BRIGHTSTAR RESOURCES LIMITED - AGM Information 2011

A1 MINERALS LIMITED

ACN 100 727 491

NOTICE OF GENERAL MEETING

TIME: 10:00am (WST) DATE: 26 October 2011 PLACE: "Harbour C" Room Rendezvous Observation City Hotel The Esplanade Scarborough WA 6019

This Notice of General 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.

NOTE: Stantons International has prepared the Independent Expert’s Report and has provided an opinion that it believes the proposals as outlined in Resolution 1 are NOT FAIR BUT REASONABLE to the Shareholders of the Company not associated with Stone Resources Ltd. It is recommended that all Shareholders read the Independent Expert’s Report in full. Should you wish to discuss the matters in this Notice of General Meeting please do not hesitate to contact the Company Secretary on +61 (0)8 9244 1400.

CONTENTS PAGE

Notice of General Meeting (setting out the proposed resolutions) 2 Explanatory Statement (explaining the proposed resolutions) 4 Glossary 19 Annexure A – Additional Material Terms of the Subscription Agreement 23 Annexure B – Associates of Stone Resources Limited / Stone Mining Limited 27 Annexure C – Independent Expert’s Report 29

TIME AND PLACE OF MEETING AND HOW TO VOTE

VENUE

The General Meeting of the Shareholders to which this Notice of Meeting relates will be held at 10:00am (WST) on 26 October 2011 at "Harbour C" Room, Rendezvous Observation City Hotel, The Esplanade, Scarborough WA 6019.

YOUR VOTE IS IMPORTANT

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

VOTING IN PERSON

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

VOTING BY PROXY

To vote by proxy, please complete and sign the enclosed Proxy Form and return by:

(a) hand to the Company A1 Minerals Limited, 5th Floor, 25 Walters Drive, Osborne Park, Western Australia 6017 or Computershare Investor Services Pty Limited at Level 2, Reserve Bank Building, 45 St Georges Terrace, Perth, Western Australia; or
(b) post to A1 Minerals Limited, 5th Floor, 25 Walters Drive, Osborne Park, Western Australia 6017 or Computershare Investor Services Pty Limited, GPO Box 242, Melbourne Victoria 3001; or

(c) facsimile to A1 Minerals Limited on (+61 8) 9244 1600 or to Computershare Investor Services Pty Limited on 1800 783 447 or +61 3 9473 2555,

so that it is received not later than 10:00am (WST) on 24 October 2011.

For Intermediary Online Subscribers only (custodians) please visit www.intermediaryonline.com to submit your voting intentions,

Proxy Forms received later than this time will be invalid.

NOTICE OF GENERAL MEETING

Notice is given that a General Meeting of Shareholders of A1 Minerals Limited will be held at "Harbour C" Room, Rendezvous Observation City Hotel, The Esplanade, Scarborough WA 6019 at 10:00am (WST) on 26 October 2011 ( General Meeting ).

The Explanatory Statement to this Notice of Meeting provides additional information on matters to be considered at the General Meeting. The Explanatory Statement and the Proxy Form are part of this Notice of Meeting.

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the General Meeting are those who are registered Shareholders of the Company at 10:00am (WST) on 24 October 2011.

Terms and abbreviations used in this Notice of General Meeting and Explanatory Statement are defined in the glossary or in the Explanatory Statement.

AGENDA

1. RESOLUTION 1 - APPROVAL FOR THE STONE TRANSACTIONS

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

“That, for the purposes of ASX Listing Rules 7.4 and 10.1 and Section 611 (Item 7) of the Corporations Act and for all other purposes, Shareholder approval is given for:

(a) the Company to allot and issue the Subscriber with the Convertible Note, in consideration for the payment of the Convertible Note Subscription Amount (being an amount of $12 million, or such lesser amount of between $10 million and $12 million as agreed by the Company and the Subscriber);
(b) the Company to allot and issue to the Subscriber that number of Shares in the Company (calculated in accordance with the terms of the Convertible Note) on conversion of the Convertible Note (including conversion in satisfaction of any capitalised interest), at a conversion price of $0.06 per Share (if converted more than 12 months after the date the Convertible Note is issued), or $0.035 per Share (if converted within 12 months of the date the Convertible Note is issued);
(c) the Company to allot and issue to the Subscriber 89,730,000 Shares at an issue price of $0.025 per Share as a Placement to raise $2,243,250, including the ratification of the allotment and issue of 30,000,000 of these Shares if issued prior to the General Meeting under the Part Placement;
(d) the Company to allot and issue the Subscriber up to 100,000,000 Shares at an issue price of $0.025 per Share following completion of the SPP;
(e) the Company to grant the Charge to the Subscriber to secure the Convertible Note; and
(f) the increase in the voting power of the Subscriber and its Associates as a result of the issue of Shares in the Company under paragraphs (b) to (d) of this Resolution,”

on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice.”

Expert’s Report: Shareholders should carefully consider the Independent Expert’s Report prepared by Stantons International for the purposes of Shareholder approval for Resolution 1 under Section 611 (Item 7) of the Corporations Act and under Listing Rule 10.1 of the ASX Listing Rules, as attached to this Notice. The Independent Expert’s Report comments on the fairness and reasonableness of the transactions to the non-associated Shareholders in the Company. Stantons International has concluded that the proposals as outlined in Resolution 1 are NOT FAIR BUT REASONABLE to the Shareholders of the Company not associated with Stone Resources Ltd. It is recommended that all Shareholders read the Independent Expert’s Report in full.

Voting Exclusion : The Company will disregard any votes cast on this Resolution by any party to the transactions including Stone Resources Limited (or its nominee, Stone Mining Limited) and any of its associates (including any associates of the nominee if appropriate), any person who has participated in the issue and any associate of that person, any person who may participate in the 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 any of them. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote in accordance with the directions on the Proxy Form or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

2. RESOLUTION 2 - APPROVAL FOR A SHARE PURCHASE PLAN

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

“That, subject to and conditional upon the passing of Resolution 1, for the purposes of ASX Listing Rules 7.1 and for all other purposes, approval is given for the Directors to allot and issue up to 100,000,000 Shares to Shareholders (other than related parties) under a Share Purchase Plan ( SPP ) at an issue price of $0.025 per Share 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, 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.

GENERAL BUSINESS

To consider any other business that may be brought forward in accordance with the Constitution of the Company or the Corporation Act.

BY ORDER OF THE BOARD

Mr Albert Longo Company Secretary 20 September 2011

EXPLANATORY MEMORANDUM

This Explanatory Memorandum has been prepared for the information of Shareholders in connection with the General Meeting of Shareholders to be held at Harbour C" Room, Rendezvous Observation City Hotel, The Esplanade, Scarborough WA 6019 on 26 October 2011 at 10:00am (WST).

The purpose of this Explanatory Memorandum is to provide Shareholders with all information known to the Company which is material to a decision on how to vote on the Resolution in the accompanying Notice of General Meeting.

1. BACKGROUND TO RESOLUTIONS 1 AND 2

1.1 Subscription Agreement

On 12 August 2011, the Company executed the Subscription Agreement with Stone Resources Ltd ( Stone ), a company listed on the TSX Venture Exchange (TSX-V: SRH), which provided for Stone (or its nominee) to acquire majority control of the Company through a number of transactions.

The key terms of the Subscription Agreement are summarised below. A summary of the other material terms of the Subscription Agreement is set out in Annexure A of this Notice.

The Subscription Agreement provides for Stone to obtain control of the Company through the issue to Stone (or its nominee, Stone Mining Limited) (the Subscriber ) of:

(a) a placement of 89,730,000 Shares at an issue price of $0.025 per Share to raise $2,243,250 ( Placement ); and
(b) a convertible note, with a face value of $12 million, or such lesser amount of between $10 million and $12 million as agreed by the Company and the Subscriber ( Convertible Note ).

The Convertible Note bears interest at 5% per annum (payable quarterly in arrears, and may be capitalised at the Company’s election), is convertible at A$0.035 per Share if exercised within 12 months of issuance or at A$0.06 per Share thereafter, is repayable 24 months after issuance or earlier with the consent of the Subscriber, will be secured by a first ranking fixed and floating charge ( Charge ) and is unlisted but freely transferrable in whole or in part.

In the event Stone is unable to obtain approval from the TSX Venture Exchange to proceed with the transactions under the Subscription Agreement on reasonable conditions by the time the Resolution is passed at the General Meeting, the Subscriber may elect to have 30,000,000 of the Placement Shares issued before the rest of the Placement ( Part Placement ).

In addition, following issue of the Convertible Note and the Placement Shares (which are to occur simultaneously at completion of the Subscription Agreement), the Company has agreed to offer a share purchase plan to its Shareholders (other than related parties) of up to 100,000,000 Shares at an issue price of $0.025 per Share (being the same issue price as the Placement) to raise up to $2,500,000 ( Share Purchase Plan or SPP ) in accordance with the Corporations Act and the ASX Listing Rules.

Following the SPP, the Subscription Agreement provides that:

(a) the Subscriber may require the Company to issue it with such number of Shares, at an issue price of $0.025 per Share, which results in the Subscriber owning 30.9% of the A1 Shares (with a right to be issued 44,722,306 Shares if the SPP is fully subscribed); and
(b) to the extent that Shares offered under the SPP are not subscribed for by Shareholders, the Subscriber may require the Company to issue it Shares to make up any shortfall, at an issue price of $0.025 per Share, up to a maximum of 100,000,000 Shares (if the SPP is not subscribed by any Shareholders),

(together, the SPP Placement Shares ).

The Company will raise between approximately $12.2 million and $14.2 million from the issue of the Convertible Note and the Placement (depending on whether a $10 million or $12 million Convertible Note is issued).

If the SPP is fully subscribed and Stone elects to take up 44,722,306 Shares to restore its 30.9% shareholding, a further $3.6 million will be raised, for a total of between approximately $15.8 million and $17.8 million.

The Company will use the proceeds of the Transactions and the SPP to discharge all its external debt obligations with any remainder to be used for working capital purposes or such other purposes as consented to by the Subscriber. Refer to Section 1.3 for further details in relation to the Company’s external debt.

Following completion of the Placement, the Subscriber will be entitled to appoint two directors to the board of the Company. Upon conversion of all or part of the Convertible Note into Shares, the Subscriber’s board representation shall be increased commensurate with its shareholding, and so the Subscriber shall be entitled to appoint a majority of the directors to the board upon full conversion of the Convertible Note into Shares. If no current Directors resign, this will result in a total of 9 Directors on the Board.

1.2 Conditions Precedent

Completion of the Subscription Agreement is conditional upon the satisfaction or waiver of the following conditions ( Conditions Precedent ), by no later than 30 November 2011 (or such later date as agreed by the Parties) ( End Date ):

(a) the Parties obtaining all necessary regulatory, shareholder and third party approvals to the issue of the Placement Shares, the issue of the SPP Placement Shares and the grant of the Convertible Note and its conversion into Shares;
(b) in relation to the Convertible Note only, the Parties entering into an agreement or agreements with Watpac and, to the extent required, other creditors who hold charges over the Company’s assets, on terms acceptable to the Subscriber, under which Watpac and such other creditors agree to the creation of the Charge and such other creditors (excluding Watpac) agree to the subordination or discharge of their charges over the Company’s assets and undertakings. This condition has been satisfied in relation to Watpac – refer Section 1.3 below;

(c) in relation to the Convertible Note only, the Parties enter into a formal deed of priority with Watpac pursuant to which the Charge will rank behind the existing charge created by the Company in favour of Watpac. This condition has been satisfied – refer Section 1.3 below;
(d) in relation to the Convertible Note only, the negotiation and execution of the Charge;
(e) the Company prepares a prospectus (on terms acceptable to the Subscriber, acting reasonably) so as to allow the Placement Shares (and, to the extent possible, any SPP Placement Shares and Shares issued on conversion of the Convertible Note) to be freely tradeable from the date of issue in accordance with section 708A(11) of the Corporations Act. The prospectus will also contain the SPP offer for the Company’s shareholders;
(f) except to the extent fairly disclosed in writing to the Subscriber prior to the Execution Date, there being no change in the financial or trading position of the Company, or the operations or assets of the Company, during the Exclusivity Period that has, or is reasonably likely to have, in the reasonable opinion of the Subscriber, a material adverse effect on the Company, being an effect that has a financial impact on the value of the Company’s assets or liabilities exceeding $300,000, and the Subscriber shall be entitled to require the Company to provide its management accounts as at the latest practicable date before Completion to prove its compliance with this sub-clause;
(g) except to the extent specifically, accurately, fairly and fully disclosed by or on behalf of the Company to the Subscriber during the course of its due diligence and discussions with the Company between 31 May 2011 and the Execution Date, the Company’s warranties and representations as set out in the Subscription Agreement are true and correct in all material aspects, and no Event of Default has occurred;
(h) there is no forfeiture of, or action taken by any governmental agency or third party to seek forfeiture of, any Tenements that the Subscriber, acting reasonably, considers to be material to the Transactions; and
(i) the Company provides the Subscriber with a certificate, no later than the date that is 2 Business Days after all other Conditions Precedent are satisfied or waived, that states that, to the best of the Company’s knowledge, after making due enquiries and investigations, as at the date the certificate is so provided to the Subscriber:
(i) all the terms, undertakings, and conditions on the part of the Subscriber under the Subscription Agreement have been performed in all material respects;
(ii) all warranties and representations on the part of the Subscriber in the Subscription Agreement remain true, correct and accurate in all material respects, subject to the limitations contained in the Subscription Agreement; and
(iii) there are no material adverse circumstances relating to the businesses, assets, financial position, management and

operations of the Subscriber arising since the Execution Date that have not been fully and fairly disclosed to the Subscriber.

The certificate shall be signed by a director on the Company’s behalf and approved by a written resolution signed by all its directors, which written resolution shall also be provided to the Subscriber together with the certificate.

1.3 External Debts

The Company has substantial external debts totalling approximately $16.2 million as at the date of this Notice. Of these debts, the Company owes approximately $16 million to Watpac, which is secured by a first ranking fixed and floating charge. The Company owes comparatively immaterial amounts to a number of other external creditors.

The Company entered into a deed of forbearance with Watpac on 12th August 2011 under which Watpac agreed not to enforce its existing first ranking charge over the Company, and to discount and discharge the debts owed to it by the Company, provided the Company pays approximately $13.5 million to Watpac by 31 October 2011 (amongst other conditions).

The Company intends to use the funds raised from the Transactions and the SPP to pay this amount (ie $13.5 million) to Watpac. The Company intends to use any remaining funds to repay its other external debts, with any remainder to be used for working capital purposes or such other purposes as consented to by the Subscriber.

2. RESOLUTION 1 – APPROVAL FOR THE STONE TRANSACTIONS

2.1 General

Resolution 1 seeks Shareholder approval, for the purpose of ASX Listing Rules 7.4 and 10.1 and Section 611 (item 7) of the Corporations Act and for all other purposes, for:

(a) the issue to the Subscriber of the Convertible Note;
(b) the issue of Shares to the Subscriber on conversion of, or otherwise under a right set out in, the Convertible Note (including the issue of Shares to satisfy capitalised interest);
(c) the issue to the Subscriber of the Placement Shares (including the issue of Part Placement Shares to the extent required by the Subscriber);
(d) the issue to the Subscriber of the SPP Placement Shares following completion of the SPP, being up to 100,000,000 Shares at an issue price of $0.025 per Share, with the Subscriber being entitled to be issued:
(i) up to 100,000,000 Shares to make up any shortfall to the SPP (with a right to 100,000,000 Shares if no Shareholders subscribe for the SPP); and
(ii) up to 44,722,306 Shares to increase the Subscriber’s Shareholding to 30.9% (with a right to 44,722,306 Shares if the SPP is fully subscribed);

(e) the Company to grant the Charge to the Subscriber to secure the Convertible Note; and
(f) the increase in the voting power of the Subscriber and its Associates as a result of the issue of Shares in the Company under paragraphs (b) to (d) above.

2.2 ASX Listing Rule 7.4

The Subscription Agreement provides that the Part Placement may occur before the General Meeting. In case this occurs, the Company is seeking Shareholder approval to ratify the issue of Shares under the Part Placement for the purposes of ASX Listing Rule 7.4.

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 (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.

To the extent ASX Listing Rules 10.1 and 10.11 and Section 208 of the Corporations Act would apply to the issue of Shares under the Part Placement before the General Meeting, the Company intends to rely on the exceptions under ASX Listing Rule 10.12(6) and the arms length exception under Section 210 of the Corporations Act to conduct the Part Placement without prior Shareholder approval.

2.3 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 a Part Placement before the General Meeting:

(a) a total of 30,000,000 Shares will be allotted and issued to the Subscriber;
(b) the issue price of the Shares will be $0.025 per Share to raise a total of $750,000;
(c) the Shares 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
(d) the funds raised from the Part Placement will be used to partially repay the Company’s external debt obligations and for working capital purposes.

2.4 ASX Listing Rule 10.1

ASX Listing Rule 10.1 provides that an entity (or any of its subsidiaries) must not acquire a substantial asset from, or dispose of a substantial asset to, a related party.

The Subscriber can be considered a related party of the Company on the basis it has reasonable grounds to believe it will become a related party in the future, being that there is a reasonable prospect that sufficient Shares will be issued on:

(a) conversion of, or otherwise under, the Convertible Note and the issue of Shares;
(b) the issue of the Placement Shares; and
(c) the issue of the SPP Placement Shares (if any),

to acquire control of the Company.

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 company as set out in the latest accounts given to ASX under the ASX Listing Rules.

The issue of Shares under the Transactions, and the grant of the Charge to Stone, may be considered to be a disposal of a substantial asset that therefore requires shareholder approval under ASX Listing Rule 10.1.

However, the issue of Shares under the Transactions falls within the exception in ASX Listing Rule 10.3, being Shares issued for cash and/or as a result of the Subscriber only being a related party by virtue of the Transactions. As such, ASX Listing Rule 10.1 approval is only necessary for the grant (and potential exercise) of the Charge

ASX Listing Rule 10.1 provides that Shareholder approval sought for the purpose of ASX Listing Rule 10.1 must include a report on the proposed acquisition or disposal from an independent expert.

Accompanying this Explanatory Statement is an Independent Expert’s Report prepared by Stantons International concluding that the proposed Transactions are not fair but reasonable to the non-associated Shareholders but that the grant of the Charge is fair and reasonable to the non-associated Shareholders (refer Schedule C).

2.5 Section 611 (item 7) of the Corporations Act

The Resolution also seeks Shareholder approval for the issue of Shares to the Subscriber under the Transactions for the purposes of Section 611 (item 7) of the Corporations Act.

2.6 Section 606 of the Corporations Act – Statutory Prohibition

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

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

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

A person ( second person ) will be an “associate” of the other person ( first person ) if:

(a) the first person is a body corporate and the second person is:
(i) a body corporate the first person controls;
(ii) a body corporate that controls the first person; or
(iii) a body corporate that is controlled by an entity that controls the first person;
(b) the second person has entered or proposed to enter in a relevant agreement with the first person for the purpose of controlling or influencing the composition of the company’s board or the conduct of the company’s affairs; and
(c) the second person is a person with whom the first person is acting or proposed to act, in concert in relation to the company’s affairs.

Section 608(1) of the Corporations Act provides that a person has a relevant interest in securities if they:

(a) are the holder of the securities;
(b) have the power to exercise, or control the exercise of, a right to vote attached to the securities; or
(c) have power to dispose of, or control the exercise of a power to dispose of, the securities.

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

Item 7 of Section 611 of the Corporations Act provides an exception to the prohibition in Section 606(1) of the Corporations Act, whereby a person may acquire a relevant interest in a company’s voting shares in excess of the prescribed limit with shareholder approval.

2.7 Reason Why Section 611 (item 7) Approval Required

In the event the Subscriber is issued Shares in accordance with the Transactions, the voting power of the Subscriber will exceed 20%.

Shareholder approval under Item 7 of Section 611 of the Corporations Act is therefore required to enable the Subscriber to be issued Shares in accordance with the Transactions.

The information set out below is required to be provided to Shareholders under the Corporations Act and ASIC Regulatory Guide 74 in respect of obtaining approval under Item 7 of Section 611 of the Corporations Act. Shareholders are also referred to the Independent Expert’s Report annexed to this Explanatory Memorandum.

2.8 Impact on the Company

The proposed Transactions will result in various advantages and disadvantages to the Company which Shareholders should consider prior to exercising their vote.

The Directors are of the view that the advantages to the Company include:

(a) enabling the Company to become debt free;
(b) enabling the Company to have access to the knowledge, experience and financial backing of the Subscriber; and
(c) it is unlikely that any fund raising obtained by the Company would be on as attractive terms as the proposed Transactions.

The disadvantages include:

(a) existing shareholders’ voting power will be reduced due to the dilution expected if the Subscriber is issued Shares in accordance with the Transactions;
(b) the voting power and control of the Company by the Subscriber will increase substantially if the Transactions occurs; and
(c) the Subscriber will obtain representation on the Board of the Company upon the issue of Shares following the Transactions. The extent of the voting power of the Subscriber will determine the extent of representation on the Board.

The Independent Expert also notes key advantages and disadvantages to the Company and non-associated Shareholders of the proposed issue of Convertible Note and the issue of Shares in accordance with the Transactions.

2.9 Identity of the person proposing to make the acquisition, and their associates

Stone Resources Limited is a company listed on the TSX Venture Exchange (TSXV: SRH).

Stone Mining Limited is a company incorporated in Hong Kong with Company Number 1247051. Stone Mining Limited is controlled by Stone Group Holdings Limited, which is a large, privately owned diversified investment group based in Hong Kong with interests in a wide range of sectors including media, healthcare, electronics and resources.

The associates of Stone Resources Limited and Stone Mining Limited as at the date of this Notice of Meeting are set out in Annexure B of this Notice.

Additional background information on Stone Resources Limited and Stone Mining Limited is set out in the Independent Expert’s Report.

2.10 Maximum increase in voting power of the Subscriber, and total voting power, as a result of the Transactions

Neither Stone Resources Limited nor Stone Mining Limited holds any Shares in the Company as at the date of this Notice of Meeting.

The impact of the Transactions on the voting power of the Subscriber is set out below.

The following table and paragraphs assume that:

(a) the conversion price of the Convertible Note is $0.035;
(b) the Convertible Note is issued with a Face Value of $12,000,000; and
(c) no Part Placement Shares are issued; and
(d) no additional Shares are issued other than as envisaged by the Subscription Agreement and this Notice of Meeting.

Shareholders should note that the Subscriber may increase or decrease its voting power prior to the issue of Shares under the Transactions. Any increase or decrease prior to the acquisition of Shares under the Transactions will have a corresponding impact on the calculation of the maximum increase in the voting power, and the total voting power, of the Subscriber.

Issue of Shares on Conversion of the Convertible Note

The maximum increase in voting power of the Subscriber in the Company under the Transactions is set out in Table 1 below assuming that the SPP is fully subscribed by existing Shareholders and the Subscriber elects to subscribe for 44,722,306 Shares under the SPP Placement.

Table 1 – Voting Power (Full Subscription under the SPP)

Proposed
Transactions
Steps		Step 1	Step 2	Step 3	Step 4
				SPP	Conversion
	Current	Placement	SPP	Placement	of Notes
Shares Issued	200,668,425	89,730,000	100,000,000	44,722,306	342,857,143
Total Shares On
Issue	200,668,425	290,398,425	390,398,425	435,120,731	777,977,874
Total Subscriber
Shareholding	-	89,730,000	89,730,000	134,452,306	477,309,449
_Total_Subscriber
*Voting Power*
*(%)*	*0.00%*	*30.90%*	*22.98%*	*30.90%*	*61.35%*

The maximum increase in voting power of the Subscriber in the Company under the Transactions is set out in Table 2 below assuming that the SPP is not subscribed and the Subscriber elects to subscribe for 100,000,000 Shares under the SPP Placement.

Table 2 – Voting Power (Nil subscription under the SPP)

Proposed
Transactions
Steps		Step 1	Step 2	Step 3	Step 4
				SPP	Conversion
	Current	Placement	SPP	Placement	of Notes
Shares Issued	200,668,425	89,730,000	0	100,000,000	342,857,143
Total Shares On
Issue	200,668,425	290,398,425	290,398,425	390,398,425	733,255,568
Total Subscriber
Shareholding	-	89,730,000	89,730,000	189,730,000	532,587,143
_Total_Subscriber
*Voting Power*
*(%)*	*0.00%*	*30.90%*	*30.90%*	*48.51%*	*72.63%*

Table 1 above shows that the total voting power of the Subscriber will be a maximum of 61.35% following the Transactions, assuming there is full subscription under the SPP, an increase of 61.35%.

Table 2 shows that the total voting power of the Subscriber will be 72.63% following the Transactions, assuming there is nil subscription under the SPP, an increase of 72.63%.

In addition, the Company may elect to capitalise interest payments on the Convertible Note, in which case such amount may be converted into Shares through conversion of the Convertible Note. Assuming all interest is capitalised then:

(a) if the Convertible Note is converted after 12 months, capitalised interest of $610,073 will be converted through the issue of an additional 17,430,657 Shares, increasing the Subscriber’s total shareholding:
(i) from approximately 61.35% to approximately 62.2% (assuming the SPP is fully subscribed); or
(ii) from approximately 72.63% to approximately 73.27% (assuming the SPP is not subscribed); and
(b) if the Convertible Note is converted after 24 months, capitalised interest of $1,250,704 will be converted through the issue of an additional 35,734,400 Shares, increasing the Subscriber’s total shareholding:

(i) from approximately 52.66% to approximately 55.18% (assuming the SPP is fully subscribed); or
(ii) from approximately 66.01% to approximately 67.95% (assuming the SPP is not subscribed).

2.11 Intentions in relation to the Company

The Subscriber has informed the Company that, as at the date of this Notice of Meeting and on the basis of the facts and information available to it, if Shareholders approve the Resolution that it:

(a) has no current intention of making any significant changes to the business of the Company in a manner that may be detrimental to nonassociated Shareholders;
(b) does not intend to redeploy any fixed assets of the Company;
(c) does not have any current intention to inject further capital into the Company;
(d) has no current intention to change the Company’s existing policies in relation to financial matters or dividends in a manner that may be detrimental to non-associated Shareholders;
(e) has no current intentions regarding the future employment of the present employees of the Company; and
(f) has no current intention to change the Board.

The intentions of the Subscriber and its associates above are stated as at the date of this Notice of Meeting, although they have reserved their right to reassess their position on these points from time to time. In particular, from time to time their position on the composition of the Board will be determined by the extent of their voting power in the Company.

2.12 Interests and Recommendations of Directors

None of the Directors have any personal interest in the outcome of the Resolution and after consideration of the advantages and disadvantage to the Company of the Resolution provide their recommendations below:

(a) Subject to a Superior Proposal, Michael Hunt recommends that Shareholders vote in favour of the Resolution. He is of the opinion that the Resolution is in the best interest of Shareholders as they will enable the Company to pursue the significant opportunities in its tenements and clear its debt obligations. In support of this recommendation, the Independent Expert’s Report confirms that the Resolution is not fair but reasonable to the non-associated Shareholders in the Company. Michael Hunt is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass the Resolution;

(b) Subject to a Superior Proposal, Albert Longo recommends that Shareholders vote in favour of the Resolution. He is of the opinion that the Resolution is in the best interest of Shareholders as they will enable the Company to pursue the significant opportunities in its tenements and clear its debt obligations. In support of this recommendation, the Independent Expert’s Report confirms that the Resolution is not fair but reasonable to the non-associated Shareholders in the Company. Albert Longo is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass the Resolution;
(c) Subject to a Superior Proposal, William Hobba recommends that Shareholders vote in favour of the Resolution. He is of the opinion that the Resolution is in the best interest of Shareholders as they will enable the Company to pursue the significant opportunities in its tenements and clear its debt obligations. In support of this recommendation, the Independent Expert’s Report confirms that the Resolution is not fair but reasonable to the non-associated Shareholders in the Company. Bill Hobba is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass the Resolution;
(d) Subject to a Superior Proposal, Ross Louthean recommends that Shareholders vote in favour of the Resolution. He is of the opinion that the Resolution is in the best interest of Shareholders as they will enable the Company to pursue the significant opportunities in its tenements and clear its debt obligations. In support of this recommendation, the Independent Expert’s Report confirms that the Resolution is not fair but reasonable to the non-associated Shareholders in the Company. Ross Louthean is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass the Resolution;

2.13 Role of the Independent Expert

The Independent Expert’s Report assesses whether the proposal outlined in the Resolution is fair and reasonable to the Shareholders who are not associated with the Subscriber and its associates.

The Independent Expert’s Report also contains an assessment of the advantages and disadvantages of the Resolution, which are designed to assist all nonassociated Shareholders in reaching their voting decision in relation to the Resolution contained within this Notice of Meeting.

Stantons International has prepared the Independent Expert’s Report and has provided an opinion that it believes the proposals as outlined in the Resolution is NOT FAIR BUT REASONABLE to the Shareholders of the Company not associated with the Subscriber

The Directors recommend that all Shareholders read the Independent Expert’s Report in full.

2.14 ASX Listing Rule 7.1

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 Company is not seeking Shareholder approval under ASX Listing Rule 7.1 for the Transactions as the Company is seeking Shareholder approval under Section 611(7) of the Corporations Act for the Transactions, and so the Company can rely on the exception in ASX Listing Rule 7.2(16).

2.15 ASX Listing Rule 10.11

ASX Listing Rule 10.11 requires a listed company to obtain shareholder approval by ordinary resolution prior to the issue of securities to a related party of the Company.

The Subscriber can be considered a related party of the Company as set out above.

However, the Company considers that it is entitled to rely on the exception in ASX Listing Rule 10.12(6), as the Subscriber is a related party only by reason of the Transactions, which is the reason for the issue of the Shares. Accordingly, approval is not being sought pursuant to ASX Listing Rule 10.11 for the issue of the Convertible Note, the Placement Shares and any SPP Placement Shares in accordance with the Subscription Agreement.

In addition, the Company is not seeking Shareholder approval under ASX Listing Rule 10.11 for the issue of Shares on the conversion of the Convertible Note in reliance on the exception in ASX Listing Rule 10.12(7), being an issue from the conversion of convertible securities that will be issued in compliance with the ASX Listing Rules. The Company intends to rely on this exception (or to the extent necessary, the exception in ASX Listing Rule 10.12(10) to allow the issue of Shares in satisfaction of any capitalised interest payments.

2.16 Section 208 of the Corporations Act

Under Chapter 2E of the Corporations Act, a public company cannot give a “financial benefit” to a “related party” unless one of the exceptions to the section apply or shareholders have in general meeting approved the giving of that financial benefit to the related party.

As noted above, the Subscriber can be considered a related party of the Company.

The issue of the Convertible Note, the Placement Shares and any SPP Placement Shares under the Subscription Agreement constitutes a “financial benefit” as defined in the Corporations Act.

The Directors consider that the arms length exception applies to the Transactions (in particular as the Subscriber has no previous relationship with the Company and the Subscription Agreement was negotiated on arms length terms which the Directors consider are reasonable). As such, the Company is not seeking Shareholder approval under Section 208 of the Corporations Act for the Transactions.

3. RESOLUTION 2 – APPROVAL FOR A SHARE PURCHASE PLAN

3.1 Background

Resolution 2 seeks Shareholder approval for the allotment and issue to Shareholders (other than related parties) of up to 100,000,000 Shares at an issue price of $0.025 per Share to raise up to $2,500,000 under a Share Purchase Plan ( SPP ) following completion of the Placement and issue of the Convertible Note ( SPP Shares ).

3.2 ASX Listing Rule 7.1

The exception to ASX Listing Rule 7.1 for share purchase plans (being ASX Listing Rule 7.2(15)) is unavailable in the present case as:

(a) the number of Shares being offered will be greater than 30% of the Company’s issued capital (being approximately 34.4% based on 290,398,425 Shares being on issue following the Placement and issue of the Convertible Note and 100,000,000 Shares being offered under the SPP); and
(b) the issue price of the Shares under the SPP is to be $0.025 per Share, which may or may not be at least 80% of the 5 day volume weighted average price of Shares at the time the SPP is formally announced or Shares issued under the SPP.

The effect of Resolution 2 will be to allow the Directors to issue up to 100,000,000 Shares pursuant to the SPP 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.

Resolution 2 is conditional on Resolution 1 also being approved by Shareholders.

3.3 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 SPP:

(a) the maximum number of Shares to be issued is 100,000,000;
(b) the Shares 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 allotment will occur on the same date;
(c) the issue price will be $0.025 per Share;
(d) the Shares will be allotted and issued to Shareholders (other than related parties) who subscribe to the SPP. Each Shareholder will be entitled to a maximum of $15,000 worth of Shares under the SPP;

(e) the SPP will be offered under a transaction specific prospectus as it does not fall within the Class Order 09/425 exception for share purchase plans due to the Company having been suspended for more than 5 days in the past 12 months;
(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; and
(g) the Company intends to use the funds raised from the SPP towards reduction of its existing debts and for working capital purposes.

4. RESPONSIBILITY FOR INFORMATION

The information concerning the Company contained in this Explanatory Memorandum, including information as to the views and recommendations of the Directors has been prepared by the Company and is the responsibility of the Company.

Stantons International has prepared the Independent Expert’s Report in relation to Resolution 1 and takes responsibility for that report and has consented to the inclusion of that report in this Explanatory Memorandum. Stantons International is not responsible for any other information contained within the Explanatory Memorandum.

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

Certain statements in the Explanatory Memorandum relate to the future. Those statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by those statements. These statements reflect views only as of the date of the Explanatory Memorandum. Neither the Company nor any other person gives any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward looking statements in the Explanatory Memorandum will actually occur and you are cautioned not to place undue reliance on those forward looking statements.

The Explanatory Memorandum does not take into account the individual investment objectives, financial situation and particular needs of individual Shareholders. If you are in doubt as to what you should do you should consult your legal, financial or professional adviser prior to voting.

5. ENQUIRIES

Shareholders are requested to contact the Company Secretary on +61 (0)8 9244 1400 if they have any queries in respect of the matters set out in these documents.

GLOSSARY

$ or AUD$ means Australian dollars.

Allotment Date means the date that Shares are allotted in respect of a conversion of the Convertible Note.

ASIC means the Australian Securities and Investments Commission.

Associates means the associates of Stone Resources Limited and Stone Mining Limited as at the date of this Notice of Meeting as set out in Annexure B.

ASX means ASX Limited or the Australian Securities Exchange, as the context requires.

ASX Listing Rules means the Listing Rules of ASX.

Board means the current board of directors of the Company.

Business Days means any day other than a Saturday, Sunday or public holiday in the State of Western Australia.

Charge means a first ranking fixed and floating charge over the Company’s assets and undertakings on standard commercial terms acceptable to the Subscriber to secure the Convertible Note.

Company means A1 Minerals Limited ACN 100 127 491.

Compensating Amount means an amount to compensate the Subscriber for its reasonable advisory and other costs relating to the Transactions, the cost of management time and reasonable out of pocket expenses related to the Transactions, being an amount of $500,000 as agreed between the parties.

Competing Proposal means a proposed transaction or arrangement pursuant to which a person other than the Subscriber would, if the proposed transaction or arrangement is entered into or completed substantially in accordance with its terms:

(a) directly or indirectly acquire, have a right to acquire or otherwise acquire an economic interest in, all or a substantial part of the business of the Company;
(b) acquire a relevant interest in 50% or more of the ordinary shares of the Company or otherwise acquire control of the Company within the meaning of section 50AA of the Corporations Act; or
(c) otherwise acquire or merge with the Company whether by way of takeover offer, scheme of arrangement, shareholder approved acquisition, capital reduction, share buyback, sale or purchase of assets, joint venture, reverse takeover, duallisted company structure or other synthetic merger or any other transaction or arrangement.

Completion Date means 5 Business Days after the Conditions Precedent have been met (or such other date as agreed by the Parties).

Conditions Precedent means the conditions precedent in the Subscription Agreement.

Constitution means the Company’s constitution.

Conversion Notice means the conversion notice prescribed in the form prescribed in the Subscription Agreement.

Convertible Note means the convertible note the Company has conditionally agreed to issue to the Subscriber pursuant to the Subscription Agreement.

Convertible Note Subscription Amount means as defined in section Error! Reference source not found. of this Notice.

Corporations Act means the Corporations Act 2001 (Cth).

Director means a current director of the Company.

End Date means 30 November 2011 or such other date as may be mutually agreed between the Parties.

Event of Default has the meaning given in the Subscription Agreement.

Exclusivity Period means the period commencing on the Execution Date and ending on the earlier of the Completion Date or the date the Subscription Agreement is lawfully terminated.

Execution Date means 12 August 2011.

Explanatory Memorandum means the Explanatory Memorandum accompanying the Notice of Meeting.

Face Value means an amount equal to the Convertible Note Subscription Amount, plus any amounts of accrued interest capitalised under the Subscription Agreement less that portion of the Convertible Note that have been previously repaid or converted in accordance with the Subscription Agreement.

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

Governmental Agency means the Crown in right of the Commonwealth, State or Territory, any government, any governmental ministry or department, or any Crown, governmental, semi governmental, statutory, parliamentary, administrative, fiscal, public, municipal, local, judicial or regulatory entity, agency, instrumentality, utility, authority, court, commission, body or tribunal.

Maturity Date means the date that is 2 years from the Completion Date.

Note Certificate means a certificate for the Convertible Note.

Notice , Notice of Meeting or Notice of General Meeting means this notice of general meeting including the Explanatory Memorandum.

Part Placement means a placement of the Part Placement Shares to the Subscriber.

Part Placement Shares means 30,000,000 Shares at an issue price of $0.025 per Share.

Part Placement Waiver means the waiver of all conditions in respect of 30,000,000 of the Placement Shares.

Parties means the parties to the Subscription Agreement.

Placement means the subscription by the Subscriber for the Placement Shares in accordance with the terms of the Subscription Agreement, as summarised in this Notice.

Placement Shares means the 89,730,000 Shares at an issue price of $0.025 per Share, unless the Part Placement has completed, in which case it means 59,730,000 Shares at an issue price of $0.025 per Share.

Placement Subscription Amount means $2,243,250, unless the Part Placement has completed, in which case it means $1,493,250.

Resolution means the resolution set out in the Notice of Meeting.

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

Shareholder means a holder of a Share.

SPP or Share Purchase Plan means the share purchase plan that the Company will conduct, subject to the issue of the Convertible Note and the Placement Shares, as detailed in the Subscription Agreement and summarised in Section 3 of the Explanatory Memorandum.

SPP Placement means the placement of up to 100,000,000 Shares to the Subscriber following completion of the SPP (at the election of the Subscriber) as provided for in the Subscription Agreement and as summarised in Sections 1.1 and 2.1 of the Explanatory Memorandum.

SPP Placement Shares means those Shares issued to the Subscriber under the SPP Placement.

SPP Shares means Shares issued under the SPP.

Stantons International means Stantons International Pty Ltd.

Subscriber means Stone Resources Limited or its nominee, Stone Mining Limited.

Subscription Agreement means the Subscription Agreement executed by the Company and the Subscriber on 12 August 2011.

Superior Proposal means a Competing Proposal which:

(a) is bona fide and in writing and in the determination of the Company’s Board acting reasonably and in good faith after consultation with the Company’s independent advisers, is capable of being valued and completed, taking into account all aspects of the Competing Proposal (including its terms and conditions and the identity of the person or persons making it); and
(b) in the determination of the Company’s Board acting reasonably and in good faith and in order to satisfy what the board considers to be its fiduciary or statutory duties would, if completed substantially in accordance with its terms, result in a transaction more favourable to the Company’s securityholders than the Transactions.

Tenements means the mining tenements in which the Company has a legal or beneficial interest.

Term means the period commencing on the Completion Date and ending on the earlier of:

(a) the last Business Day before the date upon which the Convertible Note is repaid in full in accordance or is converted into Shares in its entirety;
(b) the date that the Convertible Note is lawfully terminated; and
(c) the Maturity Date.

Transactions means the issue of the Placement Shares (including the Part Placement Shares), the SPP Placement Shares (if any), the issue and conversion of the Convertible Note and the grant of the Charge.

Watpac means Watpac Civil & Mining Pty Ltd (ACN 129 804 968).

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

ANNEXURE A – ADDITIONAL MATERIAL TERMS OF THE SUBSCRIPTION AGREEMENT

The Notice of Meeting summarises the key terms of the Subscription Agreement. In addition, the Subscription Agreement contains the following material terms.

Convertible Note

(a) With the prior written consent of the Subscriber, the Company may repay all or part of the Face Value prior to the Maturity Date.
(b) The Convertible Note does not provide for any voting rights at Shareholder meetings of the Company.
(c) If all or part of the Convertible Note is converted into Shares then, subject to the Corporations Act and the ASX Listing Rules, the accrued but unpaid and uncapitalised interest, if any, on the portion of the Convertible Note being converted shall be satisfied by the issue of that number of Shares at the Conversion Price which represents the interest payable by the Company to the Subscriber in respect of that portion of the Convertible Note which is then converted, at the time of conversion.
(d) In the event of a reconstruction of the capital of the Company during the term of the Convertible Note (including by way of consolidation, subdivision, reduction, return, scheme of arrangement or otherwise):
(i) the number of Shares to be issued upon conversion of all or part of the Convertible Note; and
(ii) the applicable Conversion Price,

will be reconstructed in the same proportion as the issued capital of the Company is reconstructed and in a manner which will not result in any additional benefits being conferred on, or detriment suffered by, the Subscriber, which are not conferred on or suffered by Shareholders, and otherwise in compliance with the ASX Listing Rules. In all other respects the terms of the Convertible Note will remain unchanged.

(e) In the event of any distribution (dividend or return of capital) made by the Company during the term of the Convertible Note, the Conversion Price is to be adjusted down by the amount distributed.
(f) Subject to the Company complying with the Corporations Act and the ASX Listing Rules, if at any time during the Term the Company makes an offer of shares, options or other securities (including convertible securities) in the Company (including rights issues and bonus issues), then the Company must make an offer to the Subscriber on terms which correspond with the offer the Subscriber would have received if the offer was made on a pro-rata basis to Shareholders and the Subscriber had held the number of Shares acquirable upon conversion of the Convertible Note immediately before the date on which participants are to be determined for the offer. The ASX has advised the Company that it considers an ASX waiver is required for this clause to be relied upon, and that there can be no assurance that such a waiver will be granted.

(g) Subject to the Company complying with the Corporations Act and the ASX Listing Rules, if at any time during the Term Shareholders are entitled to receive shares, securities or other assets with respect to, or in exchange for, their Shares (a Corporate Event ), the Company must make appropriate provision to ensure that the Subscriber will have the right to receive upon such Corporate Event such shares, securities or other assets to which the Subscriber would have been entitled if the Subscriber had held the number of Shares acquirable upon conversion of the Convertible Note immediately before the record date for Shares for the Corporate Event.

Exclusivity Undertakings

(a) ( No Shop ) During the Exclusivity Period, the Company must not, and must ensure that its representatives do not, except with the prior written consent of the Subscriber, solicit or invite any Competing Proposal or initiate discussions with any third party which may reasonably be expected to lead to a Competing Proposal.
(b) ( No Talk or Due Diligence ) Subject to the fiduciary carve out below, during the Exclusivity Period, the Company must not, and must ensure that its representatives do not, except with the prior written consent of the Subscriber:
(i) participate in any negotiations in relation to a Competing Proposal or which may reasonably be expected to lead to a Competing Proposal; or
(ii) provide any information to a third party for the purposes of enabling that party to make a Competing Proposal; or
(iii) communicate any intention to do any of the things listed in (i) or (ii).
(c) ( Fiduciary Carve out ) The no talk or due diligence undertakings above do not apply to the extent that it restricts the Company or its Board from taking or refusing to take any action with respect to a bona fide Competing Proposal (which was not solicited, invited, encouraged or initiated by the Company provided that the Company’s Board has determined, in good faith and acting reasonably that:
(i) after consultation with its advisors, such a bona fide Competing Proposal has been provided in writing and could reasonably be considered to be a Superior Proposal; and
(ii) after receiving written advice from a Queen’s Counsel or Senior Counsel, that failing to respond to such a bona fide Competing Proposal would be reasonably likely to constitute a breach of the fiduciary or statutory duties of the Board.
(d) ( Notification ) During the Exclusivity Period, the Company must:
(i) promptly inform the Subscriber in writing if it or any of its representatives receive any inquiry or proposal which may reasonably be expected to lead to a Competing Proposal;

(ii) as soon as reasonably practicable provide written notice of the identity of the party or parties involved in the inquiry or proposal; and
(iii) provide the Subscriber with regular updates on the status of any such inquiry or proposal.
(e) Restrictive Undertakings : From the Execution Date until the Convertible Note is fully converted or repaid, the Company must, except as envisaged by the Subscription Agreement or with the prior approval of the Subscriber:
(i) ( securities ) not issue or agree to issue any Shares, options or other securities (including convertible notes) in the capital of the Company. The Subscriber may make its consent to an issue conditional on the Company offering the Subscriber the opportunity to participate in the issue on the same terms as other investors and, except to the extent prohibited under the ASX Listing Rules, to maintain the Subscriber’s fully diluted shareholding in the Company at the same percentage interest immediately prior to the further issue. The ASX has advised the Company that it considers an ASX waiver is required for this clause to be relied upon, and that there can be no assurance that such a waiver will be granted;
(ii) ( new contracts ) not enter into, or agree to enter into, any contracts, arrangements or engagements except in the ordinary and proper course of its ordinary business;
(iii) ( liabilities ) not incur any single liability, or total liabilities within one month, in excess of $100,000 except in the ordinary and proper course of its ordinary business;
(iv) ( consultation ) consult and seek the approval of the Subscriber prior to making any decision that will, or is likely to have, an effect on the assets or liabilities of the Company of more than $100,000 or have a material adverse effect on the Completion of the Transactions;
(v) ( Tenements ) subject to the Company obtaining sufficient funding for such purpose before Completion, maintain any tenement that it holds in good standing and free from new encumbrances;
(vi) ( Protection of Assets ) subject to the Company obtaining sufficient funding before Completion where such funding is necessary to enable it to comply with this sub-clause, use all reasonable endeavours to maintain its assets at normal levels and carry out repairs and maintenance to its assets in accordance with good commercial practice and standards of maintenance, and maintain appropriate insurance in relation to its assets;

(vii) ( material contracts ) subject to the Company obtaining sufficient funding before Completion where such funding is necessary to enable it to comply with this sub-clause, comply with all provisions of all material contracts;
(viii) ( notification ) send to the Subscriber copies of all annual reports, accounts and other information which would normally be sent to Shareholders;
(ix) ( employees ) not hire or terminate the employment of any employee (except normal site operation employees hired or terminated in the ordinary course of business) or alter or agree to alter the terms or conditions of employment of any employee other than as required by law;
(x) ( ordinary course ) subject to the Company obtaining sufficient funding before Completion where such funding is necessary to enable it to comply with this sub-clause, conduct its business in the ordinary and proper course and in substantially the same manner as previously conducted and in accordance with all applicable laws;
(xi) ( dividends ) not announce, declare or pay any dividend or other distribution;
(xii) ( reconstruction ) not buy back its own shares, reduce its share capital, return capital to shareholders or in any other way restructure its capital, if in each case to do so would be likely to have a material adverse effect on the Company’s ability to perform and comply with its obligations under the Convertible Note or on the Subscriber’s rights under it;
(xiii) ( Constitution & Change of Name ) not alter the provisions of its Constitution or change the Company’s name;
(xiv) ( mergers and acquisitions ) not enter into, or agree to enter into, any merger or consolidation or make any acquisition of any other entity, company or business or do anything which would have the effect that the Company or any related bodies corporate was operating business or activity which was not within the course of, or directly connected with, a business carried on by it as at the date of this Agreement;
(xv) ( financing ) not incur any new material financial indebtedness or amend in any material respect any arrangement with its financiers;
(xvi) ( litigation ) not commence or settle any litigation (including arbitration); and
(xvii) ( exploration ) not to conduct or cause to be conducted any exploration on its northern tenements, except exploration for the purpose of maintaining such tenements in good standing but only with the Subscriber’s prior written consent which consent not to be unreasonably withheld.

ANNEXURE B – ASSOCIATES OF STONE RESOURCES LIMITED / STONE MINING LIMITED

STONE RESOURCES LIMITED

Company	Relation to Stone Resources Ltd
Stone Resources Limited (incorporated in HongKong)	Wholly owned subsidiary
Springbend Investment	Whollyowned subsidiary
Fairchild Information Services	Whollyowned subsidiary
Tanzania SitongResources Limited	99.99% owned subsidiary

STONE MINING LIMITED

Company	Relation to Stone Mining Limited
Stone GroupHoldings Limited	Parent company.
Beijing Stone Investment Company Limited	Controlling shareholder of Stone Group Holdings Limited, the parent company of Stone.
Prexton Investments Limited	Subsidiary of Stone Group Holdings Limited, theparent companyof Stone MiningLimited.
Sino Sign Investment Limited	As above.
Gold Vantage Investments Limited	As above.
KeySuccess TradingLimited	As above.
Orient Gain Holdings Limited	As above.
Right Gain Limited	As above.
Stone Advance Technology Company Limited	As above.
Sun Stone New Media Limited	As above.
Zhongji Mining (Hong Kong) Co. Limited	As above.
GloryHigh Limited	As above.
Media SkyDevelopment Limited	As above.
Gotech Holdings Limited	As above.
Beijing Stone Electronic Technology Co. Ltd.	As above.
Guangdong Sunnet Café Development Co., Ltd.	As above.
Stone MiningInvestment Co., Ltd.	As above.
Beijing Stone New Technology Industrial CompanyLimited(BJJS)	As above.
BeijingYushui Resort Limited	As above.
Stone Online Sci & Tech Co. Ltd.	As above.
BeijingStone Computer Co. Ltd.	As above.

Sino Sign Taiou Enterprise Management Consultant Limited	As above.
Shanghai Jianjiu Biotech Limited	As above.
Shanghai GoldPartner Biotech Co.	As above.
Shanghai Jinkai Wine Industry Co. Limited	As above.
Wuxi Heershi Commercial and TradingLimited	As above.
Shanghai Stone Hu Guang TechnologyCompanyLtd.	As above.
Dalian Tax Free Zone Orient Gain TradingLimited	As above.
Stone Giant Life Sciences Development Limited	As above.
Central New International Limited	As above.
SharpVantage Investments Limited	As above.
Sun Stone Media GroupLimited	As above.
Tanstone Resources Limited	Whollyowned subsidiary.
Afristone Gold DealingLimited	As above
Stone Resources Ltd	Acting in concert with Stone in relation to the affairs of Crescent Gold Limited.
Springbend Investment Co., Ltd.	Whollyowned subsidiary.
Fairchild Information Services Ltd.	As above.
Tanzania SitongResources Limited	As above.
Mr Duan Yongji	Acting in concert with Stone in relation to the affairs of Crescent Gold Limited.

ANNEXURE C – INDEPENDENT EXPERT’S REPORT

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8 September 2011

The Directors A1 Minerals Limited Suite 34, 25 Walters Road OSBORNE PARK WA 6017

Dear Sirs,

RE: A1 MINERALS LIMITED (ACN 100 727 491) (“AAM” OR “THE COMPANY”) MEETING OF SHAREHOLDERS TO CONSIDER A RESOLUTION PURSUANT TO SECTION 611 (ITEM 7) OF THE CORPORATIONS ACT 2001 (“TCA”) RELATING TO ISSUE OF 89,730,000 SHARES TO STONE RESOURCES LIMITED, THE POSSIBLE ISSUE OF FURTHER SHARES TO STONE RESOURCES LIMITED TO TAKE UP ANY SHORTFALL UNDER A SHARE PURCHASE PLAN AND INCREASE ITS SHAREHOLDING AS A RESULT OF THE SHARE PURCHASE PLAN AND THE PROPOSAL TO ALLOW THE ISSUE OF A CONVERTIBLE NOTE WITH A FACE VALUE OF BETWEEN $10,000,000 AND $12,000,000 FROM STONE RESOURCES LIMITED AND ALLOW THE CONVERTIBLE NOTE TO BE CONVERTED INTO SHARES IN AAM. MEETING OF SHAREHOLDERS PURSUANT TO AUSTRALIAN SECURITIES EXCHANGE LISTING RULE 10.1 ALLOWING STONE RESOURCES LIMITED TO TAKE A SECURITY OVER THE ASSETS AND UNDERTAKINGS OF THE COMPANY TO SECURE THE CONVERTIBLE NOTE

1. INTRODUCTION

1.1 We have been requested by the Directors of AAM to prepare an Independent Expert’s Report to determine the fairness and reasonableness of the transactions referred to in resolution 1 as detailed in the Notice of Meeting and Explanatory Memorandum (“EM”) attached to the Notice to AAM shareholders (“the Notice”) to be issued to shareholders in September 2011 for a shareholders meeting to be held in October 2011.
1.2 On 12 August 2011, the Company announced a Subscription package with Stone Resources Limited (“Stone” or “the Note Holder”) (or its nominee Stone Mining Limited) to raise up to $14,243,250 made up of:
the issue, subject to shareholder approval of 89,730,000 shares in AAM to Stone (or its nominee, Stone Mining Limited) at an issue price of 2.5 cents per share (“Placement Shares”) to raise a gross $2,243,250 (‘Private Placement”); and
the issue, subject to shareholder approval to Stone of a $12,000,000 Convertible Note (“AAM Note”) (may be reduced to $10,000,000 if both AAM and Stone agree no later than 2 days before the defined Completion Date).

Stone is a company based in Hong Kong and Beijing, initially incorporated in British Columbia but moved to Bermuda in 1995 that listed on the TSX Venture Exchange “TSXV”) in Canada.

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The funding package of the Private Placement and the issue of the AAM Note for the purposes of this report is known as the Subscription. Following the completion of the Subscription, the Company proposes to undertake a Share Purchase Plan (“SSP”) with an offer to all shareholders (other than related parties) to subscribe for shares in AAM at 2.5 cents per share up to a maximum capital raising from the SPP of $2,500,000 (100,000,000 shares in AAM).

Stone, as a related party, is not entitled to subscribe for shares under the SPP. On completion of the SPP, Stone may (subject to shareholder approval), by written notice to AAM, require AAM to issue to Stone that number of AAM shares at an issue price of 2.5 cents each, that results in Stone owning 30.9% of the AAM shares (“SPP Placement Shares”). If the SPP is fully subscribed, Stone is entitled to be issued 44,722,306 shares at a cost to Stone of approximately $1,118,057. In any event, Stone has the right to subscribe for AMM shares equal in number to any shortfall shares in the SPP at 2.5 cents per share (“Shortfall SPP Shares”), being up to 100,000,000 shares if no shareholders subscribed for the SPP.

Upon completion of the Private Placement, Stone will own approximately 30.9% of the outstanding shares on issue in AAM. After conversion of the AAM Note and assuming full AAM shareholder participation in the SPP and the issue of AAM shares to Stone to maintain its 30.9% shareholding following completion of the SPP (assuming the SPP is fully subscribed), Stone will own approximately 61.4% of the outstanding ordinary shares on issue in AAM. Total proceeds from the Subscription by Stone will be up to $15,361,307 if funds raised from the issue of AAM shares to maintain Stone’s shareholding at 30.9% are included. Including the monies raised from the SPP, the total monies that may be raised from all transactions will approximate $17,861,307.

Completion of the Private Placement and the AAM Note must occur simultaneously provided that, at Stone’s option, subject to compliance with the TCA, ASX and having obtained conditional approval from the TSX Venture Exchange (“TSXV”), Stone may waive the conditions to the Private Placement and subscribe at an interim date for 30,000,000 AAM shares, representing 13% of the outstanding issued shares in AAM, with the balance of the AAM shares issuable in the Private Placement to be delivered at closing of the Subscription. The Company has agreed to reimburse Stone for sunk costs to the extent of $500,000 in the event that the Subscription is not completed on the basis that a competing proposal has been received and the AAM Board recommends the competing proposal.

Following completion of the Private Placement, Stone will be entitled to appoint two directors to the Board of AAM. Upon conversion of all or part of the AAM Note, into ordinary shares in AAM, Stone’s Board representation in AAM shall be increased commensurate with its shareholding in AAM, and accordingly be entitles to appoint a majority of the directors to the Board of AAM upon full conversion of the AAM Note into ordinary shares in AAM.

As a pre-requisite to Stone executing the Subscription Agreement, AAM has reached agreement with its secured creditor, Watpac Civil and Mining Pty Ltd (“Watpac”) to forbear from exercising any enforceable rights under its charge over AAM’s assets until 31 October 2011, subject to a number of conditions including that the AMM shareholders approve the resolutions under the Notice by 31 October 2011. Watpac is owed approximately $16,017,530 but has agreed to discount its debt by $2,500,000 if it is paid in full by 31 October 2011. If the debt is not repaid when due in accordance with the forbearance agreement, Watpac is entitled to interest at 12% per annum calculated from 12

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August 2011 until payment of its debt. If Watpac’s debt is repaid by 31 October 2011, Watpac’s charge will be released and Stone’s charge will become first ranking. Stone and Watpac have entered into a deed of priority in relation to the charges.

1.3 The basic terms of the proposed AAM Note are outlined below.

There will be one tranche at $12,000,000 (which may be reduced to between $10,000,000 and $12,000,000 if the parties agree no later than 2 Business Days before completion of the Subscription;
The AAM Note will carry a coupon interest of 5% per annum payable quarterly in arrears being 31 March, 30 June, 30 September and 31 December of each year;
The AMM Note is repayable 24 months after issuance;
The AAM Note is convertible into ordinary shares in AAM at 3.5 cents per share if converted within 12 months of issuance and at 6 cents per share thereafter (but no later than 24 months after issuance);
The AAM Note is to be secured by way of a fixed and floating charge over the assets and undertakings of AAM. Should the Company not be able to meets its debts to Stone, Stone has the right to take these assets, and recover any amounts owed under the Note Facility that will total up to $12,000,000 plus any accrued interest; and
The Company at its election may capitalise all or part of the interest payable quarterly on the AAM Note. The Face Value of the AAM Note is increased by the capitalised interest and the new Face Value or part thereof may be converted into ordinary shares in AAM at the election of Stone.
1.4 Stone is currently registered as owning no shares in AAM as at 6 September 2011. Following the issue of the 89,730,000 Placement Shares, Stone will own approximately 30.90% of the expanded issued capital of AAM. Assuming the full take up of the SPP by the shareholders (100,000,000 shares), Stone has the right to take up a further 44,722,306 shares (the SPP Placement Shares) in AAM at 2.5 cents each to maintain its 30.9% shareholding interest (134,452,306 shares held by Stone out of 435,120,731 shares on issue). If no shareholders take up the SPP, Stone has the right to be issued up to 100,000,000 AMM Shares, equal to the shortfall from the SPP (“SPP Shortfall Shares”). In the event that all of the $12,000,000 AAM Note was converted to ordinary shares in AAM at 3.5 cents per share (see paragraph 1.3 above), Stone’s shareholding would increase to 477,309,449 shares that would represent an approximate 61.35% shareholding interest in AAM assuming no interest was capitalised on the AAM Note and the AAM Note was converted within 12 months of issuance and the SPP was fully subscribed. If no shareholders subscribe for the SPP, and Stone is issued 100,000,000 SPP Shortfall Shares Stone’s shareholding would increase to 532,587,143 shares that would represent an approximate 72.63% shareholding interest in AAM. If the face value of the AAM Note was converted into ordinary shares in AAM after 12 months and before the 24 month maturity date and no interest capitalised a further 200,000,000 shares would be issued to Stone and Stone’s shareholding interest in AAM would be 334,452,306 shares representing approximately 52.66% of the expanded issued capital of the Company (635,120,731 shares on issue). The above percentages assume no other share issues, including share issues from exercise of any AAM share options. In the event that all interest was capitalised and not paid in cash, the Face Value of the AAM Note at the end of 12 months would be approximately $12,610,073 and if converted at the end of the 12 month period, Stone would be issued approximately 360,287,800 shares in AAM and Stone’s shareholding interest would be approximately 494,740,016 shares representing an approximate 62.20% shareholding interest in AAM (approximately 795,408,531 shares on issue). In the event that all interest was capitalised and not paid in cash, the Face Value of the AAM Note at the end of 24 months would be approximately $13,250,704 and if converted at the end of

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the 24 month period, Stone would be issued approximately 220,845,067 shares in AAM and Stone’s shareholding interest would be approximately 355,297,373 shares representing an approximate 54.16% shareholding interest in AAM (approximately 655,965,798 shares on issue). The final shareholding of Stone cannot be determined at this point of time as it, inter-alia, depends on the conversion price and how much interest is capitalised to the Face Value of the AAM Note.

1.5 Resolution 1 relates to the Company seeking shareholder approval for the issue of 89,730,000 Placement Shares to AAM under the Private Placement, the issue of any SPP Placement Shares, the issue of the AAM Note that would allow Stone to convert the AAM Note into ordinary shares in AAM at the conversion rates set out above in paragraph 1.3 and allow a charge over the assets and undertakings of AAM to secure the AAM Note (refer below).
1.6 Further details on the AAM Note, the conversion terms and security are outlined in the EM attached to the Notice and as noted in paragraph 1.3 above.
1.7 ASX Listing Rule 10.1 provides that an entity must not acquire a substantial asset from, or dispose of a substantial asset to a related party. A substantial asset is an asset valued at greater than 5% of the equity interests of a company. For the purposes of ASX Listing Rule 10.1, Stone may be deemed to be a related party of the Company due to the fact that it is to receive the Placement Shares, the SPP Placement Shares and the grant of the AAM Note and conversion thereof. Under the terms of the Facility, the Charges and the Mortgages, Stone may receive a financial benefit either directly or indirectly.

The quantum of the Subscription is greater than 5% of AAM’s equity interests as set out in the latest accounts given to ASX by the Company. As a result, the granting of the Charge by AAM to Stone as security for the AAM Note is considered to be a deemed disposal of a substantial asset. Accordingly, the Company is seeking shareholder approval for the purpose of ASX Listing Rule 10.1. Shareholders should note that the Company does not intend to actually dispose of any assets to Stone. Approval is required under ASX Listing Rule 10.1 to cater for the circumstance where Stone may be required to enforce the Charge. The Company is to enter into the Charge (although its operation is conditional on obtaining shareholder approval). The Charge is to be entered into by the Company on the basis that the independent Directors considered the terms of the Charge and the financial benefits to be given to Stone under the Charge to be on arm’s length terms (or terms less favourable than arm’s length).

1.8 ASX Listing Rule 10.1 provides that shareholder approval sought for the purpose of ASX Listing Rule 10.1 must include a report on the proposed disposal from an independent expert. Stantons International Securities has been requested to provide an opinion on the fairness and reasonableness to the non associated shareholders of AAM on the proposal under resolution 1(e) relating to the charge.
1.9 Under Paragraph 606 of TCA, a person must not acquire a relevant interest in issued voting shares in a company if because of the transaction, that persons’ or someone else’s voting power in the company increases:

(a) from 20% or below to more than 20%; or

(b) from a starting point that is above 20% and below 90%.

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Under Section 611 (Item 7) of TCA, Section 606 does not apply in relation to any acquisition of shares in a company by resolution passed at a general meeting at which no votes were cast in favour of the resolution by the acquirer or the disposer or their respective associates. An independent expert is required to report on the fairness and reasonableness of the transactions noted in resolution 1 pursuant to a Section 611 (Item 7) meeting.

Stone may obtain a shareholding in AAM of more than 20% from the issue of the Placement Shares and may increase its shareholding further by the issuance of SPP Placement Shares to Stone and on issuing further shares to Stone on any conversion of the AAM Note (or part thereof). Shareholder approval is required pursuant to Section 611 (Item 7) of the Corporations Act 2001 in order to issue the Placement Shares, the SPP Placement Shares and to Stone and allow Stone to convert all or some of the AAM Note without Stone having to make a bid for all of the shares in AAM in the event that Stone would exceed a shareholding interest of greater than 20%. Thus shareholders’ approval will be required pursuant to Section 611 (Item 7) of the Corporations Act. An independent expert’s report should accompany the Notice stating whether the proposals as noted above regarding the issue of the Placement Shares, the SPP Placement Shares and to allow Stone to convert all or some of the AAM Note are fair and/or reasonable to the shareholders of AAM not associated with Stone.

1.10 Under ASIC Regulatory Guideline 111 “Contents of Expert Reports” an Independent Expert’s Report is required to report on the fairness and reasonableness of the transactions pursuant to resolution 1. The AAM directors have requested Stantons International Securities to prepare an Independent Expert’s Report to assist the shareholders in determining how to vote on resolution 1 as outlined in the Notice and the EM.
1.11 Apart from this introduction, the report considers the following:
Summary of opinion
Implications of the proposals
Future directions of AAM
Basis of valuation of AAM shares that may be issued to Stone
Premium for control
Fairness and Reasonableness of the Proposals
Conclusion as to Fairness and Reasonableness
Sources of information
Appendix A and our Financial Services Guide

2. SUMMARY OF OPINION

2.1 In determining the fairness and reasonableness of the transaction and proposal pursuant to resolution 1, we have had regard for the definitions set out by the Australian Securities and Investments Commission (“ASIC”) in its Regulatory Guide 111. Regulatory Guide 111 states that an opinion as to whether an offer is fair and/or reasonable shall entail a comparison between the offer price and the value that may be attributed to the securities under offer (fairness) and an examination to determine whether there is justification for the offer price on objective grounds after reference to that value (reasonableness). The concept of “fairness” is taken to be the value of the offer price, or the consideration, being equal to or greater than the value of the securities in the above mentioned offer. Furthermore, this comparison should be made assuming 100% ownership of the “target” and irrespective of whether the consideration is scrip or cash. An offer is “reasonable” if it

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is fair. An offer may also be reasonable, if despite not being ”fair”, where there are sufficient grounds for security holders to accept the offer in the absence of any higher bid before the close of the offer. Regulatory Guide 111 also states that in all cases, where an acquisition of shares by way of an allotment is to be approved by shareholders pursuant to Section 611 (Item 7) of TCA, a report by an independent expert stating whether or not the proposals pursuant to resolution 1 are fair and reasonable, having regard to the interests of shareholders other than the proposed allottees (in this case, Stone) and whether a premium for potential control is being paid by the allottees, will be required. Regulatory Guide 111 also provides that such an allotment should involve a comparison of the advantages and disadvantages likely to accrue to non-associated shareholders if the transaction proceeds compared with if it does not.

Accordingly, our report relating to resolution 1 is concerned firstly with the fairness and reasonableness of the proposals from the point of view of the existing non associated shareholders of AAM, and secondly whether the price payable for the potential for Stone to obtain a significant shareholding interest in the Company, includes a premium for control.

2.2 In our opinion:

In our opinion, taking into account the factors noted above and in section 7 of this report and the comments made in the EM to Shareholders accompanying the Notice, the proposals as outlined in resolution 1 whereby AAM will issue the Placement Shares, allow the issue of the SPP Placement Shares and allow Stone provide an AAM Note of up to $12,000,000 that may result in the AAM Note being converted into ordinary shares in AAM and allow a Charge over the assets and undertakings of AAM is on balance, not fair but reasonable to the non-associated shareholders of AAM.

However, in our opinion, the proposal noted in resolution 1(e) (in relation to the Charge) is, on balance, fair and reasonable to the non associated shareholders of AAM. However as shareholders can only vote on resolution as a whole, we overall conclude the proposals noted in resolution 1 as being not fair but reasonable.

Notwithstanding that the AAM share price (closing price of 2.8 cents) as at 6 September 2011 each shareholder needs to examine the share price of AAM and market conditions at the time of exercise of vote to ascertain the impact, if any, on resolution 1. The opinions expressed above must be read in conjunction with the more detailed analysis and comments made in this report.

3. IMPLICATIONS OF THE PROPOSALS

3.1 As at 7 September 2011, there were 200,668,425 fully paid ordinary shares on issue in AAM. The significant fully paid shareholders as at close of business on 12 August 2011 are disclosed as:

Name of Shareholder Ms Sandra Wheeler Wapimala Pty Ltd JP Morgan Nominees (Australia) Limited Mr Michael John Colton Effex Pty Ltd		No. of Shares 11,247,775 4,840,385 3,343,235 3,083,264 3,000,000	% Interest 5.61 2.41 1.67 1.54 1.50
		25,514,659	12.73

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3.2 The top twenty fully paid shareholders as at 12 August 2011 own approximately 28.30% of the current issued capital.
3.3 The unlisted share options on issue as at 7 September 2011 are 2,000,000 share options exercisable at 20 cents each on or before 30 November 2011, 9,500,000 share options exercisable at 35 cent each per share on or before 30 November 2012, 6,000,000 share options issued exercisable at 20 cents per share on or before 29 November 2011, 2,500,000 share options issued exercisable at 20 cents per share on or before 29 November 2013, 1,800,000 share options exercisable at 20 cents per share on or before 23 February 2013, 2,725,000 share options exercisable at 30 cents each, on or before 8 June 2012 and 2,675,000 share options exercisable at 30 cents each, on or before 8 June 2013.
3.4 If the proposed AAM Note is converted at 3.5 cents each, the number of shares that may be on issue would be:

On issue as at 7 September 2011 Issue of Placement Shares Issue of shares under the SPP Issue of SPP Placement Shares to Stone Potential shares on issue before exercise of share options and the AAM Note Issue of shares to Stone on conversion of the AAM Note at say 3.5 cents each Potential total shares on issue post conversion of the AAM Note by Stone	No of shares No of shares owned by Stone Percentage shareholding owned by Stone 200,668,425 - - 89,730,000 89,730,000 100.00
	290,398,425 89,730,000 30.90 100,000,000 - -
	390,398,425 89,730,000 22.98 44,722,306 44,722,306 100.00
	435,120,731 134,452,306 30.90 342,857,143 342,857,143 100.00
	777,977,874 477,309,449 61.35

The share percentage held by Stone in AAM may vary depending on whether the proposed AAM Note is converted into shares in AAM (and at what conversion prices), whether existing share options are exercised into ordinary shares in AAM, the shortfall to the SPP and whether interest on the AAM Note is capitalised and the date(s) of any conversion. It is not possible to determine the actual number of ordinary shares that may be issued to Stone under the formula for conversion of the AAM Note. In the event that the $12,000,000 AAM Note was converted at 6 cents per share (after 12 months from issuance of the AAM Note but before the 24 month Maturity Date), Stone would be issued 200,000,000 shares and Stone’s shareholding would represent approximately 52.66% of the expanded issued capital of the Company. In the event that all interest was capitalised and not paid in cash, the Face Value of the AAM Note at the end of 12 months would be approximately $12,610,073 and if converted at the end of the 12 month period, Stone would be issued approximately 360,287,800 shares in AAM and Stone’s shareholding interest would be approximately 494,740,016 shares representing an approximate 62.20% shareholding interest in AAM (approximately 795,408,531 shares on issue). In the event that all interest was capitalised and not paid in cash, the Face Value of the AAM Note at the end of 24 months would be approximately $13,250,704 and if converted at the end of the 24 month period, Stone would be issued approximately 220,845,067 shares in AAM and Stone’s shareholding interest would be approximately 355,297,373 shares representing

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an approximate 54.16% shareholding interest in AAM (approximately 655,965,798 shares on issue).

In the event that no unrelated shareholder subscribed for the SPP, Stone’s shareholding before any AMM Note conversion would increase to 189,730,000 shares in AMM if Stone subscribed for 100,000,000 SPP Shortfall Shares and Stone’s percentage shareholding would approximate 48.60% and approximately 72.63% if no shareholder subscribed for the SPP and Stone took up 100,000,000 SPP Shares and converted the AAM Note at 3.5 cents each.

3.5 The actual percentages may alter as the conversion price alters and also depending on:
The number of AAM Note issued and converted (may be as low as $10,000,000)
The amount of interest capitalised (if any)
The number of share options that may be exercised
The number of shares that may be issued from subsequent share issues

The Company would raise $2,243,250 from the issue of the Placement Shares to Stone, up to $2,500,000 from the SPP (or from Stone taking up SPP Shortfall Shares assuming no shareholders subscribe for the SPP), $1,118,057 from the issue of SPP Placement Shares to Stone (assumes the SPP is fully subscribed by other shareholders) and a minimum of $10,000,000 and up to $12,000,000 from the issue of the AAM Note.

3.6 In relation to the Board of Directors control, the current directors are Messrs Michael Hunt, Bill Hobba, Ross Louthean and Albert Longo. Following completion of the Private Placement, Stone will be entitled to appoint two directors to the Board of AAM. Upon conversion of all or part of the AAM Note, into ordinary shares in AAM, Stone’s Board representation in AAM shall be increased commensurate with its shareholding in AAM, and accordingly be entitles to appoint a majority of the directors to the Board of AAM upon full conversion of the AAM Note into ordinary shares in AAM.
3.7 If all of the AMM Note is drawdown to the extent of $12,000,000 and run for the full 24 month period, the interest that would be paid by AAM to Stone would total $1,200,000 on the basis that interest was paid quarterly by cash and interest not capitalised. If all interest was capitalised for the full 24 month period the interest capitalised would total approximately $1,250,704 (for a 12 month period approximately $610,072). In addition, at the end of 24 months, AAM will, in the absence of a conversion by Stone to shares in AAM, need to have cash of $12,000,000 (plus any accrued capitalised interest) in place to repay the AAM Note.
3.8 The AAM Note is to be secured as noted above. Should the Company not be able to meet its debts to Stone, Stone has the right to take these assets, and recover any amounts owed under the AAM Note that will total up to $12,000,000 plus any accrued interest.

4. FUTURE DIRECTION OF AAM

4.1 We have been advised by a director of AAM that:
the immediate short-term plan is to use the existing funds and raise further funds (via the Subscription and SPP as noted above) to fund working capital for the Laverton Gold Project, repay a secured creditor of approximately $13,517,530 and for the Company generally;

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no dividend policy has been set and is not proposed to be set until such time as the Company is profitable and has a positive cash flow;
The Board of Directors in planned to change in the near future as noted above; and
the Company is likely to raise further capital and possibly project loan funds as and when required to continue to develop the Company’s mineral assets.

5. BASIS OF TECHNICAL VALUATION OF AAM

5.1 In considering the proposal as outlined in resolution 1 we have sought to determine if the issue price of the Placement Shares and the conversion prices of the proposed AAM Note into ordinary AAM shares is in excess of the current fair value of the shares in AAM on issue and then conclude whether the proposals are fair and reasonable to the existing nonassociated shareholders of AAM (not associated with Stone).
5.1.2 The proposals pursuant to resolution 1 would be fair to the existing non associated shareholders if the issue price of the Placement Shares and the conversion prices of the proposed AAM Note owing by AAM to Stone into ordinary AAM shares is greater than or equal to the implicit value of the shares in AAM currently on issue. Accordingly, we have sought to determine a theoretical value that could reasonably be placed on AAM shares for the purposes of this report.
5.1.3 The valuation methodologies we have considered in determining the current technical value of an AAM share are:
Capitalised maintainable earnings/discounted cash flow;
Takeover bid - the price which an alternative acquirer might be willing to offer;
Adjusted net asset backing and windup value; and
The market value price of AAM shares.

5.2 Capitalised Maintainable Earnings / Discounted Cash Flows

5.2.1 AAM currently does not have a reliable cash flow or profit history from the mining of the various pits comprising part of the Laverton Gold Project and has yet to develop parts of the Laverton Gold Project and therefore this methodology is not entirely appropriate. The Company has prepared some cash flow forecasts but these preliminary forecasts to 30 June 2012 and 2013 are required to be updated but overall disclose a negative cash flow. An external technical valuation of the mineral assets of AAM has not been undertaken as it is considered more appropriate (for the purpose of considering the fairness and reasonableness of the potential issue of the Placement Shares and shares on any AAM Note conversion by Stone) to consider the market value of the AAM shares based on recent sales and taking into account the issue price of shares. Currently, AAM does not have sufficient funds for working capital purposes and thus any perceived technical values of the Laverton Gold Project and other mineral assets of AAM are theoretical. We have been advised that the Company sought further capital and after much negotiation with Stone it was able to enter into a Subscription Agreement as outlined above. Without such funds (cash only to be received after shareholders approval, although as an interim measure AAM may, subject to Stone having obtained conditional approval from TSXV (if applicable), issue 30,000,000 of the Placement Shares at 2.5 cents each to raise $750,000), the Company would have entered into a serious cash flow situation and ultimately may not survive without the $2,243,250 to be received from Stone under the Private

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Placement, the $2,500,000 from the SPP (entered into as part of the recapitalisation of the Company as put up by Stone) and the additional up to $12,000,000 from Stone (notwithstanding the potential positive cash flows that are expected in the future from the Laverton Gold Project. The Company’s unaudited net working capital as at 30 June 2011 is a deficiency of over $16,861,000 as current assets are only approximately $1,903,000 and current liabilities are over $18,764,000.

5.3 Takeover Bid

5.3.1 It is possible that a potential bidder for AAM could purchase all or part of the existing shares, however no certainty can be attached to this occurrence. To our knowledge, there are no current bids in the market place and the directors of AAM have formed the view that there is unlikely to be any takeover bids made for AAM in the immediate future. However as noted above Stone may acquire an initial 30.9% interest in AAM and this could increase to approximately 61.35% if all of the AMM Note without capitalised interest was converted to shares in AAM (assuming the SPP is fully subscribed) and up to 62.20% if all of the AMM Note plus all interest was capitalised was converted to shares in AAM at 3.5 cents per share and up to approximately 72.63% if no shareholders subscribe for the SPP and Stone is issued 100,000,000 SPP Shortfall Shares.

5.4 Net Asset Backing and Wind-Up Value

5.4.1 A summary of the unaudited consolidated statement of financial position of AAM as at 30 June 2011 along with a pro-forma consolidated unaudited statement of financial position after allowing for the issue of the Placement Shares to raise $2,243,250, the assumed drawdown of the full amount of the AMM Note of $12,000,000, the issue of all of the SPP shares to raise a gross $2,500,000, the issue of 44,722,306 SPP Placement Shares to Stone to raise $1,118,057 and the repayment of the sum of $13,517,530 to an existing secured creditor (being an amount allowing for a discount of $2,500,000 and assuming no interest is payable).

Current assets Cash at bank Trade and other receivables Inventory Non current assets Trade and other receivables Plant and equipment Exploration and evaluation Total assets Current liabilities Trade and other payables Provisions	Unaudited 30 June 2011 $000’s Unaudited 30 June 2011 Pro-Forma $000’s 232 4,576 337 337 1,334 1,334
	1,903 6,247
	588 588 23,924 23,924 11,515 11,515
	36,027 36,027
	37,930 42,274
	18,317 2,300 448 448
	18,765 2,748

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Non Current Liabilities Interest bearing liabilities Provisions Borrowings- AAM Note Total liabilities Net Assets Equity Issued capital Reserves Accumulated losses Net Equity	Unaudited 30 June 2011 $000’s Unaudited 30 June 2011 Pro-Forma $000’s
	743 743 891 891 - 12,000
	1,634 13,634
	20,399 16,382

	17,531 25,892
	35,103 40,964 3,776 3,776 (21,348) (18,848)
	17,531 25,892

5.4.2 Based on the book values at 30 June 2011 as adjusted this equates to a value per issued share (200,668,425 shares on issue) of approximately 8.73 cents (ignoring the value, if any, of non-booked tax benefits and any losses incurred post 30 June 2011). Based on the pro-forma consolidated statement of financial position, the net book value totals $24,347,000 or approximately 5.59 cents per issued share (435,120,731 shares on issue). No allowance has been made for further administration, corporate and exploration costs after 30 June 2011.

5.5 Market Price of AAM Shares

5.5.1 We set out below a summary of share prices of AAM from 1 March 2011 to 11 July 2011 (the shares in AAM were suspended from trading on 12 July 2011 pending a capital raising announcement that was issued on 12 August 2011 being the proposals with Stone).

	High	Low		Volumes
2011	Last Sale	Last Sale	Last Sale	Trade
	Cents	Cents	Cents	(000’s)
March	7.7	4.0	5.3	24,762
April	5.8	4.7	4.9	8,115
May	4.8	3.4	3.7	7,762
June	3.7	2.2	2.5	10,713
July (to 11th)	3.6	2.5	3.0	2,790

5.5.2 The share price has oscillated over the past month to 11 July 2011 mainly between 2.5 cents and 3.0 cents. The Company is losing money on its Laverton Gold Project and the market has factored this in as indicated by a falling share price.
5.5.3 No independent valuations have been prepared on the mineral prospects and projects of AAM and we do not consider it necessary to obtain an independent valuation of the mineral prospects and projects for the purposes of this report. We note that the market has been informed of all of the current projects, joint ventures and farm in/farm out arrangements entered into between AAM and other parties. We also note it is not the present intention of the directors of AAM to liquidate the Company and therefore any theoretical value based upon wind up value or even net book values (as adjusted), is just

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that, theoretical. The shareholders, existing and future, must acquire shares in AAM based on the market perceptions of what the market considers an AAM share to be worth. The market has either generally valued the vast majority of junior/mid size mineral exploration and development companies at significant discounts or premiums to appraised technical values and this has been the case for a number of years although we also note that there is an orderly market for AAM shares and the market is kept fully informed of the activities of the Company. The market capitalisation of AAM as at 11 July 2011 was approximately $6,020,000. AAM’s market capitalisation is substantially less than the net equity position of around $17.531 million as at 30 June 2011 as adjusted but before the drawdown of the AAM Note and before accounting for losses post 30 June 2011. The share price post the Facility and SPP announcement has been between 2.3 cents and 2.9 cents (to 25 August 2011) with a last sale price on 25 August 2011 of 2.8 cents. It is noted that post the completion of the Private Placement and SPP Placement Shares to Stone and the SPP there will be 435,120,731 shares on issue and based on the last sale price of 2.8 cents on 6 September 2011, the market capitalisation would approximate $12.183 million.

5.6 Preferred value of AAM fully paid shares (range) to arrive at fairness conclusion
5.6.1 Notwithstanding the prospectivity of AAM’s Laverton Gold Project, without cash the Company cannot continue exploration, evaluation and development of the mineral assets and meet its short term working capital requirements. The closing share price as at 11 July 2011 (and 6 September 2011) does not necessarily reflect fair value of the Company’s shares. If AAM can manage the working capital requirements over the next few months in relation to the current Laverton Gold Project and if future exploration and evaluation proves successful and the Company’s Laverton Gold Project can be returned to profitability, then arguably the fair value of a AAM share would be in excess of the 3.5 cent minimum conversion price in relation to the AAM Note (if converted to equity before 12 months) and may be in excess of the 6 cents conversion price if the AMM Note was converted to equity after 12 months but before 12 months. The share price in the future is unknown but it may be fair to say that if the continued development and exploitation of the Company’s mineral assets are enhanced and proceed then it is likely that the share price would be higher than the share price at 11 July 2011 and at the date of this report. The future ultimate value of an AAM share will depend upon, inter alia:
the future prospects of its mineral assets;
the state of the gold and base metal markets (and prices) in Australia and overseas;
the state of Australian and overseas stock markets;
the strength of the Board and management and/or who makes up the Board and management;
general economic conditions;
the liquidity of shares in AAM; and
possible ventures and acquisitions entered into by AAM.
5.6.2 Generally, the market is a fair indicator of what a share is worth, however the theoretical technical value based on the underlying value of assets and liabilities may be lower or higher. In the case of AAM, current liquidity and working capital is not strong for the short term and it is noted that the current cash, receivables and inventory as at 30 June totalled approximately $1,903,000 whilst trade creditors and accruals totalled approximately $18,765,000. The short to medium term cash position is extremely poor taking into account the cash requirements of the Company for the balance of 2011 and 2012 particularly in providing continued funding for the working capital of the Laverton Gold Project and to develop other underlying mining assets. Arguably, based on recent price history from 15 June 2011 to 11 July 2011, the pre-announcement market value of

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an AAM share lay mainly in the range of 2.2 cents to 3.0 cents but arguably would have continued to fall in the absence of the Subscription Agreement announcement with Stone.

5.6.3 The closing share price as at 11 July 2011, being 3.0 cents per share (before the Subscription Agreement announcement on 12 August 2011) does not necessarily reflect fair value of the Company’s shares. As noted above the post 12 August 2011 share price is being supported by the Stone Subscription Agreement proposals and as at 7 September 2011, the share price of an AAM share was 2.8 cents. It is believed that in the absence of shareholders approving the Subscription Agreement proposals with Stone, the share price could drift downwards and possibly below 2.5 cents per share.

We have put more of a weighting on the market value rather than the net asset backing approach. In our view, for the purposes of ascribing a value to a AAM share for the purposes of arriving at a conclusion on the fairness and reasonableness of the proposals under resolution 1, the current fair market value of a AAM share based on prices between mid June 2011 and to 11 July 2011 (prior to the Subscription Agreement announcement with Stone) lies in the range of 2.2 cents and 3.0 cents.

6. PREMIUM FOR CONTROL

6.1 Premium for control for the purposes of this report, has been defined as the difference between the price per share, which a buyer would be prepared to pay to obtain or improve a controlling interest in the Company and the price per share which the same person would be required to pay per share, which does not carry with it control or the ability to improve control of the Company.
6.2 Under TCA, control may be deemed to occur when a shareholder or group of associated shareholders control more than 20% of the issued capital. In this case, Stone’s shareholding on issue of the Placement Shares will represent a 30.9% shareholding in AAM and on any conversion of the AMM Note (at the option of Stone) to ordinary fully paid shares in AAM Stone’s shareholding may become up to approximately 61.35% (477,309,449 shares in AAM (assumes a $12,000,000 AMM Note is converted at 3.5 cents each and no interest capitalised and the SPP is fully subscribed) in the absence of any other share issues by AAM (up to approximately 62.20% if interest capitalised) and up to approximately 72.63% of no shareholder subscribes for the SPP Shares and Stone is issued 100,000,000 SPP Shortfall Shares. If the up to $12,000,000 AMM Note was converted at 6 cents each, Stone’s potential shareholding would increase to approximately 52.66% (if no interest capitalised) in the absence of any further share issues (up to approximately 54.16% if interest capitalised). Accordingly, we have addressed whether a premium for potential control will be paid.
6.3 The 11 July 2011 market value of a AAM share approximated 3.0 cents and it is noted that the shares in the one month to 11 July 2011 traded in the 2.5 cent to 3.3 cent range, although it is noted that the net book asset backing per share is now disclosed at approximately 8.73 cents per share. Therefore, Stone can arguably be considered to be not paying a premium for a potential control of 30.9% after the issue of the Placement Shares to Stone at 2.5 cents each based on the ordinary share price of an AAM share in the range of 2.5 cents to 3.3 cents to 11 July 2011. However all shareholders have the opportunity to subscribe for shares in AAM at 2.5 cents each under the SPP as note above and this arguably may be the current fair market value of a AAM share. The minimum conversion price of 3.5 cents for the AAM Note may at the date of conversion(s) be lower than the share price of an AAM share (the maximum conversion

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rate is 6 cents per share). To take Stone’s interest to up to an approximate 61.35% by converting a $12,000,000 AAM Note at 3.5 cents per share indicates that based on recent share prices, Stone would be paying some premium for an increase in control (albeit not a significant premium). Again, the actual share price of an AMM share trading on ASX at the date of conversion (s) may be higher than the 3.5 cent conversion price (and possibly the maximum 6 cent conversion price). It is noted that based on an unaudited book net asset backing of approximately 8.73 cents per share, Stone would also be not be paying a premium for control. However, it is noted that AAM is cash poor and without a significant capital/debt raising as envisaged by the proposals with Stone, the possibility of some form of Administration being entered into by the Company is high. It is reasonable in the current circumstances to expect that the share price of an AAM share would have continued to fall well below 2.5 cents in the absence of the Subscription Agreement with Stone.

7. FAIRNESS AND REASONABLENESS OF THE PROPOSALS

We set out below, some of the advantages, disadvantages and other factors pertaining to the proposals under resolution 1.

Advantages

7.1 If shareholders do not approve resolution 1 in the absence of the $2,243,250 from the Placement Shares, the up to $12,000,000 monies from the AMM Note and the up to $2,500,000 from the SPP or SPP Shortfall Shares, the ability to spend money on exploitation and or further exploration and evaluation of the Laverton Gold Project and other mineral assets would be curtailed. It is noted that AAM is cash poor and without a significant capital/debt raising as envisaged by the proposals with Stone, the possibility of some form of Administration being entered into by the Company is high. It is reasonable in the current circumstances to expect that the share price of an AAM share would have continued to fall well below 2.5 cents in the absence of the Subscription Agreement with Stone.
If allowed to be converted into ordinary shares in AAM, AAM may avoid having to outlay up to $12,000,000 to repay the AAM Note. However the option to convert is at the option of Stone and not AAM.
7.2 The possible minimum conversion price (3.5 cents) for the AMM Note is in the main at a small premium to the market share price of a AAM share over the past month to 11 July 2011 as the shares in AAM in that period traded between 2.2 cents and 3.6 cents with many sales in the range of 2.5 cents to 3.0 cents. In the current market it is time consuming for exploration companies such as AAM to raise equity and if raised significant discounts to recent traded share prices may need to be offered. It is not uncommon to offer discounts in the current market of between 20% and 50%. Arguably it could be higher for mineral exploration/producer companies that are not profitable and have negative cash flows (albeit high prospectivity of moving into positive cash flows). The Placement Shares being issued to Stone at 2.5 cents is at a small discount (16.67%) to the closing price of an AMM Share trading on ASX as at 11 July 2011. It is noted that in conjunction with the Subscription Proposal with Stone, AAM proposed a SPP Issue at 2.5 cents per share (the same price that Stone is subscribing for the Placement Shares). The AMM Note of up to $12,000,000 is significant to allow the Company to pay debts (including a significant secured creditor as noted elsewhere in this report) and provide the necessary working capital required on the Laverton Gold Project. However, in the short term, fund raising may be difficult and the continued support of Stone is still required. If the Company continues to have positive results from its underlying mineral projects, there is an increased chance that future capital raisings may

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be undertaken at a higher price than the minimum 3.5 cent conversion price attributable to the AAM Note.

7.3 There is a continuing incentive for Stone to ensure AAM becomes a viable mineral exploration and development company as Stone may have a significant shareholding interest in AAM of up to 477,309,449 shares following the Private Placement of 89,730,000 shares, the issue to Stone of 44,722,306 SPP Shortfall Shares (assuming the SPP is fully subscribed) and the issue to Stone of 342,857,143 shares on conversion of all of the AAM Note (plus additional shares if interest is capitalised and converted into shares, or the SPP is not fully subscribed and Stone elects to be issued up to 100,000,000 SPP Shortfall Shares. There is a huge incentive for Stone to make AAM a successful company and have the share price rise considerably. All shareholders would benefit from a rise in the share price. It should be noted that shareholders need to take into account the likelihood of the future prospectivity of, and any associated potential upgrades to mineral resources and mineral reserves, and thus the impact upon the share price for the duration of the AAM Note, to ascertain whether the future value and the conversion prices are considered to be congruent.

Disadvantages

7.4 The number of fully paid ordinary shares on issue may rise from 200,668,425 by up to 234,452,306 to a total of up to 435,120,731 after the issue of the Placement Shares, the SPP Shares (assuming the SPP is fully subscribed) and the SPP Placement Shares and this could represent an increase in the ordinary shares of the Company of approximately 116.8%. On any conversion of all of the AMM Note a further up to 342,857,413 shares may be issued to take the ordinary shares on issue to 777,977,874 (if no interest capitalised) and up to 360,287,800 shares to Stone if all interest capitalised after 12 months. This dilutes the shareholding of the non Stone associated shareholders.
7.5 An influential potential increase in shareholding of the Company may be given to Stone on the issue of the Placement Shares and on full conversion of the AMM Note but the final percentage shareholding cannot be determined at this point of time as discussed above (may lie between 52.66% and 62.20%) but could be as high as approximately 72.63% (ignoring any capitalised interest on the AMM Note).

Other Factors

7.6 There is no guarantee that Stone will convert the proposed AAM Note if issued to ordinary shares in AAM and if this eventuates, the cash position of the Company will need to be reduced by the debts of up to $12,000,000 (plus interest payable up to the date of repayments). Interest of $1,200,000 will be payable on the AMM Note over a two year period (assumes interest not capitalised) unless the AMM Note is converted earlier. The interest may approximate $1,250,704 if all interest is capitalised on a monthly basis.
7.7 AAM is potentially disposing of its core assets over which a first fixed and floating charge will be registered. Failure to satisfy the repayment requirements may allow Stone to gain the assets for a value which potentially is less than the actual net worth of the assets of AAM. The Directors of AAM consider that this is unlikely taking into consideration the advanced nature of the Laverton Project however if cash flows from the Laverton Gold Project are not dramatically improved, there is always the possibility of forfeiture. It is always possible (but not guaranteed) that further share equity funds can be raised to pay out Stone if required.

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7.8 The potential minimum conversion price of 3.5 cents per share for the AMM Note is significantly lower than the unaudited net book asset backing per share price of approximately 8.73 cents per AAM share as at 30 June 2011. There is potential that the conversion price of the AMM Note may be lower than the net asset backing per share and the share price of an AAM share trading on ASX at the date(s) of any conversions.
7.9 There is the potential for Stone to convert the proposed AMM Note that will incur interest at 5% per annum. If converted before the due dates, the Company will save on paying interest to maturity. The actual savings cannot be quantified with any degree of accuracy.
7.10 Currently, AAM does not have sufficient funds for working capital purposes and may only do so if the monies are raised from the Subscription and SPP raisings.
7.11 The Company, in the absence of conversion of the AMM Note to equity by Stone, will need to find up to $12,000,000 plus any capitalised interest at the end of a two year period. It is always possible (but not guaranteed) that further share equity funds can be raised to pay out Stone if required.

CONCLUSION AS TO FAIRNESS AND REASONABLENESS

8.1 After taking into account the factors referred to in paragraph 7 above and elsewhere in this report, we are of the opinion that the proposals as outlined in resolution 1 are, on balance, considered to be not fair but reasonable to the non associated shareholders of AAM.

Each shareholder needs to examine the share price of AAM, and market conditions at the time of exercise of vote to ascertain the impact, if any, on resolution 1.

8. SOURCES OF INFORMATION

9.1 In making our assessment as to whether the proposal pursuant to resolution 1 is fair and reasonable, we have reviewed relevant published available information and other unpublished information of the Company that is relevant to the current circumstances. In addition, we have held discussions with the management of AAM about the present and future operations of AAM. Statements and opinions contained in this report are given in good faith, but in the preparation of this report, we have relied in part on information provided by the directors and management of AAM.
9.2 Information we have received, includes, but is not limited to:
Draft of Notice of General Meeting of Shareholders and EM of AAM for the General Meeting of Shareholders the Company planned to be issued to shareholders in September 2011;
Discussions with certain management of AAM;
Top 20 shareholding details of AAM as at 12 August 2011;
Share prices of AAM since 1 January 2011 to 7 September 2011;
Annual Report of AAM for the year ended 30 June 2010 and the audit reviewed accounts for the six months ended 31 December 2010;
Unaudited consolidated statement of financial position of the AAM Group as at 30 June 2011;
Announcements made by AAM to the ASX from 1 January 2011 to 7 September 2011;
The cash flow forecasts of AAM for 2011/12;
The Subscription Agreement between AAM and Stone of August 2011;
Estimated debt position of AAM as at 30 June 2011; and

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Information on AAM as provided on the ASX web site and AAM’s web site.
9.3 Our report includes Appendix A and our Financial Services Guide attached to this report.

Yours faithfully STANTONS INTERNATIONAL SECURITIES

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John Van Dieren - FCA Director

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APPENDIX A

AUTHOR INDEPENDENCE AND INDEMNITY

This annexure forms part of and should be read in conjunction with the report of Stantons International Pty Ltd trading as Stantons International Securities dated 8 September 2011, relating to the proposals as outlined in resolution 1 to the Notice to be forwarded to shareholders in September 2011 for a meeting of shareholders in October 2011 that allows for the issue to Stone of the Placement Shares, the SPP Placement Shares and conversion by Stone of up to $12,000,000 in AMM Note and allowing security to be issued to Stone.

At the date of this report, Stantons International Securities does not have any interest in the outcome of the proposal. There are no relationships with AAM and Stone other than acting as an independent expert for the purposes of this report. There are no existing relationships between Stantons International Securities and the parties participating in the transaction detailed in this report which would affect our ability to provide an independent opinion. The fee to be received for the preparation of this report is based on the time spent at normal professional rates plus out of pocket expenses and is estimated at $15,000. The fee is payable regardless of the outcome. With the exception of the fee, neither Stantons International Securities nor John Van Dieren have received, nor will, or may they receive, any pecuniary or other benefits, whether directly or indirectly, for or in connection with the making of this report.

Stantons International Securities does not hold any securities in AAM or Stone. There are no pecuniary or other interests of Stantons International Securities that could be reasonably argued as affecting its ability to give an unbiased and independent opinion in relation to the proposal. Stantons International Securities and Mr J Van Dieren have consented to the inclusion of this report in the form and context in which it is included as an annexure to the Notice.

QUALIFICATIONS

We advise Stantons International Securities is the holder of an Australian Financial Services Licence (no 319600) under the Corporations Act 2001 relating to advice and reporting on mergers, takeovers and acquisitions that involve securities. A number of the directors of Stantons International Pty Ltd are the directors of Stantons International Securities and its affiliated company Stantons International Audit and Consulting Pty Ltd. Stantons International Securities and Stantons International Audit and Consulting Pty Ltd have extensive experience in providing advice pertaining to mergers, acquisitions and strategic and financial planning for both listed and unlisted companies and businesses.

Mr John Van Dieren, FCA, the person responsible for the preparation of this report, has extensive experience in the preparation of valuations for companies and in advising corporations on takeovers generally and in particular on the valuation and financial aspects thereof, including the fairness and reasonableness of the consideration offered.

The professionals employed in the research, analysis and evaluation leading to the formulation of opinions contained in this report, have qualifications and experience appropriate to the task they have performed.

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DECLARATION

This report has been prepared at the request of the directors of AAM in order to assist them to assess the merits of the proposals under resolution 1 in the Notice of Meeting to Shareholders to be forwarded to shareholders in September 2011 for a meeting of shareholders in October 2011 to which this report relates. This report has been prepared for the benefit of AAM’s shareholders (not associated with Stone) and does not provide a general expression of Stantons International Securities’ opinion as to the longer term value of the AAM Group or the individual assets of the AAM Group. Stantons International Securities does not imply, and it should not be construed, that is has carried out any form of audit on the accounting or other records of AAM and its subsidiaries or the ownership of AAM. 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, letter or statement, without the prior written consent of Stantons International Securities to the form and context in which it appears.

DISCLAIMER

This report has been prepared by Stantons International Securities with due care and diligence. However, except for those responsibilities, which by law cannot be excluded, no responsibility arising in any way whatsoever for errors or omission (including responsibility to any person for negligence) is assumed by Stantons International Securities (Stantons International Pty Ltd) and Stantons International Audit and Consulting Pty Ltd, their directors, employees or consultants for the preparation of this report.

DECLARATION AND INDEMNITY

Recognising that Stantons International Securities may rely on information provided by AAM and its officers (save whether it would not be reasonable to rely on the information having regard to Stantons International Securities experience and qualifications), AAM has agreed:

a) To make no claim by it or its officers against Stantons International Securities (and Stantons International Pty Ltd and Stantons International Audit and Consulting Pty Ltd) to recover any loss or damage which AAM may suffer as a result of reasonable reliance by Stantons International Securities on the information provided by AAM; and
(b) To indemnify Stantons International Securities (and Stantons International Pty Ltd and Stantons International Audit and Consulting Pty Ltd) against any claim arising (wholly or in part) from AAM or any of its officers providing Stantons International Securities any false or misleading information or in the failure of AAM or its officers in providing material information, except where the claim has arisen as a result of wilful misconduct or negligence by Stantons International Securities.

A draft of this report was presented to AAM directors for a review of factual information contained in the report. Comments received relating to factual matters were taken into account, however the valuation methodologies and conclusions did not alter.

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FINANCIAL SERVICES GUIDE Dated 8 September 2011

1. STANTONS INTERNATIONAL PTY LTD (TRADING AS STANTONS INTERNATIONAL SECURITIES)

Stantons International Securities ACN 103 088 697 ( “SIS” or “we” or “us” or “ours” as appropriate) has been engaged to issue general financial product advice in the form of a report to be provided to you.

2. 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: 319600 ;
remuneration that we and/or our staff and any associated receive in connection with the general financial product advice;
any relevant associations or relationships we have; and
our complaints handling procedures and how you may access them.

3. FINANCIAL SERVICES WE ARE LICENCED TO PROVIDE

We hold an Australian Financial Services Licence which authorises us to provide financial product advice in relation to:

Securities (such as shares and options)

We provide financial product advice by virtue of an engagement to issue a report in connection with a financial product of another person. Our report will include a description of the circumstances of our engagement and identify the person who has engaged us. You will not have engaged us directly but will be provided with a copy of the report as a retail client because of your connection to the matters in respect of which we have been engaged to report.

Any report we provide is provided on our own behalf as a financial services licensee authorised to provide the financial product advice contained in the report.

4. GENERAL FINANCIAL PRODUCT ADVICE

In our report we provide general financial product advice, not personal financial product advice, because it has been prepared without taking 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. Where the

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advice relates to the acquisition or possible acquisition of a financial product, you should also obtain a product disclosure statement relating to the product and consider that statement before making any decision about whether to acquire the product.

5. BENEFITS THAT WE MAY RECEIVE

We charge fees for providing reports. These fees will be agreed with, and paid by, the person who engages us to provide the report. Fees will be agreed on either a fixed fee or time cost basis.

Except for the fees referred to above, neither SIS, 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.

6. 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.

7. 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.

8. ASSOCIATIONS AND RELATIONSHIPS

SIS is a trading name owned by Stantons International Pty Ltd a professional advisory and accounting practice. Stantons International is also affiliated with Stantons International Audit and Consulting Pty Ltd that provides audit and corporate services and charges management fees to Stantons International Securities.

From time to time, SIS and Stantons International Audit and Consulting Pty Ltd and/or their related entities may provide professional services, including audit, accounting and financial advisory services, to financial product issuers in the ordinary course of its business.

9.

9.1 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 Stantons International Securities Level 1 1 Havelock Street WEST PERTH WA 6005

When we receive a written complaint we will record the complaint, acknowledge receipt of the complaints within 15 days and investigate the issues raised. As soon as practical,

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and not more than 45 days after receiving the written complaint, we will advise the complainant in writing of our determination.

9.2 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 Limited (“FOSL”). FOSL is an independent company that has been established to provide free advice and assistance to consumers to help in resolving complaints relating to the financial services industry.

Further details about FOSL are available at the FOSL website www.fos.org.au or by contacting them directly via the details set out below.

Financial Ombudsman Service Limited PO Box 3 MELBOURNE VIC 3021

Toll Free: 1300 78 08 08 Facsimile: (03) 9613 6399

10. CONTACT DETAILS

You may contact us using the details set out above or by telephone (08) 9481 3188 or facsimile (08) 9321 1204.

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Lodge your vote:

ABN 44 100 727 491

 By Mail: Computershare Investor Services Pty Limited GPO Box 242 Melbourne Victoria 3001 Australia

000001 000 AAM MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

Alternatively you can fax your form to (within Australia) 1800 783 447 (outside Australia) +61 3 9473 2555

For Intermediary Online subscribers only (custodians) www.intermediaryonline.com

For all enquiries call:

(within Australia) 1300 850 505 (outside Australia) +61 3 9415 4000

Proxy Form

 For your vote to be effective it must be received by 10:00am (WST) Monday 24 October 2011

How to Vote on Items of Business

All your securities will be voted in accordance with your directions.

Appointment of Proxy

Voting 100% of your holding: Direct your proxy how to vote by marking one of the boxes opposite each item of business. If you do not mark a box your proxy may vote as they choose. If you mark more than one box on an item your vote will be invalid on that item.

Voting a portion of your holding: Indicate a portion of your voting rights by inserting the percentage or number of securities you wish to vote in the For, Against or Abstain box or boxes. The sum of the votes cast must not exceed your voting entitlement or 100%.

Appointing a second proxy: You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you appoint two proxies you must specify the percentage of votes or number of securities for each proxy, otherwise each proxy may exercise half of the votes. When appointing a second proxy write both names and the percentage of votes or number of securities for each in Step 1 overleaf.

A proxy need not be a securityholder of the Company.

Signing Instructions

Individual: Where the holding is in one name, the securityholder must sign.

Joint Holding: Where the holding is in more than one name, all of the securityholders should sign.

Power of Attorney: If you have not already lodged the Power of Attorney with the registry, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: Where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please sign in the appropriate place to indicate the office held. Delete titles as applicable.

Attending the Meeting

Bring this form to assist registration. If a representative of a corporate securityholder or proxy is to attend the meeting you will need to provide the appropriate “Certificate of Appointment of Corporate Representative” prior to admission. A form of the certificate may be obtained from Computershare or online at www.investorcentre.com under the information tab, "Downloadable Forms".

Comments & Questions: If you have any comments or questions for the company, please write them on a separate sheet of paper and return with this form.

 Turn over to complete the form



View your securityholder information, 24 hours a day, 7 days a week:

www.investorcentre.com

Review your securityholding

Update your securityholding

Your secure access information is:

SRN/HIN: I9999999999

 PLEASE NOTE: For security reasons it is important that you keep your SRN/HIN confidential.

916CR_0_Sample_Proxy/000001/000001/i

MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

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Change of address. If incorrect, mark this box and make the correction in the space to the left. Securityholders sponsored by a broker (reference number commences with ’ X ’) should advise your broker of any changes.

I 9999999999 I ND

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Proxy Form

Please mark

to indicate your directions

Appoint a Proxy to Vote on Your Behalf

XX

I/We being a member/s of A1 Minerals Limited hereby appoint

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the Chairman of the Meeting

OR

 PLEASE NOTE: Leave this box blank if you have selected the Chairman of the Meeting. Do not insert your own name(s).

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, as the proxy sees fit) at the General Meeting of A1 Minerals Limited to be held at the "Harbour C" Room, Rendezvous Observation City Hotel, The Esplanade, Scarborough, WA, 6019 on Wednesday, 26 October 2011 at 10:00am (WST) and at any adjournment of that meeting.

Items of Business  PLEASE NOTE: If you mark the Abstain box for an item, you are directing your proxy not to vote on your behalf on a show of hands or a poll and your votes will not be counted in computing the required majority.

Resolution 1 Approval for the Stone Transactions Resolution 2 Approval for a Share Purchase Plan

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The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business.

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SIGN
Signature of Securityholder(s) This section must be completed.
Individual or Securityholder 1 Securityholder 2 Securityholder 3
Sole Director and Sole Company Secretary Director Director/Company Secretary
Contact
Contact Daytime
Name Telephone Date / /
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9 9 9 9 9 9 A

A A M

AI assistant

BRIGHTSTAR RESOURCES LIMITED — AGM Information 2011

64581_rns_2011-09-22_fb7b22cc-f994-4089-b852-b5ffe032307e.pdf

A1 MINERALS LIMITED

ACN 100 727 491

NOTICE OF GENERAL MEETING

CONTENTS PAGE

TIME AND PLACE OF MEETING AND HOW TO VOTE

VENUE

YOUR VOTE IS IMPORTANT

VOTING IN PERSON

VOTING BY PROXY

Proxy Forms received later than this time will be invalid.

NOTICE OF GENERAL MEETING

AGENDA

1. RESOLUTION 1 - APPROVAL FOR THE STONE TRANSACTIONS

2. RESOLUTION 2 - APPROVAL FOR A SHARE PURCHASE PLAN

GENERAL BUSINESS

BY ORDER OF THE BOARD

EXPLANATORY MEMORANDUM

1. BACKGROUND TO RESOLUTIONS 1 AND 2

1.1 Subscription Agreement

(together, the SPP Placement Shares ).

1.2 Conditions Precedent

1.3 External Debts

2. RESOLUTION 1 – APPROVAL FOR THE STONE TRANSACTIONS

2.1 General

2.2 ASX Listing Rule 7.4

2.3 Technical information required by ASX Listing Rule 7.4

2.4 ASX Listing Rule 10.1

2.5 Section 611 (item 7) of the Corporations Act

2.6 Section 606 of the Corporations Act – Statutory Prohibition

2.7 Reason Why Section 611 (item 7) Approval Required

2.8 Impact on the Company

2.9 Identity of the person proposing to make the acquisition, and their associates

2.10 Maximum increase in voting power of the Subscriber, and total voting power, as a result of the Transactions

Issue of Shares on Conversion of the Convertible Note

2.11 Intentions in relation to the Company

2.12 Interests and Recommendations of Directors

2.13 Role of the Independent Expert

2.14 ASX Listing Rule 7.1

2.15 ASX Listing Rule 10.11

2.16 Section 208 of the Corporations Act

3. RESOLUTION 2 – APPROVAL FOR A SHARE PURCHASE PLAN

3.1 Background

3.2 ASX Listing Rule 7.1

3.3 Technical information required by ASX Listing Rule 7.1

4. RESPONSIBILITY FOR INFORMATION

5. ENQUIRIES

GLOSSARY

$ or AUD$ means Australian dollars.

ANNEXURE A – ADDITIONAL MATERIAL TERMS OF THE SUBSCRIPTION AGREEMENT

Convertible Note

Exclusivity Undertakings

STONE RESOURCES LIMITED

STONE MINING LIMITED

1. INTRODUCTION

2. SUMMARY OF OPINION

2.2 In our opinion:

3. IMPLICATIONS OF THE PROPOSALS

4. FUTURE DIRECTION OF AAM

5. BASIS OF TECHNICAL VALUATION OF AAM

5.2 Capitalised Maintainable Earnings / Discounted Cash Flows

5.3 Takeover Bid

5.4 Net Asset Backing and Wind-Up Value

5.5 Market Price of AAM Shares

6. PREMIUM FOR CONTROL

7. FAIRNESS AND REASONABLENESS OF THE PROPOSALS

Advantages

Disadvantages

Other Factors

CONCLUSION AS TO FAIRNESS AND REASONABLENESS

8. SOURCES OF INFORMATION

John Van Dieren - FCA Director

APPENDIX A

AUTHOR INDEPENDENCE AND INDEMNITY

QUALIFICATIONS

DECLARATION

DISCLAIMER

DECLARATION AND INDEMNITY

BRIGHTSTAR RESOURCES LIMITED AGM Information 2011