PaymentofallinterestontheNewConvertibleNote(upuntil30September2016)3,4	10,629,461
UponconversionofthePrincipalOutstandingunderNewConvertibleNote7,8	42,105,263
RelevantinterestinSharesheldbyRCFIVasatMaturityDate	54,525,769
VotingpowerofRCFVIasatMaturityDate10	11.1%

TotalrelevantinterestinSharesheldbytheRelevantRCFEntitiesandtheirAssociatesasatMaturity Date	210,226,396
MaximumpotentialvotingpoweroftheRelevantRCFEntitiesandtheirAssociates9,10	43.0%

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting

Page�28�

Explanatory�notes�and�assumptions�

References�to�‘Shares�held’�refer�to�Shares�in�which�the�Relevant�RCF�Entities�have�a�relevant�interest� known�to�the�Company�at�6�May�2014,�being�the�last�practicable�date�before�the�finalisation�of�this� Explanatory�Memorandum.
Assumes�that�RCF�Management�will�exercise�all�options�held�by�it�prior�to�the�Maturity�Date.�
Assumes�that�the�price�for�calculating�the�number�of�interest�shares�to�be�issued�will�be�A$0.067� (being�an�approximately�20%�discount�to�the�5�day�VWAP�of�the�Company's�shares�on�ASX�at�2�May� 2014,�being�the�date�of�finalisation�of�the�Independent�Expert’s�Report).�However,�the�number�of� interest�shares�is�calculated�by�reference�to�the�5�day�VWAP�calculated�on�the�last�trading�day�before� the�applicable�interest�payment�date�so�this�price�will�vary�as�will�the�number�of�interest�shares�to�be� issued�to�the�RCF�Funds.��
Assumes�that�the�date�of�drawdown�under�the�New�Convertible�Note�is�10�July�2014�and�that�the� total�commitment�of�A$4�million�is�drawn�down.�This�accounts�for�the�proportional�differences�in�the� number�of�interest�shares�allocated�under�the�New�Convertible�Note�as�opposed�to�the�Existing� Convertible�Note�as�Shares�payable�in�lieu�of�interest�under�the�Existing�Convertible�Note�will�be� issued�in�satisfaction�of�the�full�third�quarter�of�2014�whereas�shares�issued�under�the�New� Convertible�Note�will�only�be�issued�for�the�relevant�portion�of�the�third�interest�quarter�of�2014.��
Assumes�that�the�Existing�Convertible�Note�will�be�converted�into�Shares�at�the�Maturity�Date.�
Assumes�that�the�price�for�calculating�the�number�of�shares�to�be�issued�in�satisfaction�of�the� Establishment�Fee�will�be�A$0.067�(being�an�approximately�20%�discount�to�the�5�day�VWAP�of�the� Company's�shares�on�ASX�at�2�May�2014,�being�the�date�of�finalisation�of�the�Independent�Expert’s� Report).�However,�the�number�of�Establishment�Fee�Shares�is�calculated�by�reference�to�the�5�day� VWAP�calculated�on�the�last�trading�day�before�the�drawdown�of�the�New�Convertible�Note,�so�this� price�may�vary�as�may�the�number�of�Establishment�Fee�Shares�to�be�issued�to�RCFVI.��
Assumes�the�New�Convertible�Note�will�be�converted�to�Shares�as�at�the�Maturity�Date,�at�a� Conversion�Price�of�A$0.095.�This�Conversion�Price�represents�the�maximum�unadjusted�price�at� which�Shares�may�be�issued�to�RCFVI�upon�conversion�of�the�New�Convertible�Note�(the�actual� Conversion�Price�will�be�calculated�based�on�the�VWAP�of�the�Company’s�Shares�on�ASX�at� drawdown�of�the�New�Facility�but�will�be�between�A$0.06�and�A$0.095).��
If�the�Company�prepays�either�Convertible�Note�and�there�are�amounts�outstanding�under�the� relevant�Convertible�Note,�then�it�must�issue�Prepayment�Options�on�the�terms�set�out�in�Schedule� 2.�The�number�of�Prepayment�Options�would�be�equal�to�the�number�of�Shares�issued�on�a� conversion�of�the�relevant�Convertible�Note.��The�issue�of�any�Shares�upon�the�exercise�of� Prepayment�Options�would�count�towards�the�Maximum�Percentage�under�the�Resolution.��
The�actual�number�of�securities�to�be�issued�under�the�relevant�Convertible�Note�is�likely�to�vary� based�on�the�application�of�the�terms�of�the�relevant�Convertible�Note.�For�example,�if�the�Company� raises�equity�at�less�than�80%�of�a�rolling�5�day�VWAP,�the�Conversion�Price�will�be�adjusted�in� accordance�with�the�anti�dilution�formula.��
Assumes�that�before�the�Maturity�Date,�Bannerman�will�not�issue�any�other�Shares,�options�or� performance�rights�other�than�in�respect�of�the�exercise�of�the�RCF�Options�and�the�Shares�to�be� issued�under�the�Convertible�Notes.�The�current�issued�capital�of�the�Company�as�at�the�date�of�this� Explanatory�Memorandum�is�324,938,790�Shares.�

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting�

Page�29

ANNEXURE�A�–�INDEPENDENT�EXPERT’S�REPORT�AND�TECHNICAL�REPORT��

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting

Page�30�

BANNERMAN RESOURCES LIMITED Independent Expert’s Report

Opinions:

The Financing Transaction is not fair but reasonable

The Security Transaction is fair and reasonable

6 May 2014

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Financial Services Guide

6 May 2014

BDO Corporate Finance (WA) Pty Ltd ABN 27 124 031 045 (‘ we ’ or ‘ us ’ or ‘ ours ’ as appropriate) has been engaged by Bannerman Resources Limited (‘ Bannerman ’ or ‘the Company’ ) to provide an independent expert’s report on the proposals for Bannerman to issue shares to Resource Capital Fund VI LP and Resource Capital Fund IV LP upon the conversion of convertible note facilities, for Bannerman to issue shares on the exercise of options issued to RCF Management Pty Ltd and for Bannerman to grant security to RCF Fund VI in the form of a mortgage over the assets comprising Bannerman’s Etango Project. You will be provided with a copy of our report as a retail client because you are a shareholder of Bannerman.

Financial Services Guide

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

This FSG includes information about:

Who we are and how we can be contacted;
The services we are authorised to provide under our Australian Financial Services Licence, Licence No. 316158;
Remuneration that we and/or our staff and any associates receive in connection with the general financial product advice;
Any relevant associations or relationships we have; and
Our internal and external complaints handling procedures and how you may access them.

Information about us

BDO Corporate Finance (WA) Pty Ltd is a member firm of the BDO network in Australia, a national association of separate entities (each of which has appointed BDO Australia Limited ACN 050 110 275 to represent it in BDO International). The financial product advice in our report is provided by BDO Corporate Finance (WA) Pty Ltd and not by BDO or its related entities. BDO and its related entities provide services primarily in the areas of audit, tax, consulting and financial advisory services.

We do not have any formal associations or relationships with any entities that are issuers of financial products. However, you should note that we and BDO (and its related entities) might from time to time provide professional services to financial product issuers in the ordinary course of business.

Financial services we are licensed to provide

We hold an Australian Financial Services Licence that authorises us to provide general financial product advice for securities to retail and wholesale clients.

When we provide the authorised financial services we are engaged to provide expert reports in connection with the financial product of another person. Our reports indicate who has engaged us and the nature of the report we have been engaged to provide. When we provide the authorised services we are not acting for you.

General Financial Product Advice

We only provide general financial product advice, not personal financial product advice. Our report does not take into account your personal objectives, financial situation or needs. You should consider the appropriateness of this general advice having regard to your own objectives, financial situation and needs before you act on the advice.

BDO CORPORATE FINANCE (WA) PTY LTD

Financial Services Guide

Page 2

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Fees, commissions and other benefits that we may receive

We charge fees for providing reports, including this report. These fees are negotiated and agreed with the person who engages us to provide the report. Fees are agreed on an hourly basis or as a fixed amount depending on the terms of the agreement. The fee payable to BDO Corporate Finance (WA) Pty Ltd for this engagement is approximately $24,000.

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

Other Assignments

In October 2013 we were engaged to provide an independent expert’s report on the proposal to extend the secured convertible note facility with Resource Capital Fund IV LP. Our fees for this work amounted to approximately $42,000.

Remuneration or other benefits received by our employees

All our employees receive a salary. Our employees are eligible for bonuses based on overall productivity but not directly in connection with any engagement for the provision of a report. We have received a fee from Bannerman for our professional services in providing this report. That fee is not linked in any way with our opinion as expressed in this report.

Referrals

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

Complaints resolution

Internal complaints resolution process

As the holder of an Australian Financial Services Licence, we are required to have a system for handling complaints from persons to whom we provide financial product advice. All complaints must be in writing addressed to The Complaints Officer, BDO Corporate Finance (WA) Pty Ltd, PO Box 700 West Perth WA 6872.

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

Referral to External Dispute Resolution Scheme

A complainant not satisfied with the outcome of the above process, or our determination, has the right to refer the matter to the Financial Ombudsman Service (“ FOS ”). FOS is an independent organisation that has been established to provide free advice and assistance to consumers to help in resolving complaints relating to the financial service industry. FOS will be able to advise you as to whether or not they can be of assistance in this matter.

Our FOS Membership Number is 12561. Further details about FOS are available at the FOS website www.fos.org.au or by contacting them directly via the details set out below.

Financial Ombudsman Service GPO Box 3 Melbourne VIC 3001 Toll free: 1300 78 08 08 Facsimile: (03) 9613 6399 Email: [email protected]

Contact details

You may contact us using the details set out on page 1 of the accompanying report.

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1.	Introduction	1
2.	Summary and Opinion	2
3.	Scope of the Report	6
4.	Outline of the Proposal	9
5.	Profile of Bannerman Resources Limited	13
6.	Profile of Resource Capital Fund VI LP	18
7.	Economic analysis	19
8.	Industry analysis	20
9.	Valuation approach adopted	22
10.	Valuation of Bannerman prior to the Financing Transaction	24
11.	Valuation of Bannerman following the Financing Transaction	32
12.	Valuation of security provided and liabilities settled	37
13.	Are the Transactions fair?	38
14.	Are the Transactions reasonable?	39
15.	Conclusion	46
16.	Sources of information	47
17.	Independence	47
18.	Qualifications	48
19.	Disclaimers and consents	48

Appendix 1 – Glossary

Appendix 2 – Valuation Methodologies

Appendix 3 – Independent Valuation report prepared by Al Maynard & Associates Pty Ltd

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6 May 2014

The Directors Bannerman Resources Limited Suite 18 Level 1, 513 Hay Street SUBIACO WA 6008

Dear Directors

INDEPENDENT EXPERT’S REPORT

1. Introduction

On 8 April 2014, Bannerman Resources Limited (‘ Bannerman ’ or ‘ the Company ’) announced that, subject to certain conditions including shareholder approval, it had agreed to issue a new convertible note facility with a total commitment of $4 million ( ‘New Convertible Note’ ) to Resource Capital Fund VI LP (‘ RCFVI ’). The Convertible Note will have a maturity date of 30 September 2016 and a coupon interest rate of 8% per annum. The conversion price will be the higher of:

a) the lower of:
i. $0.095; and
ii. 150% of the 60 day trading VWAP as at the date of drawdown.

b) $0.06.

Under the New Convertible Note, security will also be provided to RCFVI in the form of the following:

a) A charge over all of Bannerman’s present and after acquired property, interests and rights;
b) A charge over Bannerman’s shares, dividends and other rights in respect of Bannerman Resources Nominees (UK) Limited (100% owned subsidiary of Bannerman);
c) A mortgage and a fixed and floating charge over all of Bannerman Resources Nominees (UK) Limited’s assets and undertakings; and
d) A pledge over the rights, title and interests held by Bannerman Resources Nominees (UK) Limited in the shares of Bannerman Mining Resources (Namibia) (Proprietary) Limited.

The above security is collectively referred to as the ‘Secured Assets’ .

The purpose of the New Convertible Note is to allow Bannerman to fund the construction and operation of a proposed pilot plant program for the Company’s 80% owned Etango Project located in Namibia and allow the Company to meet its corporate working capital requirements.

BDO Corporate Finance (WA) Pty Ltd ABN 27 124 031 045 AFS Licence No 316158 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Corporate Finance (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

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Bannerman has an existing secured convertible note facility on issue to Resource Capital Fund IV LP ( ‘RCFIV’ ) with a face value of $8 million (‘ Existing Convertible Note’ ). The Existing Convertible Note has a maturity date of 30 September 2016, a conversion price of $0.095 (subject to adjustment) and a coupon interest rate of 8% per annum. For the purposes of the Corporations Act 2001 (Cth) (‘ the Act’ ), RCFVI and RCFIV are considered associates in relation to the Company.

The extension of the terms of the Existing Convertible Note was approved by Shareholders on 22 November 2013. On that date, Shareholders approved the issue of shares to RCFIV, up to a maximum percentage of 36.04% through the issue of shares under the Existing Convertible Note.

Approval of the resolution will allow RCFIV, RCFVI and RCF Management Pty Ltd (‘ RCF Management ’) through the issue of shares to RCFIV, RCFVI and RCF Management under the Existing Convertible Note, the New Convertible Note and existing options to increase their shareholding up to a maximum percentage of 43.0% ( ‘Financing Transaction’ ) pursuant to Item 7 Section 611 of the Act.

The security to be provided under the New Convertible Note, in the form of the Secured Assets, is also subject to shareholders’ approval under the Australian Securities Exchange ( ‘ASX’ ) Listing Rule 10.1 ( ‘Security Transaction’ ).

For the purpose of our Report, the Financing Transaction and the Security Transaction are collectively referred to as ‘the Transactions’ and RCFIV, RCFVI and RCF Management are collectively referred to as ‘ the Relevant RCF Entities ’.

2. Summary and Opinion

2.1 Purpose of the report

The directors of Bannerman have requested that BDO Corporate Finance (WA) Pty Ltd (‘ BDO ’) prepare an independent expert’s report (‘ our Report ’) to express an opinion as to whether or not the Financing Transaction and the Security Transaction are fair and reasonable to the non-associated shareholders of Bannerman (‘ Shareholders ’).

Our Report is prepared pursuant to the following sections of the Act and/or ASX Listing Rules (‘ Listing Rules ’) and is to be included in the Notice of Meeting and Explanatory Memorandum for Bannerman in order to assist Shareholders in deciding whether to approve the following:

Financing Transaction – Item 7 Section 611 of the Act as a result of the Relevant RCF Entities increasing their voting power in the Company from their current position of 13.97% up to a maximum of 43.0% following the Financing Transaction; and
Security Transaction – ASX Listing Rule 10.1 as a result of the Company being deemed to may have disposed of a substantial asset to a substantial holder (being RCFVI, which is deemed to be an associate of RCFIV who currently holds a relevant interest of 13.97% of Bannerman’s issued share capital) to secure repayment of the New Convertible Note.

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2.2 Approach

Our Report has been prepared having regard to Australian Securities and Investments Commission (‘ ASIC ’) Regulatory Guide 74 (‘ RG 74 ’), ‘Acquisitions Approved by Members’, Regulatory Guide 111 (‘ RG 111 ’), ‘Content of Expert’s Reports’ and Regulatory Guide 112 (‘ RG 112 ’) ‘Independence of Experts’.

In arriving at our opinion, we have assessed the respective terms of the Transactions as outlined in the body of this report. We have considered:

How the value of a Bannerman share prior to the Financing Transaction on a control basis compares to the value of a Bannerman share following the Financing Transaction on a minority basis;
How the value of the proceeds of the sale of the Secured Assets that would be provided to RCFVI under a general security deed in relation to the New Convertible Note in the event of a default compares to the value of the liabilities that would be settled;
The likelihood of a superior alternative being available to Bannerman;
Other factors which we consider to be relevant to the Shareholders in their assessment of the Transactions; and
The position of Shareholders should the Transactions not proceed.

2.3 Opinion

We have considered the terms of the Financing Transaction as outlined in the body of this report and have concluded that, in the absence of a superior alternative, the Financing Transaction is not fair but reasonable to Shareholders .

We have determined that the Financing Transaction is not fair as the preferred value of a Bannerman share following the Financing Transaction on a minority basis under both our primary and secondary methodologies is less than the preferred value of a Bannerman share prior to the Financing Transaction on a control basis. However, we consider the Financing Transaction to be reasonable due to significant advantages that we consider the Financing Transaction will bring to the Company and note that RCFIV has previously received shareholder approval to increase its interest in the Company to 36.04% through the issue of shares under the Existing Convertible Note and that the approval being sought under the Financing Transaction will only increase the collective interest of the Relevant RCF Entities to up to a maximum of 43.0%.

We have considered the terms of the Security Transaction as outlined in the body of this report and have concluded that, in the absence of any other relevant information, the Security Transaction is fair and reasonable to Shareholders .

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2.4 Fairness

In section 13 we determined how the value of a Bannerman share prior to the Financing Transaction on a control basis compares to the value of a Bannerman share following the Financing Transaction on a minority basis, as detailed below.

Table 1: Fairness assessment of Financing Transaction

		Low	Preferred	High
	Ref
		$	$	$
Value of a Bannerman share prior to the Financing Transaction on a	10.3	0.238	0.357	0.472
control basis
Value of a Bannerman share following the Financing Transaction on a	11.1	0.142	0.211	0.283
minority basis – primary approach
Value of a Bannerman share following the Financing Transaction on a	11.2	0.174	0.276	0.383
minority basis – secondary approach

Source: BDO analysis

The table above shows that the low, preferred and high values of a Bannerman share following the Financing Transaction on a minority basis under both our primary and secondary approaches are less than the low, preferred and high values of a Bannerman share prior to the Financing Transaction on a control basis.

The above valuation ranges are graphically presented below:

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----- Start of picture text -----

Value of a Bannerman share prior to the Financing
Transaction on a control basis
Value of a Bannerman share following the Financing
Transaction on a minority basis - primary approach
Value of a Bannerman share following the Financing
Transaction on a minority basis - secondary
approach
0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45 0.50
----- End of picture text -----

Source: BDO analysis

The above pricing indicates that, in the absence of any other relevant information, the preferred value of a Bannerman share following the Financing Transaction on a minority basis under both methodologies is less than the preferred value of a Bannerman share prior to the Financing Transaction on a control basis. Therefore, we consider the Financing Transaction to be not fair for Shareholders.

We also concluded that the value of the proceeds of the sale of the Secured Assets that would be provided to RCFVI under a general security deed in relation to the New Convertible Note in the event of a default is equivalent or lower than the value of the liabilities that would be settled. This is discussed in section 12

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of our Report. Therefore, in the absence of any other relevant information, this indicates that the Security Transaction is fair for Shareholders.

2.5 Reasonableness

We have considered the analysis in section 14 of this report, in terms of both:

advantages and disadvantages of the Transactions; and
other considerations, including the position of Shareholders if the Transactions do not proceed and the consequences of not approving the Transactions.

In our opinion, the position of Shareholders if the Transactions are approved is more advantageous than the position if the Transactions are not approved. Accordingly, in the absence of any other relevant information, we believe that:

the Financing Transaction is reasonable for Shareholders; and
the Security Transaction is reasonable for Shareholders.

The respective advantages and disadvantages considered are summarised below:

Table 2: Summary of advantages and disadvantages considered in reasonableness assessment

ADVANTAGES AND DISADVANTAGES	ADVANTAGES AND DISADVANTAGES
Section	Advantages	Section	Disadvantages
Financing Transaction
14.1.1	Minority interest values prior to and	14.2.1	The Financing Transaction is not fair
	following the Financing Transaction are
	similar
14.1.2	Financing Transaction provides a short to	14.2.2	Dilution of existing Shareholders’ interests
	medium term funding option
14.1.3	Approval of the Financing Transaction
	will provide the Company with funds to
	progress the pilot plant
14.1.4	Approval of the Financing Transaction
	will provide the Company with necessary
	working capital and allow compliance
	with financial covenants
14.1.5	Conversion will put the Company under
	less cash flow strain
14.1.6	Major shareholder support
14.1.7	The ability of Bannerman to raise
	additional funds may increase

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ADVANTAGES AND DISADVANTAGES

	ADVANTAGES AND DISADVANTAGES
	Section Advantages Section Disadvantages
	Security Transaction
	14.1.8 The Security Transaction is fair 14.2.3 Onerous restrictions on dealing with the Company’s assets
	14.1.9 Supports debt funding

Other key matters we have considered include:

Table 3: Summary of other key matters considered in reasonableness assessment

Section	Description
14.3.1	Alternative proposals
14.3.2	The change in practical level of control is not significant
14.3.3	The Transactions are unlikely to deter a takeover offer being received in the future
14.3.4	No change to the composition of Bannerman Board
14.3.5	Approval of the Financing Transaction does not guarantee conversion of the New Convertible Note
14.3.6	RCFVI’s intention if the Transactions are approved

3. Scope of the Report

3.1 Purpose of the Report

Financing Transaction

RCFIV currently owns 13.97% of the shares in Bannerman. On 22 November 2013, Shareholders approved the issue of shares to RCFIV, up to a maximum percentage of 36.04% through the issue of shares under the Existing Convertible Note. As a consequence of the New Convertible Note, Shareholders are now being asked to approve (amongst other things) the issue of shares to the Related RCF Entities under the Financing Transaction up to a maximum percentage of 43.0%. Section 606 of the Act expressly prohibits the acquisition of shares by a party if that acquisition will result in that person (or someone else) holding an interest in 20% or more of the issued shares of a public company, unless a full takeover offer is made to all shareholders.

Section 611 permits such an acquisition if the shareholders of that entity have agreed to the issue of such shares. This agreement must be by resolution passed at a general meeting at which no votes are cast in favour of the resolution by any party who is associated with the party acquiring the shares, or by the party

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acquiring the shares. Section 611 states that shareholders of the company must be given all information that is material to the decision on how to vote at the meeting.

Regulatory Guide 74 issued by ASIC deals with "Acquisitions Approved by Members". It states that the obligation to supply shareholders with all information that is material can be satisfied by the nonassociated directors of Bannerman, by either:

undertaking a detailed examination of the Transactions themselves, if they consider that they have sufficient expertise; or
by commissioning an independent expert's report.

The directors of Bannerman have commissioned this independent expert's report to satisfy this obligation.

Security Transaction

ASX Listing Rule 10.1 requires that a listed entity must obtain shareholders’ approval before it acquires or disposes of a substantial asset, when the consideration to be paid for the asset or the value of the asset being disposed constitutes more than 5% of the equity interest of that entity at the date of the last audited or reviewed accounts. The equity interests of the Company as set out in the 31 December 2013 reviewed accounts were $55,204,000. The value of the Secured Assets is greater than $2,760,200.

ASX Listing Rule 10.1 applies where the vendor or acquirer of the relevant assets, amongst other things, is a related party or a substantial holder of the listed entity. Given that RCFVI is an associate of RCFIV in relation to the Company, which held a relevant interest in 13.97% of the Company’s issued shares at the last date practicable prior to finalising the Notice of Meeting, RCFVI constitutes a substantial holder for the purposes of ASX listing Rule 10.1.

ASX Listing Rule 10.10.2 requires the Notice of Meeting for shareholders’ approval to be accompanied by a report by an independent expert expressing their opinion as to whether the transaction is fair and reasonable to the shareholders whose votes are not to be disregarded in respect of the transaction (nonassociated shareholders).

Accordingly, an independent experts’ report is required for the Security Transaction. The report should provide an opinion by the expert stating whether or not the terms and conditions in relation thereto are fair and reasonable to non-associated shareholders of Bannerman.

3.2 Regulatory guidance

Neither the Listing Rules nor the Act defines the meaning of ‘fair and reasonable’. In determining whether the Transactions are fair and reasonable, we have had regard to the views expressed by ASIC in RG 111. This regulatory guide provides guidance as to what matters an independent expert should consider to assist security holders to make informed decisions about transactions.

Financing Transaction – A control transaction

RG 111 suggests that where the transaction is a control transaction, the expert should focus on the substance of the control transaction rather than the legal mechanism to affect it. RG 111 suggests that where a transaction is a control transaction, it should be analysed on a basis consistent with a takeover bid.

In our opinion, the Financing Transaction is a control transaction as defined by RG 111 and we have therefore assessed the Financing Transaction as a control transaction to consider whether, in our opinion, it is fair and reasonable to Shareholders.

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Security Transaction – Related party transactions

RG 111 suggests that, where an expert assesses whether a related party transaction is ‘fair and reasonable’ for the purposes of ASX Listing Rule 10.1, this should not be applied as a composite test — that is, there should be a separate assessment of whether the transaction is ‘fair’ and ‘reasonable’, as in a control transaction. An expert should not assess whether the transaction is ‘fair and reasonable’ based simply on a consideration of the advantages and disadvantages of the proposal.

We do not consider the Security Transaction to be a control transaction.

3.3 Adopted basis of evaluation

RG 111 states that a transaction is fair if the value of the offer price or consideration is greater than the value of the securities subject of the offer. This comparison should be made assuming a knowledgeable and willing, but not anxious, buyer and a knowledgeable and willing, but not anxious, seller acting at arm’s length. When considering the value of the securities subject of the offer in a control transaction the expert should consider this value inclusive of a control premium.

Further to this, RG 111 states that a transaction is reasonable if it is fair. It might also be reasonable if despite being ‘not fair’ the expert believes that there are sufficient reasons for security holders to accept the offer in the absence of any higher bid.

RG 111.31 stipulates that in a control transaction a comparison should be made between the value of the target entity’s securities prior to the transaction on a controlling basis and the value of the target entity’s securities following the transaction allowing for a minority discount. This comparison reflects the fact that the acquirer is obtaining or increasing control of the target entity and the security holders in the target entity will no longer hold a controlling interest. As such we have valued a share in Bannerman prior to the Transactions on a controlling basis and compared this to the value of a share in Bannerman following the Transactions on a minority basis.

Financing Transaction

Having regard to the above, BDO has completed this comparison in two parts:

A comparison of the value of a Bannerman share prior to the Financing Transaction on a control basis and the value of a Bannerman share following the Financing Transaction on a minority basis (fairness – see section 13 ‘Are the Transactions fair?’); and
An investigation into other significant factors to which Shareholders might give consideration, prior to approving the resolution, after reference to the value derived above (reasonableness – see section 14 ‘Are the Transactions reasonable?’).

Security Transaction

In the case of the Security Transaction, the provision of the Secured Assets to RCFVI to secure repayment of the New Convertible Note is the subject of the offer.

As stated in section 3.2, we do not consider that the Security Transaction is a control transaction. As such, we have not included a premium for control when considering the value of the assets deemed to have been disposed by Bannerman.

Having regard to the above, BDO has completed this comparison in two parts:

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A comparison between the value of the assets being disposed and the value of the consideration (fairness – see section 13 ‘Are the Transactions fair?’); and
An investigation into other significant factors to which Shareholders might give consideration, prior to approving the resolution, after reference to the value derived above (reasonableness – see section 14 ‘Are the Transactions reasonable?’).

Valuation assignment

This assignment is a Valuation Engagement as defined by Accounting Professional & Ethical Standards Board professional standard APES 225 ‘Valuation Services’ (“ APES 225 ”).

A Valuation Engagement is defined by APES 225 as follows:

“an Engagement or Assignment to perform a Valuation and provide a Valuation Report where the Valuer is free to employ the Valuation Approaches, Valuation Methods, and Valuation Procedures that a reasonable and informed third party would perform taking into consideration all the specific facts and circumstances of the Engagement or Assignment available to the Valuer at that time.”

This Valuation Engagement has been undertaken in accordance with the requirements set out in APES 225.

4. Outline of the Proposal

On 28 November 2008, Bannerman entered into a financing agreement with RCFIV for $20 million through the Existing Convertible Note facility comprising an initial tranche of $10 million and a standby tranche of $10 million, available within 6 months from drawdown of the initial tranche. The initial tranche had a three year term and was drawn down on 16 December 2008. The standby tranche was never drawn down.

On 17 November 2011, Shareholders approved an amendment of the terms of the Existing Convertible Note to extend the maturity date from 16 December 2011 to 31 March 2012.

On 13 March 2012, Shareholders approved a $2 million reduction in the face value of the Existing Convertible Note through the issue of shares and an extension of the maturity date of the Existing Convertible Note to 31 March 2014.

On 22 November 2013, Shareholders approved a further amendment and restatement of the Existing Convertible Note to extend the maturity date to 30 September 2016 and the ability to increase voting power to 36.04% through the issue of shares under the Existing Convertible Note. The key terms of the Existing Convertible Note from RCFIV are as follows:

A maturity date of 30 September 2016 or such a later date as Bannerman and RCFIV may otherwise agree;
A conversion price of $0.095 per share (subject to adjustment for certain transactions that have a dilution impact on the conversion price); and
A coupon interest rate of 8% per annum with interest payable quarterly through the issue of new Bannerman shares at a price equal to the 5-day VWAP of Bannerman shares prior to the date of issue or cash in certain circumstances.

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New Convertible Note facility with RCFVI

On 8 April 2014, Bannerman announced that, subject to certain conditions including shareholder approval, it had agreed to issue a convertible note facility to RCFVI. The New Convertible Note has a face value of $4 million and the following key terms:

A maturity date of 30 September 2016;
A conversion price equal to the higher of:
a) the lower of:
- i. $0.095; and
- ii. 150% of the 60 day trading VWAP as at the date of drawdown.
b) $0.06.
A fixed coupon interest rate of 8% per annum with interest payable quarterly in arrears through the issue of new Bannerman shares at a price equal to the 5-day VWAP of Bannerman shares prior to the date of issue or in cash at the Company’s option; and
An establishment fee of $120,000 payable by Bannerman on the date of drawdown, to be satisfied through cash or shares at Bannerman’s option; the issue of shares to be at a price per share equal to the five-day VWAP for the five trading days prior to the date of drawdown. By way of example based on a 20% discount to the five-day VWAP to 2 May 2014, which amounts to $0.067 per share, this would equate to 1,791,045 Shares ( ‘Establishment Fee’ ).

Bannerman has already granted security to RCFIV to secure its obligations under the Existing Convertible Note. Shareholders are now being asked to approve a new grant of security in favour of RCFVI to secure the company’s obligations under the New Convertible Note on similar terms as the existing security granted in favour of RCFIV over the same assets. The new security will comprise:

a) a charge over all of Bannerman’s present and after acquired property, interests and rights;
b) a charge over Bannerman’s shares, dividends and other rights in respect of Bannerman Resources Nominees (UK) Limited;
c) a mortgage and a fixed and floating charge over all of Bannerman Resources Nominees (UK) Limited’s assets and undertakings; and
d) a pledge over the rights, title and interests held by Bannerman Resources Nominees (UK) Limited in the shares of Bannerman Mining Resources (Namibia) (Proprietary) Limited.

The funds received under the New Convertible Note are to be used by Bannerman to fund the construction and operation of a proposed pilot plant program for the Company’s 80% owned Etango Project located in Namibia and allow the Company to meet its corporate working capital requirements.

During 2012, the Company completed a definitive feasibility study (‘ DFS ’) on the Etango Project and completed an Environmental and Social Impact Assessment which confirmed the Etango Project’s economics and pathway to development. The Company continues to investigate a financing model that will enable fast tracking a commitment to the project development as the uranium market rises. The financing of projects typically requires the completion of a pilot testing program to confirm the scale up of laboratory level testing completed in a DFS. The opportunity to progress the pilot plant program provides a potential competitive advantage to Bannerman in positioning the Etango Project to a point to

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demonstrate the process flow sheet to potential financiers as well as to generate data to enable the detailed design phase of future development.

As at 31 December 2013, the Company’s cash balance was $2.59 million and decreased to $1.85 million as at 31 March 2014. The Company has financial covenants in place under the terms of the Existing Convertible Note whereby the Company, unless otherwise approved, maintains minimum cash and cash equivalents balance of not less than $1.25 million. The New Convertible Note will assist the Company in complying with these financial covenants.

The New Convertible Note is conditional upon, but not limited to, the following:

Legal documentation satisfactory to RCFVI;
Payment of all fees and expenses, as contemplated by the term sheet entered into between RCFVI and Bannerman;
Approval by Shareholders under Item 7 of Section 611 of the Corporations Act;
Any other necessary Shareholder or regulatory approvals;
No material adverse change in the financial conditions or operations of the Company;
The granting (and perfection) of security in favour of RCFVI;
Receipt by RCFVI of such legal opinions as RCFVI may require; and
No event of default having occurred which then remains subsisting.

Under the term sheet between RCFVI and Bannerman the conversion price of the New Convertible Note will be a minimum of $0.06 per share up to a maximum of $0.095 per share.

As at the date of this Report, RCFIV holds 13.97% of the issued shares in Bannerman. On 22 November 2013, Shareholders approved the issue of shares to RCFIV, up to a maximum percentage of 36.04% through the issue of shares under the Existing Convertible Note.

We also note that RCF Management currently holds a total of 2,203,800 options in Bannerman, comprising 394,000 options with an exercise price of $0.36 and an expiry date of 17 November 2014, 683,800 options with an exercise price of $0.12 and an expiry date of 21 November 2015 and 1,126,000 options with an exercise price of $0.072 and an expiry date of 22 November 2016.

Approval is sought for the Relevant RCF Entities to increase their collective shareholding in Bannerman under the Financing Transaction to a maximum percentage of 43.0% (‘ Maximum Percentage ’). The Maximum Percentage is derived on the following basis agreed with the Relevant RCF Entities:

shares are issued on conversion of the Existing Convertible Note at $0.095 per share;
shares are issued in satisfaction of all interest on the Existing Convertible Note up to 30 September 2016 at an assumed 20% discount to the five-day value weighted average price to 2 May 2014, which is $0.067 per share and may vary;
shares are issued on the exercise of options by RCF Management;
shares are issued in satisfaction of the Establishment Fee at an assumed 20% discount to the fiveday value weighted average price to 2 May 2014, which is $0.067 per share and may vary;
shares are issued on conversion of the New Convertible Note at a maximum conversion price of $0.095 per share; and

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shares issued in satisfaction of all interest on the New Convertible Note up to 30 September 2016 at an assumed 20% discount to the five-day value weighted average price to 2 May 2014, which is $0.067 per share and may vary.

Table 4: Capital Structure post Financing Transaction assuming New Convertible Note converted at $0.095 per share

		Other
Shares on issue under New Convertible Note & Existing	RCF	Shareholders	Total
Convertible Note
Issued Shares as at the date of this Report	45,405,704	279,533,086	324,938,790
% holdings as at the date of this Report	13.97%	86.03%	100.00%
Shares issued on conversion of the Existing Convertible Note	84,210,526	-	84,210,526
Shares issued in satisfaction of interest on the Existing	23,880,597	-	23,880,597
Convertible Note**
Issued shares after conversion of the Existing Convertible Note	153,496,827	279,533,086	433,029,913
% holdings after conversion of the Existing Convertible Note	35.5%	64.6%	100.00%
Shares issued on exercise of existing options by RCF Management	2,203,800	-	2,203,800
Shares issued in satisfaction of the Establishment Fee**	1,791,045	-	1,791,045
Shares issued on conversion of the New Convertible Note*	42,105,263	-	42,105,263
Shares issued in satisfaction of interest on the New Convertible	10,629,461	-	10,629,461
Note**
Issued shares following the Financing Transaction	210,226,396	279,533,086	489,759,482
% holdings following the Financing Transaction	43.0%	57.0%	100.00%

*The number of shares payable to RCFVI as payment upon conversion of the New Convertible Note assumes a maximum conversion price of $0.095 per share.

** The number of shares payable to RCFIV as payment of all interest under the Existing Convertible Note (being up until 30 September 2016) and the payment of the Establishment Fee and all interest under the New Convertible Note (being up until 30 September 2016) to RCFVI assumes the price for calculating the number of shares to be issued will be at a 20% discount to the five day VWAP to 2 May 2014 which is $0.067 and may vary.

If the circumstances change and the voting interest of the Relevant RCF Entities increases as a result of an acquisition of shares other than under the Financing Transaction, this will not affect the Maximum Percentage. In other words, The Relevant RCF Entities’ interest must not exceed the Maximum Percentage (without further shareholder approval) but how it reaches the Maximum Percentage is irrelevant provided it is through shares issued under the Financing Transaction.

Under the term sheet between RCFVI and Bannerman, the conversion price of the New Convertible Note will be settled at drawdown at a minimum of $0.06 per share up to a maximum of $0.095 per share. A conversion price of $0.06 per share, assuming all other assumptions remaining the same, may result in the shareholding of the Relevant RCF Entities to be 45.7%. However, given that the Maximum Percentage is 43.0%, shares issued under other components of the Financing Transaction will have to decrease accordingly.

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Table 5: Capital Structure post Financing Transaction assuming New Convertible Note converted at $0.06 per share

		Other
Shares on issue under New Convertible Note & Existing	RCF	Shareholders	Total
Convertible Note
Issued Shares as at the date of this Report	45,405,704	279,533,086	324,938,790
% holdings as at the date of this Report	13.97%	86.03%	100.00%
Shares issued on conversion of the Existing Convertible Note	84,210,526	-	84,210,526
Shares issued in satisfaction of interest on the Existing	23,880,597	-	23,880,597
Convertible Note**
Issued shares after conversion of the Existing Convertible Note	153,496,827	279,533,086	433,029,913
% holdings after conversion of the Existing Convertible Note	35.5%	64.6%	100.00%
Shares issued on exercise of existing options by RCF Management	2,203,800	-	2,203,800
Shares issued in satisfaction of the Establishment Fee**	1,791,045	-	1,791,045
Shares issued on conversion of the New Convertible Note*	66,666,667	-	66,666,667
Shares issued in satisfaction of interest on the New Convertible	10,629,461	-	10,629,461
Note**
Issued shares following the Financing Transaction	234,787,800	279,533,086	514,320,886
% holdings following the Financing Transaction	45.7%	54.3%	100.00%

*The number of shares payable to RCFVI as payment upon conversion of the New Convertible Note assumes a minimum conversion price of $0.06 per share.

5. Profile of Bannerman Resources Limited

Bannerman is an Australian exploration and development company focused on uranium. The Company listed on the ASX in April 2005, on the Toronto Stock Exchange in November 2007 and on the Namibian Stock Exchange in July 2008. Bannerman is currently focused on developing its 80% owned flagship project, the Etango Project, which is located in Namibia.

Currently the Board of Directors comprises the following people:

Ronald Beevor – Non-Executive Chairman;
Leonard Jubber – CEO and Managing Director;
Ian Burvill – Non-Executive Director (RCFIV Representative);
Clive Jones – Non-Executive Director; and
David Tucker – Non-Executive Director.

Etango Project (80% owned)

The Etango Project is a uranium focused project located 38 km east of Swakopmund, Namibia, and is one of the world’s largest undeveloped uranium projects. Bannerman currently has an 80% interest in the project through its subsidiary Bannerman Mining Resources (Namibia) Pty Ltd. The remaining 20% is owned

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by Clive Jones who is a non-executive director of Bannerman and Bannerman Mining Resources (Namibia) Pty Ltd.

The Ministry of Environment and Tourism ( ‘MET’ ) granted formal environmental approval for development of the Etango Project to the Company in the September 2012 quarter.

On 11 June 2013, the Company announced that the Namibian Ministry of Mines and Energy had provided Bannerman Mining Resources (Namibia) Pty Ltd with a two year renewal of Exclusive Prospecting Licence 3345 which hosts the Etango Project and all targeted exploration projects.

The Company continues to investigate a financing model that will enable fast tracking a commitment to the project development of the Etango Project. The financing of projects typically requires the completion of a pilot testing program to confirm the scale up of the laboratory level testing completed in the DFS. With regard to the Etango Project, the pilot plant will serve to both demonstrate the process flow sheet to potential financiers as well as generate the data to enable the detailed design phase of future development. The Company has reinitiated the process to gain requisite environmental clearance for the pilot plant program; an application was lodged with the MET during February 2014.

For further information on the Company’s Etango Project, refer to Appendix 3.

Capital raising history

On 23 December 2011, the Company completed a Share Placement which saw it issue approximately 36.5 million shares at an issue price of $0.225 per share to raise approximately $8.2 million. Of this $8.2 million raised, $2 million was subscribed for by RCFIV. This had an effect of reducing the outstanding $10 million Existing Convertible Note facility to $8 million. This was approved by Shareholders on 13 March 2012 with the issue of shares to RCFIV and the reduction in the face value of the Existing Convertible Note considered to be non-cash transactions.

In February 2012, the Company completed a follow-on placement of 8 million shares to raise a further $1.8 million, and a Share Purchase Plan comprising the issue of approximately 17.78 million shares to raise a further $4 million. Both additional capital raisings were completed at an issue price of $0.225 per share.

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5.1 Historical Financial Statements

Table 7: Historical Consolidated Statements of Financial Position of Bannerman

Consolidated Statement of Financial Position	Reviewed Audited Audited 31-Dec-13 30-Jun-13 30-Jun-12 $'000 $'000 $'000
CURRENT ASSETS Cash and cash equivalents Other receivables Other TOTAL CURRENT ASSETS NON-CURRENT ASSETS Other receivables Property, plant and equipment Exploration and evaluation expenditure TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Interest bearing liabilities Provisions TOTAL CURRENT LIABILITIES NON CURRENT LIABILITIES Interest bearing liabilities TOTAL NON CURRENT LIABILITIES TOTAL LIABILITIES	2,590 3,816 9,613 45 134 480 78 47 122
	2,713 3,997 10,215 27 27 26 856 950 1,208 58,257 59,713 61,181
	59,140 60,690 62,415
	61,853 64,687 72,630
	289 401 1,196 - 7,415 3 162 186 227
	451 8,002 1,426 6,198 - 6,751
	6,198 - 6,751
	6,649 8,002 8,177
NET ASSETS	55,204 56,685 64,453
EQUITY Contributed equity Reserves Accumulated losses Non controlling interest	116,290 115,810 115,170 35,989 36,156 38,851 (96,191) (94,454) (88,911) (884) (827) (657)
TOTAL EQUITY	55,204 56,685 64,453

Source: Reviewed financial statements for the half-year ended 31 December 2013 and audited financial statements for the years ended 30 June 2013 and 30 June 2012.

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Table 8: Historical Consolidated Statements of Comprehensive Income of Bannerman

Consolidated Statement of Comprehensive Income	Reviewed for the half Audited for the Audited for the year ended 31-Dec-13 year ended 30-Jun-13 year ended 30-Jun-12 $'000 $'000 $'000
Other revenue Other income Employee benefits Borrowing costs Compliance and regulatory expenses Depreciation expense Exploration expenditure written off Other expenses Loss before income tax Income tax benefit Net loss for the year Other comprehensive income Foreign currency translation	46 190 532 54 2 3 (871) (2,103) (3,297) (1,089) (1,371) (2,206) (189) (276) (634) (61) (203) (241) (623) (77) (12) - (2,210) (4,650)
	(2,733) (6,048) (10,505) 954 360 905
	(1,779) (5,688) (9,600)
	(1,804) (3,078) (11,604)
Total comprehensive loss for the period	(3,583) (8,766) (21,204)

Source: Reviewed financial statements for the half-year ended 31 December 2013 and audited financial statements for the years ended 30 June 2013 and 30 June 2012.

Commentary on historical financial statements

We note the following in relation to Bannerman’s historical financial statements over the period 30 June 2012 to 31 December 2013:

For the half-year ended 31 December 2013, the audit report in the financial statements included an emphasis of matter regarding the Company’s ability to continue as a going concern. The Directors acknowledged that the Company’s cash flow forecast reflects that additional working capital will need to be raised within the coming financial year to enable the Company to continue its planned business activities and expenditure levels. The Directors are satisfied that there are reasonable grounds to believe that, having regard to the Company’s position and its available financing options, the Company will be able to raise additional capital to enable it to meet its obligations as and when they fall due.
The net asset position of the Company decreased from $64.45 million as at 30 June 2012 to $55.20 million as at 31 December 2013. The decrease in net assets is primarily due to the decrease in cash and cash equivalents from $9.61 million as at 30 June 2012 to $2.59 million as at 31 December 2013. Cash has been used by the Company to fund its exploration and evaluation activities over the period.
Bannerman’s primary asset is its capitalised exploration and evaluation expense which totalled $58.26 million as at 31 December 2013. The decrease in capitalised exploration and evaluation expenses over the period 30 June 2012 to 31 December 2013 is primarily due to foreign currency translation movements.

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Bannerman’s primary liability at 31 December 2013 is the Existing Convertible Note which has moved from current liabilities as at 30 June 2013 to non-current liabilities given the maturity date has been amended to 30 September 2016.
Bannerman’s contributed equity has increased from $115.81 million to $116.29 million over the period 30 June 2012 to 31 December 2013. This increase is due to the issue of shares to RCFIV in satisfaction of interest payments and an extension fee in relation to the Existing Convertible Note.
For the half-year ended 31 December 2013, the Company made a loss of $3.58 million. This result was primarily attributable to administration and corporate expenses, employee costs, borrowing costs and non-cash share based payment expenses.

5.2 Capital Structure

The conversion of either the Existing Convertible Note or the New Convertible Note would result in conversion into Bannerman’s shares. The share structure of Bannerman as at 10 April 2014 is outlined below:

Table 9: Share structure of Bannerman

	Number
Total ordinary shares on issue	324,938,790
Top 20 shareholders	192,249,850
Top 20 shareholders - % of shares on issue	59.16%

Source: Computershare

The ordinary shares held by the most significant shareholders as at 10 April 2014 are detailed below:

Table 10: Substantial shareholders of Bannerman

Name	Number of Ordinary Shares Held Percentage of Issued Shares (%)
Resource Capital Funds	45,405,704 13.97%
Global X Management Company LLC	23,041,052 7.09%
Clive Bruce Jones	15,206,940 4.68%
Regent Pacific Group Ltd	10,854,568 3.34%
Subtotal	94,508,264 29.08%
Others	230,430,526 70.92%
Total ordinary shares on Issue	324,938,790 100.00%

Source: Bannerman management

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Bannerman also has the following unlisted options on issue:

Table 11: Options on issue

Options on Issue	RCF Management	Others	Total
$0.678 options expiring on 21 November 2015	-	1,500,000	1,500,000
$0.36 options expiring on 17 November 2014	394,000	508,500	902,500
$0.12 options expiring on 21 November 2015	683,800	1,111,400	1,795,200
$0.072 options expiring on 22 November 2016	1,126,000	3,378,000	4,504,000
TOTAL	2,203,800	6,497,900	8,701,700

If all of these options are exercised it would raise $1,881,612 in cash. However, only the options with an exercise price of $0.072 are currently in the money and therefore likely to be exercised at present. If these options are exercised then $324,288 of cash would be received by the Company.

6. Profile of Resource Capital Fund VI LP

Resource Capital Funds (‘ RCF ’) are private equity funds with mandates to make investments exclusively in the mining sector across a diversified range of hard mineral commodities and geographic regions. The funds are managed by RCF Management L.L.C. which has its principal office in Denver and additional offices in Perth, New York (Long Island) and Toronto. RCF pioneered the concept of mining-focused private equity funds and strives to produce superior returns to its investors, portfolio companies and fellow equity investors. Since inception, RCF has supported 120 mining companies (and several miningservices companies) involving projects located in 40 countries and relating to 28 commodities.

RCF has experience in building management teams specifically suited to develop and or operate assets and has the resources and networks to draw upon to source top talent from around the world. In addition to providing financing, RCF has the in-house technical and financial expertise to actively guide a mining company’s management team through the process of raising capital in the public equity and project financing markets. RCF’s management team consists of individuals with extensive commercial and technical experience in the mining industry.

RCF is currently investing its sixth fund, Resource Capital Fund VI L.P., with committed capital of $2.04 billion and currently manages three other active private equity funds, Resource Capital Fund V L.P., Resource Capital Fund IV L.P. and Resource Capital Fund III L.P. The Funds’ committed capital is sourced primarily from US-based institutional investors. Further information about RCF can be found on its website www.resourcecapitalfunds.com.

As at the date of our Report, RCFIV is the largest shareholder in Bannerman with an ownership interest of 13.97%.

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7. Economic analysis

Growth in the global economy was a bit below trend in 2013, but there are reasonable prospects of a pickup this year. The United States economy, while affected by adverse weather, continues its expansion and the euro area has begun a recovery from recession, albeit a fragile one. Japan has recorded a significant pick-up in growth. China's growth remains generally in line with policymakers' objectives, though it may have slowed a little in early 2014. Commodity prices have declined from their peaks but in historical terms remain high.

Financial conditions overall remain very accommodative. Long-term interest rates and most risk spreads remain low. Equity and credit markets are well placed to provide adequate funding, though for some emerging market countries conditions are considerably more challenging than they were a year ago.

In Australia, the economy grew at a below trend pace in 2013. Recent information suggests slightly firmer consumer demand over the summer and foreshadows a solid expansion in housing construction. Some indicators of business conditions and confidence have improved from a year ago and exports are rising. But at the same time, resources sector investment spending is set to decline significantly and, at this stage, signs of improvement in investment intentions in other sectors are only tentative, as firms wait for more evidence of improved conditions before committing to expansion plans. Public spending is scheduled to be subdued.

The demand for labour has remained weak and, as a result, the rate of unemployment has continued to edge higher. It will probably rise a little further in the near term. Growth in wages has declined noticeably. If domestic costs remain contained, some moderation in the growth of prices for non-traded goods could be expected over time, which should keep inflation consistent with the target, even with lower levels of the exchange rate.

Monetary policy remains accommodative. Interest rates are very low and savers continue to look for higher returns in response to low rates on safe instruments. Credit growth is slowly picking up. Dwelling prices have increased significantly over the past year. The decline in the exchange rate from its highs a year ago will assist in achieving balanced growth in the economy, but less so than previously as a result of the rise over the past few months. The exchange rate remains high by historical standards.

Looking ahead, continued accommodative monetary policy should provide support to demand, and help growth to strengthen over time. Inflation is expected to be consistent with the 2–3 per cent target over the next two years.

Source: www.rba.gov.au Statement by Glenn Stevens, Governor: Monetary Policy Decision 1 April 2014

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8. Industry analysis

Uranium is extracted as uranium ore. As uranium deposits are relatively scarce, mining is concentrated in a few countries worldwide. The most common method of extraction is open pit mining due to the volume intense nature of extraction. This is attributable to uranium ore mostly occurring at relatively low concentrations. The state of the world’s uranium market is almost wholly dependent on the global fortunes of the nuclear power generation industry. The Fukushima nuclear disaster, which occurred in March 2011, cast an ominous shadow over the industry and rekindled divisive opinions over the use of uranium as an energy source.

Prices

The uranium spot price as at 7 April 2014 was US$33.75/lb U3O8. The following table shows historical and forecast U3O8 weekly spot prices since December 2009:

Uranium Spot Price and Forecast

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----- Start of picture text -----

90
75
60
45
30
15
0
Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17
Uranium Spot Price Uranium Forecast
USD/lb
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Source : Bloomberg (historical prices), Consensus Economics (Forecast)

Up until the Fukushima nuclear power plant crisis, uranium prices were beginning to gain momentum after a steady decline from project delays caused by the global financial crisis and issues with over supply from production in Kazakhstan. The beginning of January 2011 had shown a significant spike in uranium prices as a result of expansion in Asia. Chinese demand is expected to keep uranium supply in a deficit and place upward pressure on prices in the long term. The long term price projections show a recovery to around US$70.0/lb.

Uranium Production

Africa has considerable mineral deposits, including uranium and, as it has become more developed will potentially become a leading producer of uranium. The leading producing countries of uranium in Africa are Namibia and Niger. Both Namibia and Niger began commercial uranium mining in the 1970s and have strong government support for expanding uranium mining operations. Collectively the mines in these countries account for approximately 16% of global uranium production in 2012. The chart below shows the world uranium production figures for 2012.

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Global Uranium Production 2012
Other
USA China 3% Australia
Russia 3% 3% 12%
5% Malawi
2%
Uzbekistan
5%
Namibia
8%
Niger
8% Kazakhstan
37%
Canada
15%
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Source: World-nuclear.org (updated at July 2013)

Kazakhstan, Australia and Canada accounted for more than 63% of the world’s uranium production in 2012.

Global Outlook

The Japanese nuclear power plant crisis at Fukushima in March 2011 has tarnished the general view of nuclear energy and as such prices have been slow to recover from a seven year low. With China, South Korea and India announcing expansion plans and Japan likely to restart its reactors, future growth in the uranium industry is likely to be heavily reliant on Asia. Nuclear power offers a viable long term source of energy over fossil fuels which are becoming scarcer. Although Kazakhstan, Canada and Australia have historically been the key producers of uranium, Africa has shown enormous potential as being the next uranium superpower with many international uranium miners such as Areva, ARMZ, Uranium One and Paladin establishing operations there.

The catalyst for a price recovery may be the closure of the Megatons to Megawatts programme in 2013. The Megatons to Megawatts program commenced in Russia in 1993 and was responsible for approximately 11% of the world’s uranium supply. With this program ceasing, the supply of uranium is likely to decrease which may lead to an increase in the price of uranium and spur growth in the industry. Additional growth may arise as emerging economies look towards uranium as an alternative source of energy. Globally, there are currently 438 nuclear reactors operable and 71 under construction. This equates to nine more reactors under construction than in the period prior to the nuclear power plant crisis at Fukushima. In China, 21 reactors are currently in operation and the construction of 28 reactors continues. Japan is also planning to fast track the restart of some of its nuclear reactors, possible by the middle of 2014, which bodes well for the medium term uranium price outlook. Japan has 48 commercial reactors which have all been offline for safety inspections since Fukushima however the Japanese government has recently drafted policy recommending reactors meeting new safety standards be switched on.

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9. Valuation approach adopted

There are a number of methodologies which can be used to value a business or the shares in a company. The principal methodologies which can be used are as follows:

Capitalisation of future maintainable earnings (‘ FME ’)
Discounted cash flow (‘ DCF ’)
Quoted market price basis (‘ QMP ’)
Net asset value (‘ NAV ’)
Market based assessment such as a Resource Multiple

A summary of each of these methodologies is outlined in Appendix 2. Different methodologies are appropriate in valuing particular companies, based on the individual circumstances of that company and available information.

Financing Transaction

In our assessment of the value of Bannerman shares prior to the Financing Transaction, we have chosen to employ the following methodologies:

NAV on a going concern basis as our primary valuation methodology; and
QMP as our secondary valuation methodology.

We have chosen these methodologies for the following reasons:

Being an exploration and pre-development company, the core value of Bannerman is in the exploration and development assets it holds. We have instructed Al Maynard & Associates Pty Ltd ( ‘AM&A’ ) to act as independent specialist and to provide an independent market valuation of the Company’s Etango Project in accordance with the Code for the Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Expert Reports 2005. Al Maynard’s full report may be found in Appendix 3. We have considered this in the context of Bannerman’s other assets and liabilities on a NAV basis;
The QMP basis is a relevant methodology to consider because Bannerman’s shares are listed on the ASX. This means there is a regulated and observable market where Bannerman’s shares can be traded. However, in order for the QMP methodology to be considered appropriate, the Company’s shares should be liquid and the market should be fully informed as to its activities. We have considered these factors in section 10.2 of our Report;
Bannerman does not generate regular trading income. Therefore there are no historic profits that could be used to represent future earnings. This means that the FME valuation approach is not appropriate; and
Bannerman has no foreseeable future net cash inflows and therefore the application of the DCF valuation approach is not appropriate.

In our assessment of the value of Bannerman shares following the Financing Transaction, we have chosen to employ the NAV (sum-of-parts) as our primary valuation methodology.

We have provided two alternate valuation approaches in assessing the NAV of a Bannerman share following the Financing Transaction. The value of Bannerman shares following the Financing Transaction using our primary approach will involve the following items:

The value of Bannerman prior to the Financing Transaction;

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Incorporate the effects of the Financing Transaction in the context of Bannerman’s other assets and liabilities on a NAV basis; and
The number of shares on issue will incorporate the shares to be issued upon conversion of the New Convertible Note inclusive of any accrued interest amounts and the issue of shares in satisfaction of the Establishment Fee.

The value of Bannerman shares following the Financing Transaction using our secondary approach will involve the following items:

The value of Bannerman prior to the Financing Transaction;
Incorporate the effects of the Financing Transaction on Bannerman’s equity value; and
Incorporate the effects of the Financing Transaction on Bannerman’s level of debt.

Under Australian Accounting Standards, the fair value of a convertible note is apportioned between debt and equity. The debt component of a convertible note that converts into a fixed number of shares is valued at the present value of its cash flows (coupons and principal). The discount rate used in the present value calculation is the interest rate that the issuer could obtain from the market on a similar debt instrument without the conversion feature. The equity component of the convertible note is the residual between the face value of the note and the value of the debt.

Similarly, for a convertible note that is convertible to a variable number of shares, the fair value of the instrument is apportioned between debt and equity. However, the valuation methodology differs in that the equity component of the instrument is fair valued, with the residual between the face value and the value of the equity being classified as debt.

In the case of Bannerman, we have valued the New Convertible Note using the Black Scholes Pricing Model to value the equity, with the residual between the equity value and the face value being classified as debt.

Security Transaction

In the case of the Security Transaction for the purpose of ASX Listing Rule 10.1, the value of the proceeds of the sale of the Secured Assets, that would be provided to RCFVI in the event of default would be less than or equal to the value of the liabilities to be settled. Although the Etango Project would form the Secured Assets, in the event of default only the proceeds from the sale of the Secured Assets up to the value that recovers the principal and interest of the New Convertible Note would be provided to RCFVI. Therefore we do not consider it necessary or relevant to value the Company or the Secured Assets.

In our assessment of the value of the liabilities to be settled we consider the nominal value of the cash amount payable in the event of default to represent the fair market value.

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10. Valuation of Bannerman prior to the Financing Transaction

10.1 Net Asset Valuation of Bannerman prior to the Financing Transaction

The value of Bannerman assets on a going concern basis is reflected in our valuation below:

Table 12: Net Asset Valuation of Bannerman prior to Financing Transaction

Notes	31-Dec-13 Low value Preferred value High value $'000 $'000 $'000 $'000	31-Dec-13 Low value Preferred value High value $'000 $'000 $'000 $'000
CURRENT ASSETS Cash and cash equivalents 1 Other receivables Other TOTAL CURRENT ASSETS NON-CURRENT ASSETS Other receivables Property, plant and equipment Exploration and evaluation expenditure 2 TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Provisions TOTAL CURRENT LIABILITIES NON CURRENT LIABILITIES Interest bearing liabilities TOTAL NON CURRENT LIABILITIES TOTAL LIABILITIES	2,590 2,174 2,174 2,174 45 45 45 45 78 78 78 78
	2,713 2,297 2,297 2,297 27 27 27 27 856 856 856 856 58,257 82,000 121,000 159,000
	59,140 82,883 121,883 159,883
	61,853 85,180 124,180 162,180
	289 289 289 289 162 162 162 162
	451 451 451 451 6,198 6,198 6,198 6,198
	6,198 6,198 6,198 6,198
	6,649 6,649 6,649 6,649
VALUE Shares on issue (number) Value per share ($)		78,531 117,531 155,531
		329,442,790 329,442,790 329,442,790 $ 0.238 $ 0.357 $ 0.472

Source: BDO analysis

We have been advised by management that there were not any material changes in the consolidated statement of financial position since 31 December 2013 other than the Company’s cash balance which is addressed in Note 1 below. We have assumed that the fair market value of the assets and liabilities as at 31 December 2013 are equal to the carrying values as set out in the above consolidated statement of financial position.

The table above indicates the net asset value of a Bannerman share prior to the Financing Transaction is between $0.238 and $0.472, with a preferred value of $0.357. The following adjustments were made to the net assets of Bannerman as at 31 December 2013 in arriving at our valuation:

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Note 1: Cash

The cash balance reflects Bannerman’s cash balance as at 31 March 2014. Most of the cash has been used to pay corporate overheads and exploration and evaluation expenditure (the value of which are replaced by an independent market valuation) between 31 December 2013 and 31 March 2014. In addition we have assumed the receipt of approximately $324,000 that would be received if all of the in the money options on issue were to be exercised. For this purpose we have assumed that only those with an exercise price below the closing pre-announcement price are in the money. That is all the 4,504,000 options that have an exercise price of $0.072 (Table 11).

Note 2: Valuation of Bannerman’s Etango Project

We have instructed AM&A to provide an independent market valuation of the Etango Project. AM&A considered a number of different valuation methods when valuing the Etango Project. These included the Multiple of Exploration Expenditure approach, which involves applying a multiple (also known as a prospectivity enhancement multiplier) based on the previous expenditure on a tenement and the Comparable Transactions method, which involves calculating a value per common attribute in a comparable transaction and applying that value to the subject asset. A common attribute could be the amount of resource or the size of a tenement. We consider the methodologies used by AM&A to be appropriate given the current market for uranium and the uranium price.

The range of values for Bannerman’s Etango Project as calculated by AM&A is set out below:

Table 13: Independent valuation of Bannerman’s 80% interest in the Etango Project

Bannerman Resources Ltd Mineral Asset Valuation - Etango Project Interest	Low value Preferred value High value $m $m $m
Value of Etango Project 80% Value of Etango Project	82.00 121.00 159.00
	82.00 121.00 159.00

Source: Independent valuation report by AM&A

The table above indicates a range of values for the Company’s 80% interest in the Etango Project of between $82 million and $159 million, with a preferred value of $121 million.

10.2 Quoted Market Price for Bannerman securities prior to the Financing Transaction

To provide a comparison to the valuation of a Bannerman share in section 10.1, we have also assessed the quoted market price for a Bannerman share.

The quoted market value of a company’s shares is reflective of a minority interest. A minority interest is an interest in a company that is not significant enough for the holder to have an individual influence in the operations and value of that company.

RG 111.11 suggests that when considering the value of a company’s shares for the purposes of approval under Item 7 of Section 611 the expert should consider a premium for control. An acquirer could be expected to pay a premium for control due to the advantages they will receive should they obtain 100% control of a company. These advantages include the following:

control over decision making and strategic direction;
access to underlying cash flows;

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control over dividend policies; and
access to potential tax losses.

Whilst the Relevant RCF Entities will not be obtaining 100% of Bannerman, RG 111 states that the expert should calculate the value of a target’s shares as if 100% control were being obtained. RG 111.13 states that the expert can then consider an acquirer’s practical level of control when considering reasonableness. Reasonableness has been considered in section 14.

Therefore, our calculation of the quoted market price of a Bannerman share including a premium for control has been prepared in two parts. The first part is to calculate the quoted market price on a minority interest basis. The second part is to add a premium for control to the minority interest value to arrive at a quoted market price value that includes a premium for control.

Minority interest value

Our analysis of the quoted market price of a Bannerman share is based on the pricing prior to the announcement of the Financing Transaction. This is because the value of a Bannerman share after the announcement may include the effects of any change in value as a result of the Financing Transaction. However, we have considered the value of a Bannerman share following the announcement when we have considered reasonableness in section 14.

Information on the Financing Transaction was announced to the market on 8 April 2014. Therefore, the following chart provides a summary of the share price movement over the 12 months to 7 April 2014.

BMN share price and trading volume history

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0.14 3.5
0.12 3.0
0.10 2.5
0.08 2.0
0.06 1.5
0.04 1.0
0.02 0.5
0.00 -
Volume Closing share price
Share Price ($)
Volume (millions)
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Source: Bloomberg and BDO analysis

The daily price of Bannerman shares from 8 April 2013 to 7 April 2014 has ranged from a low of $0.045 on 19 December 2013 to a high of $0.135 on 25 March 2014.

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During this period a number of announcements were made to the market. The key announcements are set out below:

Table 14: ASX announcements of Bannerman

		Closing Share Price	Closing Share Price	Closing Share Price	Closing Share Price	Closing Share Price	Closing Share Price
Date	Announcement	Following Announcement			Three Days After Announcement
		$ (movement)			$ (movement)
29/01/2014	December 2013 Quarterly Report	0.072	�	5.3%	0.074	�	2.8%
7/11/2013	September 2013 – Unaudited Quarterly Financials	0.046	�	2.1%	0.048	�	4.3%
23/10/2013	September 2013 Quarterly Report	0.050	�	0.0%	0.048	�	4.0%
6/9/2013	Extension of maturity date of RCF Convertible Note	0.053	�	5.3%	0.058	�	9.4%
30/07/2013	June 2013 Quarterly Activities Report	0.065	�	6.6%	0.074	�	13.8%
11/06/2013	Renewal of Bannerman's Etango Exploration	0.062	�	3.1%	0.062	�	0.0%
	Licence in Namibia
29/05/2013	Response to ASX Price Query	0.071	�	39.2%	0.069	�	2.8%
24/04/2013	March 2013 Quarterly Activities Report	0.058	�	1.7%	0.059	�	1.7%

Source : Bloomberg, ASX Announcements and BDO Analysis

The price of a Bannerman share has fluctuated significantly over the one year period to 7 April 2014. The most significant movements during this period were as follows:

Bannerman’s share price increased by 39.2% on 29 May 2013. The Company was queried regarding this price increase and commented that it was unsure why the share price had increased so significantly but did note that media coverage at the time expressed positive views on the future prospects of the uranium industry;
In the three days following the announcement of the June 2013 quarterly activities report Bannerman’s share price rose by 13.8%. The quarterly report outlined highlights included the completion of the technical design of a pilot plant for the Etango Project, a reduction in overhead expenditure and further positive news regarding the uranium industry; and
On 6 September 2013 the Company announced the proposal to extend the maturity date of the Existing Convertible Note facility with Resource Capital Fund IV LP. The announcement outlined the extension of the maturity date from 31 March 2014 to 30 September 2016 and a reduction in the conversion price. Bannerman shares rose 9.4% in the three days following the announcement.

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To provide further analysis of the market prices for a Bannerman share, we have also considered the volume weighted average market price for 10, 30, 60 and 90 day periods to 7 April 2014.

Table 15: VWAP analysis of Bannerman shares traded on the ASX

	Share Price per unit		7-Apr-14		10 Days		30 Days		60 Days		90 Days
	Closing price		$0.096
	Volume weighted average price (VWAP)				$0.104		$0.100		$0.088		$0.083

Source: Bloomberg and BDO analysis

The above weighted average prices are prior to the date of the announcement of the Financing Transaction, to avoid the influence of any increase in price of Bannerman shares that has occurred since the Financing Transaction was announced.

An analysis of the volume of trading in Bannerman shares for the six months to 7 April 2014 is set out below:

Table 16: Share price and volume analysis of Bannerman shares traded on the ASX

Trading days	Share price	Share price	Cumulative volume	As a % of
	low	high	traded	Issued capital
1 Day	$0.095	$0.097	166,542	0.05%
10 Days	$0.094	$0.135	5,300,018	1.64%
30 Days	$0.072	$0.135	20,789,126	6.44%
60 Days	$0.051	$0.135	35,337,012	10.94%
90 Days	$0.045	$0.135	41,060,101	12.72%
180 Days	$0.045	$0.135	57,677,222	17.86%

Source: Bloomberg and BDO analysis

This table indicates that Bannerman’s shares display a moderate level of liquidity, with 17.86% of the Company’s current issued capital being traded in a six month period. For the quoted market price methodology to be reliable there needs to be a ‘deep’ market in the shares. RG 111.69 indicates that a ‘deep’ market should reflect a liquid and active market. We consider the following characteristics to be representative of a deep market:

Regular trading in a company’s securities;
Approximately 1% of a company’s securities are traded on a weekly basis;
The spread of a company’s shares must not be so great that a single minority trade can significantly affect the market capitalisation of a company; and
There are no significant but unexplained movements in share price.

A company’s shares should meet all of the above criteria to be considered ‘deep’, however, failure of a company’s securities to exhibit all of the above characteristics does not necessarily mean that the value of its shares cannot be considered relevant.

In the case of Bannerman, we do not consider there to be a deep market for the Company’s shares as a result of only 17.86% of the Company’s current issued capital being traded over the six months prior to the announcement of the Financing Transaction in addition to Bannerman shares trading between a low of $0.045 and a high of $0.135 during the same period.

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Our assessment is that a range of values for Bannerman’s shares based on market pricing, after disregarding post announcement pricing, is between $0.085 per share and $0.125 per share. We have based this analysis on the share price low and high over the 30 days prior to the announcement as set out in Table 16.

Control Premium

RG 111.25 suggests that when considering the value of a company’s shares for the purposes of approval under Item 7 of Section 611 the expert should consider a premium for control. An acquirer could be expected to pay a premium for control due to the advantages they will receive should they obtain 100% control of another company. These advantages include the following:

control over decision making and strategic direction;
access to underlying cash flows;
control over dividend policies; and
access to potential tax losses.

Whilst the Relevant RCF Entities will not be obtaining 100% of Bannerman, RG 111 states that the expert should calculate the value of a target’s shares as if 100% control were being obtained. RG 111.27 states that the expert can then consider an acquirer’s practical level of control when considering reasonableness. This has been included in section 14.

We have reviewed the control premiums paid by acquirers of mining companies listed on the ASX since 2006. We have summarised our findings below:

Table 17: Control premium analysis 2006 onwards

Year	Number of Transactions	Average Deal Value (AU$m)	Average Control Premium (%)
2013	13	56.43	55.41
2012	19	135.78	42.67
2011	20	634.68	31.40
2010	23	755.97	45.04
2009	29	86.80	39.23
2008	8	553.76	38.87
2007	25	541.21	28.20
2006	20	70.15	31.11
	Median	338.49	39.05
	Mean	354.35	38.99

Source: Bloomberg and BDO analysis

In arriving at an appropriate control premium to apply we note that observed control premiums can vary due to the:

Nature and magnitude of non-operating assets;
Nature and magnitude of discretionary expenses;
Perceived quality of existing management;
Nature and magnitude of business opportunities not currently being exploited;
Ability to integrate the acquiree into the acquirer’s business;

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Level of pre-announcement speculation of the transaction; and
Level of liquidity in the trade of the acquiree’s securities.

The table above indicates that there has been an increasing trend of control premia paid by acquirers of mining companies since 2006. Based on the analysis above we believe that an appropriate control premium is between 20% and 40%.

The Relevant RCF Entities will be able to increase their holding in Bannerman to a maximum of 43.0% if Shareholders approve the Financing Transaction. In determining what premium for control should be paid by the Relevant RCF Entities (and therefore what minority interest discount should be applied) we have taken into account Bannerman’s current circumstances. Bannerman has explored a number of alternative funding sources, as discussed further in section 14, which are very limited as a result of the low uranium price and the state of the current equity capital markets.

With regard to the control premium analysis above, we consider an appropriate control premium to be applied to Bannerman’s shares is 20% to 30%.

Quoted market price including control premium

Applying a control premium to Bannerman’s quoted market price results in the following quoted market price value including a premium for control:

Table 18: Quoted market price of a Bannerman share (including premium for control)

	Low	Midpoint	High
	$	$	$
Quoted market price value	0.085	0.105	0.125
Control premium	20%	25%	30%
Quoted market price valuation including a premium for control	0.102	0.131	0.162

Source: BDO analysis

Therefore, our valuation of a Bannerman share based on the quoted market price method and including a premium for control is between $0.102 and $0.162, with a midpoint value of $0.131.

10.3 Assessment of Bannerman value prior to the Financing Transaction

The results of the valuations performed are summarised in the table below:

Table 19: Valuation Summary – Value of a Bannerman share prior to Financing Transaction

		Low	Preferred	High
		$	$	$
NAV methodology (section	10.1)	0.238	0.357	0.472
QMP methodology (section	10.2)	0.102	0.131	0.162

Source: BDO analysis

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We note the values obtained under the NAV methodology are significantly higher than the values obtained under the QMP methodology. The difference between the valuation obtained under the NAV and QMP approaches can be explained by the following:

The uranium price in 2013 has averaged approximately US$40.5/lb and the spot price as at 27 April 2014 was US$35.75/lb. The QMP valuation is influenced by the current low uranium spot price and therefore does not fully reflect the potential value of the Etango Project;
Our NAV methodology includes an independent market valuation of Bannerman’s Etango Project performed by AM&A. AM&A has relied on a combination of valuation methods which reflect the potential value of the Etango Project;
Under RG111.69 (d), the QMP methodology is considered appropriate when a liquid and active market exists for the securities. From our analysis of the QMP of a Bannerman share we note that 17.93% of the Company’s current issued capital had been traded in the six months up until the date of announcement of the Transactions, which represents a moderate level of liquidity over the six month period. We also note that over the six month period Bannerman shares have traded between a low of $0.045 and a high of $0.125. Our analysis over the ten trading days up until the date of announcement of the Transactions indicates that the liquidity of Bannerman shares has increased, with 5.71% of Bannerman’s current issued capital being traded in the 30 day period. Bannerman’s share price has also risen over this period to its twelve month high of $0.125.

Based on the above points and the lack of a ‘deep’ market for the trading of Bannerman shares, we consider the net asset value to be the most appropriate methodology and consider the value of a Bannerman share prior to the Financing Transaction to be between $0.238 and $0.472, with a preferred value of $0.357.

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11. Valuation of Bannerman following the Financing Transaction

11.1 Primary approach

The value of Bannerman assets on a going concern basis following the Financing Transaction is reflected in our valuation below:

Table 20: Primary approach – Value of a Bannerman share following the Financing Transaction

Low value Preferred value High value Notes $'000 $'000 $'000	Low value Preferred value High value Notes $'000 $'000 $'000
Net Assets of Bannerman prior to the Financing Transaction	78,531 117,531 155,531
Liability removed under Existing Convertible Note 1	8,000 8,000 8,000
Cash received from the issue of the New Convertible Note 2	4,000 4,000 4,000
Net Assets of Bannerman following the Financing Transaction Discount for minority interest 3	90,531 129,531 167,531 23% 20% 17%
Net Assets of Bannerman following the Financing Transaction (minority interest basis) Shares on issue (number) 4 Value per share ($)	69,709 103,625 139,051 492,059,682 492,059,682 492,059,682
	0.142 0.211 0.283

Source: BDO analysis

The table above indicates the net asset value of a Bannerman share following the Financing Transaction is between $0.142 and $0.283, with a preferred value of $0.211. The following adjustments were made to the net assets of Bannerman following the Financing Transaction.

Note 1: Adjustment to liability under Existing Convertible Note

The conversion of the Existing Convertible Note will result in the removal of an $8 million liability under the Existing Convertible Note, which we have added back to the net assets of Bannerman.

Note 2: Adjustment to cash and cash equivalents

As a result of the issue of the New Convertible Note the Company will receive funds totalling $4 million. The payment of the Establishment Fee will be satisfied through the issue of shares.

Note 3: Minority discount

The net asset value of a Bannerman share following the Financing Transaction is reflective of a controlling interest. This suggests that the acquirer obtains an interest in the company which allows them to have an individual influence in the operations and value of that company. Therefore, if the Financing Transaction is approved Shareholders may become minority interest shareholders in Bannerman as the Relevant RCF Entities could hold a controlling interest, meaning that their individual holding will not be considered significant enough to have an individual influence in the operations and value of the Company.

Therefore, we have adjusted our valuation of a Bannerman share following the Financing Transaction, to reflect a minority interest holding. A minority interest discount is the inverse of a premium for control and is calculated using the formula 1 – (1/1+control premium). As discussed in section 10.2, we consider an appropriate control premium for Bannerman to be in the range of 20% to 30%, giving rise to a minority interest discount in the range of 17% to 23%.

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Note 4: Number of shares on issue

Table 4 shows the total number of issued shares following the conversion of the Existing Convertible Note and following the Financing Transaction to be 492,059,682. This is under the scenario where the conversion of the New Convertible Note is at $0.095 per share to achieve a Maximum Percentage of 43.0% shareholding interest for the Relevant RCF Entities.

We have then adjusted this number of shares to show the effect of all of the in the money options being exercised by reducing the number of shares to be issued on the exercise of existing options by RCF Management and increasing the number for all the $0.072 options on issue, which includes some held by RCF Management.

These adjustments to Bannerman’s shares on issue following the Financing Transaction are set out in the table below:

Table 21 Primary approach – Number of Shares on issue following the Financing Transaction

Shares on issue Ref	Shares on issue
Issued shares following the conversion of Existing Convertible Note and Financing Transaction Table 4	489,759,482
Less: shares issued on exercise of existing options by RCF Management Table 4	(2,203,800)
Plus: shares issued for in the money options Table 11	4,504,000
Number of shares on issue following the Financing Transaction	492,059,682

Source: BDO analysis

11.2 Secondary approach

present value calculation is the interest rate that the issuer could obtain from the market on a similar debt instrument without the conversion feature. The equity component of the convertible note is the residual between the face value of the note and the value of the debt.

We have valued the Existing Convertible Note and the New Convertible Note using the Black Scholes Pricing Model to value the equity, with the residual between the equity value and the face value being classified as debt.

The Existing Convertible Note is convertible at a conversion price of $0.095 per share. Based on a principal amount of $8 million, the Existing Convertible Note would be convertible to 84.2 million shares.

The New Convertible Note is convertible at a minimum price of $0.06 per share and a maximum price of $0.095 per share; therefore the principal amount of $4 million would be convertible to a maximum of approximately 66.67 million shares or a minimum of approximately 42.11 million shares respectively.

The value of the equity is calculated using the Black Scholes Pricing Model, with the debt value calculated as the residual between the face value and the equity value.

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The key inputs used in our Black Scholes equity value are detailed below:

Underlying share price

We have used an underlying share price of $0.105, being our midpoint value of a Bannerman share prior to the Financing Transaction determined under the QMP methodology on a minority interest basis in section 10.2. We have used this value as our underlying share price as a result of the conversion price being based on the trading price of a Bannerman share.

Exercise price

The exercise prices are the conversion prices of the Existing Convertible Note and the New Convertible Note.

The exercise price of the Existing Convertible Note is $0.095 per share.

In determining the exercise price of the New Convertible Note, we have had regard to the current ASX trading price of a Bannerman Share and our underlying share price calculated above of $0.105. Based on these factors, we believe the most appropriate exercise price to use for the New Convertible Note is $0.095, being the highest conversion price of the New Convertible Note, calculated as 150% of $0.0633 per the term sheet.

Life of the Convertible Notes

The maturity dates for both the Existing Convertible Note and the New Convertible Note is 30 September 2016. This gives an effective life of both the Existing Convertible Note and the New Convertible Note of two and a half years.

Volatility

Recent volatility of the share price of Bannerman shares was calculated over one, two and three year periods, using data extracted from Bloomberg. We expect the annual share price volatility of a Bannerman share to be approximately 85% over the term of both the Existing Convertible Note and the New Convertible Note.

Risk-free rate of interest

We have used the three-year Australian Government Bond Rate of 2.90% as a proxy for the risk free rate.

Dividend Expected on the Shares

Bannerman is currently unlikely to pay a dividend during the life of both the Existing Convertible Note and the New Convertible Note.

Number of equity instruments granted

The number of equity instruments input to our option pricing model is derived by dividing the respective principal amounts by the conversion prices of both the Existing Convertible Note and the New Convertible Note. Based on this calculation, the Company will issue approximately 84.21 million shares under the Existing Convertible Note and 42.11 million shares under the New Convertible Note.

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Conclusion

We set out below our conclusion as to the values of the equity component of both the Existing Convertible Note and the New Convertible Note.

Table 22: Key inputs and valuation of equity component

Item	Existing Convertible Note	New Convertible Note

Underlying share price	$0.105	$0.105

Exercise price	$0.095	$0.095

Life of the Convertible Note (years)	2.5	2.5

Volatility (%)	85%	85%

Risk-free rate of interest (%)	2.90%	2.90%

Dividends expected on the shares (%)	-	-

Number of instruments	84.21 million	42.11 million

Valuation per instrument	$0.057	$0.057

Valuation of Equity	$4.80 million	$2.40 million

Source: BDO analysis

Based on our analysis above, the value of the debt and equity component of the New Convertible Note is set out in the table below.

Table 23: Valuation of equity and debt components

Item	Existing Convertible Note $m New Convertible Note $m
Value of Equity	4.80 2.40
Value of Debt	3.20 1.60
Face value of Convertible Note	8.00 4.00

Source: BDO analysis

These values are reflected in our secondary valuation approach set out in the table below:

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Table 24: Secondary NAV approach – Value of a Bannerman share following the Financing Transaction

Low value Preferred value High value Notes $'000 $'000 $'000	Low value Preferred value High value Notes $'000 $'000 $'000
Net Assets of Bannerman prior to the Financing Transaction	78,531 117,531 155,531
Liability removed under Existing Convertible Note	8,000 8,000 8,000
Cash received from the issue of the New Convertible Note Adjustment to debt component of Existing Convertible Note 1 Adjustment to debt component of New Convertible Note 1 Present value of interest payable on Existing Convertible Note 2 Present value of interest payable on New Convertible Note 2 Present value of Establishment Fee 2	4,000 4,000 4,000 (3,200) (3,200) (3,200) (1,600) (1,600) (1,600) (1,306) (1,306) (1,306) (653) (653) (653) (120) (120) (120)
Net Assets of Bannerman following the Financing Transaction Discount for minority interest	83,652 122,652 160,652 23% 20% 17%
Net Assets of Bannerman following the Financing Transaction (minority interest basis) Adjustment for embedded call option value of Existing Convertible Note 3 Adjustment for embedded call option value of New Convertible Note 3 Ordinary shareholder value Shares on issue (number) 4 Value per share ($)	64,412 98,121 133,341 (4,800) (4,800) (4,800) (2,400) (2,400) (2,400)
	57,212 90,921 126,141 329,442,790 329,442,790 329,442,790
	$0.174 $0.276 $0.383

Source: BDO analysis

The table above indicates the net asset value of a Bannerman share following the Financing Transaction is between $0.174 and $0.383, with a preferred value of $0.276. The following adjustments were made to the net assets of Bannerman following the Financing Transaction.

Note 1: Adjustment to debt component of The Convertible Notes

We have adjusted the net assets of Bannerman for the values of the debt components of both the Existing Convertible Note and the New Convertible Note. The debt component is derived from the residual of the face value less the equity component as calculated above.

Note 2: Present value of interest payable on The Convertible Notes and Establishment Fee

The Existing Convertible Note and the New Convertible Note have a coupon interest rate of 8% per annum with interest payable quarterly. We have calculated the net present value of the interest payable on the Existing Convertible Note to be $1.306 million. The net present value of the interest payable on the New Convertible Note is calculated to be $0.653 million. This interest payable is classed as a liability of the Company.

An establishment fee of $120,000 is also payable by Bannerman on the date of drawdown of the New Convertible Note. For the purposes of our secondary valuation methodology this is also classed as a liability of the Company.

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Note 3: Adjustment for embedded call option value of the Convertible Notes

We have adjusted the ordinary shareholder value for the value of embedded call option components of both the Existing Convertible Note and the New Convertible Note. The inputs to this valuation are detailed in Table 22 and the calculated values are set out in Table 23.

Note 4: Shares on issue

We have not increased the number of shares on issue for the conversion of the Existing Convertible Note and the New Convertible Note as this is reflected through the reduction in equity as a result of the call option value and the increase in liabilities arising from the debt components of both the Existing Convertible Note and the New Convertible Note. We have however included the number of shares that would be issued if all the $0.072 options, which are in the money, were to be exercised.

11.3 Valuation of Bannerman following the Financing Transaction

We note that our low, preferred and high values of a Bannerman share following the Financing Transaction are higher under our secondary approach in comparison to our primary approach. We consider both our primary and secondary NAV approaches to be appropriate methodologies and therefore we have compared both these values to the value of a Bannerman share prior to the Financing Transaction when concluding on fairness.

12. Valuation of security provided and liabilities settled

12.1 Value of security provided as security in event of default

Bannerman will provide the Secured Assets to RCFVI under a general security deed to secure repayment of the New Convertible Note that may be entered into between Bannerman and RCFVI in the future.

In the event of default, RCFVI would only be entitled to recover the principal and interest of the New Convertible Note and not all the proceeds from the sale of the Secured Assets. Therefore, we do not need to consider the value of the Company or the Secured Assets for this purpose as RCFVI will not receive more than the value of the liability if the security is called.

We consider the value of security provided to be less than or equal to the value of the liabilities settled.

12.2 Value of liabilities settled by the provision of the security

In the event the Company is in breach of the terms of the New Convertible Note, RCFVI is entitled to seek repayment of any Principal and accrued interest outstanding in respect of the New Convertible Note by the sale of the assets secured by the general security deed.

Interest is calculated at a rate of 8% per annum from the date of receipt of the principal up to the earlier of the conversion date or the redemption date.

The nominal value of the total secured amount (including amounts relating to the principal funds drawn down and interest) represents the valuation of liabilities settled by the provision of security.

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13. Are the Transactions fair?

Financing Transaction

The value of a Bannerman share prior to the Financing Transaction on a control basis compares to the value of a Bannerman share following the Financing Transaction on a minority basis, as detailed below.

Table 25: Fairness assessment of Financing Transaction

		Low	Preferred	High
	Ref
		$	$	$
Value of a Bannerman share prior to the Financing Transaction on a	10.3	0.238	0.357	0.472
control basis
Value of a Bannerman share following the Financing Transaction on	11.1	0.142	0.211	0.283
a minority basis – primary approach
Value of a Bannerman share following the Financing Transaction on	11.2	0.174	0.276	0.383
a minority basis – secondary approach

Source: BDO analysis

The above valuation ranges are graphically presented below:

Value of a Bannerman share prior to the Financing Transaction on a control basis Value of a Bannerman share following the Financing Transaction on a minority basis - primary approach Value of a Bannerman share following the Financing Transaction on a minority basis - secondary approach 0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45 0.50

Source: BDO analysis

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Security Transaction

As stated in section 12, the Security Transaction is fair if the value of the security provided is equal to or less than the value of the liabilities settled in the event of default under the New Convertible Note.

In the scenario that the value of the Secured Assets is greater than or equal to the amounts owed to RCFVI, and there is an event of default, then RCFVI would only be entitled to recover the principal and interest outstanding under the New Convertible Note.

In a scenario that the value of Secured Assets is less than the amounts owed to RCFVI, in an event of default, then the Secured Assets would be sold and the proceeds provided to RCFVI. This can be summarised as follows:

Table 26: Fairness assessment of Security Transaction

Scenario	Scenario	Scenario	Consequence	Consequence	Consequence	Fairness

Secured Assets	>	Liabilities to be settled	Security provided	=	Liabilities Settled	Fair

Secured Assets	=	Liabilities to be settled	Security provided	=	Liabilities Settled	Fair

Secured Assets	<	Liabilities to be settled	Security provided	<	Liabilities Settled	Fair

Source: BDO analysis

If there is an event of default, then RCFVI is only entitled to be repaid the principal and interest outstanding under the New Convertible Note, we consider that the Security Transaction is fair in all scenarios.

14. Are the Transactions reasonable?

14.1 Advantages of approving the Financing Transaction

Financing Transaction

14.1.1 Minority interest values prior to and following the Financing Transaction are similar

In assessing the fairness of the Financing Transaction in section 13, RG 111.31 stipulates that in a control transaction a comparison should be made between the value of the target entity’s securities prior to the transaction on a controlling basis and the value of the target entity’s securities following the transaction allowing for a minority discount. It is relevant for Shareholders to appreciate that as Shareholders they hold a minority interest in Bannerman prior to the Financing Transaction and they will retain a minority interest following the Financing Transaction.

We have therefore provided a comparison of the value of a Bannerman share prior to the Financing Transaction and following the Financing Transaction on a minority interest basis. Our value of a Bannerman share prior to the Financing Transaction on a minority basis has been calculated by applying our minority interest discount to our value of a Bannerman share prior to the Financing Transaction, as shown below:

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Table 27: Value of a Bannerman share prior to Financing Transaction on minority basis

	Low value Preferred value High value $ $ $
Value of Bannerman share prior to the Financing Transaction on a control basis	0.238 0.357 0.472
Discount for minority interest	23% 20% 17%
Value of a Bannerman share prior to the Financing Transaction on a minority basis	0.184 0.285 0.392

Source: BDO analysis

Therefore, the table below provides a comparison between the value of a Bannerman share prior to the Financing Transaction and following the Financing Transaction on a minority interest basis.

Table 28: Value of a Bannerman share prior to Financing Transaction and following the Financing Transaction on minority basis

	Low	Preferred	High
	$	$	$
Value of a Bannerman share prior to the Financing Transaction on a	0.184	0.285	0.392
minority basis
Value of a Bannerman share following the Financing Transaction on a	0.142	0.211	0.283
minority basis – primary approach
Value of a Bannerman share following the Financing Transaction on a	0.174	0.276	0.383
minority basis – secondary approach

Source: BDO analysis

The above valuation ranges are graphically presented below:

Value of a Bannerman share prior to the Financing Transaction on a minority basis

Value of a Bannerman share following the Financing Transaction on a minority basis - primary approach

Value of a Bannerman share following the Financing Transaction on a minority basis - secondary approach

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0.050 0.100 0.150 0.200 0.250 0.300 0.350 0.400 0.450 0.500

Source: BDO analysis

Table 28 and the graph above indicate that the range of values of a Bannerman share prior to the Transaction on a minority interest basis are similar to the range of minority interest values following the Financing Transaction under both methodologies. So were we able under RG 111 to assess fairness on this basis our opinion would have been that the Financing Transaction was fair.

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14.1.2 Financing Transaction provides a short term funding option

If the Financing Transaction is approved by Shareholders, Bannerman will not be required to seek alternative sources of funding in the short term. Bannerman has considered a number of alternative short term funding sources. The following alternative funding options are discussed below to illustrate the options available to Bannerman should the Financing Transaction not be approved:

Capital raising

Bannerman has considered the possibility of raising funds via the issue of shares. Given the Company’s current share price and that the Company’s Share Placement in December 2011 was conducted at an 18% discount to the market price, any capital raising would result in a certain level of dilution to Shareholders.

Bannerman has held discussions with its advisors regarding the ability to perform a capital raising up to $4 million as an alternative to the Financing Transaction. Their ability to raise $4 million, in order to obtain funds to construct and operate the proposed pilot plant program and allow the Company to meet its corporate working capital requirements is unlikely considering the current state of the equity capital markets in addition to the low uranium price. Other uranium companies have had limited recent success in raising funds through this means. In September 2013, Deep Yellow Limited undertook a share purchase plan to raise $1.5 million at a 15% discount to its market price. Deep Yellow Limited was only able to raise $0.97 million.

The Financing Transaction provides the Company with certainty in the current equity capital markets whilst the ability to raise the necessary funds through a capital raising remains uncertain.

Synergy Merger

The Company has also investigated the possibility of a merger that would allow Bannerman access to further funds. However, given the Company’s Etango Project is comparatively low grade and its market capitalisation is at a low level, if it entered into a merger, it is likely to end up with a comparatively small stake in any merged entity. The Company does not believe that this is a favourable alternative to the New Convertible Note.

Off-take Agreement

An off-take agreement would involve the Company entering into a contract with customers to sell set amounts of the uranium produced from the Etango Project once it is developed. The future funds to be received from these advanced sales would then be used to finance the development of the Etango Project.

The uranium price in 2013 has averaged approximately US$40.5/lb and the spot price as at 27 April 2014 was US$35.75/lb. Given the current uranium prices, it is unlikely that the Company would be able to obtain an off-take agreement that maximises shareholder value. There are also additional risks that arise in pre-selling materials under an off-take agreement.

Sale of Non-Core Assets

The Company also investigated the possibility of selling some of its non-core assets. As at 31 December 2013, the Company had total assets of $61.85 million. Of this balance, $58.26 million related to exploration and evaluation expenditure of which the majority related to the Etango Project. The Company holds minimal other assets and therefore the sale of such non-core assets could not be sold for any significant value.

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Given the analysis above, if the Financing Transaction is not approved, the options available to the Company to source alternative short term funds are very limited.

14.1.3 Approval of the Financing Transaction will provide the Company with funds to progress the pilot plant

During 2012, the Company completed a DFS on the Etango Project and completed an Environmental and Social Impact Assessment which confirmed the Etango Project’s economics and pathway to development. The Company intends to part of the funds received under the New Convertible Note to construct and operate the proposed pilot plant program. As the Company has indicated in its December 2013 quarterly activities report, the opportunity to progress the pilot plant program provides a potential competitive advantage to Bannerman in positioning the Etango Project to a point to demonstrate the process flow sheet to potential financiers as well as generate data to enable the detailed design phase of future development.

The ability to progress the Etango Project will advantage Bannerman to a point where it will be in a position to take advantage of any increase in the uranium price, with long term price projections for uranium showing a recovery to around US$70.0/lb.

14.1.4 Approval of the Financing Transaction will provide the Company with necessary working capital and allow compliance with financial covenants

As at 31 December 2013 the Company’s cash balance was $2.59 million and reduced to $1.85 million as at 31 March 2014. The Company has financial covenants in place under the terms of the Existing Convertible Note whereby the Company, unless otherwise approved maintain a minimum cash and cash equivalents balance of not less than $1.25 million. The Financing Transaction will assist the Company in complying with these financial covenants.

The Company also requires sufficient working capital. As noted in the audit report for the financial statements for the half-year ended 31 December 2013, an emphasis of matter regarding the Company’s ability to continue as a going concern was included. The Directors acknowledged that the Company’s cash flow forecast reflects that additional working capital will need to be raised within the coming financial year to enable the Company to continue its planned business activities and expenditure levels. The Directors are satisfied that there are reasonable grounds to believe that, having regard to the Company’s position and its available financing options, the Company will be able to raise additional capital to enable it to meet its obligations as and when they fall due. The Financing Transaction will assist the Company meeting its ongoing working capital requirements.

14.1.5 Conversion will put the Company under less cash flow strain

The conversion price of the New Convertible Note is at a minimum price of $0.06 per share but could be as high as $0.095 per share. For a face value of $4 million, the conversion will result in the issue of up to an additional 66.67 million shares at a conversion price of $0.06 per share and 42.11 million shares at a conversion price of $0.095 per share. The Existing Convertible Note bears a conversion price of $0.095 per share which will result in 82.21 million shares to be issued upon conversion.

The conversion of both the Existing Convertible Note and the New Convertible Note will be deemed as having been repaid. Accordingly, the Company will not have to repay both the Existing Convertible Note and the New Convertible Note in cash, which puts the Company under less cash flow strain.

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The draw down of the New Convertible Note is subject to the receipt of Shareholders’ approval for the Financing Transaction. If the Financing Transaction is not approved, Bannerman may have to re-negotiate or obtain alternative funding.

14.1.6 Major shareholder support

RCF is a private equity firm that invests in a diverse range of commodities. The primary goal of private equity firms is to generate a return on its investment. Since private equity firms receive shares in the companies they invest in, their return is generated by an increase in the value of those companies. As at the date of this Report, RCFIV holds 13.97% of the issued capital of Bannerman and has already received Shareholder approval to increase this holding to a maximum of 36.04% through the issue of shares under the Existing Convertible Note. If Shareholders approve the Financing Transaction, the Relevant RCF Entities will have the potential to increase its ownership interest to a maximum of 43.0%.

In the event that the Relevant RCF Entities do increase their interests to 43.0% of Bannerman’s issued capital, the incentive for RCF to see Bannerman succeed will be even greater as any increase in the Company’s share price will generate larger scale returns for RCF and in turn generate returns for Shareholders.

Also, having the support of a cornerstone investor such as RCF may assist Bannerman in obtaining the necessary funding as it moves towards the development of the Etango Project.

14.1.7 The ability of Bannerman to raise additional funds may increase

If Shareholders approve the Financing Transaction, upon conversion of the Existing Convertible Note and the New Convertible Note, it will extinguish the level of borrowings and unencumber the Secured Assets. The reduced level of gearing may increase the Company’s ability to raise additional funds for the additional payments which will be required to fund the Company’s development strategy.

Security Transaction

14.1.8 The Security Transaction is fair

The Security Transaction is fair. RG111 states that an offer is reasonable if it is fair.

14.1.9 Supports debt funding

The provision of security enables the Company to obtain the debt funding that it requires. If Bannerman seeks alternative funding through bank debt, it is most likely that there will be a requirement by bank lenders to request the provision of security to secure the bank debt it seeks. Therefore, the provision of security for debt funding purposes is not unusual.

14.2 Disadvantages of approving the Transactions

Financing Transaction

14.2.1 The Financing Transaction is not fair

As set out in section 13, the Financing Transaction is not fair. RG 111 states that a transaction is reasonable if it is fair. In this case it is not fair.

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14.2.2 Dilution of existing Shareholders’ interests

Shareholders have previously approved the issue of shares to RCFIV, up to a maximum percentage of 36.04% through the issue of shares under the Existing Convertible Note. As a consequence of the New Convertible Note, Shareholders are now being asked to refresh the previous approval given and to approve (amongst other things) the issue of shares to the Relevant RCF Entities under the Financing Transaction of up to a maximum percentage of 43.0%. If the Relevant RCF Entities elect to convert both the Existing Convertible Note and the New Convertible Note or exercise the existing options Shareholders’ interest will be diluted to a minimum of 57.0%. This will dilute Shareholders’ interests and their level of collective influence on the operations of the Company.

Security Transaction

14.2.3 Onerous restrictions on dealing with the Company’s assets

The security that Bannerman will grant to RCFVI will place restrictions on the Company’s ability to deal with its assets. However, similar restrictions are already in place under the security arrangement under the Existing Convertible Note.

14.3 Other considerations

14.3.1 Alternative Proposal

We are unaware of any alternative proposal that might offer the Shareholders of Bannerman a premium over the value ascribed to, resulting from the Transactions.

14.3.2 Practical level of control

If the Financing Transaction is approved then the Relevant RCF Entities combined may hold up to a maximum of 43.0% in Bannerman, which is significant when compared to other shareholders. We note however, that RCFIV has previously received shareholder approval to increase its interest in the Company to 36.04% through the issue of shares under the Existing Convertible Note and the approval of the Financing Transaction would give the Relevant RCF Entities approval to increase its collective interest to up to 43.0%.

When shareholders are required to approve an issue that relates to a company there are two types of approval levels. These are general resolutions and special resolutions. A general resolution requires 50% of shares to be voted in favour to approve a matter and a special resolution requires 75% of shares on issue to be voted in favour to approve a matter. If the Financing Transaction is approved, then the Relevant RCF Entities may have the potential to block special resolutions. RCFIV already has the capacity to do this.

Under the terms of the New Convertible Note, RCFVI has the right to appoint an additional director to the Board. However, RCFVI has indicated that Mr Ian Burvill would remain as a non-executive director of the Company and act as the Relevant RCF Entities’ sole representative on the Company’s Board. However, RCFVI still has capacity to add another director to Bannerman’s Board.

14.3.3 The Transactions are unlikely to deter a takeover offer being received in the future

RCFIV and RCFVI are financial investors rather than an investor who is interested in obtaining offtake or access to synergies. The primary goal of RCFIV and RCFVI is to generate a return on their investments

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which we consider to be consistent with a Shareholders’ primary goal. Therefore, although it is likely that any offer to acquire the Company would require RCFIV and RCFVI’s acceptance, we do not consider that an increase in their investment, as a result of approving the Financing Transaction, will deter a takeover offer being made or accepted by the Company if an acceptable offer is made.

14.3.4 No change to the composition of Bannerman Board

Under the terms of the New Convertible Note, RCFVI has the right to appoint an additional director to the Board. RCFIV is represented on the Board by Mr Ian Burvill and the Company understands that RCFVI will also be represented by him. Therefore, Ian Burvill would remain as a non-executive director of the Company and the Relevant RCF Entities’ sole representative on the Company’s Board, meaning there would be no immediate change to the composition of the Bannerman Board. However, RCFVI still has capacity to add another director to Bannerman’s Board.

14.3.5 Approval of the Financing Transaction does not guarantee conversion of the New Convertible Note

In the event that the Financing Transaction is approved, it does not guarantee that conversion under the Existing Convertible Note and the New Convertible Note will occur. While we acknowledge that the conversions are likely, there is no certainty to the conversions occurring.

The Existing Convertible Note and the New Convertible Note both have a maturity date of 30 September 2016. During this time, the uranium price is forecast to recover and this may put Bannerman in a better position to raise equity to repay the liabilities under the Existing Convertible Note and the New Convertible Note.

14.3.6 RCFVI’s intentions if the Transactions are approved

The Relevant RCF Entities have confirmed that they have no intention to:

i. make any change to the business of the Company;
ii. inject any further capital into the Company, however RCF will continue to monitor the financial position of the Company and reserve the right to inject further capital into the Company should it be required;
iii. make changes to the Company’s existing employees;
iv. transfer any of the Company’s assets between the Company and the Relevant RCF Entities or their Associates;
v. redeploy any of the Company’s fixed assets;
vi. change the Company’s financial or dividend distribution policies; or
vii. appoint an additional director to the Board if Shareholders approve the Resolution (although RCFVI reserves its contractual right to do so under the New Convertible Note). Mr Burvill will therefore remain the Relevant RCF Entities’ sole representative on the Board.

The above intentions may change as new information becomes available, as circumstances change or in the light of all material information, facts and circumstances necessary to assess the operational, commercial, taxation and financial implications of those decisions at the relevant time.

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14.3.7 Post-announcement pricing

We have analysed movements in Bannerman’s share price since the Transactions were announced. A graph of Bannerman’s share price since the announcement is set out below.

Bannerman post-announcement pricing

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----- Start of picture text -----

0.14 3.5
Announcement Date
0.12 3.0
0.10 2.5
0.08 2.0
0.06 1.5
0.04 1.0
0.02 0.5
0.00 -
Volume Closing share price
Share Price ($)
Volume (millions)
----- End of picture text -----

Source: Bloomberg and BDO analysis

The closing price of Bannerman’s shares on 7 April 2014 was $0.096. As at 5 May 2014, Bannerman’s share price closed at $0.078. Given the above analysis it is possible that if the Transactions are not approved then Bannerman’s share price may decline.

15. Conclusion

We have considered the terms of the Transactions as outlined in the body of our Report and have concluded that:

In the absence of any other relevant information, the Financing Transaction is not fair but reasonable to Shareholders .
In the absence of any other relevant information, the Security Transaction is fair and reasonable to Shareholders .

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16. Sources of information

This report has been based on the following information:

Draft Notice of General Meeting and Explanatory Statement on or about the date of this report;
Indicative Term Sheet for Convertible Note Facility dated 17 February 2014;
Reviewed financial statements for the half-year ended 31 December 2013;
Audited financial statements of Bannerman for the years ended 30 June 2013 and 30 June 2012;
Independent Valuation Report on the Etango Uranium Project dated 5 May 2014 performed by Al Maynard & Associates Pty Ltd;
Share registry information of Bannerman from Computershare;
Bloomberg;
Capital IQ;
Information in the public domain; and
Discussions with Directors and Management of Bannerman.

17. Independence

BDO Corporate Finance (WA) Pty Ltd is entitled to receive a fee of $24,000 (excluding GST and reimbursement of out of pocket expenses). The fee is not contingent on the conclusion, content or future use of this Report. Except for this fee, BDO Corporate Finance (WA) Pty Ltd has not received and will not receive any pecuniary or other benefit whether direct or indirect in connection with the preparation of this report.

BDO Corporate Finance (WA) Pty Ltd has been indemnified by Bannerman in respect of any claim arising from BDO Corporate Finance (WA) Pty Ltd's reliance on information provided by the Bannerman, including the non provision of material information, in relation to the preparation of this report.

Prior to accepting this engagement BDO Corporate Finance (WA) Pty Ltd has considered its independence with respect to Bannerman and RCF and any of their respective associates with reference to ASIC Regulatory Guide 112 “Independence of Experts”. In BDO Corporate Finance (WA) Pty Ltd’s opinion it is independent of Bannerman and RCF and their respective associates.

A draft of this report was provided to Bannerman and its advisors for confirmation of the factual accuracy of its contents. No significant changes were made to this report as a result of this review.

BDO is the brand name for the BDO International network and for each of the BDO Member firms.

BDO Australia Ltd, an Australian company limited by guarantee, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of Independent Member Firms. BDO in Australia, is a national association of separate entities (each of which has appointed BDO Australia Limited ACN 050 110 275 to represent it in BDO International).

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18. Qualifications

BDO Corporate Finance (WA) Pty Ltd has extensive experience in the provision of corporate finance advice, particularly in respect of takeovers, mergers and acquisitions.

BDO Corporate Finance (WA) Pty Ltd holds an Australian Financial Services Licence issued by the Australian Securities and Investment Commission for giving expert reports pursuant to the Listing rules of the ASX and the Corporations Act.

The persons specifically involved in preparing and reviewing this report were Sherif Andrawes and Evelyn Tan of BDO Corporate Finance (WA) Pty Ltd. They have significant experience in the preparation of independent expert reports, valuations and mergers and acquisitions advice across a wide range of industries in Australia and were supported by other BDO staff.

Sherif Andrawes is a Fellow of the Institute of Chartered Accountants in England & Wales and a Member of the Institute of Chartered Accountants in Australia. He has over twenty five years experience working in the audit and corporate finance fields with BDO and its predecessor firms in London and Perth. He has been responsible for over 200 public company independent expert’s reports under the Corporations Act or ASX Listing Rules. These experts’ reports cover a wide range of industries in Australia with a focus on companies in the natural resources sector. Sherif Andrawes is the Chairman of BDO in Western Australia, Corporate Finance Practice Group Leader of BDO in Western Australia and the Natural Resources Leader for BDO in Australia.

Evelyn Tan is a CFA charter holder and is a member of the CFA Institute. Evelyn has over 15 years of experience in corporate finance and banking. Evelyn has considerable experience in the preparation of independent expert reports and valuations in general for companies in a wide number of industry sectors.

19. Disclaimers and consents

This report has been prepared at the request of Bannerman for inclusion in the Notice of Meeting and Explanatory Memorandum which will be sent to all Bannerman Shareholders. Bannerman engaged BDO Corporate Finance (WA) Pty Ltd to prepare an independent expert's report to consider the proposals for Bannerman to issue shares to RCF upon the conversion of a convertible note facility and for Bannerman to grant security to RCF in the form of a mortgage over the assets comprising Bannerman’s Etango Project.

BDO Corporate Finance (WA) Pty Ltd hereby consents to this report accompanying the above Notice of Meeting and Explanatory Memorandum. 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 BDO Corporate Finance (WA) Pty Ltd.

BDO Corporate Finance (WA) Pty Ltd takes no responsibility for the contents of the Notice of Meeting and Explanatory Memorandum other than this report.

We have no reason to believe that any of the information or explanations supplied to us are false or that material information has been withheld. It is not the role of BDO Corporate Finance (WA) Pty Ltd acting as an independent expert to perform any due diligence procedures on behalf of the Company. The Directors of the Company are responsible for conducting appropriate due diligence in relation to RCF. BDO Corporate Finance (WA) Pty Ltd provides no warranty as to the adequacy, effectiveness or completeness of the due diligence process.

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The opinion of BDO Corporate Finance (WA) Pty Ltd is based on the market, economic and other conditions prevailing at the date of this report. Such conditions can change significantly over short periods of time.

With respect to taxation implications it is recommended that individual Shareholders obtain their own taxation advice, in respect of the Proposal, tailored to their own particular circumstances. Furthermore, the advice provided in this report does not constitute legal or taxation advice to the Shareholders of Bannerman, or any other party.

BDO Corporate Finance (WA) Pty Ltd has also considered and relied upon independent valuations for mineral assets held by Bannerman.

The valuer engaged for the mineral asset valuation, Al Maynard & Associates Pty Ltd, possess the appropriate qualifications and experience in the industry to make such assessments. The approaches adopted and the assumptions made in arriving at their valuations are considered appropriate for this report. We have received consent from the valuer for the use of their valuation report in the preparation of this report and to append a copy of their report to this report.

The statements and opinions included in this report are given in good faith and in the belief that they are not false, misleading or incomplete.

The terms of this engagement are such that BDO Corporate Finance (WA) Pty Ltd has no obligation to update this report for events occurring subsequent to the date of this report.

Yours faithfully

BDO CORPORATE FINANCE (WA) PTY LTD

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Sherif Andrawes

Director

Evelyn Tan

Associate Director Authorised Representative

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A endix 1 – Glossar of Terms pp y

Reference	Definition
The Act	The Corporations Act 2001 (Cth)
AM&A	Al Maynard & Associates Pty Ltd
APES 225	Accounting Professional & Ethical Standards Board professional standard APES 225
	‘Valuation Services’
ASIC	Australian Securities and Investments Commission
ASX	Australian Securities Exchange
Bannerman	Bannerman Resources Limited
BDO	BDO Corporate Finance (WA) Pty Ltd
The Company	Bannerman Resources Limited
DCF	Discounted Future Cash Flows
DFS	Definitive Feasibility Study
EBIT	Earnings before interest and tax
EBITDA	Earnings before interest, tax, depreciation and amortisation
Establishment Fee	A fee payable by Bannerman of $120,000 on the date of drawdown to RCFVI, to be
	satisfied through the issue shares at a price per share equal to the 5-day VWAP for the
	5 trading days prior to the date of drawdown
Existing Convertible Note	The existing secured convertible note facility on issue to RCFIV with a face value of $8
	million, expiring 30 September 2016, a conversion price of $0.095 (subject to
	adjustment) and a coupon interest rate of 8% per annum
Financing Transaction	The issue of shares to RCFIV pursuant to the Existing Convertible Note, the issue of
	shares to RCFVI pursuant to the New Convertible Note and the issue of shares on
	exercise of existing options by RCF Management
FME	Future Maintainable Earnings
Listing Rule	ASX Listing Rules
Maximum Percentage	The Relevant RCF Entities’ maximum potential shareholding in Bannerman, being
	43.0%

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Reference	Definition
MET	Ministry of Environment and Tourism
NAV	Net Asset Value
New Convertible Note	The new secured convertible note facility proposed to be issued to RCFVI which has a
	face value of $4 million, a maturity date of 30 September 2016, a coupon rate of 8%
	per annum and a conversion price which is the higher of:
	a) the lower of:
	i. $0.095; and
	ii. 150% of the 60 day trading VWAP as at the date of drawdown.
	b) $0.06.
Our Report	This Independent Expert’s Report prepared by BDO
RCF	Resource Capital Funds
RCFIV	Resource Capital Fund IV LP
RCFVI	Resource Capital Fund VI LP
RCF Management	RCF Management Pty Ltd
The Relevant RCF Entities	Collectively RCFIV, RCFVI and RCF Management
RG74	Acquisitions approved by members (December 2011)
RG111	Content of expert reports (March 2011)
RG112	Independence of experts (March 2011)
Security Transaction	The security provided to RCFVI under the New Convertible Note in the form of the
	Secured Assets
Secured Assets	Under the New Convertible Note, security will be provided to RCFVI in the form of the
	following:
	a) A charge over all of Bannerman’s present and after acquired property,
	interests and rights;
	b) A charge over Bannerman’s shares, dividends and other rights in respect of
	Bannerman Resources Nominees (UK) Limited;
	c) A mortgage and a fixed and floating charge over all of Bannerman Resources
	Nominees (UK) Limited’s assets and undertakings; and
	d) A pledge over the rights, title and interests held by Bannerman Resources

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Reference	Definition
	Nominees (UK) Limited in the shares of Bannerman Mining Resources
	(Namibia) (Proprietary) Limited.
Shareholders	Shareholders of Bannerman not associated with RCF
VWAP	Volume Weighted Average Price
The Transactions	The Financing Transaction and the Security Transaction
Valuation Engagement	An Engagement or Assignment to perform a Valuation and provide a Valuation Report
	where the Valuer is free to employ the Valuation Approaches, Valuation Methods, and
	Valuation Procedures that a reasonable and informed third party would perform taking
	into consideration all the specific facts and circumstances of the Engagement or
	Assignment available to the Valuer at that time.

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A endix 2 – Valuation Methodolo ies pp g

Methodologies commonly used for valuing assets and businesses are as follows:

1 Net asset value (“NAV”)

Asset based methods estimate the market value of an entity’s securities based on the realisable value of its identifiable net assets. Asset based methods include:

Orderly realisation of assets method
Liquidation of assets method
Net assets on a going concern method

The orderly realisation of assets method estimates fair market value by determining the amount that would be distributed to entity holders, after payment of all liabilities including realisation costs and taxation charges that arise, assuming the entity is wound up in an orderly manner.

The liquidation method is similar to the orderly realisation of assets method except the liquidation method assumes the assets are sold in a shorter time frame. Since wind up or liquidation of the entity may not be contemplated, these methods in their strictest form may not be appropriate. The net assets on a going concern method estimates the market values of the net assets of an entity but does not take into account any realisation costs.

Net assets on a going concern basis are usually appropriate where the majority of assets consist of cash, passive investments or projects with a limited life. All assets and liabilities of the entity are valued at market value under this alternative and this combined market value forms the basis for the entity’s valuation.

Often the FME and DCF methodologies are used in valuing assets forming part of the overall Net assets on a going concern basis. This is particularly so for exploration and mining companies where investments are in finite life producing assets or prospective exploration areas.

These asset based methods ignore the possibility that the entity’s value could exceed the realisable value of its assets as they do not recognise the value of intangible assets such as management, intellectual property and goodwill. Asset based methods are appropriate when an entity is not making an adequate return on its assets, a significant proportion of the entity’s assets are liquid or for asset holding companies.

2 Quoted Market Price Basis (“QMP”)

A valuation approach that can be used in conjunction with (or as a replacement for) other valuation methods is the quoted market price of listed securities. Where there is a ready market for securities such as the ASX, through which shares are traded, recent prices at which shares are bought and sold can be taken as the market value per share. Such market value includes all factors and influences that impact upon the ASX. The use of ASX pricing is more relevant where a security displays regular high volume trading, creating a “deep” market in that security.

3 Capitalisation of future maintainable earnings (“FME”)

This method places a value on the business by estimating the likely FME, capitalised at an appropriate rate which reflects business outlook, business risk, investor expectations, future growth prospects and other entity specific factors. This approach relies on the availability and analysis of comparable market data.

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The FME approach is the most commonly applied valuation technique and is particularly applicable to profitable businesses with relatively steady growth histories and forecasts, regular capital expenditure requirements and non-finite lives.

The FME used in the valuation can be based on net profit after tax or alternatives to this such as earnings before interest and tax (“ EBIT ”) or earnings before interest, tax, depreciation and amortisation (“ EBITDA ”). The capitalisation rate or "earnings multiple" is adjusted to reflect which base is being used for FME.

4 Discounted future cash flows (“DCF”)

The DCF methodology is based on the generally accepted theory that the value of an asset or business depends on its future net cash flows, discounted to their present value at an appropriate discount rate (often called the weighted average cost of capital). This discount rate represents an opportunity cost of capital reflecting the expected rate of return which investors can obtain from investments having equivalent risks.

Considerable judgement is required to estimate the future cash flows which must be able to be reliably estimated for a sufficiently long period to make this valuation methodology appropriate.

A terminal value for the asset or business is calculated at the end of the future cash flow period and this is also discounted to its present value using the appropriate discount rate.

DCF valuations are particularly applicable to businesses with limited lives, experiencing growth, that are in a start up phase, or experience irregular cash flows.

5 Market Based Assessment

The market based approach seeks to arrive at a value for a business by reference to comparable transactions involving the sale of similar businesses. This is based on the premise that companies with similar characteristics, such as operating in similar industries, command similar values. In performing this analysis it is important to acknowledge the differences between the comparable companies being analysed and the company that is being valued and then to reflect these differences in the valuation.

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A endix 3 – Inde endent Valuation pp p

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 [email protected] Australia Australian & International Exploration & Evaluation of Mineral Properties

INDEPENDENT TECHNICAL VALUATION

OF THE

ETANGO URANIUM PROJECT NAMIBIA ,

HELD BY

BANNERMAN RESOURCES LTD

PREPARED FOR

BDO CORPORATE FINANCE (WA) PTY LTD

Author: Allen J Maynard BAppSc(Geol), MAIG, MAusIMM Company; Al Maynard & Associates Pty Ltd Date 5[th] May, 2014

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

EXECUTIVE SUMMARY

This independent technical valuation has been prepared by Al Maynard & Associates (“AM&A”) at the request of Mr S. Andrawes, of BDO Corporate Finance (WA) Pty Ltd (“BDO”) who has commissioned this valuation of the exploration assets held by Bannerman Resources Ltd – ASX:BMN (“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$121 million from within the range of A$82 million to A$159 million.

Technical information has been provided by Bannerman and Coffey Mining Pty Ltd (for Bannerman). AM&A are comfortable regarding the reasonableness and quality of the technical information provided as we have worked with Coffey personnel on recent previous projects and consider Coffey’s work to be of a meticulous and thorough standard and in accordance with 2004 JORC Code guidelines. Therefore it was not considered necessary to independently verify the Mineral Resource Estimate (source provided in section 6.0).

However it is also noted that the NPV provided by the DCF analysis of the ‘Reserves’ for Bannerman is currently negative because of the prevailing uranium price. Thus we have adopted two other methods to derive the current cash value as described below.

��

Etango Uranium Project – Independent Valuation Executive Summary

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

1.0Introduction 1
*1.1* Scope and Limitations .............................................................................................................................. 1
*1.2* Statement of Competence ........................................................................................................................ 3
2.0Valuation of the Mineral Assets – Methods and Guides 3
*2.1* General Valuation Methods .................................................................................................................... 3
*2.2* Discounted Cash Flow/Net Present Value ............................................................................................. 3
*2.3* Joint Venture Terms ................................................................................................................................ 4
*2.4* Similar or Comparable Transactions ..................................................................................................... 4
*2.5* Multiple of Exploration Expenditure ..................................................................................................... 4
*2.6* Ratings System of Prospectivity (Kilburn) .............................................................................................. 4
*2.7* Empirical Methods (Yardstick – Real Estate) ........................................................................................ 4
*2.8* General Comments ................................................................................................................................... 5
*2.9* Environmental implications .................................................................................................................... 5
2.10Indigenous Title Claims .......................................................................................................................... 5
2.11Commodities-Metal prices ....................................................................................................................... 5
2.12Resource/Reserve Summary .................................................................................................................... 6
2.13Previous Valuations ................................................................................................................................. 6
2.14Encumbrances/Royalty ............................................................................................................................ 6
3.0Background Information 6
*3.1* Introduction .............................................................................................................................................. 6
*3.2* Specific Valuation Methods ..................................................................................................................... 6
4.0Etango Project 8
4.1 Introduction ............................................................................................................................................. 8
4.2 Location and Access ..................................................................................................................................... 8
4.3 Tenure ........................................................................................................................................................... 8
4.4 Geological Setting ......................................................................................................................................... 9
*4.5* Resources and Potential ......................................................................................................................... 13
5.0Valuation of the Project 15
5.1Selection of Valuation Methods ............................................................................................................ 15
5.2Comparable Transactions ...................................................................................................................... 17
5.3MEE Method ......................................................................................................................................... 17
5.4 Valuation Conclusions .......................................................................................................................... 18
6.0References 19

List of Figures

Figure 1: Location Map of the Etango Uranium Project........................................ 7 Figure 2: Tenement Location Map. ....................................................................... 9 Figure 3: EPL 3345 – Regional Geology. ........................................................... 11 Figure 4: Local Geology of the Etango Project. .................................................. 12 Figure 5: Development Ready Schematic. ......................................................... 14

List of Tables

Table 1: Tenement Information Summary. .......................................................... 9 Table 2: Etango Project Mineral Resource Estimates. ....................................... 13 Table 3: Comparable Transactions Method Ranges. ........................................ 17 Table 4: Summary Range of Current Values. .................................................... 18 Appendix 1: List of Comparable Transactions and Descriptions. ....................... 20 Appendix 2: List of Comparable Companies Trading Multiples and Descriptions ............................................................................................................................. 22

Contents ��

Etango Uranium Project – Independent Valuation

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

The Directors, BDO Corporate Finance (WA) Pty Ltd 38 Station Street, Subiaco, WA, 6008

5[th] May, 2014

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 (2005) as adopted by the Australian Institute of Geoscientists (‘AIG’) and the Australasian Institute of Mining and Metallurgy (‘AusIMM’).

This valuation is valid as of 5[th] May, 2014 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. The values obtained are estimates of the amount of money, or cash equivalent, 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. .

Page 1

Etango Uranium Project – Independent Valuation

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

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 solely 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 readily made available. All such information is available in the public domain and relevant references are listed in Sect. 6.0 –References.

Bannerman 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 writer nor any associates have any interest, nor the rights to any interest in Bannerman nor the properties reported upon. 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 4, section 5.4. Regarding the project it is considered that more than sufficient geotechnical data has been provided from the reports covering the previous exploration of the area to enable an understanding of the geology. This provides adequate information to form an informed opinion as to the current value of the mineral assets. A site visit was not undertaken as it was considered that it would not reveal any information or data that would be material to the outcome of this report.

Page 2

Etango Uranium Project – Independent Valuation

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

1.2 Statement of Competence

This report has been prepared by Allen J. Maynard BAppSc(Geol), MAusIMM and Member of AIG, a geologist with 35 continuous years in the industry and 30 years in mineral asset valuation. The writer holds the appropriate qualifications, experience and independence to qualify as an independent “Expert” under the definitions of the Valmin Code.

2.0 Valuation of the Mineral Assets – Methods and Guides

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 & 2005) – we have derived the estimates listed below using the appropriate method for the current technical value of the mineral exploration properties as described.

The ASIC publications “Regulatory Guidelines ’111 & 112” have also been duly referred to and considered in relation to the valuation procedure. 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,
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.

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.

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.

Page 3

Etango Uranium Project – Independent Valuation

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

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 or Comparable 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. PEMs 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 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.

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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 or reserve.

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;
Previous relevant expenditure;
A graph of uranium oxide prices over the last five years is presented for the readers perusal: (http://www.infomine.com/investment/metalprices/uranium-oxide/)

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2.9 Environmental implications

Information to date is that there are no identified existing environmental liabilities on the property (BMN, 2013 Annual Report, p26; BMN, 25 May 2012 p34). Accordingly, no adjustment was made during this report for environmental implications.

2.10 Indigenous Title Claims

The Company is not aware of any such claims within the tenements.

2.11 Commodities-Metal prices

Metal prices have not been considered in assessing the selected comparable market transactions.

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2.12 Resource/Reserve Summary

A 2004 JORC compliant resource/reserve has been identified.

2.13 Previous Valuations

No previous valuations have been declared within the last two years. Most recent was in 2009.

2.14 Encumbrances/Royalty

BMN owns 80% of the company that holds rights to 100% of the project area and is required to sole fund the project until completion of a bankable feasibility study, in accordance with the Share Sale Agreement dated 12[th] May, 2005 (BMN, 2013, Annual Report. p87). The term ‘bankable feasible study’ does not have a prescribed meaning for the purposes of JORC (2012).

If the project reaches the bankable feasibility stage, the project’s 20% shareholder (Mr C. Jones) may elect to contribute his share of the costs or dilute his interest. In the event Mr Jones does not contribute to at least 5% of the project costs, his ownership interest will reduce to nil and effectively convert to a 2% royalty.

The project is also subject to a state royalty of 3% of revenue as stipulated by the Namibian Government.

We have considered the existence of such royalties in arriving at our valuation of the project.

3.0 Background Information

3.1 Introduction

This valuation has been provided by way of a detailed study of information provided by BMN and other independent consultants (Coffey Mining) for the tenements. Refer to Sect 6.0.

The area under review comprises one Exclusive Prospecting Licence EPL3345, which hosts uranium resources and reserves. An application has been lodged to convert part of the EPL to a mining licence.

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 this Namibian tenement a combination of the Comparable Transactions Method and the MEE method is employed to determine a current value range.

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Figure 1: Location Map of the Etango Uranium Project.

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4.0 Etango Project

4.1 Introduction

Bannerman’s primary and most significant asset is the 80%-owned Etango Uranium Project (“Etango Project”) in Namibia. Bannerman is focused on the development of a large open pit uranium mining and processing operation at Etango, one of the world’s largest undeveloped uranium deposits.

The Etango Project is located in the Erongo uranium mining region of Namibia which hosts the Rössing and Langer-Heinrich mines and the Husab project which is currently under construction by the Chinese State-owned nuclear power entity ‘China General Nuclear Power Company’.

The Etango Project area forms part of Exclusive Prospecting Licence (“EPL”) 3345 which was granted to Bannerman’s 80% subsidiary, Bannerman Mining Resources (Namibia) (Pty) Ltd, on 27 April, 2006 to explore for nuclear fuels, including uranium, expressed as uranium oxide (U3O8). The title was renewed for a two year period from 26 April, 2013 to 26 April, 2015.

The Ministry of Environment and Tourism granted formal environmental approval for development of the Etango Project to Bannerman in the September, 2012 quarter.

4.2 Location and Access

The Etango project is located in central western Namibia about 40 km east of Swakopmund (Fig. 1). Etango is 73 km by road from Walvis Bay, one of southern Africa’s busiest deep-water ports through which uranium has been exported for over 35 years. Road, rail, electricity and water networks are all located nearby.

Access to the Etango Project, from Swakopmund, is gained via the B2 highway and then the partially sealed/unsealed C28 road, then by wellmaintained unsealed road on the D1991 into the Namib-Naukluft National Park area. The unsealed Welwitschia Drive then provides access to the project area.

4.3 Tenure

The Etango Project EPL3345 is owned by the Namibian company Bannerman Mining Resources (Namibia) (Pty) Ltd, previously called Turgi Investments (Pty) Ltd, which manages the Project.

Bannerman owns 80% of Bannerman Mining Resources (Namibia) (Pty) Ltd, while the remaining 20% is held in the name of Mr C. Jones of Perth, Australia (verified by Namibian legal opinion - Bossau, 2014).

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Ten ID	Granted	Area Km2	Expiry*	Required Expenditure (2 years)
EPL3345	27/04/2006	243	26/04/2015	A$836,000

Table 1: Tenement Information Summary.

*NOTE: Mining Lease Application underway.

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Figure 2: Tenement Location Map.

4.4 Geological Setting

4.4.1 Regional Geology

Regionally, (Fig 3) uranium mineralisation was first discovered in the Central Zone in the 1900s when uranium-bearing beryl (heliodor) was discovered near Rössing Mountain. Exploration in the area lapsed until the 1950s and in the 1960s Rio Tinto South Africa commenced intensive exploration in the area.

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In the 1970s the then South West African Geological Survey conducted a regional reconnaissance airborne radiometric survey that was followed by a further detailed spectrometer-magnetometer survey in 1974 over an area exceeding 100,000 ha. Analysis of the airborne survey identified a broad thorium and uranium/thorium anomaly along the western flank of the Palmenhorst Dome.

The EPL is located within the northeast trending Central Zone of the Neoproterozoic 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 uranium mine that Rio Tinto has been mining for several decades.

4.4.2 Local Geology

Primary uranium mineralisation in the Etango Project area is related to uraniferous leuco-granites, locally referred to as ‘alaskites’. The alaskites are often sheet-like, and occur both as cross-cutting dykes and as bedding and/or foliation-parallel sills.

The sheet-like alaskites often amalgamate to form larger, composite granite plutons or granite stockworks, made up of closely-spaced dykes and sills. These alaskite intrusions can be in the form of thin centimetre-wide stringers or thick bodies up to 200m in width.

The alaskite bodies have intruded into the metasediments of the Nosib and Swakop Groups of the Damara Supergroup. These metasediments and alaskite intrusions flank the Mesoproterozoic (1.7 - 2.0 Ga) Palmenhorst Dome which is cored by partial melts of the Abbabis Metamorphic Complex (Fig 4).

Six episodes or stages of Alaskite intrusions, from A (earliest) to F (last), have been recognised and classified by Nex, et al. (2001) of which the D and E types are significantly uranium mineralised, and form the bulk of the intrusions in the Project area.

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Figure 3: EPL 3345 – Regional Geology.

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Figure 4: Local Geology of the Etango Project.

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4.5 Resources and Potential

The current Mineral Resource/Reserve Estimates for the Etango project available at this time of writing (May, 2014) are stated at:-

Measured and Indicated Resources: 336 million tonnes (‘Mt’) at 201 g/t U3O8 (using a lower cut-off grade of 100g/t U3O8) for 149 million pounds (‘Mlbs’) U3O8.

These Resources have been converted to Proven and Probable Reserves of 279.6Mt at 194 g/t U3O8 for 119.3Mlbs of U3O8. However, this valuation considers only the Measured and Indicated (M+I) Resources.

	Measured Resources	Measured Resources	Measured Resources	Measured Resources	Indicated Resources	Indicated Resources	Indicated Resources	Indicated Resources

Cut-off Grade (ppmU3O8)	Tonnes	Grade	Contained U3O8		Tonnes	Grade	Contained U3O8
	(Mt)	(ppm U3O8)	(Tonnes)	(Mlbs)	(Mt)	(ppm U3O8)	(Tonnes)	(Mlbs)
	62.7		12,900	28.3	273.5	200	54,600
100		205						120.4

125	56.6	215	12,200	26.8	238.6	212	50,700	111.7
150	47.5	230	10,900	24.0	193.7	230	44,500	98.1

Table 2: Etango Project Mineral Resource Estimates.

For the purposes of this valuation AM&A has used the combined Measured plus Indicated (M+I) resources of 148.8 Mlbs of U3O8, (with the difference arising due to rounding). The information in this report that relates to Mineral Resources or Ore Reserves was prepared and first disclosed under the 2004 JORC Code (BMN, 28 October, 2010).

The Mineral Resource Estimates have not been updated since to comply with the 2012 JORC Code on the basis that the Resource information has not materially changed since it was last reported. All material assumptions and technical parameters underpinning the estimates of mineral resources continue to apply and have not materially changed. It is noted that the uranium price has fallen further since the date (Oct., 2010) of the Resource statement. Whilst Bannerman continues to forecast a uranium price of US$75/lb this does not impact on our valuation given the methodologies adopted.

The Etango Uranium Project has considerable merit as illustrated by the results achieved to date, including the Mineral Resource estimates stated above.

No production has occurred to date.

Figure 5 below shows general infrastructure and proposed mining pit outlines.

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Figure 5: Development Ready Schematic.

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5.0 Valuation of the Project

When valuing any project it is important to consider as many factors as possible that may either assist or impinge upon the cash value estimates of the project under consideration. In this BMN report AM&A considers the primary features to be taken into account are the Tenement Security; Mineral Resource Estimates; Sovereign Risk; Available Infrastructure; Relevant Expenditure and the general geological setting.

Basically, these “Boxes are Ticked” as described above with regards to tenement security, JORC Code compliant mineral resources, convenient infrastructure, previous expenditure and favourable geological environment.

Namibia has long been shown to be a ‘Mining-Friendly’ social and governmental country as evidenced by the +25 year ongoing operation of the Rossing uranium mine not far to the north of BMN’s Etango Project. Other mines/deposits are also nearby as depicted in Figure 2 above evidencing the willingness of Foreign Nationals to heavily invest in exploration and mining in the country.

5.1 Selection of Valuation Methods

The following valuation methods, as described in section 2, are not considered applicable for the respective reasons provided:

The Discounted Cash Flow method as the current uranium price does not sustain it;
The Kilburn ‘prospectivity’ method as the range of values generated is typically is too wide to be realistic;
Joint Venture Terms as there are no external joint ventures in place;

‘Comparable Transactions’ and the Multiple of Exploration Expenditure (“ MEE ”) methods are considered applicable and form the basis of this valuation.

Only comparable transactions since the unfortunate Fukushima nuclear reactor disaster in March, 2011 are considered applicable as the uranium price per pound (lb) dropped markedly as a result.

As noted in Sect. 2.4 above, comparing relevant transactions is a very well accepted valuation method across all jurisdictions. The key element is to compare ‘like with like’ which is the approach adopted here by comparing other recent uranium transactions as a basis to assist with valuing the Etango Project.

The MEE Method (described in Sect 2.5 above) is recognised by independent valuers and regulatory authorities around the globe as another relevant value appraisal method. It is a measure of how much ‘Value-adding’ has occurred by the application of exploration dollars.

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Conversely, if no value-adding occurred then a deflating factor is applied to that expenditure. Very clearly, BMN’s expenditure has added a great deal of value.

Thus, as the writer considers that the combination of Comparable Transactions and MEE methods is most applicable; this current technical valuation conclusion is averaged between the two methods.

The basis of averaging the separate value ranges reached by the two different methods of valuing is so that the reader can understand that neither one method nor the other is preferred over either and thus presents what the writer considers to be an unbiased conclusion without giving preferential weighting to any one particular method that is used so as to not present a particularly high or low current cash value.

All material assumptions that underpin the valuations have been disclosed and are detailed in this report and are in compliance with Listing Rule 5.17.

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5.2 Comparable Transactions

From our analysis of comparable transactions (Appendix 1), we consider a reasonable resource multiple to apply to Bannerman’s estimated resource to be in the range of $0.80/lb to $1.70/lb with a midpoint factor of $1.25/lb to derive current value ranges by this method.

The reader will see from Appendix 1 that the ‘mean’ excluding outliers of $/lb of transacted uranium oxide is $1.64 and that the ‘median’ is $0.88 so AM&A has used these ‘cash price ranges’ – with a slightly extended range for conservatism - to apply to the BMN resource numbers. The reason the ‘outliers’ are excluded is that they are so far out of the rest of the range that they unduly bias the nonexcluded mean and median.

As a cross check to the range of multiples observed in comparable market transactions AM&A has considered the trading multiples of ASX listed companies with uranium projects as their major focus. This analysis is outlined in Appendix 2, which provides support for the range of resource multiples applied to BMN.

The insitu Measured + Indicated Resources (Table 2 above) formed the basis of these estimates as set out below (Table 3).

Value Range	Resources (Mlb U3O8)	Comparable transaction multiple	Insitu Value (A$M)
Low	148.8	$0.80	119
Mid	148.8	$1.25	186
High	148.8	$1.70	253

Table 3: Comparable Transactions Method Ranges.

5.3 MEE Method

The total exploration expenditure by Bannerman on the project amounts to A$58 million (rounded) as at 31[st] December, 2013. Because of the successful exploration resulting in ‘value-adding’ (Resources converted to Reserves) the overall expenditure is considered to have provided the applicable PEM factor range from 1.5 up to 2.5 and is deemed appropriate.

As described above, (and in section 2.5), PEM factors typically range from 0 to 3.0 to reflect the results and worth, or otherwise, of the total exploration expenditure. A multiplying factor of 3 could be used when every drill hole yielded high grade results. A factor of less than 1.0, a deflating fraction, would be used when poor or insignificant results are obtained. AM&A considers that an appropriate PEM factor is in the range from 1.5 to 2.5 to reasonably reflect the added value of the exploration results

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So, applying a PEM multiplier factor range from 1.5 to 2.5 to the total exploration expenditure derives a current value range from A$87 million to A$145 million with a preferred value mid-value of A$116 million being adopted for the MEE method.

5.4 Valuation Conclusions

The valuation ranges from low to high shown in Table 4 below are derived from the two methods described above and range from a low of A$87 million (MEE method) to a high of A$253 million (Comparable Transactions method). It is therefore considered appropriate to ascribe the current cash value (100%) derived by the average of the two methods as the mid-point being A$151 million within the range from A$103 million to A$199 million.

The preferred current cash value for Bannerman’s 80% holding of the Etango Uranium Project exploration assets is therefore ascribed at A$121 million from within the range of A$82 million to A$159 million.

The dollar value per Resource (Measured + Indicated) pound of insitu uranium oxide is found by dividing the assessed total value of the project by the total ‘Resource’ of 148.8Mlbs U3O8. This implies a resource multiple in the range from A$0.69 to A$1.33 with the preferred value at A$1.01/lb U3O8. AM&A considers this to be in line with the comparable market transaction multiple assessed in section 5.2.

Valuation Method	Low	Preferred	High
Comparable (A$M)	119	186	253
MEE(A$M)	87	116	145
Average Value (A$M)	103	151	199
BMN80% (A$M)	82	121	159

Table 4: Summary Range of Current Values.

Yours faithfully,

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Allen J. Maynard

BAppSc(Geol), MAIG, MAusIMM.

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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.

BMN, 2010: ASX Release 28 Oct., 2010 “Bannerman Significantly Expands Etango Project Uranium Resource”.

BMN, 2012: ASX Release 24 May, 2012 “Bannerman Files 43-101 Technical Report for Etango Uranium Project DFS”.

BMN: Annual Report 2013.

Bossau, HD, 2014: “Legal Opinion on the Status of EPL 3345”, 28 March, 2014 prepared for Bannerman Resources Ltd. (Unpub). – Independent Namibian legal opinion

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).

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.

Nex, P, A., M., Kinnard, J. A., and Oliver, J. H., 2001. Petrology, geochemistry and uranium mineralisation of post-collisional magmatism around Goanikontes, southern Central Zone, Damaran Orogen, Namibia. Journal of African Earth Sciences, 33. pp. 481-502.

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

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Date Project/Company acquired Target Acquirer Interest Consideration ($Am) U3O8 (Mlb) Implied value ($A/lb) Where 20-Jan-14 Langer Heinrich Paladin Energy Limited China National Nuclear Corporation 25.0% 215.81 34.7 $6.22 Africa 07-Nov-13 Powertech Uranium Corp Powertech Uranium Corp Azarga Resources Limited 8.9% 1.22 1.2 $0.99 USA 12-Aug-13 Lake Maitland Mega Uranium Ltd Toro Energy Ltd 100.0% 39.4 22.3 $1.77 WA 01-Aug-13 Centennial Powertech Uranium Corp Azarga Resources Limited 60.0% 1.63 7.6 $0.21 USA 31-Jul-13 Powertech Uranium Corp Powertech Uranium Corp Azarga Resources Limited 17.5% 1.87 2.4 $0.77 USA 15-May-13 Strathmore Strathmore Minerals Corp Energy Fuels Inc 100.0% 28.7 56.0 $0.51 USA 02-May-13 Energia Minerals Ltd Energia Minerals Ltd Cauldron Energy Ltd 100.0% 1.5 16.7 $0.09 WA Italy 27-Aug-12 Yeelirrie Uranium Deposit BHP Billiton plc Cameco Corp 100.0% 408 144.5 $2.82 WA 16-Apr-12 Denison Mines Holdings and Uranium Holdings Ltd Denison Mines Corp Energy Fuels Inc 100.0% 98.51 20.9 $4.71 USA 01-Mar-12 Extract Extract Resources Ltd Taurus (CGNPC-URC) 100.0% 2100 512.9 $4.09 Africa 18-Nov-11 Hathor Hathor Exploration Ltd Rio Tinto plc 100.0% 653 57.9 $11.28 Canada 18-Jul-11 Nowthanna Private vendors Toro Energy Ltd 100.0% 2.8 7.4 $0.38 Canada Mean $2.82 Median $1.38 Mean (excl outliers) $1.64 Median (excl outliers) $0.88 *we consider these transactions to be outliers and have therefore removed them from the averages. The descriptions of these transactions are listed overleaf.	Date Project/Company acquired Target Acquirer Interest Consideration ($Am) U3O8 (Mlb) Implied value ($A/lb) Where 20-Jan-14 Langer Heinrich Paladin Energy Limited China National Nuclear Corporation 25.0% 215.81 34.7 $6.22 Africa 07-Nov-13 Powertech Uranium Corp Powertech Uranium Corp Azarga Resources Limited 8.9% 1.22 1.2 $0.99 USA 12-Aug-13 Lake Maitland Mega Uranium Ltd Toro Energy Ltd 100.0% 39.4 22.3 $1.77 WA 01-Aug-13 Centennial Powertech Uranium Corp Azarga Resources Limited 60.0% 1.63 7.6 $0.21 USA 31-Jul-13 Powertech Uranium Corp Powertech Uranium Corp Azarga Resources Limited 17.5% 1.87 2.4 $0.77 USA 15-May-13 Strathmore Strathmore Minerals Corp Energy Fuels Inc 100.0% 28.7 56.0 $0.51 USA 02-May-13 Energia Minerals Ltd Energia Minerals Ltd Cauldron Energy Ltd 100.0% 1.5 16.7 $0.09 WA Italy 27-Aug-12 Yeelirrie Uranium Deposit BHP Billiton plc Cameco Corp 100.0% 408 144.5 $2.82 WA 16-Apr-12 Denison Mines Holdings and Uranium Holdings Ltd Denison Mines Corp Energy Fuels Inc 100.0% 98.51 20.9 $4.71 USA 01-Mar-12 Extract Extract Resources Ltd Taurus (CGNPC-URC) 100.0% 2100 512.9 $4.09 Africa 18-Nov-11 Hathor Hathor Exploration Ltd Rio Tinto plc 100.0% 653 57.9 $11.28 Canada 18-Jul-11 Nowthanna Private vendors Toro Energy Ltd 100.0% 2.8 7.4 $0.38 Canada Mean $2.82 Median $1.38 Mean (excl outliers) $1.64 Median (excl outliers) $0.88 *we consider these transactions to be outliers and have therefore removed them from the averages. The descriptions of these transactions are listed overleaf.	Etango Uranium Project – Independent Valuation Page 20
Date Project/Company acquired Target Acquirer Interest Consideration ($Am) U3O8 (Mlb) Implied value ($A/lb) Where 20-Jan-14 Langer Heinrich Paladin Energy Limited China National Nuclear Corporation 25.0% 215.81 34.7 $6.22 Africa 07-Nov-13 Powertech Uranium Corp Powertech Uranium Corp Azarga Resources Limited 8.9% 1.22 1.2 $0.99 USA 12-Aug-13 Lake Maitland Mega Uranium Ltd Toro Energy Ltd 100.0% 39.4 22.3 $1.77 WA 01-Aug-13 Centennial Powertech Uranium Corp Azarga Resources Limited 60.0% 1.63 7.6 $0.21 USA 31-Jul-13 Powertech Uranium Corp Powertech Uranium Corp Azarga Resources Limited 17.5% 1.87 2.4 $0.77 USA 15-May-13 Strathmore Strathmore Minerals Corp Energy Fuels Inc 100.0% 28.7 56.0 $0.51 USA 02-May-13 Energia Minerals Ltd Energia Minerals Ltd Cauldron Energy Ltd 100.0% 1.5 16.7 $0.09 WA Italy 27-Aug-12 Yeelirrie Uranium Deposit BHP Billiton plc Cameco Corp 100.0% 408 144.5 $2.82 WA 16-Apr-12 Denison Mines Holdings and Uranium Holdings Ltd Denison Mines Corp Energy Fuels Inc 100.0% 98.51 20.9 $4.71 USA 01-Mar-12 Extract Extract Resources Ltd Taurus (CGNPC-URC) 100.0% 2100 512.9 $4.09 Africa 18-Nov-11 Hathor Hathor Exploration Ltd Rio Tinto plc 100.0% 653 57.9 $11.28 Canada 18-Jul-11 Nowthanna Private vendors Toro Energy Ltd 100.0% 2.8 7.4 $0.38 Canada	Mean $2.82 Median $1.38 Mean (excl outliers) $1.64 Median (excl outliers) $0.88

Etango Uranium Project – Independent Valuation Page 22 Company name Enterprise Value1 as at 16-Apr-14 Location Inferred (Mlbs) Indicated (Mlbs) Measured (Mlbs) Lower Cut- off grade U3O8 (ppm) Total resources and reserves (Mlbs) EV/Resource Multiple $/lb/ U3O8 Energia Minerals Limited 5.1 Australia 10.6 5.0 0.0 150.0 15.6 $0.32 Deep Yellow Limited 50.7 Africa 18.1 16.0 11.0 250.0 45.1 $1.12 Toro Energy Limited 135.6 Australia 37.4 13.7 3.8 200.0 54.8 $2.47 Forte Energy NL 12.3 Africa 1.0 43.9 0.0 100.0 44.9 $0.27 Peninsula Energy Limited 147.7 USA and Africa 35.0 21.9 0.0 600.0 56.9 $2.60 Marenica Energy Ltd 4.6 Namibia 50.9 6.5 0.0 50.0 57.4 $0.08 Cauldron Energy Limited 21.5 Australia 12.6 3.1 0.0 150.0 15.7 $1.37 A-Cap Resources Limited 14.8 Africa 139.7 29.4 0.0 200.0 169.1 $0.09 Energy and Minerals Australia Limited 44.5 Australia 28.3 0.0 0.0 500.0 28.3 $1.57 Berkeley Resources Ltd. 37.7 Spain 2.4 32.1 0.0 200.0 34.5 $1.09 Mean $1.10 Median $1.11 1Enterprise value is calculated on a controlling interest basis, by applying a control premium of 25% to the market capitalisation of the company and deducting net debt.	Etango Uranium Project – Independent Valuation Page 22 Company name Enterprise Value1 as at 16-Apr-14 Location Inferred (Mlbs) Indicated (Mlbs) Measured (Mlbs) Lower Cut- off grade U3O8 (ppm) Total resources and reserves (Mlbs) EV/Resource Multiple $/lb/ U3O8 Energia Minerals Limited 5.1 Australia 10.6 5.0 0.0 150.0 15.6 $0.32 Deep Yellow Limited 50.7 Africa 18.1 16.0 11.0 250.0 45.1 $1.12 Toro Energy Limited 135.6 Australia 37.4 13.7 3.8 200.0 54.8 $2.47 Forte Energy NL 12.3 Africa 1.0 43.9 0.0 100.0 44.9 $0.27 Peninsula Energy Limited 147.7 USA and Africa 35.0 21.9 0.0 600.0 56.9 $2.60 Marenica Energy Ltd 4.6 Namibia 50.9 6.5 0.0 50.0 57.4 $0.08 Cauldron Energy Limited 21.5 Australia 12.6 3.1 0.0 150.0 15.7 $1.37 A-Cap Resources Limited 14.8 Africa 139.7 29.4 0.0 200.0 169.1 $0.09 Energy and Minerals Australia Limited 44.5 Australia 28.3 0.0 0.0 500.0 28.3 $1.57 Berkeley Resources Ltd. 37.7 Spain 2.4 32.1 0.0 200.0 34.5 $1.09 Mean $1.10 Median $1.11 1Enterprise value is calculated on a controlling interest basis, by applying a control premium of 25% to the market capitalisation of the company and deducting net debt.	Etango Uranium Project – Independent Valuation Page 22 Company name Enterprise Value1 as at 16-Apr-14 Location Inferred (Mlbs) Indicated (Mlbs) Measured (Mlbs) Lower Cut- off grade U3O8 (ppm) Total resources and reserves (Mlbs) EV/Resource Multiple $/lb/ U3O8 Energia Minerals Limited 5.1 Australia 10.6 5.0 0.0 150.0 15.6 $0.32 Deep Yellow Limited 50.7 Africa 18.1 16.0 11.0 250.0 45.1 $1.12 Toro Energy Limited 135.6 Australia 37.4 13.7 3.8 200.0 54.8 $2.47 Forte Energy NL 12.3 Africa 1.0 43.9 0.0 100.0 44.9 $0.27 Peninsula Energy Limited 147.7 USA and Africa 35.0 21.9 0.0 600.0 56.9 $2.60 Marenica Energy Ltd 4.6 Namibia 50.9 6.5 0.0 50.0 57.4 $0.08 Cauldron Energy Limited 21.5 Australia 12.6 3.1 0.0 150.0 15.7 $1.37 A-Cap Resources Limited 14.8 Africa 139.7 29.4 0.0 200.0 169.1 $0.09 Energy and Minerals Australia Limited 44.5 Australia 28.3 0.0 0.0 500.0 28.3 $1.57 Berkeley Resources Ltd. 37.7 Spain 2.4 32.1 0.0 200.0 34.5 $1.09 Mean $1.10 Median $1.11 1Enterprise value is calculated on a controlling interest basis, by applying a control premium of 25% to the market capitalisation of the company and deducting net debt.	Etango Uranium Project – Independent Valuation Page 22 Company name Enterprise Value1 as at 16-Apr-14 Location Inferred (Mlbs) Indicated (Mlbs) Measured (Mlbs) Lower Cut- off grade U3O8 (ppm) Total resources and reserves (Mlbs) EV/Resource Multiple $/lb/ U3O8 Energia Minerals Limited 5.1 Australia 10.6 5.0 0.0 150.0 15.6 $0.32 Deep Yellow Limited 50.7 Africa 18.1 16.0 11.0 250.0 45.1 $1.12 Toro Energy Limited 135.6 Australia 37.4 13.7 3.8 200.0 54.8 $2.47 Forte Energy NL 12.3 Africa 1.0 43.9 0.0 100.0 44.9 $0.27 Peninsula Energy Limited 147.7 USA and Africa 35.0 21.9 0.0 600.0 56.9 $2.60 Marenica Energy Ltd 4.6 Namibia 50.9 6.5 0.0 50.0 57.4 $0.08 Cauldron Energy Limited 21.5 Australia 12.6 3.1 0.0 150.0 15.7 $1.37 A-Cap Resources Limited 14.8 Africa 139.7 29.4 0.0 200.0 169.1 $0.09 Energy and Minerals Australia Limited 44.5 Australia 28.3 0.0 0.0 500.0 28.3 $1.57 Berkeley Resources Ltd. 37.7 Spain 2.4 32.1 0.0 200.0 34.5 $1.09 Mean $1.10 Median $1.11 1Enterprise value is calculated on a controlling interest basis, by applying a control premium of 25% to the market capitalisation of the company and deducting net debt.	Etango Uranium Project – Independent Valuation Page 22 Company name Enterprise Value1 as at 16-Apr-14 Location Inferred (Mlbs) Indicated (Mlbs) Measured (Mlbs) Lower Cut- off grade U3O8 (ppm) Total resources and reserves (Mlbs) EV/Resource Multiple $/lb/ U3O8 Energia Minerals Limited 5.1 Australia 10.6 5.0 0.0 150.0 15.6 $0.32 Deep Yellow Limited 50.7 Africa 18.1 16.0 11.0 250.0 45.1 $1.12 Toro Energy Limited 135.6 Australia 37.4 13.7 3.8 200.0 54.8 $2.47 Forte Energy NL 12.3 Africa 1.0 43.9 0.0 100.0 44.9 $0.27 Peninsula Energy Limited 147.7 USA and Africa 35.0 21.9 0.0 600.0 56.9 $2.60 Marenica Energy Ltd 4.6 Namibia 50.9 6.5 0.0 50.0 57.4 $0.08 Cauldron Energy Limited 21.5 Australia 12.6 3.1 0.0 150.0 15.7 $1.37 A-Cap Resources Limited 14.8 Africa 139.7 29.4 0.0 200.0 169.1 $0.09 Energy and Minerals Australia Limited 44.5 Australia 28.3 0.0 0.0 500.0 28.3 $1.57 Berkeley Resources Ltd. 37.7 Spain 2.4 32.1 0.0 200.0 34.5 $1.09 Mean $1.10 Median $1.11 1Enterprise value is calculated on a controlling interest basis, by applying a control premium of 25% to the market capitalisation of the company and deducting net debt.	Etango Uranium Project – Independent Valuation Page 22 Company name Enterprise Value1 as at 16-Apr-14 Location Inferred (Mlbs) Indicated (Mlbs) Measured (Mlbs) Lower Cut- off grade U3O8 (ppm) Total resources and reserves (Mlbs) EV/Resource Multiple $/lb/ U3O8 Energia Minerals Limited 5.1 Australia 10.6 5.0 0.0 150.0 15.6 $0.32 Deep Yellow Limited 50.7 Africa 18.1 16.0 11.0 250.0 45.1 $1.12 Toro Energy Limited 135.6 Australia 37.4 13.7 3.8 200.0 54.8 $2.47 Forte Energy NL 12.3 Africa 1.0 43.9 0.0 100.0 44.9 $0.27 Peninsula Energy Limited 147.7 USA and Africa 35.0 21.9 0.0 600.0 56.9 $2.60 Marenica Energy Ltd 4.6 Namibia 50.9 6.5 0.0 50.0 57.4 $0.08 Cauldron Energy Limited 21.5 Australia 12.6 3.1 0.0 150.0 15.7 $1.37 A-Cap Resources Limited 14.8 Africa 139.7 29.4 0.0 200.0 169.1 $0.09 Energy and Minerals Australia Limited 44.5 Australia 28.3 0.0 0.0 500.0 28.3 $1.57 Berkeley Resources Ltd. 37.7 Spain 2.4 32.1 0.0 200.0 34.5 $1.09 Mean $1.10 Median $1.11 1Enterprise value is calculated on a controlling interest basis, by applying a control premium of 25% to the market capitalisation of the company and deducting net debt.	Etango Uranium Project – Independent Valuation Page 22 Company name Enterprise Value1 as at 16-Apr-14 Location Inferred (Mlbs) Indicated (Mlbs) Measured (Mlbs) Lower Cut- off grade U3O8 (ppm) Total resources and reserves (Mlbs) EV/Resource Multiple $/lb/ U3O8 Energia Minerals Limited 5.1 Australia 10.6 5.0 0.0 150.0 15.6 $0.32 Deep Yellow Limited 50.7 Africa 18.1 16.0 11.0 250.0 45.1 $1.12 Toro Energy Limited 135.6 Australia 37.4 13.7 3.8 200.0 54.8 $2.47 Forte Energy NL 12.3 Africa 1.0 43.9 0.0 100.0 44.9 $0.27 Peninsula Energy Limited 147.7 USA and Africa 35.0 21.9 0.0 600.0 56.9 $2.60 Marenica Energy Ltd 4.6 Namibia 50.9 6.5 0.0 50.0 57.4 $0.08 Cauldron Energy Limited 21.5 Australia 12.6 3.1 0.0 150.0 15.7 $1.37 A-Cap Resources Limited 14.8 Africa 139.7 29.4 0.0 200.0 169.1 $0.09 Energy and Minerals Australia Limited 44.5 Australia 28.3 0.0 0.0 500.0 28.3 $1.57 Berkeley Resources Ltd. 37.7 Spain 2.4 32.1 0.0 200.0 34.5 $1.09 Mean $1.10 Median $1.11 1Enterprise value is calculated on a controlling interest basis, by applying a control premium of 25% to the market capitalisation of the company and deducting net debt.	Etango Uranium Project – Independent Valuation Page 22 Company name Enterprise Value1 as at 16-Apr-14 Location Inferred (Mlbs) Indicated (Mlbs) Measured (Mlbs) Lower Cut- off grade U3O8 (ppm) Total resources and reserves (Mlbs) EV/Resource Multiple $/lb/ U3O8 Energia Minerals Limited 5.1 Australia 10.6 5.0 0.0 150.0 15.6 $0.32 Deep Yellow Limited 50.7 Africa 18.1 16.0 11.0 250.0 45.1 $1.12 Toro Energy Limited 135.6 Australia 37.4 13.7 3.8 200.0 54.8 $2.47 Forte Energy NL 12.3 Africa 1.0 43.9 0.0 100.0 44.9 $0.27 Peninsula Energy Limited 147.7 USA and Africa 35.0 21.9 0.0 600.0 56.9 $2.60 Marenica Energy Ltd 4.6 Namibia 50.9 6.5 0.0 50.0 57.4 $0.08 Cauldron Energy Limited 21.5 Australia 12.6 3.1 0.0 150.0 15.7 $1.37 A-Cap Resources Limited 14.8 Africa 139.7 29.4 0.0 200.0 169.1 $0.09 Energy and Minerals Australia Limited 44.5 Australia 28.3 0.0 0.0 500.0 28.3 $1.57 Berkeley Resources Ltd. 37.7 Spain 2.4 32.1 0.0 200.0 34.5 $1.09 Mean $1.10 Median $1.11 1Enterprise value is calculated on a controlling interest basis, by applying a control premium of 25% to the market capitalisation of the company and deducting net debt.	Etango Uranium Project – Independent Valuation Page 22 Company name Enterprise Value1 as at 16-Apr-14 Location Inferred (Mlbs) Indicated (Mlbs) Measured (Mlbs) Lower Cut- off grade U3O8 (ppm) Total resources and reserves (Mlbs) EV/Resource Multiple $/lb/ U3O8 Energia Minerals Limited 5.1 Australia 10.6 5.0 0.0 150.0 15.6 $0.32 Deep Yellow Limited 50.7 Africa 18.1 16.0 11.0 250.0 45.1 $1.12 Toro Energy Limited 135.6 Australia 37.4 13.7 3.8 200.0 54.8 $2.47 Forte Energy NL 12.3 Africa 1.0 43.9 0.0 100.0 44.9 $0.27 Peninsula Energy Limited 147.7 USA and Africa 35.0 21.9 0.0 600.0 56.9 $2.60 Marenica Energy Ltd 4.6 Namibia 50.9 6.5 0.0 50.0 57.4 $0.08 Cauldron Energy Limited 21.5 Australia 12.6 3.1 0.0 150.0 15.7 $1.37 A-Cap Resources Limited 14.8 Africa 139.7 29.4 0.0 200.0 169.1 $0.09 Energy and Minerals Australia Limited 44.5 Australia 28.3 0.0 0.0 500.0 28.3 $1.57 Berkeley Resources Ltd. 37.7 Spain 2.4 32.1 0.0 200.0 34.5 $1.09 Mean $1.10 Median $1.11 1Enterprise value is calculated on a controlling interest basis, by applying a control premium of 25% to the market capitalisation of the company and deducting net debt.	Etango Uranium Project – Independent Valuation Page 22 Company name Enterprise Value1 as at 16-Apr-14 Location Inferred (Mlbs) Indicated (Mlbs) Measured (Mlbs) Lower Cut- off grade U3O8 (ppm) Total resources and reserves (Mlbs) EV/Resource Multiple $/lb/ U3O8 Energia Minerals Limited 5.1 Australia 10.6 5.0 0.0 150.0 15.6 $0.32 Deep Yellow Limited 50.7 Africa 18.1 16.0 11.0 250.0 45.1 $1.12 Toro Energy Limited 135.6 Australia 37.4 13.7 3.8 200.0 54.8 $2.47 Forte Energy NL 12.3 Africa 1.0 43.9 0.0 100.0 44.9 $0.27 Peninsula Energy Limited 147.7 USA and Africa 35.0 21.9 0.0 600.0 56.9 $2.60 Marenica Energy Ltd 4.6 Namibia 50.9 6.5 0.0 50.0 57.4 $0.08 Cauldron Energy Limited 21.5 Australia 12.6 3.1 0.0 150.0 15.7 $1.37 A-Cap Resources Limited 14.8 Africa 139.7 29.4 0.0 200.0 169.1 $0.09 Energy and Minerals Australia Limited 44.5 Australia 28.3 0.0 0.0 500.0 28.3 $1.57 Berkeley Resources Ltd. 37.7 Spain 2.4 32.1 0.0 200.0 34.5 $1.09 Mean $1.10 Median $1.11 1Enterprise value is calculated on a controlling interest basis, by applying a control premium of 25% to the market capitalisation of the company and deducting net debt.	Etango Uranium Project – Independent Valuation Page 22 Company name Enterprise Value1 as at 16-Apr-14 Location Inferred (Mlbs) Indicated (Mlbs) Measured (Mlbs) Lower Cut- off grade U3O8 (ppm) Total resources and reserves (Mlbs) EV/Resource Multiple $/lb/ U3O8 Energia Minerals Limited 5.1 Australia 10.6 5.0 0.0 150.0 15.6 $0.32 Deep Yellow Limited 50.7 Africa 18.1 16.0 11.0 250.0 45.1 $1.12 Toro Energy Limited 135.6 Australia 37.4 13.7 3.8 200.0 54.8 $2.47 Forte Energy NL 12.3 Africa 1.0 43.9 0.0 100.0 44.9 $0.27 Peninsula Energy Limited 147.7 USA and Africa 35.0 21.9 0.0 600.0 56.9 $2.60 Marenica Energy Ltd 4.6 Namibia 50.9 6.5 0.0 50.0 57.4 $0.08 Cauldron Energy Limited 21.5 Australia 12.6 3.1 0.0 150.0 15.7 $1.37 A-Cap Resources Limited 14.8 Africa 139.7 29.4 0.0 200.0 169.1 $0.09 Energy and Minerals Australia Limited 44.5 Australia 28.3 0.0 0.0 500.0 28.3 $1.57 Berkeley Resources Ltd. 37.7 Spain 2.4 32.1 0.0 200.0 34.5 $1.09 Mean $1.10 Median $1.11 1Enterprise value is calculated on a controlling interest basis, by applying a control premium of 25% to the market capitalisation of the company and deducting net debt.	Etango Uranium Project – Independent Valuation Page 22 Company name Enterprise Value1 as at 16-Apr-14 Location Inferred (Mlbs) Indicated (Mlbs) Measured (Mlbs) Lower Cut- off grade U3O8 (ppm) Total resources and reserves (Mlbs) EV/Resource Multiple $/lb/ U3O8 Energia Minerals Limited 5.1 Australia 10.6 5.0 0.0 150.0 15.6 $0.32 Deep Yellow Limited 50.7 Africa 18.1 16.0 11.0 250.0 45.1 $1.12 Toro Energy Limited 135.6 Australia 37.4 13.7 3.8 200.0 54.8 $2.47 Forte Energy NL 12.3 Africa 1.0 43.9 0.0 100.0 44.9 $0.27 Peninsula Energy Limited 147.7 USA and Africa 35.0 21.9 0.0 600.0 56.9 $2.60 Marenica Energy Ltd 4.6 Namibia 50.9 6.5 0.0 50.0 57.4 $0.08 Cauldron Energy Limited 21.5 Australia 12.6 3.1 0.0 150.0 15.7 $1.37 A-Cap Resources Limited 14.8 Africa 139.7 29.4 0.0 200.0 169.1 $0.09 Energy and Minerals Australia Limited 44.5 Australia 28.3 0.0 0.0 500.0 28.3 $1.57 Berkeley Resources Ltd. 37.7 Spain 2.4 32.1 0.0 200.0 34.5 $1.09 Mean $1.10 Median $1.11 1Enterprise value is calculated on a controlling interest basis, by applying a control premium of 25% to the market capitalisation of the company and deducting net debt.	Etango Uranium Project – Independent Valuation Page 22 Company name Enterprise Value1 as at 16-Apr-14 Location Inferred (Mlbs) Indicated (Mlbs) Measured (Mlbs) Lower Cut- off grade U3O8 (ppm) Total resources and reserves (Mlbs) EV/Resource Multiple $/lb/ U3O8 Energia Minerals Limited 5.1 Australia 10.6 5.0 0.0 150.0 15.6 $0.32 Deep Yellow Limited 50.7 Africa 18.1 16.0 11.0 250.0 45.1 $1.12 Toro Energy Limited 135.6 Australia 37.4 13.7 3.8 200.0 54.8 $2.47 Forte Energy NL 12.3 Africa 1.0 43.9 0.0 100.0 44.9 $0.27 Peninsula Energy Limited 147.7 USA and Africa 35.0 21.9 0.0 600.0 56.9 $2.60 Marenica Energy Ltd 4.6 Namibia 50.9 6.5 0.0 50.0 57.4 $0.08 Cauldron Energy Limited 21.5 Australia 12.6 3.1 0.0 150.0 15.7 $1.37 A-Cap Resources Limited 14.8 Africa 139.7 29.4 0.0 200.0 169.1 $0.09 Energy and Minerals Australia Limited 44.5 Australia 28.3 0.0 0.0 500.0 28.3 $1.57 Berkeley Resources Ltd. 37.7 Spain 2.4 32.1 0.0 200.0 34.5 $1.09 Mean $1.10 Median $1.11 1Enterprise value is calculated on a controlling interest basis, by applying a control premium of 25% to the market capitalisation of the company and deducting net debt.
EV/Resource Multiple $/lb/ U3O8	$0.32	$1.12	$2.47	$0.27	$2.60	$0.08	$1.37	$0.09	$1.57	$1.09	$1.10	$1.11
	15.6	45.1	54.8	44.9	56.9	57.4	15.7	169.1	28.3	34.5	Mean	Median
Total resources and reserves (Mlbs)

Lower Cut- off grade U3O8 (ppm)	150.0	250.0	200.0	100.0	600.0	50.0	150.0	200.0	500.0	200.0
Measured (Mlbs)	0.0	11.0	3.8	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Indicated (Mlbs)	5.0	16.0	13.7	43.9	21.9	6.5	3.1	29.4	0.0	32.1
Inferred (Mlbs)	10.6	18.1	37.4	1.0	35.0	50.9	12.6	139.7	28.3	2.4
Location	Australia	Africa	Australia	Africa	USA and Africa	Namibia	Australia	Africa	Australia	Spain
Enterprise Value1 as at 16-Apr-14	5.1	50.7	135.6	12.3	147.7	4.6	21.5	14.8	44.5	37.7
Company name	Energia Minerals Limited	Deep Yellow Limited	Toro Energy Limited	Forte Energy NL	Peninsula Energy Limited	Marenica Energy Ltd	Cauldron Energy Limited	A-Cap Resources Limited	Energy and Minerals Australia Limited	Berkeley Resources Ltd.


	Company Description	Energia Minerals Limited Energia Minerals Limited explores and develops uranium properties. It holds approximately 5,500 kilometres of uranium prospective tenements in Australia and Italy.	The company’s flagship project is the Carley Bore uranium deposit located in the broader Nyang project in Western Australia.	Deep Yellow Limited Deep Yellow Limited is engaged in the exploration and development of uranium properties in Namibia and Australia. Its principal project is the Omahola uranium	project located in the Alaskite Alley, Namibia.	Toro Energy Limited Toro Energy Limited is engaged in the exploration, evaluation, and development of uranium properties in Australia and Namibia. The company’s principal project is the	Wiluna uranium project located 30 kilometres southeast of Wiluna in Central Western Australia.		Forte Energy NL Forte Energy NL focuses on the exploration, evaluation, and development of uranium and energy-related projects worldwide. It holds 10 uranium exploration licenses	covering an area of approximately 9,925 square kilometres located in the Republic of Mauritania comprising the A238 prospect and Bir En Nar project; and 4 permits	for uranium and rare earth elements covering 847 square kilometres in 2 separate concession areas, including the Firawa and Bohoduo in the Republic of Guinea,	West Africa. The company, formerly known as Murchison United NL, was incorporated in 1984 and is based in West Perth, Australia.	Peninsula Energy Limited Peninsula Energy Limited explores and develops uranium. The company also explores gold ores. It primarily focuses on producing at the Lance uranium projects	located on the north-east flank of the Powder River Basin in Wyoming, the United States; and the Karoo uranium/molybdenum projects located in the Republic of	South Africa. The company was formerly known as Peninsula Minerals Limited and changed its name to Peninsula Energy Limited in November 2010.	East Africa Resources Limited East Africa Resources Limited is engaged in the exploration of uranium properties in Tanzania. The company holds interests in the Mkuju project that comprises 18	tenements covering 3,211 square kilometres in Southern Tanzania; the Madaba project that consists of 25 tenements covering 4,393 square kilometres in the south-	east of Tanzania; and the Hemedi project, which includes 12 tenements covering 3,051 square kilometres. It also owns 32 tenements covering 4,327 square		kilometres in Eastern Rift of Tanzania.	Marenica Energy Ltd Marenica Energy Limited is engaged in the exploration, evaluation, and development of uranium deposits in Namibia and Australia. The company also explores for	gold, coal, and other minerals. It principally holds a 75% interest in the Marenica uranium project that covers an area of approximately 527 km² located in the Damara	Province, Namibia. The company was formerly known as West Australian Metals Ltd and changed its name to Marenica Energy Limited in November 2009.	Cauldron Energy Limited Cauldron Energy Limited is engaged in the mining and exploration of uranium properties. Its principal uranium projects include the Marree uranium project located in	the Eromanga Basin of South Australia; sandstone-hosted uranium Yanrey project located in Western Australia; and Rio Colorado uranium-copper-silver project	located in the Catamarca Province of Argentina. The company was formerly known as Scimitar Resources Limited and changed its name to Cauldron Energy Limited	as a result of its merger with Jackson Minerals limited in June 2009. Cauldron Energy Limited is headquartered in West Leederville, Australia.	A-Cap Resources Limited A-Cap Resources Limited is engaged in the exploration of mineral properties in Botswana. It primarily explores for uranium and coal deposits. The company’s flagship	projects include the Letlhakane uranium project; the Mea coal project; and the Bolau coal project located in Botswana.	Energy and Minerals Australia Energy and Minerals Australia Limited explores and develops uranium properties in Australia. Its primary asset is the Mulga Rock uranium project located to the	Limited northeast of the regional city of Kalgoorlie-Boulder in Western Australia.	Berkeley Resources Ltd. Berkeley Resources Limited is engaged in the exploration, appraisal, and development of uranium properties in Spain. The company’s flagship property, Salamanca	project consisting of the Retortillo, Alameda, and Gambuta deposits is located in western Spain.	Etango Uranium Project – Independent Valuation Page 23

ANNEXURE�B�–�PROXY�FORM��

Bannerman�Resources�Limited�–�Notice�of�Extraordinary�General�Meeting

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BANNERMAN ENERGY LTD — Proxy Solicitation & Information Statement 2014

64542_rns_2014-05-15_a739ed5a-2475-42f6-9ce1-e8c58aefc621.pdf

NOTICE�OF� EXTRAORDINARY�GENERAL�MEETING�

CONTENTS��

Extraordinary�General�Meeting�of�Shareholders�

NOTICE�OF�EXTRAORDINARY�GENERAL�MEETING�

AGENDA�

Special�Business

VOTING�EXCLUSION�STATEMENTS�

VOTING�AT�THE�EXTRAORDINARY�GENERAL�MEETING�

Voting�entitlements�

How�to�vote�

Voting�in�person�

Appointment�of�proxies�

Voting�by�proxy�

Corporate�representatives��

Beneficial�Shareholders�

Key�dates�

Enquiries�

By�order�of�the�Board�

Leigh�Ayn�Absolom� Company�Secretary� Dated�7�May�2014�

EXPLANATORY�MEMORANDUM�

General�Information�

Information�regarding�the�Resolution�

1.1 Background�

1.2 Independent�Expert’s�Report�

1.3 Directors’�recommendation��

1.4 Background�to�the�Existing�Convertible�Note��

1.5 The�issue�of�Shares�under�the�Convertible�Notes�

Share�issues�under�the�Existing�Convertible�Note�and�New�Convertible�Note�

1.6 The�issue�of�Shares�under�the�RCF�Options�

1.7 The�grant�of�security�under�the�New�Convertible�Note�

1.8 Advantages�if�the�Resolution�is�approved��

1.9 Disadvantages�if�the�Resolution�is�approved��

1.10 Financial�impact�if�the�Resolution�is�approved��

1.11 Financial�impact�if�the�Resolution�is�not�approved��

1.12 The�Relevant�RCF�Entities’�intentions�regarding�the�Company��

1.13 Reasons�for�seeking�shareholder�approval�

Corporations�Act�

ASX�Listing�Rules�

(a) Reason�for�seeking�Shareholder�approval�under�ASX�Listing�Rule�10.1�

(b) Substantial�holder�

(c) Disposal�

(d) Substantial�Asset�

1.14 Additional�information�required�by�the�Corporations�Act�and�ASIC�Regulatory�Guide

(a) Details�regarding�RCF�

(b) Effect�on�the�voting�power�of�the�Relevant�RCF�Entities�and�their�Associates��

(c) Details�of�other�relevant�agreements�between�the�Relevant�RCF�Entities�and�Bannerman�that� are�conditional�on�Shareholder�approval��

(d) Interests�of�Directors�

(e) Nominee�Directors�

1.15 ASX�Listing�Rule�7.1

1.16 ASIC�and�ASX’s�role�

Other�information

GLOSSARY

SCHEDULE�1���KEY�TERMS�OF�THE�EXISTING�CONVERTIBLE�NOTE�AND�NEW�CONVERTIBLE�NOTE�

SCHEDULE�2�–�CONVERTIBLE�NOTE�PREPAYMENT�OPTION�TERMS�

O’�=�O�–�E[P�(S+D)]

SCHEDULE�3�–�EFFECT�OF�THE�VARIOUS�SHARE�ISSUES�ON�THE�VOTING�POWER�OF�THE� RELEVANT�RCF�ENTITIES�AND�THEIR�ASSOCIATES�

Explanatory�notes�and�assumptions�

ANNEXURE�A�–�INDEPENDENT�EXPERT’S�REPORT�AND�TECHNICAL�REPORT��

BANNERMAN RESOURCES LIMITED Independent Expert’s Report

Opinions:

Financial Services Guide

6 May 2014

Financial Services Guide

Information about us

Financial services we are licensed to provide

General Financial Product Advice

Fees, commissions and other benefits that we may receive

Other Assignments

Remuneration or other benefits received by our employees

Referrals

Complaints resolution

Referral to External Dispute Resolution Scheme

Contact details

TABLE OF CONTENTS

INDEPENDENT EXPERT’S REPORT

1. Introduction

2. Summary and Opinion

BANNERMAN ENERGY LTD Proxy Solicitation & Information Statement 2014

SCHEDULE�1��KEY�TERMS�OF�THE�EXISTING�CONVERTIBLE�NOTE�AND�NEW�CONVERTIBLE�NOTE�