CANTERBURY RESOURCES LIMITED — Capital/Financing Update 2021

Aug 17, 2021

Canterbury Resources Limited ACN 152 189 369 Suite 301, 55 Miller St Pyrmont 2009 ph: +61 2 9392 8020

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ASX Announcement

18 August 2021

CBY OPTIONS TERMS AND CONDITIONS

PERTAINING TO THE OPTIONS TO BE ISSUED TO AFRICAN ENERGY RESOURCES LIMITED

As per the transaction announced by Canterbury Resources Limited (ASX:CBY) on 18 August 2021, please find below the terms of options to be issued to African Energy Resources Limited.

1. ENTITLEMENT

Each option ( CBY Option ) will entitle the holder to subscribe for one Share in CBY. All CBY Shares issued upon the exercise of the CBY Options will rank equally in all respects with CBY's then existing CBY Shares.

2. EXERCISE PRICE

Each CBY Option shall entitle the holder of that option ( Optionholder ) to acquire one fully paid ordinary share upon payment of the sum of $0.24 per Option ( Exercise Price ) to CBY.

3. NOTICE OF EXERCISE

The CBY Options may be exercised at any time prior to 31 December 2023 ( Expiry Date ) in whole or in part, by completing and delivering a duly completed form of notice of exercise to the registered office of CBY together with the payment of the Exercise Price in immediately available funds for the number of Shares in respect of which the CBY Options are exercised. A CBY Option not exercised on or before the Expiry Date will lapse.

Shares allotted and issued pursuant to the exercise of the CBY Options will be allotted and issued, and a holding statement provided to the holders of CBY Options in respect of those Shares, on the above terms and conditions not more than 15 Business Days after the receipt of a duly completed form of notice of exercise and the Exercise Price in immediately available funds in respect of the CBY Options exercised.

4. QUOTATION OF CBY OPTIONS AND CBY SHARES ON EXERCISE

Application will not be made to ASX for official quotation of the CBY Options. Application will be made for official quotation of the CBY Shares issued upon exercise of CBY Options not later than 10 Business Days after the date of allotment.

5. TRANSFER OF OPTIONS

The CBY Options are not transferable without CBY’s consent, other than to a Related Body Corporate of AFR.

6. PARTICIPATION RIGHTS OR ENTITLEMENTS

There are no participating rights or entitlements inherent in the CBY Options and Optionholders will not be entitled to participate in new issues of securities offered to shareholders during the currency of the CBY Options. However, CBY must give notice to the holders of CBY Options of any new issue before the record date for determining entitlements to the issue in accordance with the ASX Listing Rules so as to give Optionholders the opportunity to exercise their CBY Options before the date for determining entitlements to participate in any issue.

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www.canterburyresources.com.au

ASX: CBY

Canterbury Resources Limited ACN 152 189 369 Suite 301, 55 Miller St Pyrmont 2009 ph: +61 2 9392 8020

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7. REORGANISATION OF SHARE CAPITAL

In the event of a reorganisation (including consolidation, subdivision, reduction or return) of the issued capital of CBY, all rights of the Optionholder shall be changed to the extent necessary to comply with the ASX Listing Rules applying to a reorganisation of capital at the time of the reorganisation.

8. BONUS ISSUES

If, from time to time, before the expiry of the CBY Options, CBY makes a pro rata issue of CBY Shares to its shareholders for no consideration, the number of CBY Shares over which a CBY Option is exercisable will be increased by the number of CBY Shares which the Optionholder would have received if the CBY Option had been exercised before the date for calculating entitlements to the pro rata issue.

9. PRO RATA ISSUES

If CBY makes a pro rata issue of securities (except a bonus issue) to its shareholders (other than an issue in lieu or in satisfaction of dividends or by way of a dividend reinvestment) the exercise price of a CBY Option shall be reduced according to the following formula:

O’ = O - E[P-(S+D)] N+1 Where: O’ The new exercise price of a CBY Option. O The old exercise price of a CBY Option. E The number of underlying securities into which one CBY Option is exercisable. P The average market price per security (weighed by reference to volume) of the underlying securities during the 5 trading days ending on the day before the ex-rights date or ex entitlements date.

S The subscription price for a security under the pro-rata issue. D The dividend due but not yet paid under the existing underlying securities (except those to be issued under the pro rata issue).

N The number of securities with rights or entitlements that must be held to receive a right to one new security.

Authorised on behalf of Canterbury Resources Limited by its Managing Director, Mr Grant Craighead.

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www.canterburyresources.com.au

ASX: CBY