STEINEPREIS PAGANIN Lawyers & Consultants

Level 4, The Read Buildings 16 Milligan Street Perih WA 6000

GPO Box 2799 Perih WA 6001

Telephone: +61 8 9321 4000 Facsimile: +61 8 9321 4333

Web: www.steinpag.com.au

SIMILE TRANSMISSIO

DATE:	9 November 2011	OUR REF:	ALD:RCS:3375-01
FROM:	Andrew Disney Senior Associate	EMAIL:	[email protected]
TO:	Company Announcements ASX Limited Fax: 1300 135 638	PAGES:	60 (including this page)
SUR IFOT.	Stope Recourse Limited . Notice of with $\mathbb{C}2$ between $\mathbb{C}_3$ . $\mathbb{C}_3$ , $\mathbb{C}_4$ , $\mathbb{C}_5$ , $\mathbb{C}_5$ , $\mathbb{C}_6$ , $\mathbb{C}_5$ , $\mathbb{C}_5$ , $\mathbb{C}_6$ , $\mathbb{C}_5$ , $\mathbb{C}_7$ , $\mathbb{C}_7$ , $\mathbb{C}_7$ , $\mathbb{C}$

– Notice of Initial Substantial Holder Form 603 for A1 ses umiteat Minerals Limited

MESSAGE:

الأحد

Form 603 attached.

PLEASE NOTE: The information contained in this facsimite is confidential and is intended only for the use of the addressee named above. If you or and the intended recipient, you are hereby notified that any dissemination, copying or use of the information is strictly prohibited. If you are not the intended recipient, you are hereby notified that any dissemination reimbursed by Steinepreis Paganin. Thank you,

Form 603

Corporations Act 2001 Section 671B

Notice of initial substantial holder

To Company Name/Scheme	A1 Minerals Limited
ACN/ARSN	100 727 491
1. Details of substantial holder (1)
Name ACN / ARSN (if applicable)	Stone Resources Limited, a company incorporated in Bermuda (Stone) and the entities listed in Annexure A. NÄ
The holder became a substantial holder on	7/11/2011

2. Details of voting power

Details of vottrig power
The total number of votes attached to all the voting shares in the company or voting interests in the scheme that the substantial holder or an essociale (2) had a relevant interest (3) In on the date the substantial holder became a substantial holder are as follows:

l Class of securities (4)	Number of securities	Persons' votes (6)	Vollng power (6)
Fully paid ordinary	418.301.429	418,301,429	67.68%
shares (FPOS)

3. Details of relevant interests

o. Let will be relevant interest the substantial holder or an associate had in the following voling securities on the data the substantial holder bacame a substantial holder are as follows:

Holder of relevant interest	Nature of relevant interest (7)	Class and number of securities
Stone Resources Limited
	Entitled to be registered as holder of	418,301,429 FPOS
	voting shares

4. Details of present registered holders

The persons registered as holders of the securities referred to in paragraph 3 above are as follows:

Holder of relevant	Regislared holder of	. Person entitled to be $\overline{\phantom{a}}$	Class and number of
Interest	securities	registered as holder (8)	securities
Stone Resources	Stone Resources	. Stone Resources Limited	418,301 429 FPOS
Limited	Limiled

6. Consideration

The consideration paid for each relevant interest referred to in paragraph 3 above, and acquired in the four months prior to the day that the substantial holder became a substantial holder is as follows:

Holder of relevant Interesi	Date of acquisition	Consideration (9)	Class and number of secunties
		Cash	Non-cash
Stone Resources Limited	7/11/11	$$2,243,250$ , at an Issue price of \$0.025 per FPOS in accordance with a Subscription Agreement dated 12/8/2011 as provided In Annexure B	N/A	89,730,000
Stone Resources Limiled	711111	N/A	Part conversion of convertible note - \$11,500,000 converted at \$0.035 per FPOS, In. accordance with Θ Subscription Agreement dated 12/8/2011 es provided In. Annexure B	328.571.429

6. Associates -

The reasons the persons named in paragraph 3 above are associates of the substantial holder are as follows:

. Name and ACN/ARSN (if applicable)	Nature of association
Various (Refer to Annexure A)	Various (Refer to Annexure A)

Addresses

$\bar{z}$

$\mathcal{L}_{\mathcal{A}}$

The addresses of persons named in this form are as follows:

$\mathbb{R}^2$

	Name	Address
	Stone Resources Limited	Cumberland House, 9th Floor, T Victoria Street, Hamilton HM11, Bermuda
	Vanous (Refer to Annexure A)	Various (Refer to Annexure A)


	Signature
	Mr Francis Hui prinț name
	Limiled	Capacity Chief Financial Officer, Stone Resources
	Trants How sign here	9 November 2011 date
		DIRECTIONS
$\Omega$	names and addresses of members is clearly set out in paragraph 7 of the form.	If there are a number of substantial holders with similar or related relevant interests (eg. a corporation and its related corporations, or the manager and trustee of an equity trust), the names could be included in an annexure to the form. If the relevant interests of a group of persons are essentially similar, they may be referred to throughout the form as a specifically named group if the membership of each group, with the
$(2)$	See the definition of "associate" in section 9 of the Corporations Act 2001.
(3)	See the definition of "relevant interest" in sections 608 and 6718(7) of the Corporations A.
(4)	The voling shares of a company constitute one class unless divided into separate classes.
(5)	associate has a relevant interest in.	The total number of votes attached to all the voting shares in the company or voting interests in the scheme (if any) that the person or an
(6)	The person's voles divided by the total votes in the body corporate or scheme multiplied by 100.
(7)	include details of:
	$\left( a\right)$ and	any relevant agreement or other circumstances by which the relevant interest was acquired. If subsection 671B(4) applies, a copy of any document setting out the terms of any relevant agreement, and a statement by the person giving full and accurate details of any contract, scheme or arrangement, must accompany this form, together with a written stalement certifying this contract, scheme or arrangement;
	(b)	any qualification of the power of a person to exercise, control the exercise of, or influence the exercise of, the voting powers or disposal of the securities to which the relevant interest relates (indicating cleany the particular securities to which the qualification applies).
	See the definition of "relevant agreement" in section 9 of the Corporations Act 2001.
		If the substantial holder is unable to determine the identity of the person (eg. If the relevant interest arises because of an option) write "unknown".
9)		Details of the consideration must include any and all benefits, money and other, that any person from whom a relevant interest was acquired has, or may, become entitled to receive in relation to that acquisition. Details must be included even if the benefit is conditional on the happening or not of a contingency. Details must be included of any benefit paid on behalf of the aubstaniial holder or ile associale in relation to the acquisitions, oven if they are not paid directly to the person from whom the relevant interest was acquired.

$\bar{z}$ $\mathcal{L}$

THIS IS ANNEXURE "A" OF I PAGE REFERRED TO IN THE FORM 603 DATED 9 NOVEMBER 2011

DATED THIS 9th DAY OF NOVEMBER 2011.

Mrifrancis Hui Chief Financial Officer Duly authorised officer of Stone Resources Limited

Associate	Basis of Association	Address
Stone Resources Limited	Section $12(2)(a)(i)$ of the Corporations Act - associate of Stone Resources Limited by virtue of being a wholly owned subsidiary of Stone Resources Limited	Room 2201-2202A, 22/F., Fairmont House, 8 Cotton Tree Drive, Central, Hong Kong
Springbend Investment Co., Lid	As above	As above
Fairchild Information Services Ltd.	As above	690-4400 Hazelbridge Way, Richmond, B.C., Canada
Tanzania Sitong Resources Limited	As above	Plot No 52, Regent Estate Msasani, P.O. Box 23030, Dar Es Salaam, Tanzania

THIS IS ANNEXURE "B" OF 56 PAGES REFERRED TO IN THE FORM 603 DATED 9 NOVEMBER 2011

DATED THIS 9th DAY OF NOVEMBER 2011.

Mr Francis Hui Chief Financial Officer Duly authorised officer of Stone Resources Limited

A1 MINERALS LIMITED ACN 100 727 491 (Company)

$\sim 200$

and

STONE RESOURCES LIMITED (Subscriber)

SUBSCRIPTION AGREEMENT

	CONTENTS PAGE
ĭ.	DEFINITIONS AND INTERPRETATION manufacturer international community of the DEFINITIONS AND INTERPRETATION
	Definitions 1.1 1.2 Interpretation
2,	SUBSCRIPTION AND ISSUE
З.	CONDITIONS PRECEDENT
	-3.1 Conditions 3.2 Benefit of Conditions 3.3 8esf Endeavours 3.4 Sofisfootton of Conditions, minimum and community and community and company 3.5 Assignment www.communication.com/communication.com/communication.com/ Port Placement Waiver 3.6
4.	CONDUCT PRIOR TO COMPLETION, manufacture and manufacture and manufacture 10
5.	EXCLUSIVITY, BOARD RECOMMENDATION AND COST RECOVERY 10
	.5.1 Exclusivity 5.2 Board Recommendation 5.3 Cost Recovery
6.,	COMPLETION
	6.1 Completion Date 62 Completion of the Placement Shares 6.3 Completion of Part Placement Shares 6.4 Completion for the Convertible Note 65 Completion to be simultaneous
7,	CONVERTIBLE NOTE www.communications.communications.com/www.communications.com
	7.1 Face Value 72 Moturity Date 7.3 Conventible Note secured, announcement with an information and all 7.4 Acknowledgment of indebtedness 7.5 Note is unlisted 76 Voting rights 7.7
8.	Transfer INTEREST, , , , , , , , , , , , , , , , , , ,
	8.1 Interest rate mummunically and construction of the construction of the construction of the 8.2 Calculation of Interest 8.3 Capitalisation of interest immunomental international communities and 15 84 Payment of inferest manuscription communication and communication of 5
9.	REPAYMENT.
	9. I Payment of Monies Payable 9.2 Satisfaction of Company's obligations 9.3 Notice of non-conversion 9,4 Early Repayment
10.7	CONVERSION OF CONVERTIBLE NOTE
	10.1 Conversion 10.2 Conversion Notice can be withdrawn minimum minimum minimum 16 10.3 Safisfaction of Company's obligations
İĪ.	ALLOTMENT AND ISSUE OF SHARES are resolutionally and the continuum continuum To
	11.1 Allotment and Issue

$\sim 10^{11}$ km $^{-1}$

$\sim 10^{-10}$

$\hat{\mathcal{A}}$

$\sim 10^{11}$

$\sim 10^{-1}$

$\bar{z}$

$\mathcal{L}^{\mathcal{L}}$

$\sim 10$

		ANNEXURE 1 - CONVERTIBLE NOTE APPLICATION FORM ANNEXURE 2 - FORM OF CONVERSION NOTICE
	$26.2^{\circ}$ 26.3 26.4	Enfire Agreement Counterparts $\rm 100$ . The communication of the community of the constraint of the community of $27$
	26.1	Severance www.seconduities.com/www.com/www.com/www.com/www.com/26
26.		MISCELLANEOUS
25.		GOVERNING LAW
	24.1 24.2	Sfamp Dufy annualitation in the term and annual continuum and annual commutation of 26 Costs
24.		COSTS
	23.4	Receipt of Notice receipments and community and community and 20
	23.3	Address of Parties Change of Address, manufactured and communications and communications 26
	23. I 23.2	Requirements for Notice
23.		NOTICES www.www.work.com/www.www.work.com/www.www.www.www.www.www.25
22.		PUBLIC ANNOUNCEMENTS
21.		COVENANT OF SUBSCRIBER
	20.3	Company to use best endeavours
	20.1 20.2	Appointment of Nominee Director component in communication and 25 Further Board representation manufacture in communication and concerns 25
20.		BOARD REPRESENTATION,
19.		WATPAC DEBT
18.		USE OF PROCEEDS
	17.4 17.5	Indemnity by Compány Qualifications to Company Representations and Warrantles Warranties separate
	17.1 17.2 - 17.3	Mutual Representations and Warrantles Company Representations and Warranties
17.		REPRESENTATIONS AND WARRANTIES
	16.1 16.2 16,3	Events.of.Defoult Subscriber's powers on default Duty to notify of Event of Detault
16.		EVENTS OF DEFAULT marginalism communication communication communication and 21
15.		UNDERTAKINGS BY THE COMPANY with the company synchronology in the company of 19
14.		SHARE PURCHASE PLAN AND SPP PLACEMENT SHARES
13.		REORGANISATION OF CAPITAL AND PARTICIPATING RIGHTS
	12.1 12.2 12.3	Warn or defaced Note Centificate Lost or destreved Note Certificate Cancellation of Note Certificate
-I2.		REPLACEMENT OF NOTE CERTIFICATES
	11.2 11.3	Holding statement and new Note Centificate Quotation and ranking of Shares upon conversion

$\mathcal{A}$

$\hat{\mathcal{E}}$

ANNEXURE 5 - COMPANY REPRESENTATIONS AND WARRANTIES
ANNEXURE 6 - COMPANY LAST ACCOUNTS

$\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\$

THIS AGREEMENT is made the day of 2011 BETWEEN

Al MINERALS LIMITED (AGNICO 727 491) of Sulte 34, 25 Walters Drive, Osborne Park Western Australia (Company):

AND

STONE RESOURCES LIMITED of Room 2201-2202A, 22/F., Fairmont House, 8 Cotton Tree Drive, Centrol, Hong Kong, a company incorporated in Bermuda, whose shares are listed and traded on the TSX Venture Exchange (Subscriber).

RECITALS

The Subscriber has agreed to subscribe for, and the Company has agreed to А. Issue:
$(a)$ the Placement Shores and the Part Placement Shores (If any):
the SPP Placement Shares (if any); and $\omega$
$\left($ the Convertible Note.

on the terms and conditions set out in this Agreement (Subscription).

The Parties have agreed to enter into this Agreement to record the terms of the В. Subscription.

IT IS AGREED as follows:

Ī. DEFINITIONS AND INTERPRETATION

$1.1$ Definitions

In this Agreement, unless the context otherwise requires:

Agreement means the agreement constituted by this document and includes the Recitals, Annexures and any amendments made from fime to time in accordance with this Agreement.

Allatment Date means the date that shares are allotted in respect of a conversion of the Convertible Note, being not more than 3 Business Days after the Conversion Date (unless otherwise agreed to by the Parties).

Annexures mean the annexures to this Agreement.

ASIC means Australian Securities and Investments Commission.

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

ASX Listing Rules means the official Listing Rules of ASX.

Board means the board of Directors of the Company.

Business Day means a day an which trading banks are open for business in. Perth, 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, as referred to in clause 7.2.

Company means A1 Minerals Limited (ACN100 727 491), whose shares are listed and traded on the ASX.

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 or its nominees would. If the proposed transaction or arrangement is entered into or completed substantially in accordance with its terms.

$\circ$ 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:
$\circ$ 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
(ය) otherwise acquire or merge with the Company whether by way of fakeover offer, scheme of arrangement, shareholder approved acquisition, capital reduction, share buyback, sale or purchase of ossets. Joint venture, reverse takeover, dual-listed company structure or other synthetic merger or any other transaction or arrangement.

Completion means completion of the subscription for, and Issue of the Placement Shares and the Convertible Note in accordance with this Agreement

Completion Date means 5 Business Days after the Conditions are satisfied or waived (or such other date as is agreed in writing between the Parties).

Conditions means the conditions set out in clause 3.1.

Constitution means the constitution of the Company.

Conversion Date means the date of delivery of a Conversion Notice by the Subscriber to the Company in accordance with the terms of this Agreement.

Conversion Notice means the conversion notice in the form set out in Annexure $\overline{2}$ .

Conversion Price means:

If the Conversion Notice is provided more than 12 months after the $\circ$ Completion Date, \$0.06; and

505080_1

(b) if the Conversion Notice is provided within 12 months after the Completion Date, \$0,035,

subject to ony adjustment in accordance with this Agreement.

Convertible Note means a redeemable convertible note issued to the Subscriber on the terms set out in this Agreement.

Convertible Note Application Form means the application form set out in Annexure 1.

Convertible Note Subscription Amount means the amount of \$12,000,000 or if agreed by the Parties no later than 2 Business Days before the Completion Date, such lesser amount of at least \$10,000,000.

Corporations Act means the Corporations Act 2001 (Cth).

Director of Directors means a director of the Company for the time being or any one or more of them who has or have authority to act for the Company.

Encumbrance means a mortgage, pledge, lien, charge, assignment, hypothecation, secured interest, title referition arrangement, preferential right or other arrangement ancluding a conditionally repayable deposit or flawed asset* arrangement), trust or power, in each case having the same or a similar commercial effect as a grant of security, and any agreement to create or give any such orrangements.

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

Event of Default means any of the events or aircumstances described in clause 16.1.

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

Execution Date means the date the last of the Parties executes this Agreement.

Face Value means an amount equal to:

(a) The Convertible Note Subscription Amount;
plus any amounts of accrued Interest capitalsed in accordance with $(b)$ this Agreement:
less that portion or those portions of the Convertible Note that have $\circ$ been previously repold or converted in accordance with this Agréement.

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

Interest Payment Date means the date on which interest on the Convertible Note will payable each quarter in arrears, being 31 March, 30 June, 30 September and 31 December of each year.

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

Mining information means originals or copies of pians, maps, drawings, diagrams, flow sheets, records, reports and documents (whether in written, computer or electronically readable form) and prospecting and exploration information, geological, geophysical and fechnical information, geromagnetic data, drill logs, dill chips, dill core and samples (including drill pulps) that are in the possession or custody of, or under the control of, the Company and which relate In any way to the Tenements.

Monies Payable means, at any particular time, the Face Value and accrued Interest on the Convertible Note which has not been repola, capitalised or converted Into Shares.

NI 43-101 medns National Instrument 43-101 - Standards of Disclosure for Mineral Projects.

Naminee Director means a person or persons nominated by the Subscriber to get as a director or directors to the Company, in accordance with clause 20.1 and clause 20.2.

Note Certificate means a certificate for the Convertible Note substantially in the form of Annexure 3.

Part Placement means a placement of the Port Placement Shares to the Subscriber in accordance with clause 6.3 of this Agreement.

Part Placement Shares meons 30,000,000 Shares at an Issue price of \$0,025 per Share.

Part Placement Waiver has the meaning given in clause 3.5 of this Agreement.

Party means a party to this Agreement and Parties means all of the parties to this Agreement

Permitted Encumbrance means an Encumbrance which:

$\langle 0 \rangle$ Is a possessory lien arising by operation of low in the ordinary course of business and in the absence of default; or
$(b)$ is entered into with the prior written consent of the Subscriber.

Placement means the subscription by the Subscriber for the Placement Shares in accordance with the terms of this Agreement.

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 Shares Application Form means the share application form set out in the Annexure 4.

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

Prospectus has the meaning given in clause 3. T(e) of this Agreement,

Quarter means each three month period enaing 31 March, 30 June, 30 September and 31 December of each year.

share means a fully paid ordinary share in the capital of the Company ranking. equally with the existing issued ordinary share capital of the Company.

Shareholder means a holder of Shares.

SPP 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 this Agreement,

SPP Placement Shares means those Shares Issued to the Subscriber pursuant to the SPP, in accordance with clauses 14(b) or 14(c).

Subscriber means Stone Resources Limited (or its nominee, being Stone Mining Ltd).

Superior Proposal means a Competing Proposal which:

is bond fide and in writing and in the determination of the Company's $\circ$ Board acting reasonably and in good faith affer consultation with the Company's independent advisers, is capable of being valued and completed, toking into account all aspects of the Competing Proposal (including its terms and conditions and the identity of the person or persons making it), and
In the determination of the Company's Board acting reasonably and in $\circledcirc$ good faith and in order to satisfy what the board considers to be its fiduciary or sfatutory duties would, if completed substantially in accordance with its terms, result in a transaction more ravourable to the Combany's security holders than the Transactions.

Tax includes ony tax, levy, impost, assessment, deduction, charge, rate, stamp duty or compulsory loon or withholding levied, imposed, assessed or collected by or under any legislation or Governmental Agency, including any income, company, undistributed profits, payroll, sales, goods, services, value added; capital gains. withholding, prescribed payments, land, rating, stamp, transaction, social service and workers' compensation fax, stamp duty, charge, confibution. levy and obligation, together with any associated interest, penalty, fine, charge and fee of other amount.

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

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

the lost Business Day before the date upon which the Conventible Note $(a)$ is repaid in full in accordance with clause 9.4 or is converted into Shares In its entirety in accordance with clause 9;
the date that this Agreement is lawfully terminated; and $(b)$
the Maturity Date. $\left($ c $\right)$

505059_)

TSXV means the TSX Venture Exchange.

Transaction Documents means:

$\circ$ this Agreement, and

$\ddot{\Phi}$ the Charge referred to in clause 7.2.

Transactions means the issue of the Placement Shares, the Part Placement Shares Of any), the SPP Placement Shares (If any) and the issue and conversion of the Convertible Note.

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

$1.2$ Interpretation

In this Agreement unless the context otherwise requires:

every covenant, agreement, representation or warranty expressed or `(α) implied in which more persons than one covenant, agree represent or warrant shall blnd such persons and every two or more of them jointly and each of them severally.
reference to any Party shall mean and include a reference to that Party, $(b)$ his or its successors or personal representatives (as the case may be) assigns and transferees;
the word "person" shall include a corparation; $\langle c \rangle$
$(d)$ words importing a masculine gender shall include the feminine and neuter genders:
$\overline{(\mathbf{e})}$ the singular shall include the plural and vice versa.
$\omega$ reference to any statute shall include all statutes amending or consolidating the statutes referred to:
a reference to a recital, clause or schedule is a reference to a recital, (၁) clause or schedule of this Agreement;
a reference to currency is to the currency of Australia: (ከ)
the recitals to this Agreement ore incorporated in and form part of this. $\omega$ Agreement and
any ferm or phrase which is defined in the Corporations Act and which is $(i)$ not defined in this Agreement shall have the meaning specified in the Corporations Act.

$\overline{2}$ SUBSCRIPTION AND ISSUE

The Company agrees to Issue, and the Subscriber agrees to subscribe for:

$\omega$ the Placement Shares;
the Part Placement Shares (if any); $\left(\mathbf{b}\right)$
the SPP Placement Shares (If any); and $\mathcal{L}(\mathbf{C})$

595919_1

ω the Convertible Note;

on the terms and conditions set out in this Agreement.

CONDITIONS PRECEDENT $\overline{\mathbf{3}}$ .

Conditions 31

The obligations to subscribe for and issue the Placement Shares, the Part Placement Shares (If any), the SPP Placement Shares (if any) and the Convertible Note do not become binding until the satisfaction (or waiver) of the following conditions (Conditions):

$\omega$ 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 including:
Ó) the Company obtaining Shareholder approval under section 611(7) of the Corporations Act for the Subscriber to acquire a relevant interest in more than 20% of the Company's total Issued share capital through conversion of the Convertible Note and the Issue of Placement Shares and SPP Placement Shares without making a takeover bld, including the preparation of an Independent expert's report to advise on whether if is fair and reasonable for the Company to complete the Transactions:
$(1)$ the Company obtaining Shareholder approval under ASX Usting Rule 7.1 for the issue of the Placement Shares, the issue of the SPP Placement Shares and the grant and conversion of the Convertible Note or (to the extent required)Section 208 of the Corporations Act and ASX Listing Rules 10.1 and 10.11 to give a financial benefit to a related party of the Company, being the Issue of the Placement Shares, the SPP Placement Shares and the grant and conversion of the Convertible Note to the Subscriber; and
(III) approval of the TSX Venture Exchange (TSXV) for the Subscriber to subscribe for the Placement Shares, the SPP Placement Shares and the Convertible Note on conditions reasonably acceptable to the Subscitber.
ÓЙ 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 Compony's assets, on terms acceptable to the Subscriber, under which Warpac 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.
$\langle c \rangle$ 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.

(d)

in relation to the Convertible Note only, the negotiation and execution of the Charge referred to in clause 7.2;

FO-DRO 1

(e)

$\langle f \rangle$

ĞĎ.

$\sigma$

Act (Prospectus):

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 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

except to the extent failly 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 Compony, 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 monogement accounts as at the latest practicable date before Completion to prove its compliance with this sub-clause;

$\langle q \rangle$ 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 this Agreement are true and correct in all material aspects. and no Event of Detault has occurred.

there is no forfelture of, or action taken by any Governmental Agency or third party to seek forfelture of, any Tenements that the Subscriber; acting reasonably, considers to be material to the Transactions: and

the Company provides the Subscriber with a certificate, no later than the date that is 2 Business Days after all other Conditions are satisfied or waived, that states that, to the best of the Company's knowledge, after making que enquiries and investigations, as at the date the certificate is so provided to the Subscriber:

all the terms, undertakings, and conditions on the part of the $\omega$ Subscriber under this Agreement have been performed in all material respects:

(II) all warranties and representations on the part of the Subscriber In this Agreement remain true, correct and accurate in all material respects, subject to the limitations contained in this Agreement, and

(lii) 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 aforesaid 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 fogether with the aforesaid certificate.

$3,2$ Benefit of Conditions

595989

Subject to the femalnder of this clause2:

ġ.,

Conditions 3.1(a)(iii), 3.1(a), 3.1(b), 3.1(b, 3.1(g), 3.1(h) and 3.1(l) are for $\omega$ the benefit of the Subscriber and may only be waived by the Subscriber. and
Conditions 3.1(a)(i), 3.1(a)(ii)and 3.1(b) are for the benefit of both Parties $(b)$ and may only be waived by the agreement of both Parties.

Best Endeavours $3.3$

The Parlies must use their best endeavours to satisfy the Conditions as soon as reasonably practicable, to provide each other party with such information as may be necessary to safisfy the Conditions, and must notify each other if a Condition is satisfied with respect to them or is not capable of being satisfied.

$3.4$ Satisfaction of Conditions
If the Conditions are not satisfied, or waived, by the End Date, then $\omega$ unless otherwise extended by both parties, this Agreement may be ferminated by either Party by written notice to the other Party.
On fermination of this Agreement, neither Party will have any obligations $\dot{\mathbf{b}}$ or liabilities under this Agreement except for obligations and liabilities arising before the date of termination.

Assignment $3.5$

If the TSXV approval under Condition 3.1(a)(III) is not obtained by the $\langle \mathbf{Q} \rangle$ fime Shareholder approval is obtained under Conditions 3.1(a)(i) and 3.1(a)(l), the Subscriber shall transfer and assign all its rights, benefits. obligations and liabilities of and under this Agreement to a nominee. which nominee is under no legal obligation to obtain TSXV approval under Condition 3.1(a)(III) but which will be subject to the following Conditions (which are for the benefit of the Company and may only be waived by the Company):
a no objection letter has been obtained under the Foreign $\langle$ Acquisitions and Takeovers Act 1975 for the nominee to complete the Transactions (or the period for the Commonwealth Treasurer to object has lopsed without objection), if required, and
the Parties and the nominee have entered into a deed of ÖĎ. novation to novate this Agreement on such terms as will be reasonably agreed upon by them.
After the transfer and assignment pursuant to clause 3.5(a), the $\overline{a}$ nominee shall take up all rights and benefits and assume all obligations and liabilities of the Subscriber under this Agreement, and proceed with the Transactions in accordance with the terms of this Agreement.

3,6 Part Placement Walver

The Subscriber may, at any time prior to Completion, subject to compliance with the Corporations Act, the ASX Listing Rules and having obtained conditional approval from the TSXV, by willten notice to the Company, unliaterally walve all Conditions in respect of 30,000,000 of the Placement Shares (Part Placement Waiver), in which case the Subscriber must subscribe for, and the Company must

595769_1

complete the Issue of those 30,000,000 Placement Shares (Part Placement Shares) within 5 Business Days of notice of the walver as set out in claused 3 of this Agreement.

CONDUCT PRIOR TO COMPLETION $\overline{A}$ .

From the Execution Date until the earlier of the Completion Date or the date this Agreement is lawfully terminated, the Company must.

prepare a proper notice of general meeting and any other $(a)$ documentation required under the Corporations Act and the ASX Listing Rules (Notice of Meeting):
make available to the Subscriber a substantive final draft of the Notice ውን of Meeting (Draft), consult with the Subscriber in relation to the content of the Draft (including the inclusion of any information in relation to the Subscriber), and take into account, for the purpose of amending the Draft, any comments from the Subscriber and its legal advisers on the Draft provided that nothing in this clause 4 shall require the Company to act otherwise than in compliance with applicable laws or the ASX Listing Rules relating to the Notice of Meeting;
convene and hold the general meeting as required under the terms of $\left( \text{c}\right)$ this Agreement as soon as practicably passible following the Execution Date:
provide the Subscriber and its advisers with: $(d)$
access to its assets, properties, management, books and Ö records during normal business hours upon reasonable priorsultable. (including allowing and arranging notice accommodation for the representatives of the Subscriber to stay in the properties of the Company for conducting relevant feasibility research, provided such accommodation is reasonably available, and at the Subscriber's cost (other than comp accommodation provided in usual manner to the Company's employees).
ÒĎ copies of all budgets, business plans, development plans, studies and reports and financial statements relating to the Company which are reasonably required by the Subscriber. and.
(III) reasonable assistance to comply with the Subscriber's regulatory requirements for completing the Transactions or obtaining third party/regulatory approval for completing the Subscription, including completing a NI43-101 report which is acceptable to the TSXV; and
$\circ$ comply with clause 15 of this Agreement.
EXCLUSIVITY, BOARD RECOMMENDATION AND COST RECOVERY 5.
Exclusivity 5.1
(No Shop) During the Exclusivity Period, the Company must not, and $(a)$ must ensure that its representatives do not, except with the prior written

rosono i

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.

(No Talk or Due Diligence) Subject to clause 5.1(c), during the Exclusivity $(b)$ Period, the Company must not, and must ensure that its representatives. do not, except with the prior written consent of the Subscriber:

participate in any negotiations in relation to a Competing $\langle$ i Proposal or which may reasonably be expected to lead to a Competing Proposal; or
provide any information to a third party for the purposes of (l) enabling that party to make a Competing Proposal; or
communicate any intention to do any of the things listed in (i) or $(iii)$ ab.

(Fiduciary Carve out) Clause 5.1(b) does not apply to the extent that it $\omega$ restricts the Company or its Board from taking or refusing to take any action with respect to a bond fide Competing Proposal (which was not solicited, invited, encouraged or initiated by the Company in breach of clause 5.1(a)) provided that the Company's Board has determined, in aood faith and acting reasonably that:

after consultation with its advisors, such a bona fide Competing O) Proposal has been provided in writing and could reasonably be considered to be a Superior Proposal, and
after receiving written advice from a Queen's Counsel or Senior (II) Counsel, that falling to respond to such a bona fide Competing Proposal may constitute a breach of the fiduciary or statutory duties of the Board.
(Notification) During the Exclusivity Period, the Company must: $(d)$
promotiv inform the Subscriber in writing if it or any of its O representatives receive any inquiry or proposal which may reasonably be expected to lead to a Competing Proposal;
as soon as reasonably practicable provide written notice of the (iI) identity of the party or parties involved in the inquiry or proposel; and
provide the Recipient with regular updates on the status of ony (ili) such inquiry or proposal.
(Legal Advice) The Company acknowledges that it has received legal $(e)$ advice on this Agreement and the operation of this clause 5.

Board Recommendation $5.2$

The Company warrants that each Director of the Board has advised that he or she intends. In the Notice of Meeting and in any other public statements made after the execution of this Agreement relating to the Transactions, to recommend that the Company's Shareholders approve the resolutions in

mm.

relation to the Transactions, without any qualification other than a qualification that the recommendation is sublect to:

the Independent Expert's Report In relation to the Transactions. (a) concluding that the Transactions are fair and reasonable to the nonassociated Shareholders of the Company; and
the Board, in good faith and acting reasonably, determining that a $(b)$ bona fide Competing Proposal provided in writing could reasonably be considered to be a Superior Proposal.

$5.3$ Cost Recovery

Without prejudice to any other remedy available to the Subscriber. the Company agrees to pay the Subscriber the Compensating Amount If, at any time offer the Execution Date, up to the earlier of the Completion Date or the End Date, a bona fide Competing Proposal has been provided in writing and the Company's Board, after taking advice per clause 5.1(c), in good faith and acting reasonably, recommends or accepts the Competing Proposal on the basis that falling to recommender accept such a bond fide Competing Proposal may constitute a breach of the fiductary or statutory duties of the Board.

COMPLETION 6.

$\left( c \right)$

595939_1

Complétion Date. $6.1$

Completion will occur at 10,000m (Perth time) on the Completion Date of the offices of the Subscriber's Australian lawyers, or such other time and lacation as aareed by the Parties.

$6.2$ Completion of the Placement Shares

On or before the Completion Date, the Subscriber: (a)
must deliver to the Company o Placement Shares Application Ó) Form duly executed by the Subscriber, in the form set out in Annexure 4 or any other form that the Company agrees to $accept$
(ii) must pay the Company the Placement Subscription Amount in cleared funds into the nominated account of the Company, as directed by the Company;
On and from Completion, the Subscriber agrees to be beund by the (b) Constitution in respect of the Placement Shares and declares that the Company is not required to provide to the Subscriber a prospectus or other disclosure document for the Issue of the Placement Shares because the Subscriber comes within one of the stated exceptions in section 708(8) of the Corporations Act.
Af Completion, the Company must.
- (i) issue and allot the Piacement Shores to the Subscriber free of Encumbrances:
- register the Subscriber as the holder of the Placement Shares in (II) its register of members immediately upon the issue of the

Piacement Shares and issue a holding statement for the Placement Shares to the Subscriber:

take all steps regulied under its Constitution and the (ili) Corporations Act to constitute and evidence the Subscriber as the holder of the Placement Shares;
opply to ASX for official guotation of the Placement Shares and $\left(\sqrt{2}\right)$ give to ASX an Appendix 3B In relation to the Placement Shares; and
If it has not already done so, lodge a cleansing notice in accordance with section 708A(5)(e) of the Corporations Act in respect of the Placement Shares, or if this is unavailable or Ineffective, lodge the Prospectus at ASIC and do all things which are necessary or desirable to ensure that each Placement Share Issued to the Subscriber is freely tradeable without restriction from the date of Issue, including doing oil such things necessary to sofisfy section 708A(11) of the Corporations Act

Completion of Part Placement Shares 6.3

$\mathsf{W}$

In the event the Subscriber notifies the Company of a Part Placement Walver in accordance with clause3.6 of this Agreement.

the Partles must complete the subscription for the Part Placement Shares (a) within 5 Business Days of written notice of the Part Placement Walver. on the same terms as set out in clause 6.2 with such adjustments as are necessary: and
completion of the subscription for the remaining 59,730,000 Placement $(b)$ shares will occur on the terms as set out in clause 6.2 but with such adjustments as are necessary to reflect that fewer Placement Shares are being, issued on the Completion Date.

Completion for the Convertible Note $6.4$

On or before the Completion Date: $\circ$
the Subscriber must pay the Convertible Note Subscription Ō Amount in cleared funds to the Company into the nominated account of the Company, as directed by the Company not less than 2 Business Days before the Completion Date: and
the Company must provide the Subscriber with on original duly (II) executed copy of the Charge.
On the Completion Date, the Subscriber must subscribe for, and the $(D)$ Company must issue, the Convertible Note to the Subscriber on the ferms set out in this Agreement, Including delivering a Note Certificate evidencing the Subscriber's title to the Convertible Note.

50508931

Completion to be simultaneous 6.6

Completion for the Placement Shares and the Convertible Note must occur simultaneously (except completion of any Part Placement Shares, if any, issued in accordance with clause 6.3).

CONVERTIBLE NOTE 7.

Face Value $7,1$

The Convertible Note shall have an Initial Face Value equal to the Convertible Note Subscription Amount.

Maturity Date $7.2$

The Convertible Note will have a Maturity Date being the date that is 2 years from the Completion Date.

Convertible Note secured $7.3$

The Conventible Note will be secured by the Charge. $\langle$ a
The Charge will be drafted by the solicitors for the Subscriber and will be (b) on standard commercial terms acceptable to the Subscriber, Including that during the Term without the prior written consent of the Subscribers
no new security, other than the Charge, may be granted over $\omega$ the Company's assets;
no assets of the Company may be sold; (II)
no changes to the direction of the Company's business (dii) direction may be effected; and
no change of control of the Company may be effected. (W)

Acknowledgment of indebtedness $7.4$

The Company acknowledges that during the Term, it will be indebted to the Subscriber to the extent of the Monies Payable.

Note is unlisted 7.5

The Company does not intend to list the Convertible Note for quotation on ASX and it is not obliged to do so.

Vollng ilghts 7.6

The Convertible Note shall not provide for any voting rights at Shareholder meetings of the Company.

Transfer $7.7$

The Subscriber shall be beimifted to transfer or assign all or any part of the Convertible Note on the condition that the Subscriber procures that the assignee of the Convertible Note agrees to be bound by the terms and conditions of this Agreement and signs a deed of covenant in favour of the Company.

695989.1

INTEREST A.

Interest rate $8.1$

During the Term, the Convertible Note shall bear interest at the rate of 5% per annum on the Face Value.

Calculation of Interest $8.2$

During the Term, subject to clouses 8.3 and 8.4, Interest on the $\overline{(\mathsf{q})}$ Convertible Note will be calculated daily and will be payable quarterly In arrears on each of 31 March, 30 June, 30 September and 31 December of each year (Interest Payment Date).
If the Interest Payment Date is not a Business Doy, then the interest will $\infty$ be payable on the next succeeding Business Day.

Capifalisation of Interest 8.3

The Company may, at its election (notified in writing to the Subscriber of least 5 Business Days prior to the relevant Interest Payment Date) and subject to the Corporations Act, elect to copitalise interest payable to the Subscriber for the current Quarter. The Face Value is increased by the amount of any Interest capitalised.

$8.4$ Poyment of Interest

The Company must pay the Subscriber Interest on the Convertible Note in the following monner.

unless copitalised in accordance with clause 8.3, and subject to the (a) remainder of this clause 8.4, quarterly in arrears on each interest Poyment Date:
if the Face Value is repaid in full on the Maturity Date, then the accrued (රා) but unpaid and uncapitalised interest, if any, on the Convertible Note must be paid in cleared funds to the Subscriber on the Maturity Date as part of the Monies Payable in accordance with clause 9.1:
If the Eace Value is repaid in full prior to the Maturity Date In $\left( c\right)$ accordance with clause 9.4, then the acciued but unbaid and uncapitalised interest. If any, on the Convertible Note must be paid in cleared funds to the Subscriber on the date of the repayment as part of the Monies Pavable in accordance with clause 9.4;
if all or part of the Convenible Note is converted into Shores in (b) accordance with clause 10, then, subject to the Corporations Act and the ASX Listing Rules, the accrued but unpaid and uncopitalised 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.

$\overline{9}$ REPAYMENT

Payment of Monies Payable $9:1$

The Company must pay the Monies Payable in cleared funds to the subscriber on the Maturity Date unless the Convertible Note has been fully converted prior to the Maturlity Date.

Satisfaction of Company's obligations $9.2$

The payment by the Company to the Subscriber under clause 9.1 satisfies the Company's obilgation to the Subscriber in respect of the Monies Payable.

Notice of non-conversion 9.3

The Subscriber must notify the Company at least 60 days prior to the Maturity Date If the Subscriber is not intending to fully convert the Face Value on the Moturity Date

Early Repayment $9.4$

With the prior written consent of the Subscriber, the Company may repay all or part of the Monies Payable pilor to the Maturity Date.

CONVERSION OF CONVERTIBLE NOTE пñ.

Conversion 10.1

The Subscriber may convert all or part of the Face Value of the $\langle a \rangle$ Convenible Note Into Shares at the Conversion Price at any time up to and including the Maturity Date by delivering to the Company a duly completed and executed Conversion Notice and the Note Certificate, or such other evidence of fitte as to ownership of the Convertible Note as is acceptable to the Directors.

Any fraction of a Share will be rounded up to the nearest whole $\circ$ number.
Conversion Notice can be withdrawn 10.2

A Conversion Notice once issued can be withdrawn, in whole or part, by the Subscriber of any time prior to the Allotment Date.

Salisfaction of Company's obligations 10.3

The conversion of all or part of the Face Value of Convertible Note into Shares in accordance with clause 10.1 satisfies the Company's obligation to the Subscriber in respect of that part of the Face Value converted.

ALLOTMENT AND ISSUE OF SHARES 11.

$11.1$ Allofment and Issue

On the Allotment Date the Company must allot and Issue Shares to the Subscriber (or its nominee) in accordance with a Conversion Notice and the ASX Usting Rules and ASX Settlement Operating Rules free of Encumbrances.

595989...

Holding statement and new Note Certificate $11.2$

The Company must forward free of charge to the Subscriber:

within 3 Business Days of the Allolment Date, a certificate or holding $(a)$ statement for the Shares allatted and issued on conversion of part or all of the Face Value of the Convertible Note; and
within 10 Business Doys of the Allotment Date, a new Note Certificate in $\ddot{\text{c}}$ respect of any part of the Face Value of the Convertible Note that has not been converted in accordance with clause 10 or repaid in accordance with clause 9.4.
Quotation and ranking of Shares upon conversion 11.3
The Company must take all steps permitted by law and necessary or $\omega$ desirable to ensure the Shares Issued on a conversion of all or part of the Face Value of the Converticle Note are granted quotation by ASX on and from the Allotment Date and are freely fradeable.
The Shares issued on a conversion of all or part of the Face Value of the $(b)$ Convertible Note will rank equally with the other issued Shares of the Company from the date of issue.

REPLACEMENT OF NOTE CERTIFICATES 12.

Worn or defaced Note Certificate $12.1$

If any Note Certificate becomes wom out or defaced then upon its production to the Company It may cancel the same and issue a new Note Certificate In lieu thereof.

Lost or destroyed Note Certificate $12.2$

If the Note Certificate Is lost or destroyed then upon providing proof to the reasonable solisfaction of the Company and upon such indemnity and/or advertisement (if any) as the Company may require being given or published, a new Note Certificate in lieu thereof shall be given to the Subscriber. The cost of any advertisement and indemnity must be paid by the Subscriber.

Cancellation of Note Certificate $12.3$

Any Note Certificate that is returned to the Company in connection with the conversion or transfer of the Note must be cancelled by the Company.

REORGANISATION OF CAPITAL AND PARTICIPATING RIGHTS 13.

In the event of a reconstruction of the capital of the Company during $\omega$ the Term (including by way of consolidation, subdivision, reduction, return, scheme of arrangement or otherwise):
the number of Shares to be issued upon conversion of all or part $\ddot{\text{o}}$ of the Convertible Note: and
the applicable Conversion Price, (II)

595909_

$\left( \text{c} \right)$

(d)

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 compilance with the ASX Listing Rules. In all other respects the terms of the Convertible Note will remain unchanged.

In the event of any distribution (dividend or return of capital) made by $\omega$ the Company during the term of the Convertible Note, the Conversion Price is to be adjusted down by the amount distributed.

Subject to the Company complying with the Corporations Act and the ASX Listing Rules, if at any lime-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 porticipants are to be determined for the offer.
Subject to the Company complying with the Compactions Act and the ASX Listing Rules, if at any fime during the Term Shareholders are entitled to receive shares, securities or other assets with respect to, or in exchange for, their shores (a Corporate Event), the Company must moke depropriate provision to ensure that the Subscriber will have the dight 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 Conventible Note Immediately before the record date for Shares for the Corporate Event.

SHARE PURCHASE PLAN AND SPP PLACEMENT SHARES ٦4.

The Parties agree that, subject to the issue of the Convertible Note and (g) the Placement Shares, the Compony will conduct a share purchase plan (SPP) in accordance with the Corporations Act and the ASX Usting Rules, providing Shareholders with the opportunity to subscribe for new Shares in the Company of an Issue orice of \$0.025 per share, subject to a moximum overall cap of 100,000,000 Shares being issued.
To the extent that any shares offered under the SPP are not subscribed $(D)$ for by Shareholders by the closing date of the SPP (SPP Shortfall):
the Subscriber may, by written notice to the Company, require $\omega$ the Company to Issue the Subscriber with up to that number of Shares, at an Issue price of \$0.025 per Share, equal to the number of Shares compilsing the SPP Sherifall; and
dD where the Subscriber so elects, the Company must, subject to compliance with the Corporations Act and the ASX Listing Rules, Issue, and the Subscriber must subscribe for, those Shares within 5 Business Days of the completion of the SPP.
On completion of the SPP, the Subscriber may, by written notice to the $\left( c\right)$ Company, require the Company to Issue the Subscriber with that

595989-

าค

number of Shares, at an Issue pilce of \$0.025 per Share, which results in the Subscriber having a shareholding in the Company of 30.00% of the total exponded shares on issue. Where the Subscriber so elects, the Company must, subject to the Corporations Act and the ASX Listing Rules, Issue, and the Subscriber must subscribe for, those shares within 6 Business Days of the completion of the SPP.

(d)

Any Shares issued to the Subscriber under the clauses 14(b) or 14(c) are the SPP Placement Shares. The Company must:

allet and issue any SPP Placement Shares to the Subscriber (or its ØŚ. nominee) in accordance with the ASX Usting Rules and ASX Settlement Operating Rules free of Encumbrances;
ensure that any SPP Placement Shares rank equally with the ĞIÝ other issued Shares of the Company from the date of issue; and
take all steps permitted by law and necessary or desirable to AID ensure any SPP Placement Shares are granted quotation by ASX and are freely tradeable from the date of Issue.

UNDERTAKINGS BY THE COMPANY Ī5.

From the Execution Date until the end of the Term, the Company must, except as envisaged by this Agreement or with the prior approval of the Subscriber.

(securities) (not issue or agree to Issue any Shares, aptions or other $(a)$ 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:
(new contracts) not enter into, or agree to enter into, any contracts. $(b)$ arrangements or engagements except in the ordinary and proper course of its ordinary business;
(ligalilities) not incur any single ligality, or total ligalities within one month. $\left($ c $\right)$ In excess of \$100,000 except in the ordinary and proper course of its ardinary business.
(consultation) consult and seek the approval of the Subscriber prior to $(d)$ 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.
(Tenements) subject to the Company obtaining sufficient funding for $(e)$ such purpose before Completion, maintain any tenement that it holds in good standing and free from new Encumbrances;
(Protection of Assets) subject to the Company obtaining sufficient $_{\rm (f)}$ 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

595969

practice and standards of maintenance, and maintain appropriate Insurance in relation to its assets:

(material contracts) subject to the Company obtaining sufficient $\left( q\right)$ funding before Completion where such funding is necessary to enable It to comply with this sub-clouse, comply with all provisions of all material contracts:
(notification) send to the Subscriber copies of all annual reports. $(h)$ accounts and other information which would normally be sent to Shareholders:
(employees) not hire or terminate the employment of any employee $\theta$ (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.
(ordinary course) subject to the Company obtaining sufficient funding $\langle$ before Completion where such funding is necessary to enable if 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;
(dividends) not announce, declare or pay any dividend or other OO. disfribution:
(reconstruction) not buy back its own shores, reduce its shore capital, ∙Ō return copital 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.
(Constitution & Change of Name) not alter the provisions of its (m) Constitution or change the Company's name;
(mergers and acquisitions) not enter into, or agree to enter into, any $(n)$ 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;
(financing) not incur any new material financial indebtedness or amena $\circ$ In any material respect any arrangement with its financiers;
(litigation) not commence or settle any litigation (including arbitration); $\overline{c}$ and
(exploration) not to conduct or cause to be conducted any exploration $\overline{q}$ 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.

575789.1

EVENTS OF DEFAULT 16.

Events of Default $16.1$

Each of the following is an Event of Default:

(winding up); an application or order is made for the winding up of the (၀) Company or for the appointment of a liquidator or the Company passes a resolution for its winding up;
(receiver): a receiver, controller (within the meaning of section 9 of the $\overline{(\mathbf{b})}$ Corporations Act) or analogous person is appointed to, or the holder of an Encumbrance takes possession of all, or any part of the assets of the Company:
(Insolvency); the Company; $\ddot{\text{c}}$
suspends payment generally; $\bf{0}$
becomes an externally-administered body corporate within the (ii) meaning of the Corporations Act;
bécomes subject to administration under Part 5.3A of Chapter 5 $Q$ $D$ of the Corporations Act, or steps are taken which could reasonably be expected to result in the Company becoming so subject, or
is or states that If is, or is deemed by applicable law to be, 0V) unable to pay its debts as and when they fall due:
(atgiutory demand): a statutory demand is served on the Company (d) under section 459E of the Corporations Act or pursuant to section 459F of the Corporations Act the Company is taken to have falled to comply with that statutory demand:
(compromise or arrangement): other than with the written consent of $(e)$ the Subscriber, such consent not to be unreasonably withheld or delayed, the Company takes any step for the purpose of entering into a compromise or arrangement with any of its members or creditors except for the purpose of a reconstruction, amalgamation, merger or consolidation on terms approved by the Subscriber;
(Encumbrance): any Encumbrance over the Company or its assets or Ö undertakings becomes enforceable, other than the fixed and flaating charge held by Watpac which is currently enforceable;
(non-payment); the Company falls to pay within 3 Business Days of its $\langle$ g due date any amount payable under any of the Transaction Documents;
(suspension from trading): the Company's Shares are suspended from $(n)$ trading on the ASX for more than 15 consecutive days (other than voluntary suspensions with the prior written consent of the Subscriber); or
(amendment to Constitution): a change to the Constitution of the (I) Company without the pilor witten consent of the Subscriber.

095999_1

Ö)	(disposal of assets): the Company sells, assigns transfers or otherwise disposes of all or substantially all of its assets.
(k)	(misrepresentation): any undertaking, representation, warranty or statement made or repeated in or in connection with the Transaction Documents is breached, not complied with, untrue or misleading (whether by omission or otherwise) when so made or repeated or bécomes untrue or misleading (or, in the case of financial forecasts, untair of unreasonable) in any material aspects:
$\overline{0}$	(change in ewnership), there is a change in control of the Campany (other than as a result of the Transactions);
(m)	(material breach); the Company is in breach of a material ferm of this Agreement,
(ኪ)	(failure to comply with waiver). If any Event of Default (or occurrence which would otherwise have been or become on Event of Default) is

conditionally walved by the subscriber and the Company does not comply with those conditions or those conditions are not fulfilled (whether by the Company or any other person) or are or become Incopoble of fulfilment;
(investigations): a person is appointed under any legislation to $\langle 0 \rangle$ Investigate or manage any part of the affairs of the Company or any clirector or officer of the Company is or are subject to investigation of a material nature by any regulator or law enforcement agency, and
(provisions void); all or any material provision of any of the Transaction $\omega$ Documents:
does not have effect or ceases to have effect in accordance W) with its terms;
is or becomes void, voidable, illegal, invalid or unenforceable $(i)$ other than by reason of equitable principles or laws affecting creditors' rights generally; or
is claimed by the Company or any other person to be any of GiD the matters referred to in paragraphs (I) or (II) or the Company or any other person commences any court proceedings to establish any of the matters referred to in paragraphs (i) or (ii) to be the case.

Subscriber's powers on default 16.2

If an Event of Default occurs that is not capable of remedy or, if capable of being remedled, is not remedled to the satisfaction of the Subscriber within 5 Business Days of the Subscriber notifying the Company of the Event of Default and requiring rectification, the Subscriber may then or at any time subsequently by notice to the Company.

terminate this Agreement by written notice to the Compony: and $\omega$
declare all money owing under any of the Transaction Documents, $(b)$ Including the Monies Payable, to be immediately due and payable.

595989 I

and the Company must immediately pay that money dincluding accrued interest and fees) to the Subscriber.

Duty to notify of Event of Default 16.3

The Company must notify the Subscriber as soon as possible if the Company becomes aware of the accurrence of an Event of Default.

REPRESENTATIONS AND WARRANTIES $\overline{17}$ .

Mutual Representations and Warranties $17.1$

Each Party warrants and represents to the other Party on the Execution Date and an each day between the Execution Date and the Completion Date (including immediately prior to Completion) that:

(Authority): it has full power and authority to enter into this Agreement $\omega$ and, subject to satisfaction or waiver of the Conditions, to perform its obligations under it:
(Corporate authorisations): if has faken all necessary action to authorise $(b)$ the execution, delivery and performance by it of this Agreement in accordance with its terms:
(Binding Terms) this Agreement constitutes its legal, valid and binding (c) obligations and is enforceable in accordance with its terms, and
(Transactions permitted): the execution, delivery and, subject to $(d)$ sofistaction of waiver of the Conditions, performance by it of this Agreement does not and will not violate any low, regulation, quithorisation, ruling, consent, judgment, arder or decree of a governmental agency, its Constitution or other constituent documents. or an Encumbrance or document which is binding on it or on its assets.

Company Representations and Warrantles $17.2$

Subject to the limitations in clause 17.4, the Company makes the representations and warrantles in Annexure 6 of this Agreement on the Execution Date, on every day between the Execution Date and the Completion Date (including immediately prior to Completion), and immediately prior to the issue of any Shares provided for in this Agreement.

Indemnity by Company 17.3

Subject to the limitations in clause 17.4, the Company shall indemnify the Subscriber against all damages, losses, liabilities and expenses incurred by the Subscriber as a natural consequence of any matter or thing being found to be In breach of the representations and warranties given by the Company in clause. 17.1 and 17.2, and/or any undertaking or term in this Agreement, without prejudice to the rights of the Subscriber to seek any equitable relief.

Qualifications to Company Representations and Warrantles $17.4$

The Company will not be liable to the Subscriber for any claim for (O) breach of the representations and warranties given by the Company in clauses 17.1 and 17.2 (Company Warrantles) to the extent that the facts. matters or circumstances causing such claim have been specifically. accurately, failty and fully disclosed by ar on behalf of the Company to the Subscriber during the course of its due diligence and in discussions with the Company between 31 May 2011 and the Execution Date.

Clause 17.4(a) does not apply to the extent that there has been fraud. $(b)$ dishonesty or wilful concealment on the part of the Company or its officers, agents or advisers.

Subject to clause 17.4(a), none of the Company Warranties or claims $\left( c\right)$ under any indemnity given in favour of the Subscriber under this Agreement will be in any way qualified or affected by reason of any investigation or inquiry made or to be made by or on behalf of the Subsciber.

Where any Company Warranty Is aualitied by the expression *so fair as $(d)$ the Company is aware" or "to the best of the Company's knowledge, Information and belief" or any similar expression, the Company will be deemed to know or be aware of a particular fact, matter or circumstance if a director or officer of the Company:

la gware of that fact, matter or circumstance on the date the $\omega$ Company Warranty is given; or

would reasonably be expected to be aware of that fact, (ii) matter or circumstance if, on the date the Company Warranty is given. they had mode reasonable enquiries as to the accuracy of the Company Warranty.

Warrantles separate $17.5$

Each of the warrantles contained in this clause 17 and Annexure 5 are separate and independent.

$\overline{18}$ . USE OF PROCEEDS

The Company must use the Placement Subscription Amount, any monies from the Issue of any Part Placement Shares, any SPP Placement Shares and the Convertible Note Subscription Amount received under this Agreement to firstly repoy or discharge all its external debt obligations (except those under the Convertible Note), with priority given to payment of the debt owed to Watpac (on the basis referred to in clause 19), with any remainder used for working capital purposes or such ather purpose as consented to by the Subscriber.

19. WATPAC DEBT

595689_1

The Company must seek to negotiate the moximum discount possible to (a) cash settle any debts it owes to Watpac In full. The Company must obtain the prior written consent of the Subscriber before entering into any agreement with Watpac in relation to these debts, and must permit the Subscriber to participate in any negotiations in relation thereto.

The Company shall comply fully with all terms in the agreement if has or (Q) will enter into with Watpac in relation to these debts, and shall provide the Subscriber with valid proof of its compliance if the Subscribers so demands in writing.

-24

BOARD REPRESENTATION 20.

Appointment of Nominee Director 20.1

Following completion of the Placement, the Subscriber is entitled to appoint two Directors to the board of the Company.

Further Board representation 20.2

Upon conversion of all or part of the Convertible Note Into Shares, the Subserloer's board representation in the Company shall be increased commensurate with its shareholding in the Company, and the Subscriber shall accordingly be entitled to appoint majority of the directors to the boord of the Company upon full conversion of the Convertible Note into Shares, in addition to the Director appointed under Clause 20.1

Company to use best endeavours 20.3

The Company must use its best endeavours to procure the appointment of the Nominee Director.

COVENANT OF SUBSCRIBER $\overline{21}$

The Subscriber covenants that, in respect of all offers of Shares and the Convertible Note made under this Agreement, it falls within one or more of the categories specified in Section 708(8) of the Corporations Act.

PUBLIC ANNOUNCEMENTS $22^{\circ}$

No public announcement in connection with this Agreement and the Transactions may be made by any Party without prior consultation with the other Party to the extent reasonably practicable having regard to the requirements of disclosure under applicable stock exchange rules.

NOTICES 23.

Requirements for Nollce $23.1$

Each notice authorised or regulred to be given to a Party shall be in writing and may be delivered personally or sent by properly addressed and prepaid mail or facsimile in each case addressed to the Party at its address set out in clause 23.2, or as the case may be to such other address as It may from time to time nofity to the other Party pursuant to clause 23.3.

Address of Partles 23.2

The Initial address of the Parties shall be as follows:

In the case of the Subscriber:

Room 2201-2202A, 22/F. Falrmont House 8 Cotton Tree Drive Central, Hong Kong.

Facsimile: Attention: INT + (852) 2880-5573 Edward Tai

595902.1

In the case of the Company:

Suite 34, 25 Walters Drive OSBORNE PARK WA 6017

Facsimile:	$(NI + (6))$ 8 9244 1600
Attention:	Company Secretary

Change of Address 23.3

Each Party may from time to time change its address by giving notice pursuant to clause 23.1 to the other Party.

Receipt of Notice 23.4

Any notice given pursuant to clause 23.1 will be conclusively deemed to have been received:

In the case of personal delivery, on the actual day of delivery if $(a)$ delivered prior to 5 pm (Perin time) on a Business Day or on the next following Business Day If delivered after 5 pm (Perth time) on a Business Day or on other than a Business Day:
If sent by mail, on the second clear Business Day after the day of $\omega$ postling; or
if sent by facsimile, on the day the facsimile was sent by clear $\mathbf{c})$ transmission.

COSTS $24.$

$24.1$ Stamp Duly

All duty assessed on or in respect of this Agreement shall be paid by the Subscriber.

$-24.2$ Costs

Subject to clause 5.3, each Party shall bear their own costs of and incidental to the preparation, negotiation and execution of this Agreement, except as otherwise provided in this Agreement.

25. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the law from time to time in the State of Western Australia and the Parties agree to submit to the non-exclusive jurisdiction of the courts of Western Australia and the courts which hear appeals therefrom.

26. MISCELLANEOUS

$26.1$ Severance

If any provision of this Agreement is invalid and not enforceable in accordance with its terms, all other provisions which are self-sustaining and capable of

505757.1

seperate enforcement without regard to the invalid provision, shall be and continue to be valid and forceful in accordance with their terms.

Entire Agreement $26.2$

This Agreement shall constitute the sole understanding of the Parties with respect to the subject matter and replaces all other agreements, statements and representations with respect thereto.

26.3 Counterparts

This Agreement may be executed in ony number of counterparts (including by way of facsimile) each of which shall be deemed for all purposes to be an original and all such counterparts taken together shall be deemed to constitute one and the same instrument.

26.4 Time

Time shall be of the essence in this Agreement in all respects.

EXECUTED by the Parties as an agreement.

EXECUTED BY
AT MINERALS LIMITED
ACN 100 727 491
In occordence with the Corporations Act:

ವರ Ъ أستعد Director

Director/Secretary

EXECUTED BY
STONE RESOURCES LIMITED
In accordance with its constituent
documents and place of Incorporation:

Director

in in 1993
Contractor

Director/Secretory

Steinpreis Paganin

No. 0366 P. 38

$12/08$ 2011 18:33 FAX

Ø001

EXECUTED by the Parties as an agreement.

EXECUTED BY $\lambda$ A1 MINERALS LIMITED $\lambda$ ACN 100 727 491 J. In accordance with the Corporations Act: $\lambda$

Director

$\ddot{\phantom{a}}$

Director/Secretary

EXECUTED BY $\lambda$ STONE RESOURCES LIMITED $\lambda$ In accordance with its constituent $\lambda$ cocuments that place of inexporation: $\lambda$

Director

Director/Secretary

$696969,$

Steinpreis Paganin

No. 0366 P. 39

12/08 2011 16:34 FAX

Ø001

EXECUTED by the Parties as an agreement.

EXECUTED BY
AT MINERALS LIMITED
ACN 100 727 491
in accordance with the Corporations Act:

Director

Director/Secretary

EXECUTED BY STONE RESOURCES LIMITED In accordance with its constituent documents and place of incorporation:

$\lambda$

$\mathbf{\hat{y}}$

$\lambda$

Director

Director/Secretory

ANNEXURE 1 - CONVERTIBLE NOTE APPLICATION FORM

(Insert Subscriber)

Convertible Note.

APPLICATION FORM

TO:

The Directors A1 Minerals Umitéd (ACN 100 727 491) (Company)

I/we .................................... . . . . . . . . . . . . . . . . . . . $0₁$ , $0₂$ , $0₃$ , $0₄$ , $0₅$ , $0₆$ , $0₇$ , $0₈$ , $0₉$ , $0₁$ , $0₁$ , $0₁$ , $0₁$ , $0₁$ , $0₁$ , $0₂$ , $0₃$ , $0₁$ , $0$

aa ja diisiisii in mittisele min saan aan meessa meessa maraa meeriya waa dheer

(the Subscriber) hereby apply for the Convertible Note to be allotted and issued by the Company.

The Subscriper covenants in favour of the Company that if will be bound by the Constitution of the Company and the terms and conditions of the Convertible Note as provided for under the Subsciiption Agreement entered into between the Subscriber and the Company on(*) 2011.

DATED:

EXECUTED BY (insert Subscriber) In accordance with its constituent documents and place of incorporation.

Director

Director/Secretary

15050891

ANNEXURE 2 - FORM OF CONVERSION NOTICE

(insert Subscriber)

Convertible Note

CONVERSION NOTICE

TO.

The Directors AT Minerals Limited (ACN 100/727-491) (Company)

ការប្រាក់ទេអាចការការការការចាប់ការណ៍អាចប្រាក់អាចរបស់ការអាចថា អាចប្រាក់អាចប្រាក់ប្រាក់អាចប្រាក់អាចប្រាក់អាចប្រា I/we .........

$\mathsf{of}$ (diministrational community) operator and the distribution of distribution of the community of the community of

being registered as the holder of the Convertible Note hereby give notice that I/we wish to convert \$(*) of the Face Value(and applicable accrued Interest) of the Convertible Note in accordance with the terms of its issue.

I/we agree to accept the Shares to be issued on conversion of the Conventible Note (or part thereon subject to the terms of the Constitution of the Company.

Attached is the Note Centricate representing the Convertible Note.

I/we request that the Company. If required by, and in accordance with, clause 11.2(b) of the Subscription Agreement dated (*) (Agreement), Issue to me/us and in my/our name a new Note Certificate in respect of ony part of the Convertible Note remaining unconverted and not repaid in accordance with clause 9.4.

Terms used in this notice have the same meanings as in the Agreement and executed between the Company and the Subscriber.

DATED:

EXECUTED BY (Insert Subscriber) in accordance with its constituent documents and place of incorporation:

Director

595989_1

Director/Secretory

ANNEXURE 3 - NOTE CERTIFICATE

Certificate Number: (*)

(insert Subscriber)(Company)

Convertible Note

CONVERTIBLE NOTE CERTIFICATE

Head Office/Note Registry: (*)

THIS IS TO CERTIFY that (insert) (subscriber) is the registered holder of the Convertible Note specified in the Schedule below which was Issued on (Insert Allotment Date).

The Convertible Note confers on the Subscriber the rights, power and privileges and shall be subject to the terms and conditions as set out in the document titled subscription Agreement doted (insert) and executed between the Company and the Subscriber (Agreement). By its subscription for or purchase of a Convertible Note, the registered holder is taken to have agreed to be bound by the Agreement.

Terms used in this Note Certificate have the same meanings as in the Agreement and executed between the Company and the Subscriber.

Convertible Note Outstanding: 3C) Subscription Amount

Repayment Date:

the later of:

date of the date 24 months from the $\omega$ Completion Date: and
$(b)$ any other date agreed between the Company and the Subscriber.

DATED.

EXECUTED BY AT MINERALS LIMITED ACN 100 727 491 In accordance with the Corporations Act:

Director

Director/Secretary

505089_1

EXECUTED BY
(Insert Subscriber)
In accordance with Its constituent
documents and place of Incorporation:

Director

Director/Secretary

ะคลิสต 1

) Č $\overline{\mathbf{a}}$

$32$

ANNEXURE 4- PLACEMENT SHARES APPLICATION FORM

APPLICATION FORM

A1 MINERALS LIMITED ACN 100 727 491 (Company)

finsert) (Subscriber) hereby applies to the Company for the Placement Shares.

The Subscriber will transfer to the Company by means of electronic funds transfer an amount of \$(*) to the account nominated by the Company.

Details of the Subscriber.

Name:(Insert)

Address:

Contact Person: The Company Secretary

$\left( \cdot \right)$

Contact Number: $INT + (2)$

By signing and lodging this Application Form with the Company, the Subscriber:

declares that the agreements, statements, declarations and acknowledgments $\mathbf{I}$ contained in the following paragraph are given for the benefit of the Company:
declares that all details and statements made by the Subscriber in this 2. Application Form are complete and accurate,
agrees to be bound by the Constitution of the Company; 3.
represents, warrants and undertakes to the Company that the Subscriber has full 4. right and authority to sign and lodge this Application Form, to subscribe for the Placement Shares and to perform the other obligations set out in this Application Form, and has taken all action and obtained all regulatory and other consents, approvals and authorisations necessary in that respect:
acknowledges that the Subscriber has made its own engulaes concerning the 5. Company and its business and affairs and that the Company makes no representation or warrantles to the Subscriber other than set out in the Subscription Agreement dated the same date as this Application Form:
requests the Company to upon its receipt of this Application Form signed by the $6.$ Subscriber, issue the Placement Shares to the Subscriber.
$7.$ declares that the Company is not required to provide to the Subscriber a prospectus or other disclosure document for the issue of the Placement Shares because the Subscriber comes within one of the stated exceptions in section 708 of the Corporations Act 2001;
acknowledges that this Application form is irrevocable; and 8.

595787_1

5959921

deknowledges that returning this Application Form will constitute the Subscriber's offer to subscribe for Placement Shares and that no hotice of acceptance of this Application form will be provided.

NOTE: Return of the Application Form with your payment of the application monies will
constitute your offer to subscribe for the Placement Shares. This Application Form is for the Subscriber and must not be passed onto any person without written permission from the Company.

ANNEXURE 5 - COMPANY REPRESENTATIONS AND WARRANTIES

(Solvent): Subject to completion of the Placement and Convertible Note, the ĭ. Company is solvent and can meet its debts as and when they fall due and no get or omission has occurred which may result in an event of insolvency occurring in relation to the Company.
(Continuous disclosure): The Company has complied with ASX Usting Rule 3.1 in 2. the past 12 months.
(Full disclosure). To the best of the Company's knowledge, having made 3. reasonable enquiries, it has disclosed to the Subscriber all information which is reasonably expected to be material to an investor in Shares in the Company and that all information disclosed is accurate, camplete and not misleading.

(Title to Shares). On Issue of any Shares under Transactions envisaged by this 4. Agreement, the subscriber will acquire good and marketable title to the Shares. which will be free from Encumbrances and rank equally with all Shares then on issue.

(No right to subscribe). No person has any right or option to subscribe for ar 5. otherwise to acquire any further shares in the Company.
(No options): There are no outstanding options, contracts, calls, first refusals, ó. commitments, rights or demonds of any kind relating to the Issued or unissued capital of the Compony.
(No other allotments): The Company is not under any obligation to allot any $\tilde{Z}$ shares to any person or persons, or otherwise to alter the structure of any part of its unissued share capital, and the Company is not under any obligation to give any option over any part of their respective unissued shares copital nor has the Company offered to do any of the matters stated in this sub-paragraph:
(No liligation): the Company and the directors of the Company are not involved 8. in any material litigation, arbitration or administrative proceeding relating to ciaims or amounts relating to the Company nor is any such litigation, arbitration or administrative proceeding pending or threatened.
(Investigations): The Company and its directors are not the subject of any 9. material investigation by any regulatory body of any country nor is any such investigation pending or threatened.
(tax investigations): The Company and its directors are not the subject of any 10. material investigation or audit by the tax office of any country or state nor is any such investigation or audit pending or threatened.
(Compliance with laws): The Company and its directors are not in material 11. breach of any provision of any relevant laws (including the ASX Usting Rules).
(Subsidiaries): The Company does not have any subsidiaries other than Desert $12.$ Exploration Pty Ltd and Desertex Resources Ltd.
(Contracts): Every material contract, instrument or other commitment to which $13.$ the Company is a party is valid and binding according to its terms and no party to any such commitment or contract is in material detault under the terms of 35.

505980_1

that commitment or contract other than the Company may be in arrears of poyments of the contracted price,

(Llabilities); Other than as have arisen in the ordinary course of ordinary business, $14.$ the Company does not have any liabilities other than as set out in the accounts disclosed in Annexure 6 (Last Accounts).
(Accounts): The Last Accounts: 15.
disclose a true and tair view of the state of the offairs. financial position o) and assets and liabilities of the Company as at the balance date disclosed In the Last Accounts (Balance Date);
includes all such reserves and provisions for tax as are adequate to cover b) all tax llobilities (whether or not assessed and whether actual, contingent, deferred or otherwise) of the Company up to the Balance Date:
contain adequate provisions in respect of all other liabilities (whether C) actual, contingent, deferred or otherwise) of the Company as at the Bolance Date and proper disclosure (in note form) of any contingent or other liabilities not included or provided therein; and
were prepared. d)
- In accordance with the relevant accounting standards prescribed by t. the jurisdiction(s) in which it operates and applied on a consistent basis and without making any revaluation of assets, and
- in the manner described in the notes to them. $\mathbf{J}$
(Records properly kept): All books of accounts and other records of any kind of 16. the Company.
have been fully, properly and accurately kept on a consistent basis and O) completed in accordance with proper business and accounting practices and all applicable statutes;
have not had any material records or information removed from them. b)
do not contain or reflect any material inaccuracles or discreponcies; o).
give and reflect a true and fair view of the trading transactions, or the d). financial and contractual position of the Company and of its assets and liabilities, and
$\Theta$ are in the possession of the Company.
(Assets Owned by the Company): Except where the facts, matters or 17. circumstances have been specifically, accurately, failty and fully disclosed by or on behalf of the Company to the Subscriber during the course of its due diligence prior to Execution Date, all the fixed diset, current assets and other assets and property owned by the Company are:
legally and beneficially owned by the Company free of encumbrances αŒ cand, in particular, no such assets are the subject of any hire purchase. agreement or credit purchase agreement or any agreement for payment of deferred terms); and

695989 1

not used by any person, other than the Company. b)

(Tenement Title). The Company or its wholly owned subsidiaries are the sole legal 18. and beneficial owners of the Tenements.
(Tenement Encumbrances): The Tenements are, or will at Completion, be free of TQ. all Encumbrances, and the Company is not a party to any agreement to grant any Encumbrance over the Tenements.
(Tenement Standing). Other than where they are applications, or to the extent 20. reasonably and folily apparent from publicly available searches of the tenement realster maintained by the Department of Mines and Petroleum (DMP), the Tenements are valid, subsisting and of good standing and not liable to cancellation or forfelture for any reasons and have been maintained and renewed in accordance with the requirements of the Mining Act 1978 (WA) (Mining Act) and all relevant legislation and the terms and conditions of the Tenements have been complied with in all material respects.
(Tenement Third Party Agreements) To the Best of the Company's knowledge, $21.$ hoving completed reasonable enquiries, there are no agreements or dealings in respect of the Tenements.
(Compensation) To the best of the Company's knowledge, having completed 22 reasonable enquiries, there is not in existence any current compensation agreement with the owner or occupier of any land which is subject to the Tenements nor any royalty arrangement of whatever noture in respect of the Tenements:
(Tenement Compliance). To the best of the Company's knowledge, hoving 23. completed reasonable enquires, the activities and operations that have been carried out on the Tenements have been in compliance in all material respects. with all applicable laws and directives of Government Agencies and the Company has not received notice of non-compliance from any such Government Agencies.
(Tenement Outgoings): Other than to the extent reasonably and fairly apparent 24. from publicly available searches of the tenement register maintained by the Department of Mines and Petroleum (DMP), all fees, rentals, royalties, rates, Taxes, bonds and other payments in respect of the Tenements have been fully poid or satisfied or will be fully paid within the time reaulted for payment.
(Rehabilitation): To the best of the Company's knowledge, having completed 25. reasonable enquiries, there are no outstanding obligations or liabilities, contingent or otherwise, under any applicable environmental laws, mining law or other law, including reclamation or rehabilitation work, associated with the Tenements or arising out of past exploration, development and/or mining activities carried out on them.
(Environmental Approvals): to the best of the Company's knowledge, having $26.$ completed reasonable enauliles, all environmental approvals required with respect to activities carried out on the Tenements have been obtained, are valid and in full force and effect and have been compiled with.
(Tenement Notification). The Company has not received any notice that any of $27.$ the Tenements will be revoked, suspended, modified or will not be renewed and Is not aware of any circumstance which may give rise to any such action.

595969 1

(Native Tille) To the best of the Company's knowledge, having completed 28. reasonable enquiries, other than those Tenements which are applications, the Tenements have been granted in respect of all the ground described in each application, there are no native title agreements relating to the Tenements and the Company is not aware of any claim or anticipated claim by any Abariginal person to assert native title of any part of the grea covered by the Tenements.

(Applications) To the best of the Company's knowledge, having completed 29. reasonable enquiries, the Company is not aware of any reason why any Tenement that is an application will not be granted in due course provided that the Native Title Act 1993 (Cth) is complied with and negotiations with registered native title claimant group are successfully completed.

(Mining Information): To the best of the Company's knowledge, having 30. completed reasonable enquiries, the Mining Information is accurate in all material respects.
(Desertex Resources Ltd): To the best of the Company's knowledge, having 31. completed reasonable enquiries, Desertex Resources Ltd is a dormant shell company with no assets or liabilities.
(Annual Accounts) On or before Completion, the Company has prepared and 32. published its qualited 2010-11 accounts and annual report, in all material aspects in compliance with the ASX Listing Rules and Corporations Act.
(Employment Terms): The terms on which Mr Albert Longo and Mr William Hobba 33. are employed by, or provide services to, the Company, in whatever capacity. are constituted and governed entirely by their two employment contracts dated 11 August 2011 and 11 August 2011 respectively, as provided to the Subscriber prior to the Execution Date, and other than these agreements there are no other agreements, written or verbal, in effect between them and the Company in relation to their employment or services.
(Changes to Employment): The Company has not, prior to the Execution Date, 34. and will not after the Execution Date, make amendments to any employees terms of employment, except bond fide amendments in the ordinary course of ordinary business.

ANNEXURE 6 - COMPANY LAST ACCOUNTS $\ddot{\phantom{a}}$

39 605099_1:

$\bar{z}$

$\bar{ }$ $\mathcal{Q}^{(1)}$ and $\mathcal{Q}^{(2)}$

At Minerals Limited

Consolidated Statement of Comprehensive Income
For the year ended 30 June 2011

		Consolidated		Company	2010
	Note	2011 ٠.	2010 Ξ.	2011
Continuing Operations: Revenue	2(a)	19,469,478	2,769,155	19,469,470	2,769,155
Other Income / (loss)	2(b)	128,108 19.597.586	(241, 770) 2,527,385	128,108 19,597,586	(241, 770) 2,527,385
Cost of Sales	2(c)	(24, 424, 887)	(4,477,915)	(24, 424, 807)	(4,477.915)
Gross Profit / (Loss)		(4, 827, 301)	(1,950,530)	(4, 827, 301)	(1,950,630)
Depreciation	2(d)	(2,300,560)	(410, 707)	(2,300,660)	(410, 707)
Impairment	2(e)	÷
Finance costs	2(5)	(204,006)	(71, 113)	(204, 006)	(71.113)
Exploration costs	2(g):	(108, 314)	(105, 906)	(108, 314)	(105, 906)
Olher expense	2(h)	(1, 050, 270)	(1,630,406)	(1, 960, 279)	(1,630,408)
Share based payments	2(1)	(707, 319)	(1,731,843)	(797.319)	(1,731,843)
Profit before income tax expense.		(10, 187, 778)		(5,900,505) (10,187,778)	(5,900,505)
Income tax expense	5			ganya a
Net Loss Attributable to Members of the Company		÷. (10, 187, 778)	(6,900,605)	(10, 187, 778)	(5, 000, 505)
Basic earnings / (loss) per share	6.	(5.09)	(3.50)

$\bar{t}$

A1 Minerals Limited
ABN 44 100 727 491

Consolidated Statement of Financial Position as at 30 June 2011

			Consolidated		Gompany
			2011	2010 š.	2011 ^-	2010
		Note	\$
Current assets
Cash and cash equivalents		6.	232,743	439.303	232,743	439,303
Trade and other receivables		7	337,019	775836	337,019	775,838
Stock:		ê	1,333,967	51,496	1,333,967	51496
Total Current Assets			1,903,730	1,266,635	1,903,730	1,266,635
Non current assets
Trade and other receivables		7	686,570	203.598	3,046,959	2,766,017
Property, plant and equipment		9	23,923,659	22,321,572	23,923,659	22,321.572
Exploration and evaluation expenditure		10,	11,515,650	11,594,986	7,631,366	7,696,678
Other financial assets		11		an di	1,546,004	1,546,004
Tota Non-Current Assets			36,027,879	34,210,156	36, 147, 987	34,330,271
TOTAL ASSETS.			37,931,609 35,476,791		38,051,717	35,696,906

Current liabilities
Trade and other payables		11	18.316,366	6,096,405	18,316,356	6,896,412
Interest bearing liabilities		$\mathsf{t}^2$	448,298	418,091	446,290	418,091
Total Current Liabilities.			18.764,653.	7,314,498		18,704,653 7.314.603
Non current (labilities
Interest bearing liabilities		12	743,176	1,178,220	743,176	1,178,220
Provisions ^®		13	,890,809	676,815	890,809	676,816
Total Non Current Liabilities			1,633,985	1,055,035	1,633,985	1,855,035

TOTAL LIABILITIES			$-20,396,639$ ,	9,169,531	20,398,539	9,169,538
			17,532,970	26,307,259.	17,653,078	26,427,367
NET ASSETS
Equity
Issued Capital		14	35,103,213	34.487.042	39,103,213	34.487,042
Option Premium Reserve		16	3,770,197	3.386,797	3,776,137	3,366,797
Accumulated losses		16	(21,346,379)	(11.560,580).	(21, 226, 271)	(11, 446, 472)
					$-17,053,070$	26.427,367
TOTAL EQUITY			17,632,070	26,307,259
	Check		¥ć	۰Ő	T.	Ō

The accompanying notes form part of these financial statements

$\mathcal{E}^{(1)}$

$\ddot{\phantom{a}}$

l, $\ddot{\phantom{a}}$

Af Minerals Limited
ABN 44 100 727 491

Statement of changes in Equity
for the year ended 30 June 2011

Consolidated Balance as at 1st July 2009 Profit / (loss) for the year Net change in the fair value of available for sale financial assets Income lax relating to components of other comprehensive income	Note 15	issued Capital 20,838.735	Accumulated losses (6,668,075) (5,900,505)	Option Reserve 1.654,954	Total 16,827,614 (6,900,506).
Total comprehensive income for the year		20,638.735	(11, 566, 580)	1.654.954	10,927,109
Sharos Issued during the year Recognition of share based payments. Transfer on cancellation of options Balance as at 30 June 2010	14 16 16	13,648,307		1.731.843.	13,648,307 1,731,843
		34.487.042	(11.566, 680)	3.386,797	26,307,259
Balance as at 1st July 2010 Profil / (loss) for the year Net change in the fair value of available for sale financial assets Income tax relating to components of other comprehensive income	15.	34.487.042	(11,566,580) (10.187.778)	3 386,797	26,307,259 (10,187,778)
Total comprehensive income for the year		34.487.042	(21.754, 358)	3.386.797	16,119,481
Shares Issued during the year Recognition of share based payments Transfer on cancellation of options	14 16	816 174	407.979	797,319. (407, 979)	616.174 797,319
Balance as at 30 June 2011		35.103.216	(21.346, 379) a salarans	.3,776,137	17,532,973

$\mathbb{R}^2$

A1 Minerals Limited
ABN 44 100 727 491

Statement of Cash Flows
For the Year Ended 30 June 2011

		Consolidated 2011.	2010	Company 2011.	2010
	Note	\$			Š,
Cash flows from operating activities
Receipts from customers.		19,608,368	2,312,078	19,608,368	2.312.078
Interest received		29,401	98.361	29,401	98,361
Inlerest paid		(204,006)	(71.113)	(204, 006)	(71, 113)
Royalty		(314, 805)		(314, 805)
Payments to suppliers and employees		(13, 161, 666)	(2,688,909)	(13, 161, 866)	(2,686,009)
Net cash provided by/(used) in operating activities		5,967,094	(347, 503)	5,957,094	(347, 503)
Cash flows from investing activities
Proceeds from sale of non current assets		400,000	1,815,925	400,000	1.815.925
Payments to acquire property, plant and equipment		(05.957)	(15,755,681)	(65, 957)	(15.755, 681)
Payments for development of mine assets- Payments to acquire tenements:		(2,648,034)		(2,540,034) (365, 972)
Payments for exploration and evaluation		(355, 972) (3, 805, 010)		(3,805,010)
Payments to related party
Net cash flows (used in) investing activilies		(6,374,973)	(13,939.756)	(6,374,973)	(13,939,756)

Cash flows from financing activities
Proceeds from the issue of shares		685,502	12,634.713	665,502	12,634.713.
Share Issue costs		(69,332)	(324, 107)	(69, 332)	(324, 107)
Loan from controlled entity Proceeds from borrowings		212,709		212,709
Repayment of borrowings		(617,547)	(160.282)	(617,547)	(160,282)

Net cash flows from financing activities		211,333	12,150,324	211,333	12,150.324
Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the		(206, 546)	(2,137,015)	(206, 546)	(2, 137, 015)
financial year		439,302	2,576,318	439,302	2,576 318
Cash and cash equivalents at the end of the financial year		232,756	439,303	232,766	439.303

$\ddot{\phantom{0}}$ $\bar{\mathcal{A}}$

$\cdot$

$\mathbb{R}^2$

Ĵ,

$\frac{1}{\sqrt{2}}\frac{d\phi}{d\phi}$

$\mathcal{A}$

$\mathbf{r}$

$\frac{1}{2}$

l, l,

$\mathbf{r}$

$\bar{ }$

ý.

$\bar{\mathcal{L}}$ .

$\overline{f}$

$\hat{\mathcal{A}}$

$\hat{\boldsymbol{\theta}}$

$\bar{\bar{z}}$

$\bar{z}$ $\bar{\mathcal{A}}$

$\hat{\boldsymbol{\beta}}$

$\overline{\phantom{a}}$

$\hat{r}$ .

A1 Minerale Linked ABN 44 100 727 481
Noton to the Financial Statements For the Year Ended 30 June 2011
1 REVENUE
		Consolidated 2011	2010	.Compány 2011.	-2010 5
	Note
ial Revenus بخص يو بلاد؟		10.127,168	2.825,911	10.127,160	2,626,911
Sale of by product interant recorvable		34.254 55,551	معنجة 107,000	304.254 $-35.334$	25,500 107,003
Ofter normal		2,724	$-5.643$	174	5,043
		19,460,478	nda. 2769.155	19.449.478	$-2769.155$
(b) Other Income ( (loss)
Net loss on sale of mining in temphonic Salo of Innoments		400,000	1.815.025	400,000	1,818,025
شقها.		271,092	2 057,395	271.202	2057,695
: Cost of Servershirts		मा लग	(241,770)	12 K 10 T	(241,775)
			ويتوجب والما
2 COST OF SALES (a) Operating costs comprise;
Еприуго отроплот-		3.705.419 H7.1H	242.946 338,997	1,705.410 M7.368	2-2.944 336.987
Sier as and other consumations Fuel power and anier		1,618,678	مصرفت	1.016.070	500.540
Arioniacon was a material Amorteaton of Baia & Alpha Iana manta		10.090,078 1.110,040	813.207	10.050,075 1.616,940	813.207
Other mining, processing and televing		U. 102. 187	2584.217	6,102,TU7 : 408,520	2554,217
Kopity.		400,010 24.424.487	1,477,918	14.424.447.	4,477.016
(d) Decreasion of non pirrori assets:
Good plans and more development. Plani and equipment		2.027.444 87,970	212.734 41,907	2.027.444 17.970	212.734 41,907
Mora venima		71.361	48,720	78.384	68720
Ske oquicment ငှသနေ စုစုဟာမား		18,327 11 . a t	47.144 20.202	14. . 27 11.474	GT 144 $-20.202$
		2.300,660	410.707	300.649	410.707
(e) Impairment experise: Investment in Oosertex Resources Ltd
		πē
(0 France costs Hira purchasa contracta		204,000	91,113	205,000	21.332

(g) Exploration costs:
Exploration coaca expansed Exploration costs widen of		106.414	841 دعه څو د	100.314	M I لىن 105
		$100 - 1 +$	Tos sco	104,374	125.003
(h) Curist expenses		1,433,917	951 386	1,453.917	461,364
Еловуса вхранови t east physical to deplominat		1117.43 U 448.910-	(SSB 125) 423.244	(947.044) AA 110	(641.125) $-22.241$
: Exploration gests expensed
Exploration costs written off وخسمت		111.122	95.033	111 021	. 25,000
Officer animalisations		810.440 7ش ربط	292.031 420 O.I	410.440 - 631.667	292.031 120.0 - 1
		1.850.279	1830.408	1,960.279	1,530,468
(I) Employee bavietos supertre		797 STD	17918-3	787.319	$-1.731.642$
Braro based payments
3 NCOMBTAX
(8) Income tax recognized in profit and loss
The prima face tix banals on the operating result is raconcier to the income tax provision
25 The Brant Saf Electron of the AS Column .
Arcoursing Joan Belora income las hom
REVENUED ODEFFOOTS
Income las benedi celquista al 30% Ghara baind payments
ITORITTER EXPERIE
Exploration costs written of Universid bix lowers and lamporary determines
nice recognized as deferred tax assots.
Incómii taz ilizjense ((beneti) reported in the ncono Relevent		$\cdots$
The lax rate used in the whole reconcident in the corporate ray rate of 30% payable by Australian corporate enlives
on taxable price unger Australian Tax lew. There has been no change in the corporate tax rzate when compared with the previous reporting period

Unrecognized derred lax assets and
(b) Bahilifee The following deferred but sheets and Secretary
have not been prought to wood re- Unrecognized defected consesses compress.
Louses available for officit against heart
taxable inzome.
Capital maing corts

$\bar{\epsilon}$

$\pm$

$\mathcal{L}_{\mathcal{A}}$ $\overline{\phantom{a}}$

$\ddotsc$

$\frac{1}{\sqrt{2}}$

÷,

$\sqrt{2}$

ł,

$\epsilon$

A1 Minerate Limited ABN 44 100 727 401
Moter to the Financial Statements For the Year Ended 30 June 2011 Provision for distinction
Accrosed expenses and Laboure . . . 7. A.	$\sim$ $\sim$ $\bullet$ $\overline{1}$	Section Ave - 77 Trip $\mathbf{r}$
Unrocognized defentes las Receites comprese:
Exportant expenditure Process expenses and acciual income		2007.00	122 100521

4 SECULENT REPORTING
The Company operator entroly in the mineral exploration business and 100% of the expensions and assets employed
Initio to operators in Australia

5 EARNINGS PER SHARE	2011	2010
(Losa VProfit road in calculation of loss own share	110.107.7741	(5,00,00)
Base on mgMoss De share	Canta. (0.0509)	Can a رمدمة
Weighted sveringe humber of thanks med in The culturation of earnings por share	200.200.335	154,783,895
Options

	Computated たい	Compány ^. 1.1.1 2010 2011 -2010

4 CASH AND CASH EDUMALENTS
(A) Cash Asaeca
Caun at bank and on hand	125,010) 74,182	74.442 (25,810)
Short larm coposits	152.211 $E1 = 100$ 1000	155,244. 4:4.912
Total cash and tash we valued.	410.303 232.743	$2327 + 3$ 439.303

Short lerm dopoulds are made for yarying periods between one day and three months: depending on the immediate madi

(i). Reconciliation of Cash Flow Britannels.
For the purposes of the coup now statement, cash and cash squiralines comprise italy on hand and at bank and immediately.
Call and cash econolistics as shown the spatement of ea

CORN STATES THE GOVALISTICS OF INVENIES AND INSTEAD OF CORN DOWN IN ACCOUNTING IN OUR COMPANY INJURIES			.
Cash and cash equivalents.	232.743	439.303	232,744	439.300
furk overstalls.	232,743	439.333	an defin 132.741	AM 303
Mr. Rocencilla lorrof Loss for the year to net
cash flows from concelling activities.
Profit (Loss) for the year after recorns tax	(10, 187, 779)	(5,900,505)	(10.147.774)	(6,900,603)
Add I (less) non cash cemic
Depreciation	2,300,560	410.707	2.300.340	410,707 813.207
Americation waste material	10.010.074	813.207	10,090.075 1.610,018	r in
- Americation of Bota & Apha tonuments	1,818,940	241.775	(124, 104)	- 11.770
Profit on sale of teneriner is .	(111, 101)		104.314	105,908
Exploration axpenditure conversed and written on	102,314 797,319	105,906 1-731.643	T97.319	1.731.843
Share based payments
ino arment uxpento
Charges in second and inherity, net of the effects of the purchase of subsidiaries
(Victorese) / decrease in assets		(+87,740)	170.274	(487,740)
Current raciovables	170.274	(61,496)	(1,202,471).	(81.436)
Curtent inventories.	(1,232,474)
Increase / (decrease) in Exhibition	2.487,009	2610.557	3,407,070	2.010,007
Current pinnelss Encloyed provisions	4.942	118.100	. 4,962	170.109
Not cash from from operations	5,957,094	CA7-521	1057.014	047.5321

	Ronaciólista		Company
	$-3011$	2010	30 I T	2010

TRADE AND OTHER RECEIVABLEST
Guarant	175.845	350.074	175, 148	-3603074
Trade receivables	116	284,451	115	264.401.
CIST recoverable. Other receivables	. 167,058	141 361	-181.068	141.301
	337,019	فتقدي	337, 014.	775,838
				3.
Non Current
Loan là Controlled Array			2.458.386	2472419
Ober kans	1.401	1703 202.106	1,441	-1,00 282.195
Security and environmental boods	-- 557.167 533,570	253,600	617317 - 3.044.969	2.748,017
			$\sim$ $\sim$ $\sim$
I IKVILNYORIES.
Inventorios	1,333,987	61,400	1.333.M7	- 51.405

Erobvees prove or 4

A1 Minerale Linded
ABN 44 100 727 481 Hotes to the Elnancial Statements
For the Year Ended 30 June 2011 1 PROPERTY PLANT AND EQUIPMENT Site plant¹² Capitalised Consolidated one. u otor Mice and vehicles Euroomo Cost aukomšnt ocularient processing (a) 2811 plant
development Cost
Al the beginning of the Grancial year
Additions 25 451 839
. 13.902.722 ا
141.392
1,642 ।
2010मे $3.109.001$ $20.861524$ in er .
40. TU 33,626 13 392,323 $515313$ Contabilities minin kiurika nya sreduktion. state and on the phase of Anti-
Distribute
Distributed for manager counts 39,444,559 150,033.00 301.024.50 BOJYZ44 $-10.612, 221$ $71.419.337$ Actionalated dépreciation
Arms beginning of the bisistes hast
Charge for the year
Transferred amortisation to capitalism pro
production cost
Disposition (3,130,266)
(12,300,630) (100,933)
(16,471) (254,748)
(160,320) (106,044)
(60,327) (2.447,003)
(0.050,075) (212,734)
(2,027,434) $T15.520,531$ 127.444 (194,175) (425.070) 112.527.0701 2.240.1611 Al the arid of the Shancfal Year 104,500 509,217 4066 14 -19,240,160 25.023,450 وتمثد Net book value as at 30 June 2011 100.601
T.RO 1,043,144 19,270,189 23.923.661
1.90 509 212 . ci sok 22,630 PROPERTY, PLANY AND EQUIPMENT Ske plant & Leased motor
squipment vehicles rimes. CANHARMAR Miné and Consolidated ENTRE ENTE
Plant
Plant
Plant Ente
Plant Ente pping.com automoni . solo 45,556
191.701 ]
109,271
32,121 -
207,925
626,742 Cost
Al the beginning of the financial year 3
3,187,072
20,630,970 ţ. 2800220 3,189,898 16,530,500 Aristons Capitalised
pluste
Disposals ومحاومه ومحمد بدميم بمبعث 1.633,705 1,633,796 20.064.524 . 25.451,438 141,392 261,367 mār 3,159,690 At the and of the feareral year Accumulated depressibles
Al the beginning of the Intercultureal
Change by the View
Transformed americation to explained pro
production, cost
production, cost (272.556)
(1,223,934) 100.731)
(20.202) (39.10-1)
(07.144) $(110, 027)$ (813.207). $(212,734)$ $(1,633,790)$ $(1, 033, 796)$ $724740$ 17.417.003 करका At the end of the financial year (3,130,260) - 1100.000) TIOR ALBI $-57.45$ 339.910 20,751,780 Net book value as at 30 June 2010 22.321.372 184,509 742.863 (b) Lansed Assets Property, praise and eigenment includes Consolidated
2011 Coin 2010 $1011$ 2010 Motor vehicles. $610.282$ $\frac{1}{2}$ .
134. G.Y M 606 804,007 Cost
Accionainted depreciation
Net book value $\frac{(2.91748)}{8.39.919}$ $\frac{65}{200}$ 502.074 $(421.075)$ 609.217 GANCIATION $1,030,502$
$(00,107)$ 1,000,502
- (10,953)
1,019,619 1,030,502 (Ó) 1,030.602 Così
Acomunist depression $rac{100011}{1000010}$ (18.157)
932.345 Net book valve Company
| 2011
| 10 EXPLORATION AND EVALUATION EXPENDITURE $2017$ Consenting 2010 2010 ÷ $\overline{\mathbf{r}}$ Cost
Al the beginning of the frumeial year
Costs capitalised during the frumeial year
Trimalis cost on sale for hinements 7,696,974
1,014,472
(284,771) 0,103.300
1.747.376
(2,049.367) 11,007,599
1.761,384 11,694,916
1.014.472 $(254, 729)$ $(2011367)$ Transaction of the main of the main of the mandal
Captures coals writen of during the intended
Year
Captures coals at the end of the financial (101,314)
(1811,948) $(104.630)$ $(101314)$ $(101.656)$ (1,810,949) 7,590,0/4 31,594,950 7.031.366 $-11,529,574$ ₩ ٠, 11,016,600
- 11,016,600
- 114,024) 7.434,423
(132,944) $AB = \pi$ 11 OTHER FINANCIAL ASSETE s (1) -774.000 770,000 070.000 $(770,000)$ Less: knowman alowance 1518.004 1.41.004 Dezeri Exploration Pty LTd investment in contrased entities are stated of cost. Fretar Note 21 11 PAYABLES Current
Trade payables
Sundry creators and socrated 6,913,073
|- 921,679
|- 181,662 8,913,064
| 821,070
| 181,692 17,183,432
190,387
192,737 17.153,432 110,147

11.310.254

6.056,406

18.310.356

0.000.412

$\overline{a}$

$\frac{2011}{3}$

-34,487,042

$\frac{\partial}{\partial x}$

$\mathbf{r}$

$(60,322)$

$\ddot{\phantom{a}}$

NO. 2011

106,000,002

÷. $\overline{a}$ $\Delta$

$\bar{z}$

A1 Minerals Limited
ABH 44 100 727 491

.
Notas to the Eldancial Statements'
For the Year Ended 30 June 2011

12 INTEREST BEARING LIABLITIES

II MICHED GEWAND CARRILLES
Current hara purchana labilitas			49.211	118,091	الالله	411,091
Non Current He porchase Entropes			744,176	1.175.220	743,470	1.176,220

13 PROVISIONS
Non Current Employees provisions - Long Kervick leave			33.539	44.665	-33,869	44,565
Rahabutrton -			147.230	532.550	657,250	62.250
			- 500,000	576.AIS	110,400	676,315
				Consentatu d
14 ISSUED CAPITAL
		lamat orica .	2011 No.	-2010 NC.	2017	2010 \$
Oromary Imarii Capital
but del and hely paid.			209, 568, 426	106.660.052	$-35.103.213$ $-$	34.47.042
Movements in ordinary Share capital.
Drugs of the slad of the period			108,000,002	119,556,681	34.447.042	20,038,733
proposed as part consideration for gold
processing plant	\$ š	0.12 0.06
Share Placement Stury Placement - 24 July 02		0.03		7.500.000		ಕರಾ.ಕಂ
Share purchase plan - 20 July 09	j	0.15.		12,667,635		2944.703
Share Placement - 13 October 09	ä	0.19		10,474,415		1,990.215
Esued in consideration of exploration rasid 13		0.15		500.000		75,000
04-6472009 Shain Placeriest - 17 November 09	۰. ţ.	0.19		7.448.631		1.419.021
lasued in consideration for purchase of camp
15 & 21 December 2009	\$	مده		1441620		432140
haven's Dec 00 the exercise of ortologen	٠.	6.20		300.000 123,000		100.000 37. SO
haved 9 Dec 01 the custome of employee. hausd 15 Dec 09 the exercise of emotoyee	Ţ. Ţ	యి ð sa		250,000		76.000
haund 15 D40.09 the exercise of employee.	s.	6.20		500.000		100.000
buiued 24 Dec 00 the exercise of employee.	Я.	0.20		600,000		100,000
usuca 30.000.00 km exercise of employee	g,	محم		540,000		150,000 100.000
haued 5 Lan 10 the assurance of omployee.	Ś \$.	0.20 020		500,000 750,000		100.000
haved in Jan 10 the execute of enothers hauad 19 Jan 10 ma axercise of circuloyed	5	פכס		100.000		30.000
bscied 22 Jan 10 tris expresse of employee.	5	620		750.000		150,000
ISSUED 4 Feb10 We Starting of employee tround on 11 Feb10 in consideration for	Ś	0.20		1,000,000		700 000
considerev	1	0.975		1.000.000		374,000
131160 TT Feb ID the exercise of employee وبمثلتان	s	0.25		3 250 000		150,000
kausd 23 Feb 10 The avercise of employee oodona	ŝ	دغه		1,000,000		200.000
Ricard 25 Feb10 the exection of employee		0.20		750.000.		150,000
odona Blure Plecenent on 17 Mar. 10-	2 5	02 S.		15,785,500		J,941,400
Sharo parenatė pun – 13 August 05. Coats associated with harm of shares	≰.	0.18	3.898.347		118.505 (00, 3.52)	C24,107
Chi issue al the and of the reporting partod.				an into bes --	35.103.216	34.47.042

200,044.425 190,000.042 35,103,216 34,467.042

15 RETAINED EARNINGS AND RESERVES

Retained toeses
Movaments of relation dipeson wore as follows:

	Consolidated		Company
	7011	2010	2011	20.10
Balanco al Do beginno of the year	(11,044,440) 407,979	(5,660,075)	(13 متاريخ) -407.070	ふふたり (5545,907)
Transfer on condellation of pitci year opcom Louis for the reporting period	(10.187.778)	(5,000,001)	(10.197, 779)	(5,100,600)
As the one of the monitors period	(21,348,379)	(11,5652-50)	(21.416.271)	11444.4721
Arrent
Bhara bitted baynent	Consolidated		Company
	1111	2010	$-2011$	2010
Balance at the beganning of the year.	3,344,797 797,319	1,884,854 1,731,43	3.YA.TOT 707.319°	بعربهم و 1731,613
Share based payments Transfer on cancellation of prop year cocord	(407,978)		(407.971)
Cottone issued in part consideration for post plant As the wind of the reporting partner.	3.778.137	1.124.797	$376 - 37$	$-3.389.797$
			$- - -$	1.1.1 $\cdots$

Nature and purpose of the relative
Binare based purpose of the relative
Binare based purposes relative used to licens the relative
of equity benefits provided to employees and different as
Basic hence the contracts of furn

A1 Minerālē Umitēd
ADN 44 160 727 491

.
For the Year Ended 30 June 2011
For the Year Ended 30 June 2011

16 SHARE BASED PAYMENT PLANS

Employee Share Option Plan

The contractual tre of each option granted is
Option Series	Number:	Grafis Bate	Eyeiry dalu	Fair value at متعبه امسنو

The following label Business the number and weighted average attention prices of and motions in the album opening
Vesued during the year

	7611 Weighted 2010 2011- EVELLON Kumber aracaine orien Humber	2010 Weighted IVerson 43 produg price
Oveitariano at the beginning of the year.	್ಯ ತಂತ್ರ 27,550,000 15.000.000	60.27
Granto procyear (29/08/2010)	5,405,000
Granted during the year	10.033.000 30.56 8.500.000	\$3.56
Fortuned during the year	(3.759,000)
Execting during the Very	(10,476,000)	50.ZL
Expand diffing the year	(a.000.000). (10,376 (200)	50.55
Cumanitrig at the end of the year	23.950,000 16,600,000 \$0.50	10.30
and a start of the second company of the start of the monotonic start of	والمخاطبة عاد همد معمده FA 55	. -005

The outstanding balance 24 of 30 state 2011 is represented by:

. 2,000,000 optons tivar tizšnag aharas visn an ozotčiai priza bi 20 cents sech, sverznable upon mosting tro abova
Longidore and une 20 November 2011

. 1,200,000 općine ovar državky shires wili sin ezerdisa price of 20 cerce sach, exercisacie upon moding the above
-condizine and und 23 February 2012

9 500.000 episms dver ordnery saknet veh an amerika price of 35 cents each, kraftmater upon meeting teratove
Johnsteins and unit 30 November 2012

– 2,160,000 optony twer didikary klukas with an avareais photo of 30 corts each, azertimalia (ipon marting ina above
concisions and lindi 8 June 2012

.= 6,000,000 spions over ordnary shares with which a ship of 30 parts each, sing dialitie upon meeting ow shows
. conditions and with 29 (torember 2011

2.500,000 cyclona cyle cronary shares win sin exercise phos of 20 conts each, exercisable upon meeting the above
conditions and und 23 November 2010

the engage segment remaining compound the terminal second compound as it as and 2011 is a press (2010).
Ally encourage the compound compound of the press compound and compound compound in the compound of the compo

The range of axertiss prizes for extern continuing at the end of the year was 20 m 35 cons (2010; 20 to 35 cons)

The worked average for verte of option graded during way with with $\pm$ ....................................

.
This lair yakan di thư tư pước sedag share options granad under both the colon and the bian plane le stammad at altra data
of the grant using the Black sino Scholas model (altra into account the terms and accord sonal ye

17 FRIANCIAL INSTRUMENTS

Vibrositon enlored dracty into Armid Report

18 COMMITMENTS AND CONTINUENCIES

Information entered directly into Annual Report.

IS RELATED PARTY DISCLOSUARS

information entered directly rub Armual Report

20 PARENT ENTITY DISCLOSURES

INSURASON Sourced from Balanco Blood & Profit and Loss. Enterod directly into Annual Report

EVENTS AFTER THE BALANCE SHEET

Information secreted from Eulanea Sheet & Proof and Loss. Entered dracity into Annual Asport

22 AUDITOR'S REMUNERATION

The action of AS Mertines Contests HUB Menn Just

Amounts meated or due and receivable by
HER Mann Andelbur

. an augs or recent of the financial report of the only and airs other with in the Group		11 A 49.940	19,950	40.000	معجزا
other services in relation to the wholy sind any Strait entity in the Croup. – uz correlanta - Plianice respect	. . . $$ ³	14 $\cdot$ Contract Contract	agree to a	بصر $1.11 - 1.00$
		49,940	. 10,450	. . 64.470	and of Media 19,950*

Amminis recanned or gua and receivable by
Telesed process of HTO Mann Jodd for

Dragona
John Walama
Michael Huni
Rosa Loufwan

Bart Juy 10 Ganto Opona anerce Net charge bal 30 Jun11 6.926.666

АНАRE BASED PAYMENTS

АНАВЕ ВАЗЕД РАУМБИТА $1.1.1 - 1.0$					$\cdots$ Total Share
		Braza paseo payments. (turing 2008-08	ينبهجا التلاحات لجانبيون PH YE?	Bruce District	-91144 ani durng payments at and of year. $\cdot$
MONTH NUM John Weitere	$0.0300 -$ 0.03004	75.979 76,099	2,000,000 5,500.000 500.000	346,000 1,157,000. 45,500	-31,009 1,232,009 45.500
Rest Louisen		$\cdots$ - and the	1,000,000		178.000
Tan Hyendey	8,03004 0.02059	126,585			120,683
Albert Longo
Mark Prix	0.13621.	, 59, 103			68,103
Eirpinyers	0.13521	313,272			313272
		654.158	10,000,000	1.736.500	$2.39 - 6.3$
		1.111 1999	ARRIVER

AI assistant

BRIGHTSTAR RESOURCES LIMITED — Major Shareholding Notification 2011

64581_rns_2011-11-08_eb66a460-1854-49f7-96d8-1904d5393f13.pdf

STEINEPREIS PAGANIN Lawyers & Consultants

SIMILE TRANSMISSIO

MESSAGE:

Form 603

Notice of initial substantial holder

2. Details of voting power

3. Details of relevant interests

4. Details of present registered holders

6. Consideration

6. Associates -

THIS IS ANNEXURE "A" OF I PAGE REFERRED TO IN THE FORM 603 DATED 9 NOVEMBER 2011

THIS IS ANNEXURE "B" OF 56 PAGES REFERRED TO IN THE FORM 603 DATED 9 NOVEMBER 2011

STONE RESOURCES LIMITED (Subscriber)

THIS AGREEMENT is made the day of 2011 BETWEEN

RECITALS

IT IS AGREED as follows:

Ī. DEFINITIONS AND INTERPRETATION

$1.1$ Definitions

$\overline{2}$ SUBSCRIPTION AND ISSUE

ω the Convertible Note;

CONDITIONS PRECEDENT $\overline{\mathbf{3}}$ .

$3,2$ Benefit of Conditions

Best Endeavours $3.3$

Assignment $3.5$

3,6 Part Placement Walver

CONDUCT PRIOR TO COMPLETION $\overline{A}$ .

Board Recommendation $5.2$

$5.3$ Cost Recovery

COMPLETION 6.

Complétion Date. $6.1$

$6.2$ Completion of the Placement Shares

Completion of Part Placement Shares 6.3

Completion for the Convertible Note $6.4$

Completion to be simultaneous 6.6

CONVERTIBLE NOTE 7.

Face Value $7,1$

Convertible Note secured $7.3$

Acknowledgment of indebtedness $7.4$

Note is unlisted 7.5

Vollng ilghts 7.6

Transfer $7.7$

INTEREST A.

Interest rate $8.1$

Calculation of Interest $8.2$

Capifalisation of Interest 8.3

$8.4$ Poyment of Interest

$\overline{9}$ REPAYMENT

Payment of Monies Payable $9:1$

Satisfaction of Company's obligations $9.2$

Notice of non-conversion 9.3

Early Repayment $9.4$

CONVERSION OF CONVERTIBLE NOTE пñ.

Conversion 10.1

Salisfaction of Company's obligations 10.3

ALLOTMENT AND ISSUE OF SHARES 11.

$11.1$ Allofment and Issue

Holding statement and new Note Certificate $11.2$

REPLACEMENT OF NOTE CERTIFICATES 12.

REORGANISATION OF CAPITAL AND PARTICIPATING RIGHTS 13.

SHARE PURCHASE PLAN AND SPP PLACEMENT SHARES ٦4.

UNDERTAKINGS BY THE COMPANY Ī5.

EVENTS OF DEFAULT 16.

Events of Default $16.1$

Subscriber's powers on default 16.2

Duty to notify of Event of Default 16.3

REPRESENTATIONS AND WARRANTIES $\overline{17}$ .

Mutual Representations and Warranties $17.1$

Company Representations and Warrantles $17.2$

Indemnity by Company 17.3

Qualifications to Company Representations and Warrantles $17.4$

Warrantles separate $17.5$

$\overline{18}$ . USE OF PROCEEDS

19. WATPAC DEBT

BOARD REPRESENTATION 20.

Appointment of Nominee Director 20.1

Further Board representation 20.2

Company to use best endeavours 20.3

BRIGHTSTAR RESOURCES LIMITED Major Shareholding Notification 2011

A1 Minerals Limited
ABN 44 100 727 491

A1 Minerals Limited
ABN 44 100 727 491

A1 Minerālē Umitēd
ADN 44 160 727 491