BLAZE MINERALS LIMITED - Proxy Solicitation & Information Statement 2018

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ASX Compliance Pty Limited ( ASX )

Level 40, Central Park 152-158 St George's Terrace Perth WA 6000

DISPATCH OF NOTICE OF GENERAL MEETING

Blaze International Limited (ASX: BLZ ) ( Company ) is pleased to confirm that the enclosed Notice of General Meeting of Shareholders was dispatched on the 25[th] of January 2018.

The general meeting of shareholders will take place at 10:00am, on the 26[th] of February 2018 at the Company’s office.

For, and on behalf of, the board of the Company,

Blaze International Limited Tel: (+61 8) 6489 1600 [email protected]

-END-

Suite 9, 330 Churchill Avenue, Subiaco WA 6008 PO Box 866 Subiaco WA 6904 66 Subiaco WA 6904 Telephone: +61 8 6489 1600 Facsimile: +61 8 6489 1601

BLAZE INTERNATIONAL LIMITED

ACN 074 728 019

NOTICE OF GENERAL MEETING

TIME : 10:00 AM (WST)

DATE : 26 February 2018 PLACE : Level 2, Suite 9, 330 Churchill Avenue, Subiaco, Western Australia 6008

The Independent Expert has concluded that the Payment the subject of Resolution 10 outlined in this Notice of Meeting, is FAIR AND REASONABLE to the non-associated Shareholders.

All Shareholders should refer to the Independent Expert’s Report enclosed with this Notice of Meeting.

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting.

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on +61 8 6489 1600.

Business of the Meeting (setting out the proposed Resolutions)	3
Explanatory Statement (explaining the proposed Resolutions)	7
Glossary	26
Schedule 1 - Terms and Conditions of Options	28
Schedule 2 – Pro-Forma Balance Sheet	30
Schedule 3 – Independent Experts Report	32
Proxy Form	33

IMPORTANT INFORMATION

Time and place of Meeting

Notice is given that the Meeting will be held at 10:00 AM (WST)on 26 February 2018 at: Level 2, Suite 9, 330 Churchill Avenue, Subiaco, Western Australia 6008.

Your vote is important

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

Voting eligibility

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered Shareholders at 5:00 PM (WST) on 23 February 2018.

Voting in person

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

Voting by proxy

To vote by proxy, please complete and sign the enclosed Proxy Form and return by the time and in accordance with the instructions set out on the Proxy Form.

In accordance with section 249L of the Corporations Act, Shareholders are advised that:

each Shareholder has a right to appoint a proxy;
the proxy need not be a Shareholder of the Company; and
a Shareholder who is entitled to cast 2 or more votes may appoint 2
proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If the member appoints 2 proxies and the appointment does not specify the proportion or number of the member’s votes, then in accordance with section 249X(3) of the Corporations Act, each proxy may exercise one-half of the votes.

Shareholders and their proxies should be aware that changes to the Corporations Act made in 2011 mean that:

if proxy holders vote, they must cast all directed proxies as directed; and
any directed proxies which are not voted will automatically default to the Chair, who must vote the proxies as directed.

Further details on these changes are set out below.

Proxy vote if appointment specifies way to vote

Section 250BB(1) of the Corporations Act provides that an appointment of a proxy may specify the way the proxy is to vote on a particular resolution and, if it does :

the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way (ie as directed); and
if the proxy has 2 or more appointments that specify different ways to vote on the resolution, the proxy must not vote on a show of hands; and
if the proxy is the chair of the meeting at which the resolution is voted on, the proxy must vote on a poll, and must vote that way (ie as directed); and
if the proxy is not the chair, the proxy need not vote on the poll, but if the proxy does so, the proxy must vote that way (ie as directed).

Transfer of non-chair proxy to chair in certain circumstances

Section 250BC of the Corporations Act provides that, if:

an appointment of a proxy specifies the way the proxy is to vote on a particular resolution at a meeting of the Company's members; and
the appointed proxy is not the chair of the meeting; and
at the meeting, a poll is duly demanded on the resolution; and
either of the following applies:
the proxy is not recorded as attending the meeting; or
the proxy does not vote on the resolution,

the chair of the meeting is taken, before voting on the resolution closes, to have been appointed as the proxy for the purposes of voting on the resolution at the meeting.

BUSINESS OF THE MEETING

AGENDA

1. RESOLUTION 1 - CHANGE TO NATURE AND SCALE OF ACTIVITIES

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

“That, subject to and conditional upon the passing of all Essential Resolutions, for the purpose of ASX Listing Rule 11.1.2 and for all other purposes, approval is given for the Company to make a significant change in the nature and scale of its activities as described in the Explanatory Statement accompanying this Notice.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by any person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed and any associates of those persons. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

2. RESOLUTION 2 – ISSUE CONSIDERATION SHARES AND CONSULTANCY OPTIONS

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

“That, subject to and conditional upon the passing of all Essential Resolutions, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue up to 48,520,012 Shares and 50,000,000 Options on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by any person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed and any associates of those persons. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

3. RESOLUTION 3 – RATIFICATION OF PRIOR ISSUE

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

“That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 19,051,990 Shares on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast in favour of the Resolution by or on behalf of a person who participated in the issue or any associates of those persons. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

4. RESOLUTION 4 – RATIFICATION OF PRIOR ISSUE

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

“That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 12,701,326 Shares on the terms and conditions set out in the Explanatory Statement.”

5. RESOLUTION 5 – APPROVAL OF FREE ATTACHING OPTIONS

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

“That, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue up to 31,753,316 Options on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast in favour of the Resolution by or on behalf of a person who is expected to participate in, or who will obtain a material benefit as a result of, the proposed issue (except a benefit solely by reason of being a holder of ordinary securities in the Company) or an associate of that person (or those persons). However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

6. RESOLUTION 6 – ISSUE OF OPTIONS TO CICERO ADVISORY SERVICES PTY LTD

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

“That, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue up to 7,741,038 Options on the terms and conditions set out in the Explanatory Statement.”

7. RESOLUTION 7 – ISSUE OF OPTIONS TO SISU INTERNATIONAL PTY LTD

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

“That, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue up to 10,000,000 Options on the terms and conditions set out in the Explanatory Statement.”

8. RESOLUTION 8 – ISSUE OF OPTIONS TO KONKERA PTY LTD

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

9. RESOLUTION 9 – CHANGE OF COMPANY NAME

To consider and, if thought fit, to pass the following resolution as a special resolution :

“That, subject to completion of the Acquisition, for the purposes of section 157(1)(a) and for all other purposes, approval is given for the name of the Company to be changed to Everest Minerals Ltd.”

10. RESOLUTION 10 – APPROVAL OF PAYMENT

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

“That, for the purposes of ASX Listing Rules 10.1 and 10.9 and for all other purposes, approval is given for the Company to complete the Payment on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by a party to the transaction and any associate of that party (or those parties). However, the Company need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, if it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

Independent Expert’s Report : Shareholders should carefully consider the Independent Expert’s Report prepared for the purpose of the Shareholder approval required under

ASX Listing Rule 10.1. The Independent Expert’s Report comments on the fairness and reasonableness of the transaction the subject of this Resolution to the non-associated Shareholders. The Independent Expert has determined the Disposal is fair and reasonable to the non-associated Shareholders.

Dated: 23 January 2018

By order of the Board

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Josh Puckridge

Chairman

EXPLANATORY STATEMENT

This Explanatory Statement has been prepared to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions.

1. BACKGROUND

1.1 General Background and Current Activities

The Company was incorporated on 8 July 1996 and is currently listed on the ASX, having commenced quotation on 12 September 1996.

As announced on 1 November 2017, the Company and Kalgoorlie Mine Management Pty Ltd (ACN 009 235 625) ( KMM ) have entered into a deed of termination and release relating to the disposal of the Mt. Barkly Project. Payments made under this deed contravened ASX Listing Rule 10.1 and, as such, further shareholder approval is being sought under Resolution 10.

As communicated in past announcements, the Board has spent considerable time recently assessing and evaluating its strategy for the creation of Shareholder value. Further to this, the Company has spent equal time assessing and evaluating new projects for acquisition. The Company has focussed its efforts on assessing and reviewing exploration opportunities for gold in the West, Central and East Pilbara.

1.2 Proposed Acquisition

On 3 January 2018, the Company entered into a share sale agreement with Everest Minerals Pty Ltd (ACN 149 201 963) ( Everest ) ( Share Sale Agreement ), pursuant to which the shareholders of Everest agreed to sell ( Everest Shareholders ) and the Company agreed to purchase all of the outstanding share capital in Everest ( Acquisition ) in consideration for 48,520,012 Shares.

As announced by the Company on 19 January 2018 the Company will shortly issue 31,753,316 Shares to sophisticated and professional investors, at an issue price of $0.05 per Share to raise $1,587,666 ( Placement ). Funds raised from the Placement will be used in accordance with the use of funds table set out in Section 1.7.

This Notice of Meeting sets out the Resolutions necessary to complete the Acquisition. Each of the Resolutions is conditional upon the approval by Shareholders of each of the Essential Resolutions (being Resolutions 1 and 2). Resolutions 1 and 2 are each conditional on the other receiving Shareholder approval. If any of the Essential Resolutions are not approved by Shareholders, all of the Resolutions will fail and settlement of the Acquisition will not occur.

A summary of the Resolutions is as follows:

(a) approval for the Acquisition which, if successfully completed, will represent a significant change in the nature and scale of the Company’s operations (Resolution 1); and
(b) approval for the Company issuing the Consideration Shares as consideration for the Acquisition, being 48,520,012 Shares and 25,000,000 Consultancy Options to each of Corporate & Resource

Consultants Pty Ltd (ACN 073 232 318) and Klaus Eckhof of Everest in consideration for consultancy services provided (Resolution 2).

(c) ratification of the issue of 31,753,316 Shares to be issued under the Placement (Resolutions 3 and 4);
(d) approval for the Company to issue 31,753,316 attaching Options under the Placement (Resolution 5);
(e) approval for the Company to issue 27,741,038 Options to advisors that have assisted with the Placement and the Acquisition (Resolutions 6, 7 and 8).
(f) approval for the Company to change its name to Everest Minerals Ltd (Resolution 9); and
(g) approval of the Company’s payment to Kalgoorlie Mine Management Pty Ltd (ACN 009 235 625) (Resolution 10); and

1.3 Everest Minerals Pty Ltd

Everest holds investments in other listed mining and exploration companies, as at 22 December 2017 the value of these investments totals approximately $340,000, and $880,000 in cash.

Everest also holds an option to acquire 100% of E59/2280 from its current registered holder, Bar None Exploration Pty Ltd, which is proposed to be the Company’s Kirkalocka Gold Project. The Kirkalocka Gold Project is located in Western Australia, within Meekathara’s Greenstone Belt. The option to acquire 100% of the Kirkalocka Gold Project is exercisable by Everest through a cash payment of $100,000 and is exercisable at any time prior to 30 April 2018.

The Company is working with its new advisors to collate existing exploration results and construct an exploration plan – the Company will keep the market updated of any progress in this regard.

Klaus Eckhof and Corporate & Resource Consultants Pty Ltd are currently advisors to Everest and their engagement will be maintained post settlement of the Acquisition.

1.4 Current Company Project

As noted at Section 1.1, the Company is in the process of disposing of its interest in the Mt. Barkly Project in satisfaction of the Deed of Settlement with KMM. The Company otherwise acquired the Thundelarra Project in December 2017 (refer to announcements dated 8 and 18 December 2017).

1.5 Share Sale Agreement

On 3 January 2018, the Company entered into the Share Sale Agreement with Everest to acquire all of the outstanding share capital in Everest from its shareholders. The key terms of the Share Sale Agreement are as follows:

(a) ( Consideration ): the Company agreed to issue 48,520,012 Shares to the Everest Shareholders at settlement of the Share Sale Agreement;
(b) ( Conditions Precedent ): the completion of the Acquisition is subject to and conditional upon:

(i) Everest acquiring an option to purchase the Kirkalocka Project tenement application E59/2280 from Bar None Exploration Pty Ltd (ACN 621 333 015);
(ii) completion of technical, financial and legal due diligence by the Company on the business, assets and operations of Everest, to the sole and absolute satisfaction of the Company;
(iii) completion of technical, financial and legal due diligence by Everest on the business, assets and operations of the Company, to the sole and absolute satisfaction of Everest, which sale include Everest being comfortable that ASX imposed escrow will not apply to the Consideration Shares;
(iv) the Company and Everest obtaining all required third party, regulatory and governmental approvals and consents to give effect to the matters contemplated by the Share Sale Agreement, including any necessary shareholder approvals required by the Corporations Act 2001 (Cth) ( Corporations Act ) (and any other applicable law or regulations) and the Australian Securities Exchange Listing Rules; and
(v) Australian Securities Exchange ( ASX ) confirming that ASX Listing Rule 11.1.3 will not apply to the Acquisition; and
(c) ( Options ): each of Corporate & Resource Consultants Pty Ltd and Klaus Eckhof will be issued 25,000,000 Options (exercisable at $0.08 on or before 5:00pm WST on 1 March 2019 and otherwise on the terms set out in Schedule 1).

There will not be any changes to the Board or the Company’s senior management as a result of the Acquisition.

1.6 Effect on Capital Structure

The indicative effect of the Acquisition and the issue of attaching Options under the Placement on the capital structure of the Company will be as follows:

Capital Structure	Shares	Options1
Current	158,766,5802	75,505,646
Consideration Shares (Resolution 2)	48,520,012	50,000,000
Attaching Options under the Placement (Resolution 5)	-	31,753,316
Issue of Options (Resolutions 6, 7 and 8)	-	27,741,038
TOTAL	207,286,592	185,000,000

Notes:

Each exercisable at $0.08 on or before 1 March 2019.
This incorporates 31,753,316 Shares to be issued under the Placement.

1.7 Use of Funds

The Company intends to apply funds raised from the Placement, together with existing cash reserves of the Company and Everest over the next two years as follows:

Use of Funds	Amount	%
Existing cash reserves of the Company and Everest	$1,950,000	55.12%
Funds raised under the Capital Raising	$1,587,666	44.88%
TOTAL	$3,537,666	100%
Exploration at Kirkalocka Gold Project	$1,125,000	31.80%
Exploration at Thundellara Gold Project	$550,000	15.55%
Business development and corporate overheads	$400,000	11.31%
General working capital	$1,367,406	35.83%
Expenses associated with the Placement and the Acquisition	$195,260	5.52%
TOTAL	$3,537,666	100%

The above table is a statement of current intentions as of the date of this Notice. As with any budget, intervening events and new circumstances (such as exploration results and commodity prices) have the potential to affect the manner in which the funds are ultimately applied. The Board reserves the right to alter the way funds are applied on this basis.

1.8 Indicative Timetable

An indicative timetable with respect to the Acquisition and the Placement is set out below:

Event	Date
Completion of Placement	25 January 2018
Date of General Meeting	26 February 2018
Settlement of Acquisition and issue of Options the subject of Resolutions 5 - 8	28 February 2018

The above dates are indicative only and may change without notice.

1.9 Pro Forma Statement of Financial Position

Set out in Schedule 2 is a pro forma balance sheet of the Company assuming that all Essential Resolutions have been passed and both the Acquisition and Placement are complete.

The historical and pro-forma information is presented in an abbreviated form, insofar as it does not include all of the disclosure required by the Australian Accounting Standards applicable to annual financial statements.

1.10 Board Intention if settlement of Acquisition Occurs

In the event that the Essential Resolutions are approved by Shareholders, the Company’s existing cash reserves will be used to continue the Company’s operations, which will include:

(a) Expenditure on its existing project and appraising new acquisitions for the Company pursuant to Section 1.1 above;
(b) pay the costs associated with the Acquisition; and
(c) contribute to the administration and working capital of the Company.

1.11 Advantages of the proposals in the Essential Resolutions

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

(a) the Acquisition creates a highly attractive listed junior gold company, with an option over the Kirkalocka Gold Project;
(b) the Acquisition provides the Company with an option to acquire a key asset and access to Everest’s significant investments in other listed and mining exploration companies;
(c) creation of a larger-scale entity that has a larger market capitalisation and improved access to capital markets; and
(d) the Board, strengthened with the consultancy of Klaus Eckhof and Corporate & Resource Consultants Pty Ltd, will provide a strong leadership team with a proven track record of gold exploration, development and production.

1.12 Disadvantages of the proposals in the Essential Resolutions

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

(a) current Shareholders will have their interest in the Company significantly diluted by the Acquisition and any further equity raising undertaken by the Company (see further detail in Section 1.12.1(a) below); and
(b) there will be risks inherent in the Acquisition and shareholders may consider these risks outweigh the potential advantages. See Section 1.12 for more information on significant risk factors.

1.13 Risk Factors

Shareholders should be aware that if the Acquisition is approved and completed, the Company will be changing the scale of its activities. The risks and uncertainties described below are not intended to be exhaustive. There may be additional risks and uncertainties that the Company is unaware of or that the Company currently considers to be immaterial, which may affect the Company. Based on the information available, a non-exhaustive list of risk factors for the Company associated with the proposed Acquisition is set out below.

1.13.1 Risks relating to the change in scale of activities

(a) Dilution Risk

On completion of the Acquisition and all issues of Shares and Options contemplated by this Notice, existing Shareholders will be significantly diluted. In this scenario, existing Shareholders will retain approximately 80% of the issued capital of the Company, with Great Southern Flour Mills Pty Ltd holding 7.30% of the Shares on issue and sophisticated and professional investors who subscribe under the Share Sale Agreement for Consideration Shares holding 23.41%.

If subsequently all Options are exercised and convert into Shares, the interests of the existing Shareholders will be further diluted.

There is also a risk that the interests of Shareholders will be further diluted as a result of future capital raisings required in order to fund the development of the Project.

1.13.2 Industry Specific Risks

(a) Exploration

The Tenements which the Company holds, or proposes to acquire, are at various stages of exploration, and potential investors should understand that mineral exploration and development are high-risk undertakings.

There can be no assurance that exploration of these Tenements, or any other tenements that may be acquired in the future, will result in the discovery of an economic ore deposit. Even if an apparently viable deposit is identified, there is no guarantee that it can be economically exploited.

The future exploration activities of the Company may be affected by a range of factors including geological conditions, limitations on activities due to seasonal weather patterns, unanticipated operational and technical difficulties, industrial and environmental accidents, native title process, changing government regulations and many other factors beyond the control of the Company.

The success of the Company will also depend upon the Company having access to sufficient development capital, being able to maintain title to its Tenements and obtaining all required approvals for its activities. In the event that exploration programmes prove to be unsuccessful this could lead to a diminution in the value of the Tenements, a reduction in the case reserves of the Company and possible relinquishment of the Tenements.

The exploration costs of the Company are based on certain assumptions with respect to the method and timing of exploration. By their nature, these estimates and assumptions are subject to significant uncertainties and, accordingly, the actual costs may materially differ from these estimates and assumptions. Accordingly, no assurance can be given that the cost estimates and the underlying assumptions will be realised in practice, which may materially and adversely affect the Company’s viability.

(b) Failure to satisfy Expenditure Commitments

Interests in tenements in Western Australia are governed by the mining acts and regulations that are current in Western Australia and are evidenced by the granting of licences or leases. Each licence or lease is for a specific term and carries with it annual expenditure and reporting commitments, as well as other conditions requiring compliance. Consequently, the Company could lose title to or its interest in the Tenements if licence conditions are not met or if insufficient funds are available to meet expenditure commitments.

(c)

Resource Estimates

No JORC Code compliant mineral resources have been defined in respect of the Tenements in which the Company is earning an interest. In the event a resource is delineated this would be an estimate only. An estimate is an expression of judgement based on knowledge, experience and industry practice. Estimates which were valid when originally calculated may alter significantly when new information or techniques become available. In addition, by their very nature, resource estimates are imprecise and depend to some extent on interpretations, which may prove to be inaccurate. As further information becomes available through additional fieldwork and analysis, the estimates are likely to change. This may result in alterations to development and mining plans which may, in turn, adversely affect the Company’s operations.

(d)

Mine development

Possible future development of mining operations at the Tenements is dependent on a number of factors including, but not limited to, the acquisition and/or delineation of economically recoverable mineralisation, favourable geological conditions, receiving the necessary approvals from all relevant authorities and parties, seasonal weather patterns, unanticipated technical and operational difficulties encountered in extraction and production activities, mechanical failure of operating plant and equipment, shortages or increases in the price of consumables, spare parts and plant and equipment, cost overruns, access to the required level of funding and contracting risk from third parties providing essential services.

If the Company commences production on the Tenements, its operations may be disrupted by a variety of risks and hazards which are beyond the control of the Company. No assurance can be given that the Company will achieve commercial viability through the development of the Tenements.

The risks associated with the development of a mine will be considered in full should the Tenements reach that stage and will be managed with ongoing consideration of stakeholder interests.

(e) Environmental

The operations and proposed activities of the Company are subject to State and Federal laws and regulations concerning the environment. As with most exploration projects and mining operations, the Company’s activities are expected to have an impact on the environment, particularly if advanced exploration or mine development proceeds. It

is the Company’s intention to conduct its activities to the highest standard of environmental obligation, including compliance with all environmental laws.

Mining operations have inherent risks and liabilities associated with safety and damage to the environment and the disposal of waste products occurring as a result of mineral exploration and production. The occurrence of any such safety or environmental incident could delay production or increase production costs. Events, such as unpredictable rainfall or bushfires may impact on the Company’s ongoing compliance with environmental legislation, regulations and licences. Significant liabilities could be imposed on the Company for damages, clean-up costs or penalties in the event of certain discharges into the environment, environmental damage caused by previous operations or non-compliance with environmental laws or regulations.

The disposal of mining and process waste and mine water discharge are under constant legislative scrutiny and regulation. There is a risk that environmental laws and regulations become more onerous making the Company’s operations more expensive.

Approvals are required for land clearing and for ground disturbing activities. Delays in obtaining such approvals can result in the delay to anticipated exploration programmes or mining activities.

(f)

Native title and Aboriginal Heritage

In relation to tenements which the Company has an interest in or will in the future acquire such an interest, there may be areas over which legitimate common law native title rights of Aboriginal Australians exist. If native title rights do exist, the ability of the Company to gain access to tenements (through obtaining consent of any relevant landowner), or to progress from the exploration phase to the development and mining phases of operations may be adversely affected.

The Directors will closely monitor the potential effect of native title claims involving tenements in which the Company has or may have an interest.

1.13.3 General Risks

(a) Commodity price volatility and exchange rate risks

If the Company achieves success leading to mineral production, the revenue it will derive through the sale of commodities exposes the potential income of the Company to commodity price and exchange rate risks. Commodity prices fluctuate and are affected by many factors beyond the control of the Company. Such factors include supply and demand fluctuations for precious and base metals, technological advancements, forward selling activities and other macro-economic factors.

Furthermore, international prices of various commodities are denominated in United States dollars, whereas the income and expenditure of the Company are and will be taken into account in Australian currency, exposing the Company to the fluctuations and volatility of the rate of exchange between the United States dollar and the Australian dollar as determined in international markets.

(b) Competition risk

The industry in which the Company will be involved is subject to domestic and global competition. Although the Company will undertake all reasonable due diligence in its business decisions and operations, the Company will have no influence or control over the activities or actions of its competitors, which activities or actions may, positively or negatively, affect the operating and financial performance of the Company’s projects and business.

(c) Economic

General economic conditions, introduction of tax reform, new legislation, movements in interest and inflation rates and currency exchange rates may have an adverse effect on the Company’s exploration, development and production activities, as well as on its ability to fund those activities.

(d)

Force Majeure

The Company’s projects now or in the future may be adversely affected by risks outside the control of the Company including labour unrest, civil disorder, war, subversive activities or sabotage, fires, floods, explosions or other catastrophes, epidemics or quarantine restrictions.

(e)

Government policy changes

Adverse changes in government policies or legislation may affect ownership of mineral interests, taxation, royalties, land access, labour relations, and mining and exploration activities of the Company. It is possible that the current system of exploration and mine permitting in Western Australia may change, resulting in impairment of rights and possibly expropriation of the Company’s properties without adequate compensation.

(f)

Litigation Risks

The Company is exposed to possible litigation risks including native title claims, tenure disputes, environmental claims, occupational health and safety claims and employee claims. Further, the Company may be involved in disputes with other parties in the future which may result in litigation. Any such claim or dispute if proven, may impact adversely on the Company’s operations, financial performance and financial position. The Company is not currently engaged in any litigation.

(g)

Regulatory Risks

The Company’s exploration and development activities are subject to extensive laws and regulations relating to numerous matters including resource licence consent, conditions including environmental compliance and rehabilitation, taxation, employee relations, health and worker safety, waste disposal, protection of the environment, native title and heritage matters, protection of endangered and protected species and other matters. The Company requires permits from regulatory authorities to authorise the Company’s operations. These permits relate to exploration, development, production and rehabilitation activities.

Obtaining necessary permits can be a time consuming process and there is a risk that Company will not obtain these permits on acceptable terms, in a timely manner or at all. The costs and delays associated with obtaining necessary permits and complying with these permits and applicable laws and regulations could materially delay or restrict the Company from proceeding with the development of a project or the operation or development of a mine. Any failure to comply with applicable laws and regulations or permits, even if inadvertent, could result in material fines, penalties or other liabilities. In extreme cases, failure could result in suspension of the Company’s activities or forfeiture of one or more of the Tenements.

(h)

Market conditions

Share market conditions may affect the value of the Company’s quoted securities regardless of the Company’s operating performance. Share market conditions are affected by many factors such as:

(i) General economic outlook.
(ii) Introduction of tax reform or other new legislation.
(iii) Interest rates and inflation rates.
(iv) Changes in investor sentiment toward particular market sectors.
(v) The demand for, and supply of, capital.
(vi) Terrorism or other hostilities.

The market price of securities can fall as well as rise and may be subject to varied and unpredictable influences on the market for equities in general and resource exploration stocks in particular. Neither the Company nor the Directors warrant the future performance of the Company or any return on an investment in the Company.

Securities listed on the stock market, and in particular securities of exploration companies experience extreme price and volume fluctuations that have often been unrelated to the operating performance of such companies. These factors may materially affect the market price of the Shares regardless of the Company’s performance.

(i)

Additional requirements for capital

The Company’s capital requirements depend on numerous factors. The Company may require further financing. Any additional equity financing will dilute shareholdings, and debt financing, if available, may involve restrictions on financing and operating activities. If the Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations and scale back its exploration programmes as the case may be. There is however no guarantee that the Company will be able to secure any additional funding or be able to secure funding on terms favourable to the Company.

(j) Reliance on key personnel

The responsibility of overseeing the day-to-day operations and the strategic management of the Company depends substantially on its senior management and its key personnel. There can be no assurance given that there will be no detrimental impact on the Company if one or more of these employees cease their employment.

(k) Agents and Contractors

The Directors are unable to predict the risk of the insolvency or managerial failure by any of the contractors used (or to be used in the future) by the Company in any of its activities or the insolvency or other managerial failure by any of the other service providers used (or to be used in the future) by the Company for any activity.

The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by investors in the Company. The above factors, and others not specifically referred to above, may in the future materially affect the financial performance of the Company and the value of Shares.

1.14 Plans for the Company if Resolutions not passed

If the Essential Resolutions are not passed and the Acquisition does not occur, the Company will continue exploration on their existing tenement in addition to the continuing consideration of new potential business acquisitions to take the Company forward and provide value to Shareholders.

1.15 Directors Interests in the Acquisition

None of the Company’s existing Directors have any interest in the proposed Acquisition, other than as disclosed in this Notice.

1.16 Conditionality of Resolutions

Each of the Resolutions in this Notice of Meeting is conditional upon the approval by Shareholders of each of the Essential Resolutions. Should any of the Essential Resolutions not be approved, the Company will not proceed with the Acquisition.

2. RESOLUTION 1 – CHANGE TO NATURE AND SCALE OF ACTIVITIES

2.1 General

Resolution 1 seeks approval from Shareholders for the Acquisition of Everest.

The Acquisition, if completed, will result in the Company acquiring ownership of 100% of the issued share capital in Everest.

Full details of the terms of the Acquisition are set out in Section 1 of this Explanatory Statement, as well as an overview of the profile of the Company post-Acquisition and a summary of the key risks.

2.2 ASX Listing Rule 11.1

ASX Listing Rule 11.1 provides that where an entity proposes to make a significant change, either directly or indirectly, to the nature or scale of its activities, it must

provide full details to ASX as soon as practicable (and before making the change) and comply with the following:

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

ASX has indicated to the Company that the change in nature and scale of the Company’s activities as a result of the Acquisition requires the Company in accordance with ASX Listing Rule 11.1.2 to obtain shareholder approval and must comply with any requirements of ASX in relation to the Notice of Meeting.

ASX has also indicated to the Company that the change in the nature and scale of the Company’s activities as a result of the Acquisition does not require the Company to re-comply with the admission requirements set out in Chapters 1 and 2 of the ASX Listing Rules in accordance with ASX Listing Rule 11.1.3.

This Resolution therefore seeks Shareholder approval pursuant to ASX Listing Rule 11.1.2 for the change in nature and scale of the Company which will occur as a result of the Acquisition.

3. RESOLUTION 2 – ISSUE OF CONSIDERATION SHARES AND CONSULTANCY OPTIONS

3.1 General

This Resolution seeks Shareholder approval for the issue of 48,520,012 Shares ( Consideration Shares ) and 50,000,000 Options to Corporate & Resource Consultants Pty Ltd and Klaus Eckhof (25,000,000 each) ( Consultancy Options ) in consideration for the Acquisition.

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue more equity securities during any 12 month period than that amount which represents 15% of the number of fully paid ordinary securities on issue at the commencement of that 12 month period.

The effect of this Resolution will be to allow the Company to issue the Consideration Shares during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity.

3.2 Technical information required by ASX Listing Rule 7.1

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to the issue of the Consideration Shares:

(a) the maximum number of securities to be issued is:

(i) 48,520,012 Shares; and (ii) 50,000,000 Options;

(b) the Consideration Shares and Consultancy Options will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that issue of the Consideration Shares and Consultancy Options will occur on the same date;
(c) the Consideration Shares will be issued for nil cash consideration as consideration for the Acquisition;
(d) the Consultancy Options will be issued at an issue price of $0.001 per Consultancy Options to Corporate & Resource Consultants Pty Ltd and Klaus Eckhof in connection with their Consultancy Agreements.
(e) the Consideration Shares will be issued to the Everest Shareholders on a pro rata basis to their interests in Everest, none of which are related parties of the Company and the Consultancy Options will be issued to Corporate & Resource Consultants Pty Ltd and Klaus Eckhof;
(f) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;
(g) the Consultancy Options will be issued on the terms and conditions contained in Schedule 1;
(h) no funds will be raised from the proposed issue of the Consideration Shares as the Consideration Shares are proposed to be issued in consideration for the Acquisition and consideration for consultancy services provided to the Company; and
(i) the funds raised from the issue of the Consultancy Options will be used in accordance with Section 1.7.

4. RESOLUTION 3 AND 4 – RATIFICATION OF PRIOR ISSUE – SHARES

4.1 General

The Company proposes issuing 31,753,316 Shares at an issue price of $0.05 per Share to raise $1,587,666 following the date of dispatch of the Notice of Meeting but prior to the Meeting being held.

12,701,326 Shares will be issued pursuant to the Company’s capacity under ASX Listing Rule 7.1A which was approved by Shareholders at the annual general meeting held on 28 November 2017 and 19,051,990 Shares will be issued pursuant to the Company’s capacity under ASX Listing Rule 7.1.

Resolutions 3 and 4 seek Shareholder ratification pursuant to ASX Listing Rule 7.4 for the issue of those Shares ( Ratification ).

4.2 Resolution 3 – ASX Listing Rule 7.1

A summary of ASX Listing Rule 7.1 is set out in section 3.1 above.

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

By ratifying this issue, the Company will retain the flexibility to issue equity securities in the future up to the 15% annual placement capacity set out in ASX Listing Rule 7.1 without the requirement to obtain prior Shareholder approval.

4.3 Resolution 4 – ASX Listing Rule 7.1A

ASX Listing Rule 7.1A provides that in addition to issues permitted without prior shareholder approval under ASX Listing Rule 7.1, an entity that is eligible and obtains shareholder approval under ASX Listing Rule 7.1A may issue or agree to issue during the period for which the approval is valid a number of quoted equity securities which represents 10% of the number of fully paid ordinary securities on issue at the commencement of that 12 month period as adjusted in accordance with the formula in ASX Listing Rule 7.1.

Where an eligible entity obtains shareholder approval to increase its placement capacity under ASX Listing Rule 7.1A then any ordinary securities issued under that additional placement capacity:

(a) will not be counted in variable “A” in the formula in ASX Listing Rule 7.1A; and
(b) are counted in variable “E”,

until their issue has been ratified under ASX Listing Rule 7.4 (and provided that the previous issue did not breach ASX Listing Rule 7.1A) or 12 months has passed since their issue.

By ratifying the issue the subject of Resolution 4, the base figure (ie variable “A”) in which the Company’s 15% and 10% annual placement capacities are calculated will be a higher number which in turn will allow a proportionately higher number of securities to be issued without prior Shareholder approval.

4.4 Technical information required by ASX Listing Rule 7.4

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

(a) 31,753,316 Shares will be issued on the following basis:
(i) 19,051,990 Shares will be issued pursuant to ASX Listing Rule 7.1; and
(ii) 12,701,326 Shares will be issued pursuant to ASX Listing Rule 7.1A;
(b) the issue price will be $0.05 per Share under both the issue of Shares pursuant to ASX Listing Rule 7.1 and ASX Listing Rule 7.1A;
(c) the Shares issued will all be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;
(d) the Shares will be issued to sophisticated and professional investors. None of these subscribers will be related parties of the Company; and
(e) the funds raised from this issue will be used in accordance with Section 1.7.

5. RESOLUTION 5 – APPROVAL OF FREE ATTACHING OPTIONS

5.1 General

Resolution 5 seeks Shareholder approval for the issue of up to 31,753,316 attaching Options.

The Placement described above, included 1 attaching Option for every 1 Share subscribed for and issued, being 31,753,316 Options.

The Options are exercisable at $0.08 each on or before 1 March 2019 (and otherwise on the terms and conditions set out in Schedule 1) to the subscribers to the Placement.

No funds will be raised from the Placement Options as they are being issued for nil consideration as attaching Options to subscribers to the Placement.

A summary of ASX Listing Rule 7.1 is set out in section 3.1 above.

The effect of Resolution 5 will be to allow the Company to issue the Options pursuant to the Placement during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity.

5.2 Technical information required by ASX Listing Rule 7.1

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to the Placement:

(a) the maximum number of Options to be issued is 31,753,316;
(b) the Options will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that issue of the Options will occur on the same date;
(c) the issue price per Option will be nil as they will be issued attaching with the Shares issued under the Placement on a 1 for 1 basis;
(d) the Options will be issued to subscribers to the Placement (or their nominees), who are sophisticated and professional investors and are not related parties of the Company; and
(e) the Options will be issued on the terms and conditions set out in Schedule 1; and
(f) no funds will be raised from the issue of the Placement Options as the Placement Options are being issued for nil cash consideration.

6. RESOLUTIONS 6, 7 AND 8 – ISSUE OF OPTIONS

6.1 General

Resolutions 6, 7 and 8 seek Shareholder approval for the total issue of up to 27,741,038 Options in consideration for;

(a) brokerage services provided by Cicero Advisory Services Pty Ltd (ACN 166 321 393);

(b) advisory services provided by Sisu International Pty Ltd; and
(c) advisory services provided by Konkera Pty Ltd.

A summary of ASX Listing Rule 7.1 is set out in section 3.1 above.

The effect of Resolutions 6, 7 and 8 will be to allow the Company to issue the Options during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity.

6.2 Technical information required by ASX Listing Rule 7.1

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to the Placement:

(a) the maximum number of Options to be issued is;
(i) 7,741,038 Options Cicero Advisory Services Pty Ltd (ACN 166 321 393) (or their nominees);
(ii) 10,000,000 Options Sisu International Pty Ltd (or their nominees); and
(iii) 10,000,000 Options Konkera Pty Ltd (or their nominees);
(b) the Options will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that the issue of the Options will occur on the same date;
(c) the Options will be issued at an issue price of $0.001 per Option in satisfaction of
(i) brokerage services provided by Cicero Advisory Services Pty Ltd (ACN 166 321 393);
(ii) advisory services provided by Sisu International Pty Ltd; and
(iii) advisory services provided by Konkera Pty Ltd.
(d) the Options will be issued to Cicero Advisory Services Pty Ltd (or their nominees), Sisu International Pty Ltd (or their nominees) and Konkera Pty Ltd (or their nominees), who are not related parties of the Company;
(e) the Options will be issued on the terms and conditions set out in Schedule 1; and
(f) the funds raised from the issue of the Options will be used in accordance with Section 1.7.

7. RESOLUTION 9 – CHANGE OF COMPANY NAME

Section 157(1)(a) of the Corporations Act provides that a company may change its name if the company passes a special resolution adopting a new name.

Resolution 9 seeks the approval of Shareholders for the Company to change its name to Everest Minerals Ltd.

If Resolution 9 is passed the change of name will take effect when ASIC alters the details of the Company’s registration.

The proposed name is the current name of Everest, the company the subject of the Acquisition as per Resolution 2. If Resolution 9 is passed, the Company will lodge a copy of the special resolution with ASIC contemporaneously with an Everest resolution approving the resulting change in name.

8. RESOLUTION 10 – APPROVAL OF PAYMENT

8.1 General

As announced on 4 December 2015, the Company and Kalgoorlie Mine Management Pty Ltd (ACN 009 235 625) ( KMM ) entered into a deed of termination and release (which was subsequently varied on 5 May 2017) ( Deed ) relating to a management agreement dated 17 November 2009 (and its subsequent variation dated 10 October 2012) ( Management Agreement ).

The effect of the Deed is to terminate the Management Agreement as at 4 December 2015 and in consideration for the termination, the Company was entitled to, within 4 months, either:

(a) pay to KMM the sum of $466,379; or
(b) transfer all of its shares in K2Fly (formerly Power Resources Ltd) and Colour Minerals to KMM ( Disposal ).

On 8 December 2015, the Company announced that it had elected to complete the Disposal, subject to obtaining Shareholder approval under ASX Listing Rule 10.1. The Disposal, amongst other things, was subsequently approved by Shareholders at a general meeting of the Company held on 1 April 2016. Further details in respect of the Disposal are set out in the Notice of General Meeting released to the ASX on 4 March 2016 and announcement dated 12 May 2017.

The variation to the Deed dated 5 May 2017 included provision for the Company to make a cash payment of $90,000 to KMM ( Payment ) in addition to the Disposal. This payment to KMM was predicated as a reasonable payment, that does not materially impact the financial state of the Company and allows the Company to pursue new opportunities without the incumbencies of the Disposal having not completed.

On 12 May 2017, the Company announced that settlement under the Deed had occurred, resulting in the Disposal and the Payment being made.

Pursuant to ASX Listing Rules 10.1 and 10.9, the Payment requires Shareholder approval and accordingly, Resolution 10 seeks this approval.

8.2 ASX Listing Rule 10.1

ASX Listing Rule 10.1 provides that an entity must ensure that neither it, nor any of its child entities, acquires a substantial asset from, or disposes of a substantial asset to, amongst other persons, a related party of the entity, a substantial holder or one of its associates, without the prior approval of holders of the entity’s ordinary shareholders.

Substantial asset

For the purposes of ASX Listing Rule 10.1, an asset is substantial if its value, or the value of the consideration for it is, or in ASX’s opinion is, 5% or more of the equity interests of the entity as set out in the latest accounts given to ASX under the ASX Listing Rules.

The total equity of the Company as defined by the ASX Listing Rules and as set out in the latest accounts given to ASX under the ASX Listing Rules at the time the payment was made (being the half-yearly report for the period ending 31 December 2016 ( Half-Yearly Report )) was $1,630,414, 5% of which is $81,520.70.

As the value of the Payment was more than 5% of the equity interests of the Company set out in its Half-Yearly Report, the Payment resulted in a contravention of ASX Listing Rule 10.1.

It should be noted that the Company agreed with KMM that the Payment would be made during the half-year ended 31 December 2016 (i.e. prior to release of the Half-Yearly Report). The Company’s annual report for the financial year ended 30 June 2016 ( Annual Report ) stated that the Company’s total equity was $1,902,757, 5% of which was $95,137.85.

Had the Company made the Payment prior to release of its Half-Yearly Report, the Payment would have been permitted under the ASX Listing Rules. However, due to delays in effecting settlement under the Deed, the Half-Yearly Report was released, which resulted in the Payment being in excess of the threshold permissible under ASX Listing Rule 10.1. At the time of making the Payment, the Company inadvertently based the permissible threshold on the total equity set out in its Annual Report rather than its Half-Yearly Report, resulting in the Company being in contravention of ASX Listing Rule 10.1.

As such, subsequent to making the Payment, ASX advised that the Payment contravened ASX Listing Rule 10.1 and corrective action under ASX Listing Rule 10.9 must be made by the Company.

Substantial shareholder

For the purposes of ASX Listing Rule 10.1, a substantial shareholder is a person who has a relevant interest (either directly or through its associates), or had at any time in the 6 months before the transaction, in at least 10% of the total votes attaching to the voting securities.

KMM, by virtue of its relevant interest in 14.93% of the voting shares of the Company, is a substantial holder of the Company for the purposes of ASX Listing Rule 10.1.

Requirement for shareholder approval

As a result of the above, making of the Payment has resulted in the disposal of a substantial asset to a substantial holder of the Company and the Company is therefore required to seek Shareholder approval under ASX Listing Rule 10.1 in accordance with ASX Listing Rule 10.9.

8.3 ASX Listing Rule 10.9

ASX Listing Rule 10.9 provides that an entity must take corrective action if ASX requires it to as a result of a contravention of ASX Listing Rule 10.1. The corrective action, at the option of the entity, is either of the following:

(a) cancelling the transaction (or arranging for its cancellation);
(b) seeking the approval of holders of ordinary securities to the transaction. If approval is not obtained, the entity must cancel the transaction (or arrange for its cancellation).

Accordingly, the Company is seeking Shareholder approval pursuant to ASX Listing Rule 10.9(b).

8.4 Independent Expert’s Report

ASX Listing Rule 10.10.2 requires a notice of meeting containing a resolution under ASX Listing Rule 10.1 to include a report on the transaction from an independent expert.

The Independent Expert's Report set out in Schedule 3 sets out a detailed independent examination of the Payment to enable non-associated Shareholders to assess the merits and decide whether to approve the Payment.

To the extent that it is appropriate, the Independent Expert’s Report enclosed with this Notice of Meeting sets out further information with respect to the Payment and concludes that it is both fair and reasonable to the nonassociated Shareholders.

Shareholders are urged to carefully read the Independent Expert’s Report to understand its scope, the methodology of the valuation and the sources of information and assumptions made.

The Company will make a hard copy of the Independent Expert’s Report available to Shareholders upon request.

GLOSSARY

$ means Australian dollars.

Acquisition means the acquisition by the Company of Everest Minerals Pty Ltd, pursuant to the Share Sale Agreement.

ASIC means the Australian Securities & Investments Commission.

ASX means ASX Limited (ACN 008 624 691) or the financial market operated by ASX Limited, as the context requires.

ASX Listing Rules means the Listing Rules of ASX.

Barkly Project means the Barkly Copper-Gold Project.

Blaze Shares means fully paid ordinary shares in the capital of the Company.

Board means the current board of directors of the Company.

Business Day means Monday to Friday inclusive, except New Year’s Day, Good Friday, Easter Monday, Christmas Day, Boxing Day, and any other day that ASX declares is not a business day.

Chair means the chair of the Meeting.

Company means Blaze International Limited (ACN 074 728 019).

Consideration Shares means 48,520,012 Shares, the subject of Resolution 2.

Constitution means the Company’s constitution.

Consultancy Agreement has the meaning given to it in Section 1.5.2 of the Explanatory Statement.

Consultancy Options means 50,000,000 Options to be issued to Corporate & Resource Consultants Pty Ltd (ACN 073 232 318) and Klaus Eckhof, the subject of Resolution 2.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

Disposal has the meaning given to it in Section 1.1 of the Explanatory Statement.

Essential Resolutions means Resolutions 1 and 2.

Everest means Everest Minerals Pty Ltd (ACN 149 201 963).

Everest Shareholders means shareholders in Everest.

Existing Assets means the Company’s interest (via its subsidiary) in the farm-in and joint venture agreement with Meteoric Resources NL (ACN 107 985 651) over the Barkly Copper-Gold project.

Explanatory Statement means the explanatory statement accompanying the Notice.

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

KMM means Kalgoorlie Mine Management Pty Ltd (ACN 009 235 625).

Notice or Notice of Meeting means this notice of meeting including the Explanatory Statement and the Proxy Form.

Option means an option to acquire a Share with the terms and conditions set out in Schedule 1.

Placement means the issue of 31,753,316 Shares to sophisticated and professional investors, at an issue price of $0.05 per Share to raise $1,587,666.

Proxy Form means the proxy form accompanying the Notice.

Resolutions means the resolutions set out in the Notice, or any one of them, as the context requires.

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

Shareholder means a registered holder of a Share.

Share Sale Agreement means the agreement between Everest Shareholders and the Company, pursuant to which the Everest Shareholders have agreed to sell all of their shares in Everest for the Consideration Shares.

Tenement means E59/2280.

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

SCHEDULE 1 – TERMS AND CONDITIONS OF OPTIONS

(a) Entitlement

Each Option entitles the holder to subscribe for one Share upon exercise of the Option.

(b) Exercise Price

Subject to paragraph (j), the amount payable upon exercise of each Option will be $0.08 ( Exercise Price )

(c) Expiry Date

Each Option will expire at 5:00 pm (WST) on 1 March 2019 ( Expiry Date ). An Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

(d) Exercise Period

The Options are exercisable at any time on or prior to the Expiry Date ( Exercise Period ).

(e) Notice of Exercise

The Options may be exercised during the Exercise Period by notice in writing to the Company in the manner specified on the Option certificate ( Notice of Exercise ) and payment of the Exercise Price for each Option being exercised in Australian currency by electronic funds transfer or other means of payment acceptable to the Company.

(f) Exercise Date

A Notice of Exercise is only effective on and from the later of the date of receipt of the Notice of Exercise and the date of receipt of the payment of the Exercise Price for each Option being exercised in cleared funds ( Exercise Date ).

(g) Timing of issue of Shares on exercise

Within 15 Business Days after the Exercise Date, the Company will:

(i) allot and issue the number of Shares required under these terms and conditions in respect of the number of Options specified in the Notice of Exercise and for which cleared funds have been received by the Company;
(ii) if required, give ASX a notice that complies with section 708A(5)(e) of the Corporations Act, or, if the Company is unable to issue such a notice, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors; and
(iii) if admitted to the official list of ASX at the time, apply for official quotation on ASX of Shares issued pursuant to the exercise of the Options.

If a notice delivered under (g)(ii) for any reason is not effective to ensure that an offer for sale of the Shares does not require disclosure to investors, the Company must, no later than 20 Business Days after becoming aware of such notice being ineffective, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors.

(h) Shares issued on exercise

Shares issued on exercise of the Options rank equally with the then issued shares of the Company.

(i) Quotation of Shares issued on exercise

If admitted to the official list of ASX at the time, application will be made by the Company to ASX for quotation of the Shares issued upon the exercise of the Options.

(j) Reconstruction of capital

If at any time the issued capital of the Company is reconstructed, all rights of an Option holder are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reconstruction.

(k) Participation in new issues

There are no participation rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options without exercising the Options.

(l) Change in exercise price

An Option does not confer the right to a change in Exercise Price or a change in the number of underlying securities over which the Option can be exercised.

(m) Unquoted

The Company will not apply for quotation of the Options on ASX.

(n) Transferability

The Options are transferable subject to any restriction or escrow arrangements imposed by ASX or under applicable Australian securities laws.

3,562,483 14,756	3,577,239	89,568 340,000 - 2,426,001	2,855,568	6,432,807	25,000 28,151 -	53,151	53,151	6,379,656
1,587,666 -	1,587,666	- - - -	-	1,587,666	- - -	-	-	1,587,666
880,000 -	880,000	- 340,000 - -	340,000	1,220,000	25,000 - -	25,000	25,000	1,195,000
- -	-	- - - 2,426,001	2,426,001	2,426,001	- - -	-	-	2,426,001
1,094,817 14,756	1,109,573	89,568 - - -	89,568	1,199,140	- 28,151 -	28,151	28,151	1,170,989

41,750,560 989,745 (36,360,649)	6,379,656
1,587,666 - -	1,587,666
1,195,000 - -	1,195,000
2,426,001 - -	2,426,001
36,541,893 989,745 (36,360,649)	1,170,989
Equity Issued capital Option Reserve Accumulated losses Total equity

SCHEDULE 3 – INDEPENDENT EXPERTS REPORT

PROXY FORM

BLAZE INTERNATIONAL LIMITED ACN 074 728 019

GENERAL MEETING

I/We

of:

being a Shareholder entitled to attend and vote at the Meeting, hereby appoint:

Name:

OR: the Chair of the Meeting as my/our proxy.

or failing the person so named or, if no person is named, the Chair, or the Chair’s nominee, to vote in accordance with the following directions, or, if no directions have been given, and subject to the relevant laws as the proxy sees fit, at the Meeting to be held at 10:00 AM (WST), on 26 February 2018 at Level 2, Suite 9, 330 Churchill Avenue, Subiaco, Western Australia, 6008, and at any adjournment thereof.

AUTHORITY FOR CHAIR TO VOTE UNDIRECTED PROXIES ON REMUNERATION RELATED RESOLUTIONS

Where I/we have appointed the Chair as my/our proxy (or where the Chair becomes my/our proxy by default), I/we expressly authorise the Chair to exercise my/our proxy on Resolution 6 (except where I/we have indicated a different voting intention below) even though Resolution 6 is connected directly or indirectly with the remuneration of a member of the Key Management Personnel, which includes the Chair.

CHAIR’S VOTING INTENTION IN RELATION TO UNDIRECTED PROXIES

The Chair intends to vote undirected proxies in favour of all Resolutions. In exceptional circumstances the Chair may change his/her voting intention on any Resolution. In the event this occurs an ASX announcement will be made immediately disclosing the reasons for the change.

Voting on business of the Meeting	Voting on business of the Meeting	FOR	AGAINST	ABSTAIN
Resolution 1	Change to Nature and Scale of Activities
Resolution 2	Issue Consideration Shares and Consultancy Options
Resolution 3	Ratification of Prior Issue
Resolution 4	Ratification of Prior Issue
Resolution 5	Approval of Free Attaching Options
Resolution 6	Issue of Options to Circero Advisory Services Pty Ltd
Resolution 7	Issue of Options to Sisu International Pty Ltd
Resolution 8	Issue of Options to Konkera Pty Ltd
Resolution 9	Change of Company Name
Resolution 10	Approval of Payment

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

poll.	poll.	poll.
If two proxies are being appointed, the proportion of voting rights this proxy represents is:			%
Signature of Shareholder(s):
Individual or Shareholder 1	Shareholder 2	Shareholder 3

Sole Director/Company Secretary	Director	Director/Company Secretary
Date:

Contact name: Contact ph (daytime):

Consent for contact by e-mail in relation to this Proxy Form: YES NO

E-mail address:

Instructions for completing Proxy Form

( Appointing a proxy ): A Shareholder entitled to attend and cast a vote at the Meeting is entitled to appoint a proxy to attend and vote on their behalf at the Meeting. If a Shareholder is entitled to cast 2 or more votes at the Meeting, the Shareholder may appoint a second proxy to attend and vote on their behalf at the Meeting. However, where both proxies attend the Meeting, voting may only be exercised on a poll. The appointment of a second proxy must be done on a separate copy of the Proxy Form. A Shareholder who appoints 2 proxies may specify the proportion or number of votes each proxy is appointed to exercise. If a Shareholder appoints 2 proxies and the appointments do not specify the proportion or number of the Shareholder’s votes each proxy is appointed to exercise, each proxy may exercise one-half of the votes. Any fractions of votes resulting from the application of these principles will be disregarded. A duly appointed proxy need not be a Shareholder.
( Direction to vote ): A Shareholder may direct a proxy how to vote by marking one of the boxes opposite each item of business. The direction may specify the proportion or number of votes that the proxy may exercise by writing the percentage or number of Shares next to the box marked for the relevant item of business. Where a box is not marked the proxy may vote as they choose subject to the relevant laws. Where more than one box is marked on an item the vote will be invalid on that item.

3. ( Signing instructions ):

( Individual ): Where the holding is in one name, the Shareholder must sign.
( Joint holding ): Where the holding is in more than one name, all of the Shareholders should sign.
( Power of attorney ): If you have not already provided the power of attorney with the registry, please attach a certified photocopy of the power of attorney to this Proxy Form when you return it.
( Companies ): Where the company has a sole director who is also the sole company secretary, that person must sign. Where the company (pursuant to section 204A of the Corporations Act) does not have a company secretary, a sole director can also sign alone. Otherwise, a director jointly with either another director or a company secretary must sign. Please sign in the appropriate place to indicate the office held. In addition, if a representative of a company is appointed pursuant to section 250D of the Corporations Act to attend the Meeting, the documentation evidencing such appointment should be produced prior to admission to the Meeting. A form of a certificate evidencing the appointment may be obtained from the Company.
( Attending the Meeting ): Completion of a Proxy Form will not prevent individual Shareholders from attending the Meeting in person if they wish. Where a Shareholder completes and lodges a valid Proxy Form and attends the Meeting in person, then the proxy’s authority to speak and vote for that Shareholder is suspended while the Shareholder is present at the Meeting.
( Return of Proxy Form ): To vote by proxy, please complete and sign the enclosed Proxy Form and return by:
(a) post to Blaze International Limited, Suite 9, 330 Churchill Avenue, Subiaco, Western Australia; or
(b) facsimile to the Company on facsimile number +61 8 6489 1601; or
(c) email to the Company at [email protected],

so that it is received not less than 48 hours prior to commencement of the Meeting.

Proxy Forms received later than this time will be invalid.

BLAZE INTERNATIONAL LIMITED Independent Expert’s Report

OPINION: FAIR AND REASONABLE

9 November 2017

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Financial Services Guide

9 November 2017

BDO Corporate Finance (WA) Pty Ltd ABN 27 124 031 045 ( ‘ we ’ or ‘ us ’ or ‘ ours ’ as appropriate) has been engaged by Blaze International Limited ( ‘ Blaze ’) to provide an independent expert’s report on the payment of $90,000 by Blaze to Kalgoorlie Mine Management Pty Ltd (‘ KMM ’) . You will be provided with a copy of our report as a retail client because you are a shareholder of Blaze.

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 $14,000.

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

BDO Corporate Finance (WA) Pty Ltd was engaged to complete an Independent Expert’s Report in February 2016. The transaction related to the disposal of assets held by the Company in consideration for the termination of the Facilities and Management Agreement in place with Kalgoorlie Mine Management Pty Ltd.

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 Client 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 Free call: 1800 367 287 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	4
4.	Outline of the Transaction	5
5.	Profile of Blaze	6
6.	Economic analysis	12
7.	Industry analysis	13
8.	Valuation approach adopted	17
9.	Assessment of the net decrease in value of Blaze should the Transaction not be approved 18
10.	Valuation of Payment	19
11.	Is the Transaction fair?	20
12.	Is the Transaction reasonable?	20
13.	Conclusion	22
14.	Sources of information	22
15.	Independence	22
16.	Qualifications	23
17.	Disclaimers and consents	23

– Appendix 1 Glossary and copyright notice

– Appendix 2 Valuation Methodologies

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9 November 2017

The Directors Blaze International Limited Suite 9, 330 Churchill Avenue SUBIACO, WA, 6008

Dear Directors

INDEPENDENT EXPERT’S REPORT

1. Introduction

On 12 May 2017, Blaze International Limited (‘ Blaze ’ or ‘ the Company ’) announced that it had completed the transfer of the Company’s equity int erests in Colour Minerals Pty Ltd and K2Fly Limited (formerly Power Resources Limited) to Kalgoorlie Mine Management Pty Ltd (‘ KMM ’) , as announced on 4 December 2015 and detailed in the notice of general meeting to shareholders dated 4 March 2016 (‘ Disposal ’). Details of the Disposal are as follows:

a) The following assets were transferred to KMM (or its nominees):
i. 100% of Colour Minerals Pty Ltd ( ‘Colour Minerals’ ) (which held rights and title to the Barkly Copper-Gold Project ( ‘Barkly Project’ ));
ii. The assignment to KMM of the intercompany loan owed by Colour Minerals to Blaze;
iii. The transfer of 450,000 shares in Power Resources Limited ( ‘ PWW’ ) (now K2Fly Limited (‘ K2Fly ’ )); and
iv. The transfer of two bank deposits totalling $19,455 held as security by the Northern Territory Department of Mines in relation to the Barkly Project.

On 12 May 2017, Blaze also announced that the Company had entered into a second settlement deed (being a second deed of settlement to the original deed entered into on 4 December 2015) with KMM (‘ Payment ’). The Payment included the payment of $90,000 by the Company as the only addition to the commercial terms of the Disposal.

This payment of $90,000 to KMM contravened Listing Rule 10.1 due to the following:

the value of the Payment is considered substantial by definition under the Australian Securities Exchange (‘ ASX ’) Listing Rules as it is more than 5% of the equity interest of Blaze as set out in the most recent accounts at the time (31 December 2016); and
KMM, the entity with which the Payment is being transacted, is considered a substantial shareholder by definition under the ASX Listing Rules, with more than 10% of the voting rights of Blaze.

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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2. Summary and Opinion

2.1 Purpose of the report

The directors of Blaze 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 approval of the Payment to KMM ( ‘ the Transaction ’ ) is fair and reasonable to the non-associated shareholders of Blaze ( ‘ Shareholders ’ ).

Our Report is prepared pursuant to ASX Listing Rule 10.1 and is to be included in the Explanatory Memorandum for Blaze in order to assist the Shareholders in their decision whether to approve the Transaction.

2.2 Approach

Our Report has been prepared having regard to Australian Securities and Investments Commission ( ‘ ASIC ’ ) Regulatory Guide 111 ‘Content of Expert’s Reports’ ( ‘ RG 111 ’ ) and Regulatory Guide 112 ‘Independence of Exper ts’ ( ‘ RG 112 ’ ).

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

The value of the cash payment requiring approval;
The net decrease in the value of Blaze should the Transaction not be approved;
Other factors which we consider to be relevant to the Shareholders in their assessment of the Transaction; and
The position of Shareholders should the Transaction not proceed.

2.3 Opinion

We have considered the terms of the Transaction as outlined in the body of this report and have concluded that, in the absence of an alternate offer, the Transaction is fair and reasonable to Shareholders.

2.4 Fairness

In section 11 we determined that the value of the cash payment requiring approval compares to the decrease in the value of Blaze should Shareholders not approve the Transaction, as detailed below.

		Low	Preferred	High
	Ref
		$	$	$
Net decrease in the value of Blaze should the Transaction
not be approved	9	(339,206)	(297,206)	(227,206)
Value of Payment requiring approval	10	(90,000)	(90,000)	(90,000)

Source: BDO analysis

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2.5 Reasonableness

We have considered the analysis in section 12 of this report, in terms of both

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

In our opinion, the position of Shareholders if the Transaction is approved is more advantageous than the position if the Transaction is not approved. Accordingly, in the absence of any other relevant information and/or an alternate proposal we believe that the Transaction is reasonable for Shareholders.

The respective advantages and disadvantages considered are summarised below:

ADVANTAGES AND DISADVANTAGES
Section Advantages	Section	Disadvantages
12.1 The Transaction is fair	12.2	The Company will no longer be exposed to the potential upside of the Barkly Project
12.1 The Company avoids the consequences listed in Section 12.3
12.1 The Company can continue to focus on new opportunities to create Shareholder value

Other key matters we have considered include:

Section	Description
12.3	Consequences of not approving the Transaction
	� The potential for legal recourse
	� The Company may incur significant legal costs in defending a potential legal claim
	� The Company may be the subject of negative press

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3. Scope of the Report

3.1 Purpose of the Report

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 latest published accounts. Based on the reviewed accounts as at 31 December 2016 the value of the Payment is approximately 5.52% of the equity interest of Blaze.

Listing Rule 10.1 applies where the vendor or acquirer of the relevant assets is a related party of the listed entity.

KWW is a related party of Blaze as it is a substantial shareholder. For the purposes of Listing Rule 10.1, a substantial shareholder is a person who has a relevant interest, or had at any time in the six months before the transaction, in at least 10% of the total votes attaching to the voting securities. KMM, by virtue of its relevant interest in 14.93% of the voting shares of Blaze, is a substantial shareholder of the Company for the purposes of Listing Rule 10.1.

As a result of the above, the Disposal represents a substantial asset which is being acquired by a substantial shareholder of Blaze and the Company is therefore required to seek Shareholder approval under Listing Rule 10.1 in accordance with Listing Rule 10.9.

Listing Rule 10.9 provides that an entity must take corrective action if ASX requires it to as a result of a contravention of Listing Rule 10.1. The corrective action, at the option of the entity, is either of the following:

10.9.1 Cancelling the transaction (or arranging for its cancellation); or
10.9.2 Seeking the approval of holders of ordinary shares to the transaction. If approval is not obtained, the entity must cancel the transaction (or arrange for its cancellation).

Accordingly, Blaze is seeking Shareholder approval pursuant to Listing Rule 10.9.2.

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.

Accordingly, an independent experts’ report is required for the 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 Blaze.

3.2 Regulatory guidance

Neither the Listing Rules nor the Corporations Act defines the meaning of ‘fair and reasonable’. In determining whether the Transaction is 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.

This regulatory guide 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

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simply on a consideration of the advantages and disadvantages of the proposal. We do not consider the Transaction to be a control transaction. As such, we have used RG 111 as a guide for our analysis but have considered the Transaction as if it were not 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 equal to or 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. RG 111 states that 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. However, as stated in Section 3.2 we do not consider that the Transaction is a control transaction. As such, we have not included a premium for control when considering the value of the Payment nor the net decrease in value should the Transaction not be approved.

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 alternate options.

RG 111 suggests that the main purpose of an independent expert’s report is to adequately deal with the concerns that could reasonably be anticipated of those persons affected by the transaction.

Having regard to RG 111, we have completed our Report as follows:

A comparison between the value of the Payment and the net decrease in value of Blaze if the Transaction is not approved by Shareholders (fairness – see Section 11 ‘Is the Transaction Fair? ’ ); and
An investigation into the advantages and disadvantages of the Transaction (Sections 12.1 and 12.2);
An analysis of any other issues that could be reasonably anticipated to concern Shareholders as a result of the Transaction (Section 12.3).

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 Transaction

On 17 November 2009, Blaze and KMM entered into a management agreement which detailed the terms and conditions by which KMM was to be employed to carry out management, administrative, geological and secretarial and other duties on behalf of the Company (‘ Management Agreement ’) . Under the terms of the Management Agreement, the minimum annual management fee payable to KMM was $235,000 plus GST (with annual reviews allowing for price increases based on a Consumer Price Index calculation). The Management Agreement was for an initial term of five years.

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On 10 October 2012, Blaze and KMM signed a Deed of Variation to the Management Agreement, whereby it was agreed to extend the term of the Management Agreement for a further three years to 17 November 2017. The annual management fee payable to KMM at this time had increased to $249,069 plus GST.

On 4 December 2015, Blaze and KMM entered into the Deed relating to the termination and release of the Management Agreement. As consideration for the termination under the Deed, Blaze could elect to either:

a) Pay KMM the sum of $466,379 under the Cash Consideration Alternative; or
b) Elect the Asset Consideration Alternative and transfer the following assets to KMM (or its nominees):
i. 100% of Colour Minerals (which holds the rights and title to the Barkly Project);
ii. The assignment to KMM of the intercompany loan owed by Colour Minerals to Blaze;
iii. The transfer of 450,000 PWW shares (now K2Fly); and
iv. The transfer of two bank deposits totalling $19,455 held as security by the Northern Territory Department of Mines in relation to the Barkly Project.

On 8 December 2015, Blaze announced it has elected the Asset Consideration Alternative to satisfy the consideration payable for termination of the Management Agreement.

On 12 May 2017, Blaze announced that it had completed the Disposal, as announced on 4 December 2015 and that it had made the Payment to KMM.

As the Payment forms part of the total dealings with KMM (which includes the initial Disposal), nonapproval of the Payment by Shareholders will result in the Company being required to take corrective action, as per Listing Rule 10.9, which would entail cancellation and unwinding of the Payment and Disposal. Specifically, this would include the following:

Blaze would seek to regain ownership of the shares in Colour Minerals (which holds the rights and title to the Barkly Project);
Blaze would seek to regain assignment of the loan owed by Colour Minerals to KMM;
Blaze would seek to regain ownership of the PWW (now K2Fly) shares; and
Blaze would seek to regain title over the two bank deposits totalling $19,455 held as security by the Northern Territory Department of Mines in relation to the Barkly Project.

In effect, the cancellation of the Payment and Disposal would constitute a reversal of the initial Disposal and subsequent Payment.

5. Profile of Blaze

5.1 History

Blaze is headquartered in Perth, Western Australia and listed on the ASX on 2 September 1996. It is an exploration company with its primary focus being on the exploration and development of the Barkly Project in the Northern Territory. However, on 8 April 2016, the Company announced that shareholders had approved the disposal of the Company’s interest in Colour Minerals, a subsidiary that holds the rights and title to the Barkly Project and its interests in PWW. Throughout the 2017 financial year, the Company

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assessed possible new project acquisitions, including the Marble Bar Lithium Project (‘ Marble Bar Project’ ) over which Blaze had an option to acquire from Great Sandy Pty Ltd. The Company commenced a drilling program at the Marble Bar Project on 21 November 2016 and completed 12 reverse circulation drill holes. On 30 December 2016, the Company announced that the Board had resolved not to exercise its option over the Marble Bar Project, as market conditions did not support the exercise of the option. The Company plans to assess other acquisition opportunities over the 2018 financial year.

The current board of directors and senior management are:

Mr Josh Puckridge, Non-Executive Chairman
Mr Maciej Rosiewicz, Non-Executive Director; and
Ms Loren Jones, Non-Executive Director and Company Secretary.

Barkly Project

The Barkly Project is located in the eastern part of the Tennant Creek Mineral Field in the Northern Territory and comprises one granted exploration licence, being EL28620. Blaze entered into the JV Agreement with Meteoric Resources NL (‘ Meteoric ’) to earn up to an 80% interest in the project on 2 September 2013.

Under the JV Agreement, Blaze had the right to earn a 50% interest through exploration expenditure of $250,000 before March 2015, an additional 20% through further exploration expenditure of $350,000 by March 2017, and a further 10% if it elected to sole fund all expenditure up to the commencement of a Bankable Feasibility Study.

On 4 May 2015, Blaze’s interest in the joint venture increased to 70% and Blaze advised Meteoric that it elected to sole fund all joint venture expenditure up to the commencement of a Bankable Feasibility Study in order earn a further 10% interest.

On 4 December 2015, Blaze announced that it had entered into a deed of termination and release relating to the Management Agreement with KMM dated 17 November 2009, and subsequent variation dated 10 October 2012.

In a notice of general meeting dated 4 March 2016, the Company put forward a resolution to shareholders to transfer, among other things, the Company’s 100% interest in Colour Minerals, which holds the rights and title to the Barkly Project.

On 8 April 2016, the Company announced shareholders had approved the Disposal to KMM, including the Company’s interest in Colour Minerals.

Key Funding Events

On 24 February 2015, the Company issued 15 million shares at $0.001 per share to S3 Consortium Pty Ltd as consideration for consultancy services provided to the Company.

On 7 September 2015, the Company issued 1.76 million shares at $0.0337 per share and 12.63 million shares at $0.0302 per share through a share placement to clients of Cicero Advisory Services Pty Ltd which raised a total of $440,360.

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On 4 December 2015, the Company issued 30.07 million shares at $0.04 to sophisticated investors, raising $1.20 million. The funds were raised to provide additional working capital and to seek out new acquisition opportunities.

On 20 January 2016, the Company announced the placement of 38 million shares at $0.04 to sophisticated investors, to raise $1.52 million. The funds were raised to provide additional working capital and to seek out new acquisition opportunities.

On 17 August 2016, the Company announced that it had completed a placement of 11,000,000 new fully paid ordinary shares at $0.05 per share raising $550,000. The funds were raised to provide additional working capital.

On 4 November 2016, the Company issued a Rights Issue Prospectus to raise up to $2.1 million. The Prospectus was for a non-renounceable entitlement issue of one share for every three shares held by those shareholders registered at the record date, at an issue price of $0.05 per share.

5.2 Historical Financial Information

Statement of Financial Position	Audited as at Audited as at Audited as at
	30-Jun-17 30-Jun-16 30-Jun-15
	$ $ $
CURRENT ASSETS
Cash and cash equivalents	1,318,381 1,923,998 31,116
Trade and other receivables	14,755 103,044 46,614
Other current assets	- - -
TOTAL CURRENT ASSETS	1,333,136 2,027,042 77,730
NON-CURRENT ASSETS
Plant and equipment	89,568 - -
Available-for-sale financial assets	- 4,050 4,050
Deferred exploration expenditure	- 442,874 602,013
TOTAL NON-CURRENT ASSETS	89,568 446,924 606,063
TOTAL ASSETS	1,422,704 2,473,966 683,793
CURRENT LIABILITIES
Trade and other payables	15,668 571,209 487,654
Borrowings	- - 492,649
TOTAL CURRENT LIABILITIES	15,668 571,209 980,303
TOTAL LIABILITES	15,668 571,209 980,303
NET ASSETS	1,407,036 1,902,757 (296,510)
EQUITY
Issued capital	36,541,893 36,291,073 32,777,006
Reserves	989,745 686,585 900
Accumulated losses	(36,124,602) (35,074,901) (33,074,416)
TOTAL EQUITY	1,407,036 1,902,757 (296,510)

Source: Audited financial statements for the year ended 30 June 2015, 30 June 2016 and 30 June 2017.

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Commentary on Historical Statements of Financial Position

We note the following in relation to Blaze’s statement of financial position :

Cash and cash equivalents was $31,116 as at 30 June 2015, $1,923,998 as at 30 June 2016 and $1,318,381 as at 30 June 2017. The decrease in cash and cash equivalents of $605,617 during the year ended 30 June 2017 was primarily a result of payments to suppliers and employees of $581,473 and cash outflows from investing activities of $579,024, which mainly comprised payments for property plant and equipment of $96,224 and exploration and evaluation expenditure of $482,800. This was partially offset by proceeds from the issue of shares of $605,664.
Available-for- sale financial assets held at 30 June 2015 and 30 June 2016 related to Blaze’s 450,000 PWW shares.
Deferred exploration expenditure of $422,874 for the year ended 30 June 2016 and $602,013 for the year ended 30 June 2015 related to work carried out on the Barkly Project.
The trade and other payables balances as at 30 June 2016 and 30 June 2015 largely related to Management Agreement invoices issued by KMM for management fees.
Borrowings of $492,649 as at 30 June 2015 related to unsecured convertible loan notes and accrued interest.

	Audited for the	Audited for the	Audited for the
Statement of Comprehensive Income	year ended 30-Jun-17	year ended 30-Jun-16	year ended 30-Jun-15
	$	$	$
Continuing Operations
Revenue	11,138	10,161	58
Other Income	-	900	1,602
Accounting and audit fees	(33,430)	(87,798)	(46,287)
Administration expenses	(120,000)	(635,421)	(186,005)
Corporate compliance costs	(53,523)	(73,693)	(24,629)
Depreciation	(6,656)	-	-
Directors’ fees, salaries, super and consulting costs	(134,000)	(129,787)	(85,225)
Share based payments	-	(685,385)	-
Exploration expenditure written off	(482,800)	(259,547)	(477)
Legal fees	(58,034)	(39,088)	(6,400)
Management fees	-	(84,376)	(257,010)
Other expenses from ordinary activities	(116,893)	(9,852)	(56,190)
Project evaluation	(34,074)	(6,600)
Loss on disposal of subsidiary	(21,429)		-
Share registry fees	-	-	(25,065)
Interest expense	-	-	(52,649)
Loss before income tax expense	(1,049,701)	(2,000,485)	(738,277)

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Statement of Comprehensive Income	Audited for the Audited for the Audited for the
	year ended 30-Jun-17 year ended 30-Jun-16 year ended 30-Jun-15
	$ $ $
Income tax (benefit)/expense	- - -
Loss for the year from continuing operations	(1,049,701) (2,000,485) (738,277)
Items that will not be reclassified to profit or loss	(900) - -
Other comprehensive income for the year	- - 900
Total comprehensive loss for the period	(1,050,601) (2,000,485) (737,377)

Source : Audited financial statements for the year ended 30 June 2015, 30 June 2016 and 30 June 2017.

Commentary on Historical Statements of Comprehensive Income

We note the following in relation to Blaze’s recent financial performance:

Administration expenses decreased from $635,421 for the year ended 30 June 2016 to $120,000 for the year ended 30 June 2017. The decrease was primarily the result of reduced expenditure following the Disposal in April 2016.
Exploration Expenditure of $482,800 written off for the year ended 30 June 2017, related to exploration expenditure incurred during the year on the Marble Bar Project.
Management fees of $257,010 for the year ended 30 June 2015 related to management fees paid to KMM under the Management Agreement.
Loss on disposal of subsidiary of $21,429 for the year ended 30 June 2017, related to the disposal of Colour Minerals to KMM.

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5.3 Capital Structure

The share structure of Blaze as at 3 November 2017 is outlined below:

	Number
	Total ordinary shares on issue 127,013,264
	Top 20 shareholders 82,222,384
	Top 20 shareholders - % of shares on issue 64.74%

Source: Share registry information

The range of shares held in Blaze as at 3 November 2017 is as follows:

	Number of	Number of Ordinary	Percentage of Issued
Range of Shares Held	Ordinary Shareholders	Shares	Shares (%)
1 - 1,000	119	33,778	0.03%
1,001 - 5,000	195	661,811	0.52%
5,001 - 10,000	85	641,489	0.51%
10,001 - 100,000	173	6,780,098	5.34%
100,001 - and over	118	118,896,088	93.61%
TOTAL	690	127,013,264	100.00%

Source: Share registry information

The ordinary shares held by the most significant shareholders as at 3 November 2017 are detailed below:

	Number of Ordinary	Percentage of Issued
Name	Shares Held	Shares (%)
Great Southern Flour Mills Pty Ltd	15,125,000	11.91%
Kalgoorlie Mine Management Pty Ltd	13,602,655	10.71%
Ms Nicole Gallin and Mr Kyle Haynes	6,350,000	5.00%
Fidelity & Security Nominees Pty Ltd	6,250,000	4.92%
Station Nominees Pty Ltd	6,000,000	4.72%
Subtotal	47,327,655	25.35%
Others	79,685,609	62.74%
Total ordinary shares on Issue	127,013,264	88.09%

Source: Share registry information

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6. Economic analysis

The Australian economy expanded by 0.8% in the 2017 June quarter, and this growth is expected to gradually increase over the next twelve months. This is largely due to recent positive economic indicators such as a solid pick up in non-mining business investment, increasing capacity utilisation and a large pipeline of infrastructure investment. However, slow growth in real wages and high levels of household debt may constrain future growth in household spending.

Inflation in the coun try remains below the Reserve Bank of Australia’s (‘ RBA ’) target of 2% to 3%, with headline consumer price index (‘ CPI ’) inflation currently around 1.9%. This is expected to pick up gradually as the economy strengthens.

Housing market conditions continue to differ between states, with prices increasing rapidly in some markets and conditions starting to ease in others such as Sydney. For some time now, growth in housing debt has been outrunning the slow growth in household incomes. As a result, the Australian Prudential Regulation Authority recently introduced supervisory measures to address the medium-term risks associated with rising household indebtedness.

Commodity prices

Global commodity prices have been variable in recent months. The iron ore spot price has pulled back from recent highs, with weaker sentiment in the market fuelled partly by impending steel output cuts in China, and the expectation that iron ore restocking demand will likely decrease as steel production faces added pressure.

Other commodity prices such as oil are expected to remain volatile, and liquefied natural gas prices may trend downwards due to shifts in supply and demand. Available information suggests most industrial raw materials are on an upward trajectory, allowing for some unexpected movements along the way.

Currency movements

The Australian dollar has appreciated since mid-year, partially reflecting a lower US dollar. This higher exchange rate is expected to contribute to the subdued price pressures in the economy. The RBA states there is a chance the Australian dollar could appreciate even further, which would negatively impact the forecasted pick-up in economic activity and inflation than currently forecast.

Source: www.rba.gov.au Statement by Philip Lowe, Governor: Monetary Policy Decision 3 October 2017.

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7. Industry analysis

7.1. Copper

Copper is a soft, malleable, ductile metal used primarily for its excellent electrical and thermal conductive properties and its resistance to corrosion. As well as electrical and electronic applications, copper is utilised extensively as an alloy. Copper is produced from an oxide or sulphone ore from which it is converted to copper metal.

The majority of copper ore bodies can be classified as either porphyries (where copper occurs in igneous rock), strata bound ore bodies (sedimentary rock), and volcanic hosted massive sulphide deposits (volcanic rock along with other base metal sulphides). In these deposits, copper is mined in very low concentrations and consequently is a volume intensive process. For this reason, open pit mining is the preferred method of extraction, however underground mining and leach mining are also used in limited circumstances.

Copper Prices

Copper is a global commodity and, as such, prices are determined by global supply and demand factors. Due to this, copper prices have historically reflected global economic cycles and experienced major fluctuations reflecting equity market movements. At the beginning of 2008, supply concerns, falling inventories and increased demand from emerging economies provoked a significant and accelerated rise in copper prices. As with most commodities, prices fell during the global financial crisis. Prices have since overtaken the increases which occurred in 2008, occurring during the latter half of 2010 and throughout the beginning of 2011, reaching a peak of just over US$10,000 per tonne in February 2011. Since that peak, prices have shown a continued downward trend until a recovery beginning in the second half of 2016.

The average copper price from January 2017 through to October 2017 has been approximately US$6,042 per tonne, ranging from a low of US$5,461 per tonne on 8 May 2017 to a high of US$7,122 per tonne on 16 October 2017. The increase in copper prices in mid- February 2017 was due to strike action at the world’s largest copper mine Escondida, located in Chile. In addition, output was scaled back at the large Grasberg mine in Indonesia amid export restrictions and contractual disputes with the Indonesian government. According to Consensus Economics the long term forecast copper price is expected to be between approximately US$6,600 and US$6,900 per tonne.

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

London Metals Exchange Copper Price
12,000
10,000
8,000
6,000
4,000
2,000
-
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Spot Price Forecast
US$/tonne
----- End of picture text -----

Source: Bloomberg and Consensus Economics

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Copper Production

Most of the world’ s copper comes from South and Central America, particularly in Chile and Peru. In 2016, Chile, China and Peru have been estimated to account for approximately 50% of the world’s copper production. Although Australia has substantive reserves of copper, in terms of production, Australia has been estimated to account for 5% in 2016. The graph below shows the split between the different country’s estimated productions for the year 2016.

Copper Production by Country 2016 (Estimated)

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

Chile
20%
Peru
28%
China
United States
3% Australia
4% Congo (Kinshasa)
Zambia
4%
Canada
4% Russia
12% Mexico
5%
Other Countries
5%
7% 9%
----- End of picture text -----

Source: U.S. Geological Survey

As at 2016, Chile, Australia and Peru are collectively estimated to account for just over 50% of global reserves of copper. A figure illustrating an estimated country breakdown of reserves for 2016 is shown below:

Copper Reserves by Country 2016 (Estimated)

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

Chile
21%
Peru
29%
Australia
Mexico
United States
2%
3% Russia
China
3%
Congo (Kinshasa)
4%
Zambia
4% Canada
11%
Other Countries
5%
6% 12%
----- End of picture text -----

Source: U.S. Geological Survey

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The dominant consumers include China, Japan and India. China acquires approximately 33.7% of the Australian copper exports given the demand influenced by the above average growth of urbanisation and energy use. Japan accounts for approximately 32.4%, and commonly utilises copper concentrates for further processing into final copper goods.

The Australian copper industry revenue is expected to grow at an annualised 3.0% over the five years through to 2022-23, or up to $7 billion. Over the short to medium term, industry revenue is forecast to increase by 5.3% as output is expected to increase in response to stabilising prices.

Source : IBISWorld and US Geological Survey

7.2. Gold

Gold is a soft malleable metal which is highly desirable due to its rarity and unique mineral properties. Gold has been used in jewellery and as a form of currency for thousands of years, however in more recent history there has been increasing demand for its use in the manufacture of electronics, dentistry, medicine and aerospace technology.

In addition to its practical applications, gold also serves as an international store of monetary value. Gold is widely regarded as a monetary asset as it is considered less volatile than world currencies and provides a safe haven investment during periods of economic uncertainty. Once mined, gold continues to exist indefinitely and is often melted down and recycled to produce alternative or replacement products.

Consequently, demand for gold is supported by both gold ore mining and gold recycling. A summary of the supply of gold for the seven years through 2016 is provided in the table below:

Gold supply (tonnes)	2010 2011 2012 2013 2014 2015 2016
Mine production	2,744 2,846 2,911 3,073 3,148 3,220 3,255
Net producer hedging	(109) 23 (45) (28) 105 13 33
Recycledgold	1,683 1,667 1,691 1,262 1,189 1,120 1,296
Total supply	4,318 4,536 4,557 4,307 4,442 4,353 4,584

Source : World Gold Council and Independent Market Research

The gold ore mining industry has performed steadily in recent years, with growth driven by price increases and gold’s status as a c ounter cyclical commodity. However, industry revenue is projected to stagnate as the world economy stabilises following the United States ( ‘US’ ) Presidential Election and the United Kingdom’s exit from the European Union. According to IBIS World, industry revenue is projected to decline at an annualised rate of 1.8% over the five years through 2022-2023, to total $15.5 billion. Over the short to medium term, industry revenue is forecast to increase by 2.7%, as production increases and limited pricing growth is expected.

Gold Prices

The price of gold peaked at US$1,900 on 5 September 2011, due largely to the debt market crisis in Europe and the Standard and Poor’s downgrade of the US credit rating. Global stock markets subsequently went into turmoil, which saw a flood of investors towards safer havens such as gold.

The price of gold fluctuated around US$1,700 during 2012 before entering a steep decline in 2013. The downturn represented the beginning of a correction in the price of gold, which had almost tripled in the two-year period prior to the European crisis in 2011. Improved market sentiment and increased risk appetite from investors saw gold prices continue to decline throughout 2014 and 2015 to US$1,051 in December 2015. During 2016, gold prices strengthened, likely as a result of heightened uncertainty

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surrounding the US Presidential election and the United Kingdom’s exit from the European Union. The price of gold reached US$1,363 in late 2016 before stabilising around US$1,200 for the first half of 2017, before climbing to reach a high of $1,349 in September 2017. The gold spot price since 2010 and forecast prices through to 2026 are depicted in the graph below:

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

Gold Spot and Forecast Price
2,000
1,600
1,200
800
400
-
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Historical Price Forecast Price
Gold Price (US$/Ounce)
----- End of picture text -----

Source : Bloomberg and Consensus Economics

According to Consensus Economics, gold prices are forecast to remain relatively stable with a long term nominal price forecast of approximately US$1,300 per ounce.

Source : IBISWorld, US Geological Survey, Bloomberg and Consensus Economics

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8. Valuation approach adopted

There are a number of methodologies which can be used to value a business or the shares in a company. We have not valued the shares in Blaze because our fairness assessment is based on a comparison between the value of the Payment and the net decrease in the value of Blaze, should the Transaction not be approved. 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)

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

RG 111.57 suggests that a proposed related party transaction is ‘fair’ if the value of the financial benefit to be provided by the entity to the related party is equal to or less than the value of the consideration being provided to the entity. 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. RG 111.58 further suggests that where the proposed transaction consists of an asset acquisition by the entity, it is fair if the value of the financial benefit being offered by the entity to the related party is equal to or less than the value of the assets being acquired.

Therefore, for the Transaction to be considered fair, the value of the Payment for which Blaze is seeking approval for, must be less than net decrease in the value of Blaze should the Transaction not be approved.

In order to value the net decrease in the value of Blaze if the Transaction is not approved, we have valued the individual assets that were the subject of the Disposal, being:

i. The Barkly Project;
ii. The intercompany loan owed by Colour Minerals to Blaze;
iii. The 450,000 PWW shares (now 47,873 shares in K2Fly); and
iv. The two bank deposits totalling $19,455 held as security by the Northern Territory Department of Mines in relation to the Barkly Project.

But for the Disposal, the Company would have been required to make payments in accordance with the Management Agreement. Therefore, we have also valued the financial obligations of Blaze under the Management Agreement from the date of termination being 4 December 2015 until expiry on 17 November 2017.

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9. Assessment of the net decrease in value of Blaze should the Transaction not be approved

9.1 Valuation of the Barkly Project

We instructed Agricola Mi ning Consultants Pty Ltd (‘ Agricola ’) to provide an independent market valuation of the Barkly Project. Agricola considered the Barkly Project to be an ‘exploration project’ in which cost based valuation methodologies are considered to be the most appropriate. As its preferred valuation methodology, Agricola applied the geo-factor rating method as it focusses on the future prospectivity of the area. Agricola’s valuation report has been prepared in accordance with the Australasian Code for Public Reporting of Technical Assessments and Valuations of Mineral Assets (2015 Edition) (‘ Valmin Code 2015 ’) . We consider the valuation methods to be appropriate given the early stage of development for the Barkly Project.

Prior to the Disposal, Blaze (through its subsidiary Colour Minerals) held a 70% interest in the Barkly Project. Therefore, the valuation of the 70% interest held prior to Disposal is shown in the table below:

	Low value	Preferred value	High value
Mineral Asset Valuation	$	$	$
Valuation of the Barkly Project (100% interest)	180,000	240,000	340,000
Valuation of the Barkly Project (70% interest)	126,000	168,000	238,000

Source: Independent Valuation Report prepared by Agricola and BDO analysis

We note that the values presented above represents the current value of the Barkly Project based on the 70% held immediately prior to the Disposal.

The table above indicates a range of values for the 70% interest in the Barkly Project between $126,000 and $238,000 with a preferred value of $168,000. Further information regarding Agricola’s independent valuation can be found in Appendix 3.

9.2 Valuation of PWW ordinary shares

As part of the Disposal, Blaze transferred its holding of 450,000 ordinary shares in PWW to KMM. PWW has since changed its name to K2 Fly. Following the disposal of Blaze’s PWW shares to KMM, PWW, underwent a consolidation of capital on a 9.4 for 1 basis. On a post consolidation basis, and following the change of name, 450,000 PWW shares would be 47,873 shares in K2Fly. Our review of the recent trading in K2Fly indicates that that K2Fly shares display a low to moderate level of liquidity with approximately 33% of its issued capital traded in the past twelve months. We have valued the shares based on the closing share price on 1 November 2017, being $0.090. Given that the value of these shares are not material, we do not consider it appropriate to adopt an alternative valuation methodology. Nor do we consider that an alternate valuation approach would have a material effect on our total valuation or our opinion.

Therefore, based on the closing share price on 1 November 2017, we consider the value of the holding in K2Fly to be $4,309.

9.3 Valuation of other assets

The other assets that were the subject of the Disposal were two bank deposits that were held as security by the Northern Territory Department of Mines in relation to the Barkly Project and an intercompany loan currently payable by Colour Minerals to KMM.

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The two bank deposits total $19,455 while the effect of transferring the intercompany loan owed by Colour Minerals back to Blaze would have nil effect on Blaze’s financial position given that it would eliminate on consolidation.

9.4 Valuation of the obligations under the management agreement

The key inputs used to calculate the value of the obligations under the Management Agreement are as follows:

Termination date, being the date of the Deed, is 4 December 2015;
The Management Agreement is due to expire on 17 November 2017; and
Management fee payable to KMM at the date of the variation of the Management Agreement is $249,069 per annum (with annual reviews allowing for price increases based on a Consumer Price Index calculation).

Therefore, we have calculated the value of the financial obligations to be $488,970 being the management fees that would have accrued between 4 December 2015 and 17 November 2017, had the Disposal not been effected.

9.5 Assessment of the net decrease in the value of Blaze should the Transaction not be approved

Our assessment of the net decrease in the value of Blaze should the Transaction not be approved is shown in the below table.

Ref Net decrease in value of Blaze should the Transaction not be approved	Low	Preferred High $ $ 168,000 238,000 4,309 4,309 19,455 19,455 (488,970) (488,970)
	$
Valuation of the Barkly Project (70% interest) 9.1	126,000
Valuation of K2Fly ordinary shares (previously PWW) 9.2	4,309
Valuation of other assets to be transferred 9.3	19,455
Management Agreement Obligations 9.4	(488,970)
Total	(339,206)	(297,206) (227,206)

Source: BDO analysis

10. Valuation of Payment

On 12 May 2017, Blaze announced that the Company had entered into a second settlement deed. The second deed included the payment of $90,000 by the Company as the only change to commercial terms. Therefore, the valuation of the payment is $90,000.

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11. Is the Transaction fair?

The value of the Payment requiring approval compares to the net decrease in the value of Blaze should Shareholders not approve the Transaction, as set out below:

		Low	Preferred	High
	Ref
		$	$	$
Net decrease in the value of Blaze should the Transaction
not be approved	9	(339,206)	(297,206)	(227,206)
Value of Payment requiring approval	10	(90,000)	(90,000)	(90,000)

Source: BDO analysis

We note from the table above that the value of the Payment is less than the net decrease in the value of Blaze should the Transaction not be approved. Therefore, we consider that the Transaction is fair.

12. Is the Transaction reasonable?

12.1 Advantages of Approving the Transaction

We have considered the following advantages when assessing whether the Transaction is reasonable.

Advantage	Description
The Transaction is fair	As set out in Section 11 the Transaction is fair. RG 111 states that
	an offer is reasonable if it is fair.
The Company avoids the consequences listed	As set out below, the Company avoids the following
in Section 12.3	consequences:
	� The possibility of legal recourse;
	� The potential for negative press; and
	� The potential for significant legal costs.
	The consequences of not approving the transaction are detailed in
	Section 12.3 below.
The Company can continue to focus on new	If the Transaction is approved the Company will be in a position to
opportunities to create Shareholder value	focus its attention and resources at new opportunities to create
	value for Shareholders.

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12.2 Disadvantages of Approving the Transaction

If the Transaction is approved, in our opinion, the potential disadvantages to Shareholders include those listed in the table below:

Disadvantage	Description
The Company will no longer	If the Transaction is approved the Company will no longer be exposed to the
be exposed to the potential	potential upside from the Barkly Project, however we note that Shareholders
upside of the Barkly Project	previously approved the disposal of this asset, so we do not consider this to be a
	significant disadvantage.

12.3 Consequences of not Approving the Transaction

On 12 May 2017, Blaze announced that its payment of $90,000 to KMM contravened ASX Listing Rule 10.1. The Company announced that it would seek corrective action under ASX Listing Rule 10.9.2, however, ASX listing rule 10.9.2 provides that if approval is not obtained, then the Company must cancel the Transaction or arrange for its cancellation. As such, if the Transaction is not approved the Company could be subject to the following consequences:

12.3.1 The potential for legal recourse

If the Transaction is not approved, the Disposal will be reversed. The reversal of the Disposal will likely result in losses being incurred by KMM and potentially other parties. As a result, the Company may face the possibility of legal recourse from KMM and any other affected parties. If the Company is required to pay damages to KMM and any other affected parties, this would reduce the value of S hareholders’ interest in Blaze.

12.3.2 The Company may incur legal costs

If the Transaction is not approved, KMM (or other affected parties) may take legal action against the Company. As a result, the Company is likely to incur significant legal costs in defending these claims. The legal costs incurred by the Company would decrease the value of S hareholders’ interest in the Company.

12.3.3 The Company may be the subject of negative press

If the Transaction is not approved the Company is likely face negative press associated with the potential unwinding of the Disposal. Negative press related to this matter may cause a decrease in the Company’s share price.

12.3.4 The legal claims and negative press may prevent the Company from pursuing its other objectives

If the Transaction is not approved and the Company has to defend against legal claims as set out above, this may prevent the Company from being able to allocate its resources to pursuing its other objectives. This will likely impede the Company’s ability to generate value for Shareholders.

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13. Conclusion

14. 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;
Audited financial statements of Blaze for the years ended 30 June 2017, 30 June 2016 and 30 June 2015;
Independent Valuation Report of the Barkly Project performed by Agricola;
Share registry information;
Information in the public domain including:
ASX announcements made by Blaze;
RBA Publications (statements by Phillip Lowe);
US Geological Survey;
World Gold Council publications; and
Discussions with Directors and Management of Blaze.

15. Independence

BDO Corporate Finance (WA) Pty Ltd is entitled to receive a fee of $14,000 (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 Blaze in respect of any claim arising from BDO Corporate Finance (WA) Pty Ltd's reliance on information provided by Blaze, including the nonprovision 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 Blaze 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 Blaze and their respective associates.

A draft of this report was provided to Blaze 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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16. 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 Adam Myers and Sherif Andrawes 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.

Adam Myers is a member of the Australian Institute of Chartered Accountants. Adam’s career spans 19 years in the Audit and Assurance and Corporate Finance areas. Adam is a CA BV Specialist and has considerable experience in the preparation of independent expert reports and valuations in general for companies in a wide number of industry sectors.

Sherif Andrawes is a Fellow of the Institute of Chartered Accountants in England & Wales and a Fellow of Chartered Accountants Australia & New Zealand. He has over 29 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 300 public company independent expert’s reports under the Corporations Act o r ASX Listing Rules and is a CA BV Specialist . 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.

17. Disclaimers and consents

This report has been prepared at the request of Blaze for inclusion in the Explanatory Memorandum which will be sent to all Blaze Shareholders. Blaze engaged BDO Corporate Finance (WA) Pty Ltd to prepare an independent expert's report to consider whether or not the approval of the $90,000 payment to KMM is fair and reasonable to the non-associated shareholders of Blaze.

BDO Corporate Finance (WA) Pty Ltd hereby consents to this report accompanying the above 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 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 the Transaction. 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 Transaction, tailored to their own particular circumstances. Furthermore, the advice provided in this report does not constitute legal or taxation advice to the Shareholders of Blaze, or any other party.

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

The valuer engaged for the mineral asset valuation, Agricola, possess the appropriate qualifications and experience in the industry to make such assessments. The approaches adopted and assumptions made in arriving at their valuation is 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 is required to provide a supplementary report if we become aware of a significant change affecting the information in this report arising between the date of this report and prior to the date of the meeting or during the offer period.

Yours faithfully

BDO CORPORATE FINANCE (WA) PTY LTD

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Adam Myers Sherif Andrawes Director Director

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A endix 1 – Glossar of Terms pp y

Reference	Definition
Agricola	Agricola Mining Consultants 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
BDO	BDO Corporate Finance (WA) Pty Ltd
Barkly Project	Barkly Copper-Gold Project
Blaze	Blaze International Limited
Colour Minerals	Colour Minerals Pty Ltd
The Company	Blaze International Limited
Corporations Act	The Corporations Act 2001 Cth
CPI	Consumer Price Index
DCF	Discounted Future Cash Flows
Disposal	The transfer of the following assets from Blaze to KMM (or its nominees):
	� 100% of Colour Minerals (which held rights and title to the Barkly
	Project’);
	� The assignment to KMM of the intercompany loan owed by Colour
	Minerals to Blaze;
	� The transfer of 450,000 shares in PWW (now K2Fly); and
	� The transfer of two bank deposits totalling $19,455 held as security
	by the Northern Territory Department of Mines in relation to the
	Barkly Project.
FME	Future Maintainable Earnings
FOS	Financial Ombudsman Service

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Reference	Definition
FSG	Financial Services Guide
JORC Code	The Australasian Code for Reporting of Exploration Results, Mineral Resources
	and Ore Reserves (2012 Edition)
K2Fly	K2Fly Limited
KMM	Kalgoorlie Mine Management Pty Ltd
Management Agreement	An agreement between Blaze and KMM, which detailed the terms and
	conditions by which KMM was to be employed to carry out management,
	administrative, geological, secretarial and other duties on behalf of Blaze.
Marble Bar Project	Marble Bar Lithium Project
Meteoric	Meteoric Resources NL
NAV	Net Asset Value
RBA	Reserve Bank of Australia
Our Report	This Independent Expert’s Report prepared by BDO
Payment	The payment of $90,000 to KMM under a second settlement deed with KMM
PWW	Power Resources Limited
QMP	Quoted Market Price
RBA	Reserve Bank of Australia
RG 111	Content of expert reports (March 2011)
RG 112	Independence of experts (March 2011)
Shareholders	The non-associated shareholders of Blaze
The Transaction	The payment of $90,000 to KMM under the second settlement deed
Valmin Code 2015	Australasian Code for Public Reporting of Technical Assessments and
	Valuations of Mineral Assets (2015 Edition)
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

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Reference	Definition
	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.

All rights reserved. No part of this publication may be reproduced, published, distributed, displayed, copied or stored for public or private use in any information retrieval system, or transmitted in any form by any mechanical, photographic or electronic process, including electronically or digitally on the Internet or World Wide Web, or over any network, or local area network, without written permission of the author. No part of this publication may be modified, changed or exploited in any way used for derivative work or offered for sale without the express written permission of the author.

For permission requests, write to BDO Corporate Finance (WA) Pty Ltd, at the address below:

The Directors

BDO Corporate Finance (WA) Pty Ltd

38 Station Street SUBIACO, WA 6008 Australia

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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 mark et 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 liquid and active 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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Appendix 3 – Independent Valuation Re ort p

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Malcolm Castle Agricola Mining Consultants Pty Ltd P.O. Box 473, South Perth, WA 6951 Mobile: 61 (4) 1234 7511 Email: [email protected] ABN: 84 274 218 871

6 November 2017

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

Dear Sirs,

Re: INDEPENDENT VALUATION OF THE BARKLY COPPER-GOLD PROJECT in the NORTHERN TERRITORY HELD BY BLAZE INTERNATIONAL LIMITED

Agricola Mining Consultants Pty Ltd (“Agricola”) has been commissioned by the Directors of BDO Corporate Finance (WA) Pty Ltd (“BDO”) to provide a Mineral Asset Valuation Report (“Report”) of the Barkly Copper-Gold Project in the Northern Territory which was previously held by Blaze International Ltd (the “Company”). This report serves to comment on the geological setting and exploration results on the properties and presents a technical and market valuation for the exploration assets based on the information in this Report.

The present status of the tenements is based on information made available by the Company and independently verified by Agricola. The Report has been prepared on the assumption that the tenements are lawfully accessible for evaluation. Agricola notes that the Company does not currently own the Barkly Project, however this Report is prepared on the basis that the Company did not dispose its 70% interest in the Barkly Project on 4 December 2015.

Scope of the Valuation Report

A valuation report expresses an opinion as to monetary value of a mineral asset but specifically excludes commentary on the value of any related corporate Securities. Agricola prepared this Report utilizing information relating to exploration methods and expectations provided to it by various sources. Where possible, Agricola has verified this information from independent sources. This Report has been prepared for the purpose of inclusion in the Independent Expert’s Report, prepared by BDO.

This mineral asset valuation endeavours to ascertain the unencumbered price which a willing but not anxious vendor could reasonably expect to obtain and a hypothetical willing but not

too anxious purchaser could reasonably expect to have to pay for the property if the vendor and the purchaser had got together and agreed on a price in friendly negotiation.

This is commonly known as the Spencer Test after the Australian High Court decision upon which these principles are based and to which the Courts have used in their determinations of market value of a property. In attributing the price that would be paid to the hypothetical vendor by the hypothetical purchaser it is assumed that the property will be put to its “highest and best use”.

Applying the Spencer Test may not be confined to a technical valuation exercise but may involve a consideration of market factors. In a highly speculative market during ‘boom’ conditions or a depressed market during ‘bust’ conditions the hypothetical purchaser may expect to pay a premium or receive a discount commensurate with the current market for mineral properties.

The findings of the valuation Report include an assessment of the technical value (i.e. the value implied by a consideration of the technical attributes of the asset) and a market value (which considers the influences of external market forces and risk). A range of values (high, low and preferred) has been determined and stated in the Report to reflect any uncertainties in the data and the interaction of the various assumptions made.

The main requirements of the Valuation Report are:

Prepared in accordance with the VALMIN Code 2015
Experience and qualifications of key personnel to be set out
Details of valuation methodologies
Reasoning for the selection of the valuation approach adopted
Details of the valuation calculations
Conclusion on value as a range with a preferred value

The Mineral Assets

Barkly Copper-Gold Project, Northern Territory - 100% Equity

DECLARATIONS

Relevant codes and guidelines

This Report has been prepared as a technical assessment and valuation in accordance with the Australasian Code for Public Reporting of Technical Assessment and Valuation of Mineral Assets (the “VALMIN Code”, 2015 Edition), which is binding upon Members of the Australasian Institute of Mining and Metallurgy (“AusIMM”) and the Australian Institute of Geoscientists (“AIG”), as well as the rules and guidelines issued by the Australian Securities and Investments Commission (“ASIC”) and the ASX Limited (“ASX”) Regulatory Guides that pertain to Content of Experts Reports (RG 111, March 2011) and Independence of Experts ( RG 112, March 2011).

The report has been prepared in compliance with the Corporations Act and ASIC Regulatory Guide 112 with respect to Agricola’s independence as experts. Agricola regards RG112.31 to

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be in compliance whereby there are no business or professional relationships or interests that would affect the expert’s ability to present an unbiased opinion within this report. Agricola compiled a valuation of the Barkly Copper-Gold Project on 29 February 2016 for the Company and this Report represents an update to the earlier assessment.

Where exploration results have been referred to in this report, the information was prepared and first disclosed under the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (“JORC Code”), prepared by the Joint Ore Reserves Committee of the AusIMM, the AIG and the Minerals Council of Australia 2012.

Sources of Information

The statements and opinion contained in this report are given in good faith and this review is based on information provided by the Company, along with technical reports by consultants, previous tenements holders and other relevant published and unpublished data for the area if available. Agricola has endeavoured, by making all reasonable enquiries, to confirm the authenticity, accuracy and completeness of the technical data upon which this report is based. A final draft of this report was provided to the Company, along with a written request to identify any material errors or omissions in the technical information prior to lodgement.

In compiling this report, Agricola did not carry out a site visit to the project areas. Based on its professional knowledge, experience and the availability of extensive databases and technical reports made available by various Government Agencies and the early stage of exploration, Agricola considers that sufficient current information was available to allow an informed appraisal to be made without such a visit.

This Report may contain statements attributable to third persons. These statements are made in, or based on statements made in previous geological reports that are publicly available from either a government department or the ASX. The authors of these previous reports have not consented to the statements’ use in this Report, and these statements are included in accordance with ASIC Corporations (Consents to Statements) Instrument 2016/72.

The independent valuation report has been compiled based on information available up to and including the date of this report. The information has been evaluated through analysis, enquiry and review for the purposes of forming an opinion as to value. However, Agricola does not warrant that its enquiries have identified or verified all of the matters that an audit, extensive examination or "due diligence" investigation might disclose.

Qualifications and Experience

The person responsible for the preparation of this report is:

Malcolm Castle, B.Sc.(Hons), GCertAppFin (Sec Inst), MAusIMM

Malcolm Castle has over 50 years’ experience in exploration geology and property evaluation, working for major companies for 20 years as an exploration geologist. He established a consulting company over 30 years ago and specializes in exploration management, technical audit, due diligence and property valuation at all stages of development. He has wide experience in a number of commodities including uranium,

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gold, base metals, iron ore and mineral sands. He has been responsible for project discovery through to feasibility study in Australia, Fiji, Southern Africa and Indonesia and technical audits in many countries. He has completed numerous Independent Geologist’s Reports and Mineral Asset Valuations over the last decade as part of his consulting business.

Mr Castle completed studies in Applied Geology with the University of New South Wales in 1965 and has been awarded a B.Sc.(Hons) degree. He has completed postgraduate studies with the Securities Institute of Australia in 2001 and has been awarded a Graduate Certificate in Applied Finance and Investment in 2004.

Mr Castle is the Principal Consultant for Agricola Mining Consultants Pty Ltd, an independent geological consultancy established 30 years ago. He is a Member of the Australasian Institute of Mining and Metallurgy (“MAusIMM”).

Declaration – VALMIN Code: The information in this report that relates to Technical Assessment and Valuation of Mineral Assets reflects information compiled and conclusions derived by Malcolm Castle, who is a Member of The Australasian Institute of Mining and Metallurgy. Malcolm Castle is not a permanent employee of the Company.’

Malcolm Castle has sufficient experience relevant to the Technical Assessment and Valuation of the Mineral Assets under consideration and to the activity which he is undertaking to qualify as a Practitioner as defined in the 2015 edition of the ‘Australasian Code for the Public Reporting of Technical Assessments and Valuations of Mineral Assets’. Malcolm Castle consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.’

Competent Persons Statement – JORC Code: The information in this report that relates to Exploration Results and Mineral Resources of the Company has been reviewed by Malcolm Castle, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Castle has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which they are undertaking to qualify as an Expert and Competent Person as defined under the VALMIN Code and in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Castle consents to the inclusion in this report of the matters based on the information in the form and context in which they appear.

Independence

Agricola or its employees and associates are not, nor intend to be a director, officer or other direct employee of the Company and have no material interest in the projects. The relationship with the Company is solely one of professional association between client and independent consultant. The review work and this Report are prepared in return for professional fees of $3,500 plus GST for the updated Report based upon agreed commercial rates and the payment of these fees is in no way contingent on the results of this Report.

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Consent has been given for the distribution of this report in full in the form and context in which it is provided, for the purpose for which this report was commissioned. Agricola provides its consent on the understanding that the assessment expressed in the individual sections of this report will be considered with, and not independently of, the information set out in full in this report. Agricola has no reason to doubt the authenticity or substance of the information provided.

Valuation Opinion

Based on an assessment of the factors involved, the estimate of the market value for 100% equity in the Company’s previously held Barkly Copper-Gold Project is in the range of A$0.18 million to A$0.34 million with a preferred value of A$0.24 million.

This valuation is effective on 6 November 2017.

This mineral asset valuation endeavours to ascertain the unencumbered price which a willing but not anxious vendor could reasonably expect to obtain and a hypothetical willing but not too anxious purchaser could reasonably expect to have to pay for the property if the vendor and the purchaser had got together and agreed on a price in friendly negotiation (the Spencer Test).

Agricola’s opinion should be considered as a whole as the various elements of its analysis are often interdependent. Agricola cautions against examination of individual elements of its analysis as this may create a misleading impression of the overall opinion.

Yours faithfully

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Malcolm Castle

B.Sc.(Hons) MAusIMM, GCertAppFin (Sec Inst) Agricola Mining Consultants Pty Ltd

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TENEMENT SCHEDULE Northern Territory Tenements

	Tenement
BLAZE	Factors
Tenement	Area	Start	Expiry		Status
	Blocks
Barkly
EL28620	Colour Minerals Pty Ltd 70%, Meteoric Resources NL			30%
	13	16/12/11	15/12/17		Live
Total Area

The status of the tenements has been verified based on a recent independent inquiry of the Department of Mines and Energy, NT, STRIKE database ( source: strike.nt.gov.au ) by Agricola, pursuant to section 7.2 of the Valmin Code. The tenements are believed to be in good standing at the date of this valuation. Some future events such as the grant (or otherwise) of expenditure exemptions and plaint action may impact of the valuation and may give grounds for a reassessment.

PROJECT REVIEW

BARKLY COPPER-GOLD PROJECT

The Barkly Project is located 30 km east of the town of Tennant Creek in the Northern Territory on granted exploration licence EL28620. The Company was in a Farm-In Joint Venture Agreement over the Barkly Copper-Gold Project and had the right to earn up to an 80% interest in the project.

Bluebird Prospect

The highest priority target within the Barkly Project is the Bluebird Prospect. It covers a 1.6km-long gravity ridge open to the east where shallow geochemical drilling by Meteoric Resources NL identified a 600m-long copper anomaly, also open to the east. Follow-up drilling confirmed Tennant Creek-style copper-gold mineralisation associated with ironstone. The ironstones and mineralisation are often discordant to the host sediments and are considered to be a high-grade variant of the iron oxide-copper-gold (IOCG) deposits found in Proterozoic terranes in Australia.

Early drilling was successful with all holes intersecting significant Cu-Au-Bi mineralisation. Intercepts included BBDD-2: 20m at 8.17g/t Au, 0.61% Cu and 0.22% Bi from 157m (Including 4 metres at 37.9g/t Au, 0.66% Cu and 0.80% Bi from 169m) and BBRC-5: 25m at 1.9% Cu and 0.3g/t Au from 69m (Including 4 metres at 8.99% Cu and 1.06g/t Au from 74 metres). Based on the drilling results, the mineralisation is defined to a depth of at least 150m vertical from surface and over a strike length of up to 120m. The mineralisation starts at less than 50m below surface.

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The highest grade mineralisation is located on the footwall contact of the ironstone body. BBRC-2, which was drilled previously by Meteoric Resources, NL did not penetrate this footwall contact position. Gold grades and mineralisation thickness appear to be increasing with depth.

A high power DHTEM survey of BBDD-4 was completed and several subtle electromagnetic responses were detected by the survey. The copper sulphides at Bluebird are likely to be moderately conductive and relatively discontinuous.

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Cross section of Bluebird, looking west, showing recent drilling results, historic drilling and planned drilling

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Long section of Bluebird, looking north, showing recent drilling, historic drilling, planned drilling and new geological interpretation.

Other Targets Within The Barkly Project

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Longitudinal projection of the Bluebird Trend looking north, showing successful drillhole pierce points in grey circles, labelled with significant intercepts where appropriate, and high priority targets in red stars. Bluebird mineralisation is shown in red. Note the proximity of Dillon and Red Parrot to significant historic intercepts.

Nine magnetic/gravity exploration targets similar to Bluebird have been identified within the Barkly JV exploration licence. Reprocessing of magnetic and gravity geophysical datasets identifyed other similar features to the ironstone that hosts Bluebird. A number of targets

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were generated and ranked based on coincident magnetic, gravity, and/or geochemical anomalies.

In most cases the targets are obscured by soil cover and at Bluebird the ironstone and the mineralisation do not develop until at least 40m below surface. There is no expression of the Bluebird mineralisation at surface as the weathering profile appears to be strongly leached in the top 40m.

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Regional prospectivity map of the Barkly Cu-Au project showing ironstone structural trends in blue, gravity ridge in black and copper geochemical anomaly in red

References

Blaze International Limited, 2015, “Quarterly Activities Report for the Quarter Ended 30 September 2015”, 30 October 2015

Blaze International Limited, 2015, “Annual Report 2015

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VALUATION ASSESSMENT

Mineral Assets Classification	Mineral Assets Classification
Pre- development projects	Mineral assets with Feasibility Studies -_Tenure holdings where Mineral Resources have been identified and their extent estimated (possibly incompletely), but where a decision to proceed with development has not been made. Properties at the early assessment stage, properties for which a decision has been made not to proceed with development, properties on care and maintenance and properties held on retention titles are included in this category if Mineral Resources have been identified, even if no further work is being undertaken; � Projects:none _Valuation Methods: Comparable Transactions,*Discounted Cash* *Flow*(if Ore Reserves have been estimated)
Advanced exploration projects	Mineral assets with Mineral Resources -_Tenure holdings where considerable exploration has been undertaken and specific targets identified that warrant further detailed evaluation, usually by drill testing, trenching or some other form of detailed geological sampling. A Mineral Resource estimate may or may not have been made, but sufficient work will have been undertaken on at least one prospect to provide both a good understanding of the type of mineralisation present and encouragement that further work will elevate one or more of the prospects to the Mineral Resources category; Projects:none _Valuation Methods:*Comparable Transactions*. Yardstick (Rule of Thumb)
Early stage exploration projects	Mineral assets in the exploration stage -_Tenure holdings where mineralisation may or may not have been identified, but where Mineral Resources have not been identified; Projects:Barkly Copper Gold Project _Valuation Methods:*Geo Rating*, Prospectivity Enhancement Multiplier, Yardstick (Rule of Thumb).
Agricola’s preferred valuation method is in bold print

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EXPLORATION PROJECTS – BARKLY COPPER GOLD PROJECT

GEO-FACTOR RATING METHOD

Technical Value – Exploration Properties

The valuation is estimated for 100% equity in the Project. The tenement is granted and Grant Factor and Equity Factor are 100%.

	Tenement
BLAZE	Factors
Tenement	Area	Status	Grant	Equity	Adj. Area
	units				km2
Barkly
EL28620	13	Live	100%	100%	39.16

Prospectivity Assessment Factors

An assessment of the prospectivity of tenements was compiled.

Geological Assessment

	Geological Assessment
Off Site	Physical indications of favourable evidence for mineralisation, such as
	workings and mining on the nearby properties, which may or may not be
	owned by the company being valued. Such indications are mineralised
	outcrops, old workings through to world-class mines;
	The Company’s tenements are located in the Tennant Creek Region and
	are considered to have some similarities with the Peko Mine.
	A rating of1.75 to 2.00has been ascribed to Project.
On Site	Local mineralisation within the tenements and the application of
	conceptual models within the tenements. Location and nature of any
	mineralisation, geochemical, geological or geophysical anomaly within
	the property and the tenor (grade) of any mineralisation known to exist on
	the property being valued;

The Bluebird Prospect has been identified over significant strike length. Early drilling has returned encouraging results A rating of 1.75 to 2.00 has been ascribed to Project.

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Anomalies Identified anomalies warranting follow up within the tenements. Geophysical and/or geochemical targets and the number and relative position of anomalies on the property being valued;

A number of early stage anomalies have been identified from exploration geophysics and some drilling has tested some areas

A rating of 2.25 to 2.50 has been ascribed to Project.

Geology The proportion of structural and lithological settings within the tenements and difficulty encountered by cover rocks and other factors. Geological patterns and models appropriate to the property being valued;

The tenement block overlies similar lithologies to the Peko Mine area.

A rating of 2.00 to 2.25 has been ascribed to Project.

Prospectivity Index = [Off Site Factor]x[On Site Factor]x[Anomaly Factor]x[Geology Factor]

Prospectivity 13.8 (Low) to 22.5 (High) Index

Assessments in each category are based on a set scale and are multiplied together to arrive at a “prospectivity index”.

Rating	Off Property Factor	On Property Factor	Anomaly Factor	Geology Factor
0.5			Extensive previous exploration. Low encouragement	Favourable lithology (50%)
1.0	No known mineralisation		No Targets Defined
1.5	Minor exploration pits		Early stage targets with geophysics and geochemistry
2.0	Several old workings		Several well defined targets
2.5	Abundant old workings		Several significant sub economic intersections
3.0	Resource definition drilling		Several significant sub economic targets defined	Favourable lithology with structuresalong strike of a major mine
3.5	Significant Historical production	Resource Areas Identified	Economic targets defined
4.0	Operating Mines on related trands	Advanced Project in tenementgroup

Brief summary of Geo Factor values

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Base Value

The base value represents the exploration cost for a set period of the tenement at an early stage and is considered to be the average expenditure and associated expenses for the first year of the licence tenure. This is considered to be A$400 to A$450 per square kilometre.

Technical Value

An estimate of technical value has been compiled for the tenements based on the base value, area, grant status, equity and ratings for prospectivity. For the purpose of this valuation the preferred value is selected at 40% of the difference between Low and High estimates.

Technical Value = [Base Value]*[Prospectivity Index]

BLAZE
	Base Value		Prospectivity Index		Technical Value
	A$/km2					A$/km2
	Low	High	Low	High	Low	High	Preferred
Barkly	400	450	13.8	22.5	5,500	10,100	7,300

Technical Value is quoted at A$/square kilometres

BLAZE		*Summary Technical*	*Summary Technical*	*Value, A$*
	Area	Low	High	Preferred
	km2
Barkly
A$/km2		5,500	10,100	7,300
Total Value, A$	39.16	215,000	396,000	286,000

MARKET VALUE

Market Premium or Discount

The market in Australia may pay a premium over the technical value for high quality mineral assets (i.e. assets that hold defined resources that are likely to be mined profitably in the short-term or projects that are believed to have the potential to develop into mining operations in the short term even though no resources have been defined). On the other hand exploration tenements that have no defined attributes apart from interesting geology or a good address may well trade at a discount to technical value. Deciding upon the level of discount or premium is entirely a matter of the technical expert’s professional judgement. This judgement must of course take account of the commodity potential of the tenement, the proximity of an asset to an established processing facility and the size of the land holding.

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In the light of the study results, elements of low country risk, changing economics and future market outlook a market discount of 15% has been applied to the technical value of the Barkly Copper Gold Project.

Summary of Market Value

Market Value = [Technical Value]*[Adjusted Market Factor]

BLAZE			*Market Value,*	*Market Value,*	A$
	Market	Area	Low	High	Preferred
	Factor	km2
Barkly
A$/km2	85%		4,700	8,600	6,200
TotalValue,A$		39.16	184,000	337,000	243,000

Comparable Transactions for Exploration Properties - $/km[2]

A Rule-of-Thumb method sometimes used for valuing Mineral Assets without identified Resources is based on conversion of comparable sales data to a unit area (per km[2] or per ha). It is probably the most difficult comparative tool to justify.

A search for recent publicly available market transactions involving comparable exploration projects suggests the following implied values for exploration projects. The estimates refer to market value compiled during mining boom times (2006 – 2008):

Gold – early stage gold exploration projects generally lie in the range of A$2,500/km[2] to A$6,000/km[2] with more advanced or strategically located exploration projects attracting higher multiples over A$10,000/km[2] ;

		Gold Exploration Projects - Early	Gold Exploration Projects - Early	Stage A$/km2
Minimum		1st Quartile	2nd Quartile	3rd Quartile	Maximum
	200	2700	4400	5900	9800

Base metals – early stage base metal exploration projects generally lie in the range of A$2,000/km[2] to A$5,000/km[2] with more advanced or strategically located exploration projects attracting higher multiples over A$6,000/km[2] ;

Base Metal Exploration Projects - A$/km2 Minimum 1st Quartile 2nd Quartile 3rd Quartile Maximum 200 1800 3300 4700 6100

Nickel – early stage nickel exploration projects generally lie in the range of A$2,500/km[2] to A$10,000/km[2] with more advanced or strategically located exploration projects attracting higher multiples up to A$30,000/km[2] ;

	Nickel Exploration Projects - A$/km2 Minimum 1st Quartile 2nd Quartile 3rd Quartile Maximum 1000 2600 5700 12400 34200

Iron – early stage iron exploration projects generally lie in the range of A$2,000/km[2] to A$6,000/km[2] with more advanced or strategically located exploration projects attracting higher multiples over A$50,000/km[2] ;

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		Iron Exploration Projects -	Iron Exploration Projects -	A$/km2
Minimum		1st Quartile	2nd Quartile	3rd Quartile	Maximum
	800	2500	3400	16500	64500

Uranium – uranium exploration projects generally lie in the range of A$1,000/km[2] to A$3.000/km[2] with more strategically located exploration projects attracting higher multiples overA$6,000/km[2] .

multiples o	verA	$6,000/km2.	$6,000/km2.
		Uranium Exploration Projects		- A$/km2
Minimum		1st Quartile	2nd Quartile	3rd Quartile	Maximum
	100	800	1800	2800	6,000

Source: Helm, S., Froud, J.,2008 “Independent Valuation Of The Mineral Assets Of Jupiter Mines Ltd and those Vended in by Red Rock Resources Plc”, Snowden Mining Industry Consultants Pty Ltd, 19 December 2008, Page 14 and appendices. http://www.jupitermines.com/images/jupiter---jaijo.pdf

The comparative transactions review for exploration projects was compiled over a period of buoyancy in the minerals markets and current valuation estimates may vary in line with commodity prices market expectations.

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VALUATION OPINION

This valuation is effective on 6 November 2017.

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AI assistant

BLAZE MINERALS LIMITED — Proxy Solicitation & Information Statement 2018

64535_rns_2018-01-28_1deacde9-381e-44b0-b9ec-fc7886c2c228.pdf

DISPATCH OF NOTICE OF GENERAL MEETING

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BLAZE INTERNATIONAL LIMITED

ACN 074 728 019

NOTICE OF GENERAL MEETING

CONTENTS

IMPORTANT INFORMATION

Time and place of Meeting

Your vote is important

Voting eligibility

Voting in person

Voting by proxy

Proxy vote if appointment specifies way to vote

Transfer of non-chair proxy to chair in certain circumstances

AGENDA

1. RESOLUTION 1 - CHANGE TO NATURE AND SCALE OF ACTIVITIES

2. RESOLUTION 2 – ISSUE CONSIDERATION SHARES AND CONSULTANCY OPTIONS

3. RESOLUTION 3 – RATIFICATION OF PRIOR ISSUE

4. RESOLUTION 4 – RATIFICATION OF PRIOR ISSUE

5. RESOLUTION 5 – APPROVAL OF FREE ATTACHING OPTIONS

6. RESOLUTION 6 – ISSUE OF OPTIONS TO CICERO ADVISORY SERVICES PTY LTD

7. RESOLUTION 7 – ISSUE OF OPTIONS TO SISU INTERNATIONAL PTY LTD

8. RESOLUTION 8 – ISSUE OF OPTIONS TO KONKERA PTY LTD

9. RESOLUTION 9 – CHANGE OF COMPANY NAME

10. RESOLUTION 10 – APPROVAL OF PAYMENT

Dated: 23 January 2018

By order of the Board

Chairman

EXPLANATORY STATEMENT

1. BACKGROUND

1.1 General Background and Current Activities

1.2 Proposed Acquisition

1.3 Everest Minerals Pty Ltd

1.4 Current Company Project

1.5 Share Sale Agreement

1.6 Effect on Capital Structure

Notes:

1.7 Use of Funds

1.8 Indicative Timetable

1.9 Pro Forma Statement of Financial Position

1.10 Board Intention if settlement of Acquisition Occurs

1.11 Advantages of the proposals in the Essential Resolutions

1.12 Disadvantages of the proposals in the Essential Resolutions

1.13

Risk Factors

1.13.1 Risks relating to the change in scale of activities

(a) Dilution Risk

1.13.2 Industry Specific Risks

(a) Exploration

(b) Failure to satisfy Expenditure Commitments

(c)

Resource Estimates

(d)

Mine development

(f)

Native title and Aboriginal Heritage

1.13.3 General Risks

(a) Commodity price volatility and exchange rate risks

(b) Competition risk

(c) Economic

(d)

Force Majeure

(e)

Government policy changes

Litigation Risks

Regulatory Risks

(h)

Market conditions

(i)

Additional requirements for capital

(j) Reliance on key personnel

(k) Agents and Contractors

1.14 Plans for the Company if Resolutions not passed

1.15 Directors Interests in the Acquisition

1.16 Conditionality of Resolutions

2. RESOLUTION 1 – CHANGE TO NATURE AND SCALE OF ACTIVITIES

2.1 General

BLAZE MINERALS LIMITED Proxy Solicitation & Information Statement 2018