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BOWEN COKING COAL LIMITED Proxy Solicitation & Information Statement 2011

Jan 11, 2011

64503_rns_2011-01-11_6d5eb8e3-4b37-46b9-bd17-ad0cc84088a2.pdf

Proxy Solicitation & Information Statement

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RIMCAPITAL LIMITED

ACN 064 874 620

(COMPANY)

NOTICE OF GENERAL MEETING

Notice is hereby given that the General Meeting of Shareholders of the Company will be held at Press Room 1& 2, Lower Ground Floor, The Radisson Plaza Hotel, 27 O'Connell Street, Sydney, NSW, 2000 at 10.00am on Friday, 11 February 2011.

The Business to be considered at the General Meeting is set out below. The Notice of Meeting should be read in conjunction with the accompanying Explanatory Memorandum, which contains information in relation to each of the following resolutions.

Terms and abbreviations used in this Notice of Meeting and Explanatory Statement are defined in the Glossary.

ORDINARY BUSINESS

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 for the purposes of ASX Listing Rule 11.1.2 and for all other purposes, approval is given for the Directors to change the nature and scale of the Company's activities as described in the Explanatory Memorandum accompanying this Notice of General Meeting."

Voting Exclusions: The Company will disregard any votes cast on this Resolution by any person who may participate in the proposed issue and any person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, 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 of 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 of securities to acquire Cabral Resources Pty Limited

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

"That, subject to the passing of Resolutions 1 and 3, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Directors to allot and issue 30,000,000 Shares and 15,000,000 Future Performance Rights to the Sellers as consideration for the acquisition of 1,265 Cabral Shares on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice of General Meeting."

Voting Exclusions: The Company will disregard any votes cast on this Resolution by any person who may participate in the proposed issue and any person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, 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 of 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 – Placement of Shares

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

"That, subject to the passing of Resolutions 1 and 2, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Directors to allot and issue up to $40,000,000 worth of Shares at a minimum issue price per Share which is at least 80% of the average market price of Shares trading on ASX over the last 5 days on which sales were recorded before the day on which the issue is to be made on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice of General Meeting."

Voting Exclusions: The Company will disregard any votes cast on this Resolution by any person who may participate in the proposed issue and any person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, 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 of 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 – Change of name to Cabral Resources Limited

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

"That, subject to the passing of Resolutions 1 to 3 (inclusive) , for the purposes of section 157(1) of the Corporations Act and for all other purposes, the name of the Company be changed to "Cabral Resources Limited" and the Constitution and all other Company records be amended accordingly."

5. Resolution 5 – Issue of Options to Mr Albert Yue-Ling Wong

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

" That, subject to the passing of Resolutions 1 to 4 (inclusive), 6 and 7 for the purposes of ASX Listing 10.11 and for all other purposes, approval is given for the grant and issue of 1,000,000 Options to Mr Albert Yue-Ling Wong or his nominee(s), on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice of General Meeting. "

Voting Exclusions: The Company will disregard any votes cast on this Resolution by Mr Wong and any associate of Mr Wong. 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 of 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 Mr Malcolm Cyril Hancock

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

" That, subject to the passing of Resolutions 1 to 5 (inclusive) and 7 for the purposes of ASX Listing 10.11 and for all other purposes, approval is given for the grant and issue of 750,000 Options to Mr Malcolm Cyril Hancock or his nominee(s), on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice of General Meeting. "

Voting Exclusions: The Company will disregard any votes cast on this Resolution by Mr Hancock and any associate of Mr Hancock. 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 of 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.

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7. Resolution 7 – Issue of Options to The Honorable Neville Kenneth Wran

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

" That, subject to the passing of Resolutions 1 to 6 (inclusive) for the purposes of ASX Listing 10.11 and for all other purposes, approval is given for the grant and issue of 500,000 Options to Mr Neville Kenneth Wran or his nominee(s), on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice of General Meeting. "

Voting Exclusions: The Company will disregard any votes cast on this Resolution by The Hon. Wran and any associate of The Hon. Wran. 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 of 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.

8. Resolution 8 - Ratification of prior issue of Shares

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, approval is given for the prior issue of 13,606,000 Shares as described in the Explanatory Memorandum accompanying this Notice of General Meeting."

Voting Exclusions: The Company will disregard any votes cast on this Resolution by any person who participated in the issue, 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 of 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.

INFORMATION FOR SHAREHOLDERS - PROXIES

A Shareholder entitled to attend and vote is entitled to appoint not more than two proxies to attend and vote on behalf of the Shareholder. A proxy need not be a Shareholder of the Company. Where two proxies are appointed, each may be appointed to represent a specific proportion or number of the Shareholder's voting rights. If the instrument of appointment does not specify the number or portion of the Shareholder's votes, each proxy may exercise one-half of the votes.

The form of proxy must be signed by the Shareholder or the Shareholder’s attorney. Proxies given by corporations must be signed in accordance with their constituent documents or as authorised by the Corporations Act.

If the form of proxy is executed under power of attorney it must accompany the form of proxy unless it has already been noted by the Company.

In the case of joint Shareholders, the names of the joint Shareholders should be shown on the form of proxy.

A form of proxy is attached. To be effective, proxies must be received by the Company at its registered office at Level 6, Suite 603, Currency House, 23 Hunter Street, Sydney NSW 2000 at least 48 hours before the time appointed for the meeting. A proxy may be sent by fax to (02) 9232 0233 to be received by the time specified above.

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By order of the Board

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Carolyn Patman Company Secretary 12 January 2011

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Explanatory Memorandum

This Explanatory Memorandum has been prepared to assist Shareholders to understand the business to be put to Shareholders at the General Meeting and forms part of the Notice of Meeting.

The purpose of this Explanatory Memorandum is to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions in the Notice of Meeting.

The Company has provided, and is responsible for, the Company Information in this Explanatory Memorandum, and the Sellers and their respective directors, officers, employees and advisers (as applicable) do not assume any responsibility for the accuracy or completeness of the Company Information.

The Sellers have provided, and are responsible for, the Sellers' Information in this Explanatory Memorandum, and the Company and its directors, officers, employees and advisers do not assume any responsibility for the accuracy or completeness of the Sellers' Information.

1. ACQUISITION OF CABRAL RESOURCES LIMITED

1.1 Overview of the acquisition

As announced to ASX on 24 December 2010, the Company has entered into a share sale and purchase agreement ( SSPA ) to acquire 100% of Cabral.

Cabral is an unlisted proprietary limited company whose main asset is an option to acquire 9 mining exploration tenements located in the Brazilian state of Bahia ( Cabral Tenements ). A brief description of Cabral, the option and the Cabral Tenements is set out in section 1.3 below.

The Company has an interest in approximately 19.89% of Cabral Shares held by an associate company of the Company. These Cabral Shares will be transferred from the associate company to the Company prior to the completion of the Transaction for a cash consideration of A$200,000.

Pursuant to the terms of the SSPA, the Company is proposing to enter into the following transactions in relation to Cabral (together, the Transaction ):

  • (a) the acquisition of the remaining approximately 80.11% of Cabral Shares currently on issue; and

  • (b) the subscription for 7,000,421 new ordinary shares in the capital of Cabral.

The material terms of the SSPA are set out in section 1.2 below.

None of the Sellers are related parties of the Company and none of the Sellers will hold more than 20% of the Shares in the expanded capital of the Company.

On completion of the Transaction, Cabral will be a wholly owned subsidiary of the Company.

If the Transaction is implemented, the Company is also proposing to:

  • (a) change its name to ' Cabral Resources Limited '; and

  • (b) seek to change its classification with ASX from a financial company to a mining exploration company.

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1.2 Summary of the SSPA

The Company, Cabral and the Sellers entered into the SSPA on 24 December 2010.

The material terms of the SSPA are as follows:

  • (a) subject to the satisfaction or waiver of certain conditions precedent (see paragraph (e) below), the Company has agreed to acquire all of the Cabral Shares held by the Sellers ( Share Sale );

  • (b) the purchase consideration under the Share Sale is $5,550,000 and will be satisfied by the issue of equity securities to the Sellers as follows:

  • (i) Shares: 30 million Shares on completion of the Transaction, at an agreed value of $0.035 per Share; and

  • (ii) Future Performance Rights: 15 million Future Performance Rights on completion of the Transaction. These Future Performance Rights will be convertible into Shares (on a one for one basis) upon the satisfaction of the Future Performance Rights Conversion Precondition, at an agreed value of $0.30 per Share. If the Future Performance Rights Conversion Precondition is not satisfied the Future Performance Rights will lapse and no Shares will be issued to the Sellers;

  • (c) subject to the satisfaction or waiver of certain conditions precedent (see paragraph (e) below), the Company has agreed to the subscribe for 7,000,421 new ordinary shares ( Subscription Shares ) in the capital of Cabral ( Subscription );

  • (d) the consideration payable by the Company under the Subscription will be a cash amount of R$12 million (or approximately A$7.2 million). This amount must be used by Cabral to exercise its option to acquire the Cabral Tenements (see section 1.3 below);

  • (e) the conditions precedent to the Transaction include:

  • (i) the Shareholders approving the Transaction;

  • (ii) the Placement, as defined below, being successfully completed;

  • (iii) any third party, regulatory or tax consents, waivers or approvals that are triggered by or required in connection with the Transaction (including consent to a change of control required under any contract, licence, permit, right or financial agreement or any consent or approval required by a Government Agency and including, without limitation, ASX confirming that Listing Rule 11.1.3 does not apply to the Transaction) are received on terms satisfactory to RMC.

  • (iv) the Company being reasonably satisfied that Cabral and the Sellers have done all things and satisfied all conditions (other than the payment of the Purchase Price) necessary to lawfully exercise and complete the Option Agreement and that there are no matters that would or would be likely to prevent or impede completion of the Option Agreement on the basis contemplated in paragraph (iv) below;

  • (v) subject only to the payment of the Purchase Price, that upon completion of the Option Agreement Stekelenburg Participações S/A, a wholly owned subsidiary of Cabral, will acquire legal and beneficial ownership of the Cabral Tenements, free of any encumbrance or other third party rights or interests other than specified in the Option Agreement or otherwise fairly disclosed to the Company;

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  • (vi) the Company being reasonably satisfied that the amount of R$220,000 (or approximately A$140,000) payable by Cabral under the Option Agreement has been paid;

  • (vii) Cabral providing the Company evidence of the waiver by all members of Cabral of any pre-emptive rights in respect of the Subscription Shares under the Cabral Constitution and the Cabral Shareholders' Agreement;

  • (viii) a Seller or the Company not having committed a material breach of the SSPA;

  • (ix) no material adverse event occurring changing or becoming known to the Company that affects, or could reasonably be expected to affect the financial or trading position, assets, liabilities or profitability of Cabral in a material and adverse way; and

  • (x) no prescribed occurrence (which include changes to Cabral's capital structure, issue of equity securities, declaration of dividends, amendment to Cabral's constitution, creation of any encumbrance or other third party interest, litigation, prosecution or other legal proceeding having commenced and insolvency events) occurring with respect to Cabral.

  • (f) the SSPA otherwise contains terms and conditions, including representations are warranties pertaining to the Company and Cabral, which are typical for an agreement of this nature.

With respect to paragraph (e)(iii) above, ASX has confirmed that Listing Rule 11.1.1 applies (see the discussion in section 2 below). However, Cabral has confirmed to the Company that it wishes to proceed with the Transaction despite ASX imposing the requirements of Listing Rule 11.1.3 and that formal waivers will be sought from all parties to the SSPA for the non-satisfaction of the conditions to the SSPA resulting from that ASX decision.

1.3 Summary of Cabral and the Cabral Tenements

Cabral is an unlisted proprietary limited company.

Cabral's business consists of Australian and South American mining, legal and finance professionals focused on the acquisition and development of resource assets in South America.

Cabral's primary focus is in Brazil, where it seeks to identify and enhance undervalued assets for delivery to international operators and equity markets.

Cabral has entered into an option agreement ( Option Agreement ) with a Brazilian company ( Offeror ) pursuant to which the Offeror has granted to Cabral an exclusive option to acquire the Cabral Tenements for a cash purchase price of R$12.0 million (approximately A$7.2 million) ( Purchase Price ).

As noted in section 1.2 above, it is a condition precedent to the Transaction that:

  • (a) the Company is reasonably satisfied that Cabral and the Sellers have done all things and satisfied all conditions (other than the payment of the Purchase Price) necessary to lawfully exercise and complete the Option Agreement and that there are no matters that would or would be likely to prevent or impede completion of the Option Agreement on the basis contemplated in paragraph (b) below;

  • (b) subject only to the payment of the Purchase Price, upon completion of the Option Agreement Stekelenburg Participações S/A, a wholly owned subsidiary of Cabral, will acquire legal and beneficial ownership of the Cabral Tenements, free of any encumbrance or other third party rights or interests other than specified in the Option Agreement or otherwise fairly disclosed to the Company; and

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  • (c) the Company is reasonably satisfied that the amount of approximately A$140,000 payable by Cabral to the Offeror under the Option Agreement has been paid.

The Company notes that as at the date of the Notice of Meeting, Cabral has paid approximately A$140,000 of the Purchase Price to the Offeror pursuant to the terms of the Option Agreement, and the Company is therefore reasonably satisfied that the condition set out in paragraph (c) above has been satisfied.

The option granted under the Option Agreement expires on 28 February 2011 ( First Option Period ), unless extended by the parties. If, at the end of the First Option Period, Cabral has not exercised the option but informs the Offeror that it is still interested in acquiring the Cabral Tenements, a new option period of 75 days shall commence to allow Cabral to complete its evaluation of the tenements ( Second Option Period ), subject to the payment by Cabral to the Offeror of R$2 million (approximately A$1.2 million).

The A$140,000 paid by Cabral to the Offeror, and the payment of approximately A$1.2 million to the Offeror upon the commencement of the Second Option Period (if commenced), shall be deducted from the Purchase Price payable to the Offeror if Cabral exercises the option.

Notwithstanding the length of the First Option Period and the Second Option Period, it is proposed that the option will be exercised by Cabral simultaneously with, or shortly following, completion of the Transaction and the Placement.

Cabral Tenements

The Cabral Tenements comprise of 9 iron ore exploration tenements located around the Lagoa Real region in the State of Bahia, Brazil. The aggregate tenement area is approximately 140 square kms.

The Cabral Tenements have exploration targets of 331 million to 644 million tonnes of high grade, medium to coarse grained magnetite iron ore amenable to beneficiation by a simple crushing, grinding and magnetic separation process. In all areas the banded ironformations are highly metamorphosed and recrystallised. Recrystallisation, and hence coarsening, of the magnetite is significant. The implications for ore processing are that the magnetite should liberate at grind sizes in the vicinity of 75 microns which compares favourably to many of the new magnetite projects in Western Australia.

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The planned initial tenement exploration phase comprises:

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  • (a) regional low-level aeromagnetics to map the structure and banded iron-formation distribution within the Cabral area of interest;

  • (b) in parallel the geological team will undertake reconnaissance geological mapping of key targets at Morro do Gergelim and others;

  • (c) first pass drilling to be undertaken on key targets determined from geology and geophysical work;

  • (d) follow-up and resource definition drilling as required;

  • (e) continuing evaluation of remaining and new tenure; and

  • (f) engagement of consultant, ProMet Engineers, to undertake an initial magnetite deposit evaluation study to establish economic project limits including resources.

The Cabral Tenements are directly situated on the proposed rail and port infrastructure corridor to be funded by the Brazilian Federal Government. Construction of the East-West Rail Line has commenced and the section past the Cabral tenements to Caetité is due for completion in July 2012. VALEC Engenharia, Construções e Ferrovias S.A. is coordinating the construction process.

A new dedicated, open access deep water port is proposed to be built approximately 20kms north of Ilheus in the State of Bahia. The Cabral Tenements are approximately 380 kms from the proposed port.

About Brazil and its iron ore Industry

Brazil, officially the Federative Republic of Brazil, is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population. It is the only Portuguese-speaking country in the Americas. The Brazilian economy is currently the world's eighth largest economy by nominal GDP.

Brazil is a federation composed of twenty-six States, one federal district (which contains the capital city, Brasília) and municipalities. The states and the federal district may be grouped into regions: Northern, Northeast, Central-West, Southeast and Southern with the state of Bahia in the Northeast region.

Brazil has a free market economy with abundant natural resources. The Brazilian economy has been predicted to become one of the five largest in the world in the decades to come. It has large and developed agricultural, mining, manufacturing and service sectors, as well as a large labor pool. Brazil’s major export products include iron ore, steel, aircraft, electrical equipment, automobiles, ethanol, textiles, footwear, coffee, orange juice, soybeans and corned beef. The country has been expanding its presence in international financial and commodities markets, and is one of a group of four emerging economies called the BRIC countries.

Sound economic policies and countercyclical measures helped the country weather the 2009 global financial crisis with relatively minor effect, and recovered handily from it in 2010. Brazil has immense natural resources and a strong industrial development potential, but still suffers from a wide gap between rich and poor. Innovative social programs and a more inclusive growth in recent years have been gradually decreasing this inequality.

Recent growth has put in evidence important infrastructure challenges. The country will host the World Cup in 2014 and the Olympic Games in 2016, demanding massive investments in areas such as urban and social development and transport infrastructure.

Brazil experiences extreme regional differences, especially in social indicators such as health, infant mortality and nutrition. The richer South and Southeast regions enjoy much better indicators than the poorer North and Northeast – including the state of Bahia.

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Brazil is currently the world’s largest producer and exporter of iron ore. Vale is one of Brazil’s largest companies and is the largest iron ore exporter in the world mainly from the state of Minas Gerais, immediately south of the state of Bahia, from an area known as “The Iron Quadrangle”. The types of iron ore deposits in Brazil vary but mainly comprise hematite, magnetite and itabirite type ores. The state of Bahia has an emerging iron ore industry which is expected to be a beneficiary of the pro-development attitude of its State Government including very recent initiatives to construct new rail and port facilities, namely the East West Rail and the proposed new port just north of Ilheus, which are expected to assist the development of the Cabral Tenements which are in very close proximity.

1.4 Pro forma balance sheet

Set out below for the purposes of illustration only, is a balance sheet of the Company as at 30 June 2010 and a pro forma balance sheet of the Company and Cabral as at 30 June 2010 (based on the assumptions set out below).

RIMCAPITAL LIMITED

Unaudited pro forma balance sheet for the 12 months ended 30 June 2010

Notes
Current Assets
Cash assets
(c),(d)
Receivables
TOTAL CURRENT ASSETS
Non Current Assets
Receivables
Investments accounted for equity
method
Property, plant and equipment
Mining tenement costs
Exploration and evaluation
expenditure
TOTAL NON CURRENT ASSETS
TOTAL ASSETS
Current Liabilities
Payables
Current tax liabilities
Provisions
TOTAL CURRENT LIABILITIES
Non Current Liabilities
Employee benefits
TOTAL NON CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
SHAREHOLDERS’ EQUITY		 As at 30 June
2010
Pro forma(a), (b)
344,185
31,493,002
6,385
6,385
350,570
31,499,387
107
1,493,440
1,493,440
29,234
29,234
7,337,294
64,578
968,510
1,587,252
9,828,585
1,937,822
41,327,972
63,921
63,921
23,777
23,777
60,009
60,009
147,707
147,707
6,521
6,521
6,521
6,521
154,228
154,228
1,783,594
41,173,744

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Notes
Contributed Equity
Reserves
Accumulated losses
TOTAL SHAREHOLDERS’ EQUITY		 As at 30 June
2010
Pro forma(a), (b)
14,554,530
55,944,680
1,408,618
(591,382)
(14,179,554)
(14,179,554)
1,783,594
41,173,744

Notes to the pro forma balance sheet

The unaudited pro-forma balance sheet has been prepared to reflect the financial position of the Company as if completion of Transaction had occurred at 30 June 2010 save for certain material events since that date which are disclosed and other assumptions as shown below:

  • (a) The unaudited pro forma balance sheet has been based on:

  • (i) the audited balance sheet of the Company as at 30 June 2010; and

  • (ii) the unaudited management accounts of Cabral as at 30 November 2010.

  • (b) The Company has not independently verified the unaudited management accounts of Cabral when preparing the pro form balance sheet. The Company notes that the Sellers are responsible for the information contained in the unaudited management accounts of Cabral and the Company and its directors, officers, employees and advisers do not assume any responsibility for the accuracy or completeness of the unaudited management accounts of Cabral.

  • (c) The Company has included the gross proceeds from a 15% equity placement of 13,606,000 fully paid ordinary shares in the Company at $0.035 per share to raise $340,150 which was completed on 29 October 2010.

  • (d) The Company has included the net proceeds of an equity placement, as proposed in Resolution 3, which assumes that A$40.0 million in gross proceeds are raised.

1.5 Capital structure

The capital structure of the Company following implementation of all of the Resolutions contained in this Notice of Meeting is set out below:

Shares Number
Current Shares on issue 104,316,667
Shares to be issued as part consideration for acquisition of
Cabral (as contemplated by Resolution 2)		 30,000,000
Shares to be issued to sophisticated/wholesale investors (as
contemplated by Resolution 3)(a)		 133,333,333
Total Shares 267,650,000
Future Performance Rights (as contemplated by Resolution
2)		 15,000,000
Current Options on issue 10,095,172
Options to be issued under Resolutions 5, 6 and 7 2,250,000
Total Securities 294,995,172

Footnote: (a) The capital structure table assumes A$40.0 million is raised in new equity proceeds via the issue of 133,333,333 fully paid ordinary shares at an issue price of A$0.30. Under Resolution 3 the issue price to raise up to A$40.0 million in funding is at a minimum issue price per share which is at least 80% of the average market price of

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the Company’s shares trading on ASX over the last 5 days on which sales were recorded before the day on which the issue is to be made in accordance with Listing Rule 7.3.3.

1.6 Advantages of the acquisition

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

  • (a) the Cabral Tenements and proposed exploration activities in Brazil represent a significant, new, and attractive investment, acquisition and future opportunity for the Company;

  • (b) the iron ore industry in general has attractive long term supply and demand dynamics and Brazil is an ideal location to pursue the Company’s strategy of becoming a significant mining and investment company;

  • (c) the Transaction and the ongoing development of the Cabral Tenements combined with other acquisition or consolidation opportunities which the Company may pursue, enables the Company to potentially move to an operating mining company over time and generate future cash flows to facilitate potential future dividends for Shareholders;

  • (d) the Company is able to leverage off existing management expertise and contact network across the global resources sector with the aim of accelerating exploration activities, infrastructure solutions and the potential development of the Cabral Tenements towards commercial production;

  • (e) the Company and the performance of its Shares may be re-rated by the equity market following the Transaction and any future exploration success within the Cabral Tenements; and

  • (f) share trading depth and liquidity levels in the Company’s Shares are likely to improve with the proposed equity capital raising under Resolution 3.

1.7 Disadvantages of the acquisition

The Directors note that there are a number of risks associated with mining exploration, including the failure to discover an economically recoverable iron ore reserve, uncertainty of obtaining access to adequate capital for project development and general operational risks.

Based on the information available, a non-exhaustive list of risk factors are as follows:

  • (a) Exploration and mining activities

Mining exploration is inherently associated with risk. Notwithstanding the experience, knowledge and careful evaluation which a company brings to an exploration project, there is no assurance that exploration of the Cabral Tenements will result in the discovery of recoverable mining resources.

Even if mining resources are identified, other factors such as technical difficulties, geological conditions, lack of sufficient water or power sources, environmental, health or safety concerns, lack of access to key infrastructure such as railway and port facilities, adverse changes in government policy or legislation or a lack of access to sufficient funding may mean that any resources discovered are not economically recoverable or may otherwise preclude the Company from successfully mining and exploiting such resources.

(b) Tenure and access

The Cabral Tenements are subject to legislative conditions, periodic renewal, environmental laws, landowner access negotiation and agreement and other

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regulations across multiple Brazilian regulatory bodies who may act at their sole discretion.

(c) Compulsory tenement commitments

The Cabral Tenements are subject to meeting certain annual expenditure commitments imposed from time to time to keep them in good standing and any failure to meet such commitments can result in forfeiture of any such tenement(s).

(d)

Future capital risks

Further funding may be required by the Company to support its ongoing activities and operations. There can be no assurance that such funding will be available on satisfactory terms or at all. Any inability to obtain finance will adversely affect the business and financial condition of the Company and its performance.

(e)

Due Diligence

Prior to executing the SSPA, the Company undertook due diligence on information provided by Cabral for the purposes of negotiating the acquisition of Cabral. Such investigation was carried out in a short time frame of approximately 8 weeks.

If the Resolutions are passed, after implementation of the proposed acquisition, the Company will be subject to any unknown liabilities of Cabral which may have an adverse effect on the Company's performance and financial condition.

Additionally, there is a risk that the information provided may have changed due to changes in the economy.

(f) Economic Risks

Factors such as inflation, exchange rate or currency fluctuations, interest rates, supply and demand of capital and industrial disruption have an impact on business costs, commodity prices and stock market prices or conditions. The Company's exploration, development, construction and operating costs, possible future revenues and future profitability can be affected by these factors, which are beyond the control of the Company.

(g)

Potential Acquisitions

As part of its business strategy, the Company may make acquisitions of, or significant investments in, complementary companies or assets. Any such future transactions would be accompanied by the risks commonly encountered in making such acquisitions.

(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, general economic outlook, interest rates and inflation rates, currency fluctuations, demand for commodities and commodity prices, shipping costs, changes in investor sentiment toward particular market sectors, the demand for, and supply of, capital and terrorism or other hostilities.

(i)

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.

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(j) Investment Speculative

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 the Company's securities.

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

2.1 General

Resolution 1 seeks approval from Shareholders to change to the nature and scale of the Company's activities.

2.2

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 and scale of its activities, it must provide full details to ASX as soon as practicable 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 any requirements of ASX in relation to the notice of meeting; and

  • (c) if ASX requires, meeting the requirements of Chapters 1 and 2 of the ASX Listing Rules as if the company were applying for admission to the official list of ASX.

ASX has indicated to the Company that, given the change in the nature and scale of the Company's activities as a result of the proposed acquisition of Cabral, the Company must obtain Shareholder approval under Listing Rule 11.1.2 and re-comply with the ASX's admission requirements set out in Chapters 1 and 2 of the ASX Listing Rules in accordance with Listing Rule 11.1.3.

The effect of the application of ASX Listing Rule 11.1.3 is that, to facilitate completion of the proposed acquisition of Cabral, the Company must satisfy the requirements of Chapters 1 and 2 of the ASX Listing Rules as if the Company was making application for the first time for its Shares to be admitted to the Official List and for its Shares to be officially quoted for trading on the ASX.

2.3 Directors' recommendation

The Directors unanimously recommend that Shareholders vote in favour of Resolution 1.

3. RESOLUTION 2 – ISSUE OF SECURITIES TO ACQUIRE CABRAL

3.1 General

Resolution 2 seeks Shareholder approval, pursuant to Listing Rule 7.1, for the issue of 30,000,000 Shares and 15,000,000 Future Performance Rights to the Sellers in consideration for the acquisition of 1,265 Cabral Shares pursuant to the terms of the SSPA.

If Resolution 2 is approved by shareholders, the Company will not issue the securities to the Sellers pursuant to that resolution until the Company has satisfied the requirements of Chapters 1 and 2 of the Listing Rules.

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3.2 Listing Rule 7.1

Subject to a number of exceptions, Listing Rule 7.1 limits the number of equity securities that a listed company may issue or agree to issue without shareholder approval in any 12 month period to 15% of its issued securities.

Future Performance Rights are "equity securities" for the purposes of Listing Rule 7.1.

The effect of Resolution 2 will be to allow the Directors to issue Shares and Future Performance Rights to the Sellers in consideration for the acquisition of 1,265 Cabral Shares pursuant to the terms of the SSPA during the 3 months after the General Meeting (or a longer period, if allowed by ASX), without using the Company's annual 15% placement capacity.

Additionally, Exception 4 of Listing Rule 7.2 provides that the 15% limit in Listing Rule 7.1 does not apply to an issue of securities on conversion of a convertible security issued in accordance with the Listing Rules. As the Future Performance Rights are convertible securities, any Shares issued to the Sellers on conversion of the Future Performance Rights will not count towards the Company's 15% limit.

3.3 Technical information required by ASX Listing Rule 7.3

The following information is provided in relation to the issue of Shares pursuant to Resolution 2 in accordance with Listing Rule 7.3:

  • (a) the maximum number of Shares to be issued is 30,000,000;

  • (b) the Shares will be allotted and issued no later than 3 months after the date of the General Meeting (or such other date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules). It is intended that allotment of the Shares will occur on one date;

  • (c) the deemed issue price of the Shares is $0.035 per Share;

  • (d) the allottees of Shares issued pursuant to Resolution 2 will be the Sellers pro-rata to their holding of Cabral Shares. None of the recipients of the Shares will be related parties of the Company;

  • (e) the Shares issued will be fully paid ordinary shares in the capital of the Company and will be issued on the same terms and conditions as the Company's existing Shares; and

  • (f) the Company will not be raising funds from the issue of the Shares as they are being issued in consideration for the acquisition of Cabral Shares.

The following information is provided in relation to the issue of the Future Performance Rights pursuant to Resolution 2 in accordance with Listing Rule 7.3:

  • (a) the maximum number of Future Performance Rights to be issued is 15,000,000;

  • (b) the Future Performance Rights will be allotted and issued no later than 3 months after the date of the General Meeting (or such other date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules). It is intended that allotment of the Future Performance Rights will occur on one date;

  • (c) the allottees of Future Performance Rights issued pursuant to Resolution 2 will be the Sellers pro-rata to their holding of Cabral Shares. None of the recipients of the Future Performance Rights will be related parties of the Company;

  • (d) the terms of the Future Performance Rights are set out in Schedule 2;

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  • (e) the Company will not be raising funds from the issue of the Future Performance Rights as they are being issued in consideration for the acquisition of Cabral Shares; and

  • (f) the Future Performance Rights will be issued for nil consideration.

3.4 Directors Recommendation

The Directors unanimously recommend that Shareholders vote in favour of Resolution 2 as they are of the view that the acquisition of Cabral by the Company represents an excellent investment opportunity.

4. RESOLUTION 3 – PLACEMENT OF SHARES

4.1 General

Resolution 3 seeks Shareholder approval, pursuant to Listing Rule 7.1, for the allotment and issue of up to $40,000,000 worth of Shares ( Placement ).

A summary of Listing Rule 7.1 is set out in section 3.2 above.

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

4.2 Technical information required by ASX Listing Rule 7.3

The following information is provided in relation to the Placement pursuant to Resolution 3 in accordance with Listing Rule 7.3:

  • (a) the maximum number of Shares to be issued under the Placement will be such number that equates, in aggregate value, to $40,000,000, where the minimum issue price per Share is at least 80% of the average market price of Shares trading on ASX over the last 5 days on which sales were recorded before the day on which the issue is to be made in accordance with Listing Rule 7.3.3;

  • (b) the Shares will be allotted and issued no later than 3 months after the date of the General Meeting (or such other date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules);

  • (c) the Shares will be allotted and issued to professional and/or sophisticated investors who satisfy the definition contained in section 708(8) of the Corporations Act. Although the proposed allottees are unknown at the date of the Notice of Meeting, the Company confirms that none of the recipients of the Shares will be related parties of the Company. The Company also confirms that the Placement will be structured to ensure that no single investor, together with its associates, acquires voting power in excess of 20% in the Company (on a fully diluted basis);

  • (d) 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; and

  • (e) the Company intends to use the funds raised from the Placement for the following purposes:

  • (i) as to $7.2 million, to pay the cash consideration under the Subscription;

  • (ii) as to $30.6 million, to fund the development and exploration of the Cabral Tenements, to acquire further tenements in Brazil and for general working capital;

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  • (iii) as to $200,000, to pay the consideration for the Cabral Shares the Company is to acquire from an associate company; and

  • (iv) as to the remaining $2 million, to meet the expenses of the Placement.

4.3 Directors' recommendation

The Directors unanimously recommend that Shareholders vote in favour of Resolution 3.

5. RESOLUTION 4 – CHANGE OF NAME TO CABRAL RESOURCES LIMITED

5.1 General

As a result of the proposed acquisition of Cabral, the Board believes that if Cabral is acquired the current name of the Company, "RIMCapital Limited", will no longer adequately represent the Company's strategy and market presence. Accordingly, the Company proposes to change its name to “ Cabral Resources Limited ”.

Resolution 4 seeks Shareholder approval to this change pursuant to section 157 of the Corporations Act, which provides that if a Company wants to change its name it must pass a special resolution adopting the new name.

As this Resolution is a special resolution, it must be passed by at least 75% of the votes cast by Shareholders entitled to vote on the Resolution and present at the Meeting (in person or by proxy).

5.2 Directors' recommendation

The Directors unanimously recommend that Shareholders vote in favour of Resolution 4.

6. RESOLUTIONS 5 TO 7 – ISSUE OF OPTIONS TO MR ALBERT YUE-LING WONG, MR MALCOLM CYRIL HANCOCK AND THE HONORABLE NEVILLE KENNETH WRAN

6.1 General

At a Board meeting held on 21 December 2010, the Directors, subject to shareholder approval, resolved:

  • (a) to issue 1,000,000 Options to Mr Wong or his nominee(s) (without Mr Wong being present for that part of the meeting);

  • (b) to issue 750,000 Options to Mr Hancock or his nominee(s) (without Mr Hancock being present for that part of the meeting); and

  • (c) to issue 500,000 Options to The Hon. Wran or his nominee(s) (without The Hon. Wran being present for that part of the meeting).

Accordingly, Resolutions 5, 6 and 7 separately seek Shareholder approval for the Company to grant and issue a total of 2,250,000 Options as follows:

**Director ** Number of Options
Mr AlbertYue-LingWong (or hisnominee(s)) 1,000,000
Mr Malcolm Cyril Hancock (or his nominee(s)) 750,000
TheHonorableNevilleKenneth Wran(or hisnominee(s)) 500,000

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6.2 Purpose of the Options issue

The purpose of the proposed grant of Options to:

  • (a) Mr Wong is to provide Mr Wong with an added incentive in carrying out his duties as Non-Executive Chairman of the Company; and

  • (b) Mr Hancock and Hon. Wran is to provide Mr Hancock and Hon. Wran with an added incentive in carrying out their duties as Non-Executive Directors of the Company.

The Company acknowledges that the issue of the Options to the non-executive directors is not consistent with the guidelines under Recommendation 8.2 the ASX Principles of Good Corporate Governance and Best Practice Recommendations. However, the Board considers the issue of Options to the non-executive directors under Resolutions 5, 6 and 7 to be a cost-effective and efficient incentive for the Company in view of its current financial resources as opposed to alternative forms of incentive such as cash bonuses or increased remuneration.

6.3 Listing Rule 10.11

Subject to a number of exceptions, Listing Rule 10.11 requires a listed company to obtain shareholder approval for the issue of securities to a related party of the company.

Mr Wong, Mr Hancock and The Hon. Wran are each considered to be related parties of the Company by virtue of the fact that they are each a Director of the Company.

As Shareholder approval is being sought pursuant to Listing Rule 10.11, under Listing Rule 7.2 Exception 14, additional approval under Listing Rule 7.1 is not required. Accordingly, the grant of the Options to Mr Wong, Mr Hancock and The Hon. Wran pursuant to Resolutions 5, 6 and 7 will not be included in the 15% calculation for the purposes of Listing Rule 7.1.

6.4 Technical information required under ASX Listing Rule 10.13

The following information is provided in relation to the issue of Options to Mr Wong, Mr Hancock and The Hon. Wran pursuant to Resolutions 5, 6 and 7 in accordance with Listing Rule 10.13:

  • (a) the maximum number of Options to be issued is 2,250,000;

  • (b) the Options will be issued no later than 1 month after the date of the General Meeting (or such other date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules);

  • (c) the Options will be issued for no consideration and are exercisable at 30 cents;

  • (d) the terms and conditions of the Options are set out in Schedule 3; and

  • (e) no funds will be raised by the issue of the Options. In the event of exercise of the Options, funds raised will be based on multiplying the number of Options exercised by 30 cents. Any funds raised from the exercise of the Options will be used for working capital purposes.

6.5 Chapter 2E of the Corporations Act

Under Chapter 2E of the Corporations Act, a public company cannot give a financial benefit to a related party (such as a director) unless an exception applies or shareholders approve the giving of that financial benefit to the related party.

As Directors of the Company, Mr Wong, Mr Hancock and The Hon. Wran are related parties of the Company. The grant of Options to Mr Wong, Mr Hancock and The Hon. Wran

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constitute financial benefits as defined in the Corporations Act. Accordingly, the proposed grant of Options to Mr Wong, Mr Hancock and The Hon. Wran under Resolutions 5, 6 and 7 will constitute the provision of a financial benefit to related parties of the Company.

It is the view of the Directors (with Mr Wong, Mr Hancock and The Hon. Wran abstaining) that the exception under section 211(1) of the Corporations Act (reasonable remuneration and reimbursement) applies to the proposed issue of Options to Mr Wong, Mr Hancock and The Hon. Wran. Accordingly, the Directors (with Mr Wong, Mr Hancock and The Hon. Wran abstaining) have determined not to seek Shareholder approval under section 208 of the Corporations Act.

6.6 Directors' recommendation

In respect of Resolution 5, those Directors who have no interest in the outcome of Resolution 5 (being all Directors other than Mr Wong) recommend that Shareholders vote in favour of Resolution 5.

In respect of Resolution 6, those Directors who have no interest in the outcome of Resolution 6 (being all Directors other than Mr Hancock) recommend that Shareholders vote in favour of Resolution 6.

In respect of Resolution 7, those Directors who have no interest in the outcome of Resolution 7 (being all Directors other than The Hon. Wran) recommend that Shareholders vote in favour of Resolution 7.

7. RESOLUTION 8 – RATIFICATION OF PRIOR ISSUE OF SHARES

As announced to ASX on 29 October 2010, the Company completed a non-underwritten equity placement of 13,606,000 Shares at 2.5 cents per share, raising $340,150.

Pursuant to Listing Rule 7.4, where a company in general meeting ratifies the previous issue of securities which was made without shareholder approval under Listing Rule 7.1 and the previous issue did not breach Listing Rule 7.1, those securities shall be deemed to have been made with shareholder approval for the purpose of Listing Rule 7.1.

Resolution 8 seeks Shareholder ratification for the prior issue of 13,606,000 Shares under the placement pursuant to Listing Rule 7.4 to reinstate the Company's capacity to issue up to 15% of its issued capital, if required, in the next 12 months without Shareholder approval.

Listing Rule 7.5 requires the following information to be provided to Shareholders for the purpose of obtaining Shareholder approval pursuant to Listing Rule 7.4:

  • (a) the number of Shares allotted was 13,606,000 Shares;

  • (b) the Shares were issued for $0.025 per Share;

  • (c) the Shares were allotted and issued on the same terms and conditions as the Company's existing Shares; and

  • (d) the Shares were issued to sophisticated and professional investors who satisfied the definition contained in section 708(8) of the Corporations Act. No Shares were issued to any related parties of the Company;

  • (e) the funds raised by the issue of Shares have been retained and used by the Company for ongoing working capital purposes.

7.2 Directors' recommendation

The Directors unanimously recommend that Shareholders vote in favour of Resolution 8.

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Schedule 1

GLOSSARY

A$ means Australian dollars.

ASIC means the Australian Securities and Investments Commission.

ASX means the Australian Securities Exchange Limited (ABN 98 008 624 691).

ASX Listing Rules or Listing Rules means the listing rules of ASX.

Board means the board of directors of the Company.

Cabral means Cabral Resources Pty Limited (ACN 144 001 143).

Cabral Constitution means the constitution of Cabral.

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

Cabral Shareholders' Agreement means the shareholders' agreement between the Sellers and Cabral in relation to Cabral dated 15 June 2010.

Cabral Tenements has the meaning given to that expression in section 1.3 of this Explanatory Memorandum.

Company means RIMCapital Limited (ACN 064 874 620).

Company Information means the information contained in this Explanatory Memorandum except for the Cabral Information.

Constitution means the Constitution of the Company, as amended from time to time.

Converted Right Shares means new Shares to be issued by the Company in accordance with section 3 of Schedule 2 of this Explanatory Memorandum.

Corporations Act means the Corporations Act 2001 (Cth).

Determined Claim means a Claim by the Company against the Sellers in respect of the SSPA or any part of it that:

  • (a) has been resolved by agreement or a Court or Tribunal of competent jurisdiction; or

  • (b) is not being actively disputed or contested by the Sellers.

Determined Claim Amount has the meaning given to that expression in section 3(b) of Schedule 2 of this Explanatory Memorandum.

Directors means the current directors of the Company.

Exercise Notice has the meaning given to that expression in paragraph (g) of Schedule 3 of this Explanatory Memorandum.

Exercise Price has the meaning given to that expression in paragraph (d) of Schedule 3 of this Explanatory Memorandum.

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Expiry Date has the meaning given to that expression in paragraph (a) of Schedule 3 of this Explanatory Memorandum.

Explanatory Memorandum means this explanatory memorandum accompanying the Notice.

First Option Period has the meaning given to that expression in section 1.3 of this Explanatory Memorandum.

Future Performance Rights means a convertible security granted by the Company having the terms and conditions set out in Schedule 2 of this Explanatory Memorandum.

Future Performance Rights Conversion Precondition means Cabral's project located in Brazil achieving and the Company reporting to the ASX a JORC compliant iron resource (of any category) of the greater of:

  • (a) 350 million tonnes; and

  • (b) the tonnage determined by consultants ProMet Engineers (or such other consultants appointed for this purpose) as the JORC compliant magnetite iron ore resource tonnage required to justify an economic magnetite operation at an annual production rate of 4.0 million tonnes of concentrate per annum from the Company's project location in Brazil.

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

Liabilities means debts, obligations, liabilities, losses, expenses, costs and damages of any kind and however arising, including penalties, fines, taxes, duties and interest, whether prospective or contingent and whether the amount is ascertained or ascertainable.

Notice means the notice of meeting to which this Explanatory Memorandum is attached.

Offeror has the meaning given to that expression in section 1.3 of this Explanatory Memorandum.

Option means an option to acquire a Share.

Option Agreement has the meaning given to that expression in section 1.3 of this Explanatory Memorandum.

Placement has the meaning given to that expression in section 4.1 of this Explanatory Memorandum.

Purchase Price has the meaning given to that expression in section 1.3 of this Explanatory Memorandum.

R$ means Brazilian Reais.

Resolution means a resolution contained in the Notice.

Second Option Period has the meaning given to that expression in section 1.3 of this Explanatory Memorandum.

Sellers means the current shareholders of Cabral other than the Company’s associate entity, being Magellan Capital Advisors Pty Ltd, RAJ Investment Nominees Pty Ltd as trustee for The Leica Trust, Mr Bruno Pereira Rosa Ribeiro, Mr Vernon William Tidy, Ms Angela Assiria Bossi, Mr Mark Clifford Stephen as trustee for the Stephen Family Trust, Mr Alastair Miyamori Haldane as trustee for A. Haldane Family Trust No. 2, Mr Conor Edward John O’Brien as trustee for the O’Brien Family Trust No. 2, Mr Chris Bates as trustee for the Bates Family Trust No. 2 and Hematite Consultants Pty Ltd.

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Sellers' Information means the information contained in section 1.3 of this Explanatory Memorandum and the unaudited management accounts of Cabral as at 30 November 2010 used to prepare the pro forma balance sheet set out in section 1.4 of this Explanatory Memorandum.

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

Share Sale has the meaning given to that expression in section 1.2(a) of this Explanatory Memorandum.

SSPA has the meaning given to that expression is section 1.1 of this Explanatory Memorandum.

Shareholder means a holder of Shares.

Subscription has the meaning given to that expression in section 1.2(c) of this Explanatory Memorandum.

Subscription Shares has the meaning given to the expression in section 1.2(c) of this Explanatory Memorandum.

Transaction has the meaning given to that expression is section 1.1 of this Explanatory Memorandum.

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Schedule 2

TERMS AND CONDITIONS OF THE FUTURE PERFORMANCE RIGHTS

1. TERMS OF GRANT

  • (a) Each Future Performance Right is unrenounceable and will, subject to paragraph 2 of these Future Performance Right Terms of Grant, be convertible into one Share in the Company in accordance with section 3 of this Schedule.

  • (b) If the Future Performance Rights Conversion Precondition is not satisfied on or by the date which is 60 months after the date of the SSPA:

  • (i) the Future Performance Rights will immediately terminate and lapse and be of no force or effect;

  • (ii) the obligation on the Company to issue the Converted Right Shares to the Sellers under section 3 of this Schedule will terminate; and

  • (iii) the Sellers will not be entitled to any Converted Right Shares.

  • (c) The Future Performance Rights will not:

  • (i) carry any right to participate in or be entitled to any dividends, returns of capital or other distributions (including in a winding up) of the Company; and

  • (ii) carry any right to vote at meetings of the Company.

  • (d) The Sellers must not:

  • (i) sell, transfer or offer for sale any Future Performance Rights or enter into any agreement to sell, transfer or offer for sale any Future Performance Rights; or

  • (ii) create, grant, issue or transfer any interest in (including a security interest or an Encumbrance or other third party right), or options or warrants over any Future Performance Rights; or

  • (iii) agree to do any of the matters referred to in paragraphs (d)(i) and (d)(ii) above.

  • (e) Subject to the Listing Rules, the Future Performance Right carry no right to participate in any offering of securities by the Company and the Company reserves the right at all times to issue securities, including further Future Performance Rights, to any person in any manner.

  • (f) In the event of any reorganisation (including consolidation, sub-division, reduction or return) of the issued capital of the Company, all rights of a holder of Future Performance Rights will be reconstructed (as appropriate) in accordance with the Listing Rules.

  • (g) There are no participating rights or entitlements inherent in the Future Performance Rights and holders will not be entitled to participate in new issues of capital offered to Shareholders unless they have exercised their Future Performance Rights. However, the Company will ensure that for the purposes of the proposed issue, notice of the new issue will be given to holders of Future Performance Rights at

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least ten (10) Business Days before the record date. This will give these holders the opportunity to exercise their Future Performance Rights (if permitted) prior to the date for determining entitlements to participate in any such issue.

2. PRECONDITIONS

  • (a) Subject to paragraph (b) below, no Converted Right Shares will be issued to the Sellers under section 3 of this Schedule unless and until the Future Performance Rights Conversion Precondition is satisfied. The Company agrees to use (to the extent it is within its power to do so) its reasonable endeavours to satisfy the Future Performance Rights Conversion Precondition.

  • (b) If the Company disposes of the Company’s project in Brazil before the date which is 60 months after the date of the SSPA and no Converted Right Shares have been issued to the Sellers as at the date of the disposal, the Company must immediately issue the Converted Right Shares to the Sellers under section 3 of this Schedule.

3.

CONVERSION AND REDUCTION

  • (a) Subject to paragraph (b), (c) and (d) below, within 3 Business Days after:

  • (i) the precondition in section 2(a) of this Schedule is satisfied; or

  • (ii) section 2(b) of this Schedule applies,

the Sellers are deemed to have subscribed for the Converted Right Shares and the Company must convert all of the Future Performance Rights to Shares and issue the Converted Right Shares to the Sellers.

  • (b) If, on the date that the Converted Right Shares are due to be issued to the Sellers under section 3 of this Schedule, the Sellers have a Liability to the Company in respect of a Determined Claim which has not been satisfied ( Determined Claim Amount ), the number of Converted Right Shares will reduce as follows:

Determined Claim Amount N = $0.30

Where N equals the number of shares to be deducted from the Converted Right Shares to be issued to the Sellers under section 3 of this Schedule.

  • (c) If, on the date that the Converted Right Shares are due to be issued to the Sellers under section 3 of this Schedule, the Company has any Unresolved Claims against the Sellers, the issue date for the Converted Right Shares will be postponed until such Unresolved Claims have become Determined Claims (and any applicable reduction has been made to the number of Converted Right Shares in respect of such claims in accordance with paragraph (d) below).

  • (d) Where the number of Future Performance Rights to which a holder is entitled under this Schedule is a number which includes a fraction of a Future Performance Right, that fraction must be disregarded and the holder has no further claim or right to that fraction of a Future Performance Right.

  • (e) The Company must use all reasonable endeavours and furnish all such documents, information and undertakings as may be reasonably necessary in order to procure official quotation of the Converted Right Shares on the financial market conducted by ASX and to procure that such quotation is maintained.

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Schedule 3

TERMS AND CONDITIONS OF THE OPTIONS

  • (a) The Options will vest immediately upon issue.

  • (b) The Options are exercisable at any time prior to 5.00pm Eastern Standard Time on a date that is 5 years from the date of issue ( Expiry Date ). Any Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

  • (c) Subject to these terms and conditions, each Option gives the optionholder the right to subscribe for one fully paid ordinary share in the capital of the Company.

  • (d) The exercise price payable upon exercise of each Option will be A$0.30 ( Exercise Price ).

  • (e) The Options are not transferable without the prior written consent of the Company, which consent shall not be withheld if the assignee or transferee of the Options is an entity controlled by the relevant Director and in which he has in excess of a 75% equity interest and provided the assignee enters into a deed with the Company agreeing not to transfer the said Options.

  • (f) If the Director being the recipient of the Options issued pursuant to Resolution 5, 6 or 7 (as the case may be) ceases to be a Director prior to the Options being exercised, the relevant Options shall be forfeited.

  • (g) An optionholder may exercise their Options by lodging with the Company, before the Expiry Date:

  • (i) a written notice of exercise of Options specifying the number of Options being exercised; and

  • (ii) a cheque or electronic funds transfer for the Exercise Price for the number of Options being exercised,

( Exercise Notice ).

  • (h) An Exercise notice is only effective when the Company has received the full amount of the Exercise Price in cleared funds.

  • (i) Within 5 Business Days of receipt of the Exercise Notice accompanied by the Exercise Price, the Company will allot the number of Shares required under these terms and conditions in respect of the number of Options specified in the Exercise Notice.

  • (j) The exercise of only a portion of the Options held shall not effect the optionholder's right to exercise the balance of the Options remaining.

  • (k) All Shares allotted upon the exercise of Options will, upon allotment, rank pari passu in all respects with other Shares.

  • (l) Application will not be made to the ASX for official quotation of the Options. Application will be made to the ASX for official quotation of the Shares issued on exercise of the Options.

  • (m) In the event of any reorganisation (including consolidation, sub-division, reduction or return) of the issued capital of the Company before the expiry of any Options, all rights of an optionholder will be reconstructed (as appropriate) in accordance with the Listing Rules.

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  • (n) 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.

  • (o) There are no participating rights or entitlements inherent in the Options and optionholders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options. However, the Company will ensure that for the purposes of the proposed issue, notice of the new issue will be given to optionholders at least ten (10) Business Days before the record date. This will give optionholders the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue.

  • (p) The Options will not:

  • (i) carry any right to participate in or be entitled to any dividends, returns of capital or other distributions (including in a winding up) of the Company; or

  • (ii) carry any right to vote at meetings of the Company.

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PROXY FORM

RIMCAPITAL LIMITED

ACN 064 874 620

Registered address: Level 6, Suite 603, Currency House, 23 Hunter Street, Sydney NSW 2000

In respect of the General Meeting to be held at Press Room 1 & 2, Lower Ground Floor, The Radisson Plaza Hotel, 27 O’Connell Street, Sydney NSW 2000 at 10.00am on Friday, 11 February 2011 or any adjournment thereof, or poll

I/We ........................................................................................................................................................................ (full name) of .............................................................................................................................................................................................. being a member/members, holding ..................................... fully paid ordinary shares in RIMCapital Limited, hereby appoint:................................................................................................................................................................................................ of .......................................................................................................................................................................................... and (in the case of a second proxy) ................................................................................................................................................................................................ of ..........................................................................................................................................................................................

or in default, or if no person is named, the Chairman of the Meeting, as my/our proxy to attend and vote for me/us and on my/our behalf at the said General Meeting or at any adjournment thereof or poll in respect of:

*all of my/our shares *or (this number) .............................................. shares-(proxy one)
.............................................................shares-(proxy two)
total shares ..........................................................................

(Should you desire to direct your proxy how to vote, please complete the following section of this form by inserting "X" or a tick in the appropriate boxes. If you do not direct your proxy on any item, your proxy may vote on it as the proxy thinks fit or may abstain from voting.)

may abstain from voting.)
I/We instruct my/our proxy to vote as indicated below in respect of the item of business referred to:
Item of Business For Against Abstain
1. Change to nature and scale of activities � � �
2. Issue of securities to acquire Cabral Resources Pty Ltd � � �
3. Placement of Shares � � �
4. Change of name to Cabral Resources Limited � � �
5. Issue of Options to Mr Albert Yue-Ling Wong � � �
6. Issue of Options to Mr Malcolm Cyril Hancock � � �
7. Issue of Options to The Honorable Neville Kenneth Wran � � �
8. Ratification of prior issue of Shares � � �

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NOTE:

If a member appoints a Chairman of the meeting as a member's proxy and does not specify how the Chairman is to vote on an item of business, subject to requirements of the Corporations Act, it is the intention of the Chairman to vote on a poll as proxy for the member in favour of each resolution.

If the Chairman of the meeting is appointed as your proxy, or may be appointed by default, and you do not wish to direct your proxy how to vote, please mark the box �

By marking this box you acknowledge that the Chairman may exercise your proxy even if he has an interest in the outcome of the resolution and votes cast by him other than as proxy holder will be disregarded because of that interest.

If you do not mark this box, and you have not directed your proxy how to vote, the Chairman will not cast your votes on the resolution and your votes will not be counted in calculating the required majority if a poll is called on the resolution.

Dated this .......................................... day of ....................................................... 2011 Signature of Member(s) ........................................................................................................................................................

  • Please delete one; if no deletion is made and the proportion or number of shares is not inserted and only one proxy is appointed, it will be assumed that the proxy is for all shares registered in the name of the member(s); if no deletion is made and two proxies are appointed, each proxy may exercise half of the member's voting rights. Neither proxy is entitled to vote on a show of hands.

INSTRUCTIONS - APPOINTMENT OF PROXIES

  • A Shareholder entitled to attend and vote at the meeting is entitled to appoint not more than two proxies to attend and vote on behalf of the Shareholder.

  • A proxy need not be a Shareholder of the Company.

  • Where two proxies are appointed, each may be appointed to represent a specific portion or number of the Shareholder's voting rights. If such apportionment is not made, each proxy may exercise one-half of the Shareholder's voting rights.

  • The form of proxy must be signed personally by the Shareholder or his/her attorney, duly authorised in writing. If a proxy is given by a corporation, it must be signed in accordance with the corporation’s constituent documents or as authorised by the Corporations Act. In the case of joint Shareholders, this proxy must be signed by at least one of the joint Shareholders personally or by an authorised attorney.

  • If a proxy is executed by an attorney of a Shareholder, the original of the relevant power of attorney or a certified copy of the power of attorney, if it has not already been noted by the Company, must accompany the form of proxy.

  • To be effective, proxies must be received by the Company at its registered office at Level 6, Suite 603, Currency House, 23 Hunter Street, Sydney NSW 2000 at least 48 hours before the time appointed for the meeting.

  • A proxy may be sent by fax to (02) 9232 0233 to be received by the time specified in the Notice of Meeting.

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