CANYON RESOURCES LIMITED

ACN 140 087 261

NOTICE OF GENERAL MEETING

TIME : 9:00am (Perth time) DATE : 24 February 2014 PLACE : The Park Business Centre 45 Ventnor Avenue West Perth, Western Australia

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

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on (+61 8) 6143 4256

CONTENTS PAGE

Business of the Meeting (setting out the proposed Resolutions)	3
Explanatory Statement (explaining the proposed Resolutions)	8
Glossary	21
Schedule 1 – Terms and Conditions of Options	23
Schedule 2 – Terms and Conditions of Director Incentive Options	25
Schedule 3 – Summary Terms and Conditions of Option Plan	27
Proxy Form	Enclosed

IMPORTANT INFORMATIO N

TIME AND PLACE OF MEETING

Notice is given that the meeting of the Shareholders to which this Notice of Meeting relates will be held at 9:00am (Perth time) on 24 February 2014 at:

The Park Business Centre 45 Ventnor Avenue West Perth, Western Australia

YOUR VOTE IS IMPORTANT

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

VOTING ELIGIBILITY

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered Shareholders at 4:00pm (Perth time) on 22 February 2014.

VOTING IN PERSON

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

VOTING BY PROXY

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

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

each member has a right to appoint a proxy;
the proxy need not be a member of the Company; and
a member who is entitled to cast 2 or more votes may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If the member appoints 2 proxies and the appointment does not specify the proportion or number of the member’s votes, then in accordance

with section 249X(3) of the Corporations Act, each proxy may exercise one-half of the votes.

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

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

Further details on these changes are set out below.

Proxy vote if appointment specifies way to vote

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

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

Transfer of non-chair proxy to chair in certain circumstances

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

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

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

BUSINESS OF THE MEETING

AGENDA

1. RESOLUTION 1 – APPROVAL TO ISSUE SHARES – CAMEROON PROJECTS

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

“That, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company issue up to 8,000,000 Shares on the terms and conditions set out in the Explanatory Statement.”

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

2. RESOLUTION 2 – APPROVAL FOR THE ISSUE OF SHARES AND OPTIONS TO PROPOSED DIRECTOR

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

“That, for the purposes of ASX Listing Rule 10.11 and for all other purposes, approval is given for the Company to issue to David Netherway (or his nominee) up to 1,111,111 Shares at $0.045 per Share and up to 1,111,111 free Options on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by David Netherway (or his nominee) and any of their associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

Voting Prohibition Statement: A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

(a) the proxy is either:

(i) a member of the Key Management Personnel; or (ii) a Closely Related Party of such a member; and (b) the appointment does not specify the way the proxy is to vote on this Resolution.

However, the above prohibition does not apply if:

(a) the proxy is the Chair of the Meeting; and (b) the appointment expressly authorises the Chair to exercise the proxy even if the Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel.

3. RESOLUTION 3 – APPROVAL TO GRANT INCENTIVE OPTIONS TO PHILLIP GALLAGHER

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

“That, for the purposes of section 195(4) and section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, approval is given for the Company to grant to Phillip Gallagher (or his nominee) up to 3,000,000 Director Incentive Options on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by Phillip Gallagher (or his nominee) and any of their associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

Voting Prohibition Statement: A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

(a) the proxy is either:

(i) a member of the Key Management Personnel; or (ii) a Closely Related Party of such a member; and (b) the appointment does not specify the way the proxy is to vote on this Resolution.

However, the above prohibition does not apply if:

(a) the proxy is the Chair of the Meeting; and

(b) the appointment expressly authorises the Chair to exercise the proxy even if the Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel.

4. RESOLUTION 4 – APPROVAL TO GRANT INCENTIVE OPTIONS TO MATTHEW SHACKLETON

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

“That, for the purposes of section 195(4) and section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, approval is given for the Company to grant to Matthew Shackleton (or his nominee) up to 1,500,000 Director Incentive Options on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution Matthew Shackleton (or his nominee) and any of their associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

Voting Prohibition Statement: A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

(a) the proxy is either: (i) a member of the Key Management Personnel; or

(ii) a Closely Related Party of such a member; and (b) the appointment does not specify the way the proxy is to vote on this Resolution.

However, the above prohibition does not apply if:

(a) the proxy is the Chair of the Meeting; and

(b) the appointment expressly authorises the Chair to exercise the proxy even if the Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel.

5. RESOLUTION 5 – APPROVAL TO GRANT INCENTIVE OPTIONS TO RHODERICK GRIVAS

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

“That, for the purposes of section 195(4) and section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, approval is given for the Company to grant to Rhoderick Grivas (or his nominee) up to 2,000,000 Director Incentive Options on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by Rhoderick Grivas (or his nominee) and any of their associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

Voting Prohibition Statement: A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

(a) the proxy is either:

(i) a member of the Key Management Personnel; or (ii) a Closely Related Party of such a member; and (b) the appointment does not specify the way the proxy is to vote on this Resolution.

However, the above prohibition does not apply if:

(a) the proxy is the Chair of the Meeting; and

(b) the appointment expressly authorises the Chair to exercise the proxy even if the Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel.

6. RESOLUTION 5 – APPROVAL TO GRANT INCENTIVE OPTIONS TO DAVID NETHERWAY

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

“That, subject to Mr David Netherway being appointed a Director of the Company, for the purposes of section 195(4) and section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, approval is given for the Company to grant to David Netherway (or his nominee) up to 1,500,000 Director Incentive Options on the terms and conditions set out in the Explanatory Statement.”

Voting Prohibition Statement: A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

(a) the proxy is either: (i) a member of the Key Management Personnel; or (ii) a Closely Related Party of such a member; and (b) the appointment does not specify the way the proxy is to vote on this Resolution. However, the above prohibition does not apply if: (a) the proxy is the Chair of the Meeting; and

(b) the appointment expressly authorises the Chair to exercise the proxy even if the Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel.

7. RESOLUTION 7 – APPROVAL TO ISSUE BROKER OPTIONS

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

“That, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue up to 5,500,000 Options on the terms and conditions set out in the Explanatory Statement.”

8. RESOLUTION 8 – APPROVAL TO ISSUE OPTIONS TO ZENIX NOMINEES

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

“That, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue up to 3,000,000 Options on the terms and conditions set out in the Explanatory Statement.”

9. RESOLUTION 9 – APPROVAL OF EMPLOYEE INCENTIVE SCHEME

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

“That, for the purposes of ASX Listing Rule 7.2 Exception 9(b) and for all other purposes, approval is given for the Company to grant Options (and issue any Shares upon exercise of those Options) under the employee incentive scheme titled “Canyon Resources Limited Employee Share Option Plan” for a period of 3 years commencing on the date of this Meeting and otherwise on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by any Director, other than any Directors who are ineligible to participate in any employee incentive scheme in relation to the Company, and any associates of those Directors. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

Voting Prohibition Statement: A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

However, the above prohibition does not apply if:

(a) the proxy is the Chair of the Meeting; and

(b) the appointment expressly authorises the Chair to exercise the proxy even if the Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel.

DATED: 17 JANUARY 2014

BY ORDER OF THE BOARD

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PHILLIP MACLEOD COMPANY SECRETARY

EXPLANATORY STATEMEN T

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

1. RESOLUTION 1 – APPROVAL TO ISSUE SHARES – CAMEROON PROJECTS

1.1 General

On 24 December 2013, the Company announced that it had entered in a farmin and joint venture agreement with wholly owned subsidiaries of UK based Altus Strategies Ltd ( Altus Group ), to acquire up to a 75% interest in the Birsok Bauxite Project in an emerging bauxite province in Cameroon ( Cameroon Projects ) ( Agreement ).

Resolution 1 seeks Shareholder approval for the issue of 8,000,000 Shares ( Initial Consideration Shares ) to the Altus Group (or their nominees) who are the vendors under the Agreement pursuant to the terms and conditions of the Agreement upon settlement of the Agreement.

The effect of Resolution 1 will be to allow the Company to issue the Initial Consideration Shares during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity or additional 10% annual placement capacity.

1.2 Technical information required by ASX Listing Rule 7.1

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to Resolution 1:

(a) the maximum number of Shares to be issued is 8,000,000;
(b) the Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that issue will occur on the same date;
(c) the Shares will be issued to the vendors under the Agreement (or their nominees) all of whom are wholly owned subsidiaries of Altus Strategies Ltd, a UK based company. None of the vendors are related parties of the Company;
(d) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares; and
(e) no funds will be raised from the issue of the Shares as the Shares will be issued as part consideration pursuant to the Agreement to earn up to a 75% interest in the Cameroon Projects on the terms and conditions announced by the Company to ASX on 24 December 2013.

2. RESOLUTION 2 – APPROVAL TO ISSUE SHARES AND OPTIONS TO PROPOSED DIRECTOR

2.1 General

Resolution 2 seeks approval for the Company to issue Shares and Options to Mr David Netherway, a proposed Director of the Company.

Mr Netherway has agreed to subscribe for up to $50,000 worth of Shares and Options, to be issued at $0.045 per Share with one free Option for each Share issued (the same terms as the Company’s non-renounceable entitlement issue announced on 24 December 2013).

As set out in the announcement made by the Company on 24 December 2013, it is proposed, subject to settlement under the Agreement, that Mr Netherway will be appointed a Director of the Company as the nominee of the Altus Group.

2.2 Chapter 2E of the Corporations Act

For a public company, or an entity that the public company controls, to give a financial benefit to a related party of the public company, the public company or entity must:

(a) obtain the approval of the public company’s members in the manner set out in sections 217 to 227 of the Corporations Act; and
(b) give the benefit within 15 months following such approval,

unless the giving of the financial benefit falls within an exception set out in sections 210 to 216 of the Corporations Act.

Although Mr Netherway is not currently a Director of the Company, given that there is a reasonable expectation that Mr Netherway will be appointed a Director, assuming the settlement of the Agreement, he is a ‘related party’ of the Company for the purposes of the Corporations Act.

The current Directors consider that Shareholder approval pursuant to Chapter 2E of the Corporations Act is not required in respect of the issue of Shares and Options to Mr Netherway because the Shares and Options will be issued to Mr Netherway (or his nominee) at the same price as the Shares and Options being issued under the non-renounceable entitlement issue that Shareholders have had the chance to participate in and as such the giving of the financial benefit is on arm’s length terms.

2.3 ASX Listing Rule 10.11

ASX Listing Rule 10.11 also requires shareholder approval to be obtained where an entity issues, or agrees to issue, securities to a related party, or a person whose relationship with the entity or a related party is, in ASX’s opinion, such that approval should be obtained unless an exception in ASX Listing Rule 10.12 applies.

As Resolution 2 involves the issue of Shares and Options to a replated party of the Company, Shareholder approval pursuant to ASX Listing Rule 10.11 is required unless an exception applies. It is the view of the Directors that the exceptions set out in ASX Listing Rule 10.12 do not apply in the current circumstances.

2.4 Technical Information required by ASX Listing Rule 10.13

Pursuant to and in accordance with ASX Listing Rule 10.13, the following information is provided in relation to the Participation:

(a) the Shares will be issued to Mr David Netherway (or his nominee) who is a proposed Director of the Company;
(b) the maximum number of Shares and Options to be issued is 1,111,111 Shares and 1,111,111 Options;
(c) the Shares and Options will be issued no later than 1 month after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that issue of the Shares and Options will occur on the same date;
(d) the issue price will be $0.045 per Share with the Options being issued for free on the basis of 1 Option for every 1 Share issued, being the same ratio as the Entitlement Issue which was announced on 24 December 2013;
(e) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;
(f) the Options will be issued on the terms and conditions set out in Schedule 1; and
(g) the funds raised will be used for the same purposes as all other funds raised under the non-renounceable entitlement issue and as set out in the Company’s Prospectus dated 24 December 2013.

Approval pursuant to ASX Listing Rule 7.1 is not required for the Participation as approval is being obtained under ASX Listing Rule 10.11. Accordingly, the issue of Shares and Options to Mr Netherway (or his nominee) will not be included in the use of the Company’s 15% annual placement capacity pursuant to ASX Listing Rule 7.1.

3. RESOLUTIONS 3 TO 6 – APPROVAL TO ISSUE DIRECTOR INCENTIVE OPTIONS

3.1 General

The Company has agreed, subject to obtaining Shareholder approval, to issue up to a total of 8,000,000 Options ( Director Incentive Options ) to Messrs Philip Gallagher, Matthew Shackleton, Rhoderick Grivas and David Netherway (or their respective nominees) ( Related Parties ) on the terms and conditions set out below.

Resolutions 3, 4 and 5 seek Shareholder approval so that the Company may grant Options to each of the Directors Messrs Gallagher, Shackleton and Grivas.

Resolution 6 seeks Shareholder approval so that the Company may grant Options to a proposed Director, Mr Netherway. It is proposed that Mr Netherway become a Director of the Company on completion of the Agreement. As such Mr Netherway is a related party of the Company. No Director Incentive Options will be issued to Mr Netherway should he not become a Director of the Company.

As set out in Section 2.2 above, for a public company, or an entity that the public company controls, to give a financial benefit to a related party of the public company, the public company or entity must:

(a) obtain the approval of the public company’s members in the manner set out in sections 217 to 227 of the Corporations Act; and
(b) give the benefit within 15 months following such approval,

unless the giving of the financial benefit falls within an exception set out in sections 210 to 216 of the Corporations Act.

The grant of the Director Options constitutes giving a financial benefit and Messrs Gallagher, Grivas and Shackleton are related parties of the Company by virtue of being Directors. Mr Netherway is a related party by virtue of being a proposed Director as at the date of this Notice of Meeting.

It is the view of the Company that the exceptions set out in sections 210 to 216 of the Corporations Act do not apply in the current circumstances. Accordingly, Shareholder approval is sought for the grant of Director Options to the Related Parties.

3.2 Shareholder Approval (Chapter 2E of the Corporations Act – Related Party Transactions

Pursuant to and in accordance with the requirements of section 219 of the Corporations Act, the following information is provided in relation to the proposed grant of Director Options:

(a) The related parties to whom the proposed Resolutions would permit the financial benefit to be given

The related parties are Phillip Gallagher (Resolution 3), Matthew Shackleton (Resolution 4), Rhoderick Grivas (Resolution 5) and David Netherway (Resolution 6) or their nominees and they are related parties by virtue of being Directors or proposed Directors.

(b) The nature of the financial benefit

The maximum number of Director Options (being the nature of the financial benefit provided) to be granted to the Related Parties is:

(i) 3,000,000 Director Incentive Options to Phillip Gallagher (or his nominee);
(ii) 1,500,000 Director Incentive Options to Matthew Shackleton (or his nominee);
(iii) 2,000,000 Director Incentive Options to Rhoderick Grivas (or his nominee); and
(iv) 1,500,000 Director Incentive Options to David Netherway (or his nominee).

The terms and conditions of the Director Options are set out in Schedule 2.

(c) Directors Recommendation and Basis of Financial Benefit

The Board currently consists of Phillip Gallagher, Rhoderick Grivas and Matthew Shackleton. It is proposed that David Netherway become a Director on completion of the Agreement for the Cameroon Projects.

By Resolutions 3, 4, 5 and 6 the Company is proposing to grant Director Incentive Options to each of the Directors and a proposed Director. In each case, the number of Director Incentive Options to be granted and the terms of the Director Incentive Options was negotiated by the Directors independent of the particular Related Party to be granted the Director Incentive Options.

The purpose of the grant of the Director Incentive Options to the Related Parties is to provide each Director with added incentive to achieve the goals set by the Board to add Shareholder value. The Director Incentive Options are issued as part of each Director's remuneration package.

The independent Directors in each case consider that the quantity of Director Incentive Options together with the terms of the Director Incentive Options in each case constitute an appropriate number to adequately incentivise the Directors in light of that Director's skill and experience and their current remuneration as detailed below.

The Board acknowledges that the grant of the Director Incentive Options to Matthew Shackleton as non-executive Directors and David Netherway as a proposed non-executive Director is contrary to guidelines for non-executive remuneration in Recommendation 8.3 of The Corporate Governance Principles and Recommendations with 2010 Amendments (2[nd] Edition) as published by The ASX Corporate Governance Council. However, the Board considers the grant of the Director Incentive Options to be reasonable in the circumstances given the Company's size and stage of development and the importance of maintaining the Company's cash reserves.

Phillip Gallagher declines to make a recommendation to Shareholders in relation to Resolution 3 due to his material personal interest in the outcome of the Resolution on the basis that he is to be granted Related Director Incentive Options in the Company should Resolution 3 be passed. However, in respect of Resolutions 4, 5 and 6 Mr Gallagher recommends that Shareholders vote in favour of those Resolutions for the following reasons:

(i) the grant of Director Incentive Options to the Related Parties will align the interests of the Related Parties with those of Shareholders;
(ii) the grant of the Director Incentive Options is a reasonable and appropriate method to provide cost effective remuneration as the non-cash form of this benefit will allow the Company to spend a greater proportion of its cash reserves on its operations than it would if alternative cash forms of remuneration were given to the Related Parties; and
(iii) it is not considered that there are any significant opportunity costs to the Company or benefits foregone by the Company in granting the Director Incentive Options upon the terms proposed.

Matthew Shackleton declines to make a recommendation to Shareholders in relation to Resolution 4 due to his material personal interest in the outcome of the Resolution on the basis that he is to be granted Director Incentive Options in the Company should Resolution 4 be passed. However, in respect of Resolutions 3, 5 and 6 Mr Shackleton recommends that Shareholders vote in favour of those Resolutions for the reasons set out in (i) to (iii) above.

Rhoderick Grivas declines to make a recommendation to Shareholders in relation to Resolution 5 due to his material personal interest in the outcome of the Resolution on the basis that he is to be granted Director Incentive Options in the Company should Resolution 5 be passed. However, in respect of Resolutions 3, 4 and 6 Mr Grivas recommends that Shareholders vote in favour of those Resolutions for the reasons set out in (i) to (iii) above.

In forming their recommendations, each Director considered the experience of each other Related Party, the current market price of Shares, the current market practices when determining the number of Director Incentive Options to be granted as well as the exercise price and expiry date of those Director Incentive Options.

(d)

Dilution

The passing of Resolutions 3, 4, 5 and 6 would have the effect of granting up to 8,000,000 Director Incentive Options.

If any of the Director Incentive Options are exercised into Shares, the effect would be to dilute the shareholding of existing Shareholders. If all the Director Incentive Options are exercised, a total of 8,000,000 Shares would be issued. This will increase the number of Shares on issue from 71,506,962 to 79,506,962 (assuming that no other Options are exercised and no other Shares are issued) with the effect that the shareholding of the existing Shareholders would be diluted by an aggregate of 10.1%, comprising 3.8% by Phillip Gallagher, 1.9% by Matthew Shackleton, 2.5% by Rhoderick Grivas and 1.9% by David Netherway.

The market price for Shares during the term of the Director Incentive Options would normally determine whether or not the Director Incentive Options are exercised. If, at any time any of the Director Incentive Options are exercised and the Shares are trading on ASX at a price that is higher than the exercise price of the Director Incentive Options, there may be a perceived cost to the Company.

The actual dilution will depend on the extent of further equity raised by the Company and whether any of the Director Incentive Options are exercised.

(e) Total Remuneration Package of Related Parties

The following table shows the total (and proposed) annual remuneration paid to both executive and non-executive directors.

Director	FY14	FY13	FY12
Rhoderick Grivas	$131,100	$99,9171	$54,500
Phillip Gallagher	$202,112	$250,700	$237,075

Matthew Shackleton	$43,600	$48,6002	$48,6002
David Netherway3	$14,533	-	-

Note

Prior to 1 February 2013 Mr Grivas was a Non-Executive Director.
Includes consulting fees of $5,000 paid for financial management services.
Mr Netherway is currently a proposed Director and has not received any remuneration from the Company.

(f) Existing Relevant Interests

At the date of this Notice, Messrs Gallagher, Shackleton, Grivas and Netherway and their associates have the following relevant interest in securities of the Company (which excludes any securities to be issued pursuant to taking up their entitlement under the Entitlement Issue or any Shares to be issued pursuant to this Meeting).

Name	Shares	Options1
Phillip Gallagher	1,520,001	20,000
Rhoderick Grivas	1,665,385	115,385
Matthew Shackleton	1,655,001	20,000
David Netherway	-	-

Note

Quoted Options exercisable at $0.16 on or before 29 February 2016.
Pursuant to Resolution 2, approval is being sought for Mr Netherway to subscribe for up to 1,111,111, Shares and 1,111,111 Options.

(g) Trading History

The following table gives details of the highest, lowest and the latest closing price of the Company's Shares trading on the ASX in the 12 months before the date of this Notice.

		Closing Price
	Date

Highest Price	17 January 2013	$0.18
Lowest Price	25 and 28 June 2013	$0.045
Latest Price	14 January 2014	$0.069

(h) Valuation of Director Options

The Director Options will not be quoted on ASX.

The Company has valued the Director Incentive Options to be granted to the Related Partied or their nominees using the Black & Scholes option model.

The following assumptions have been made regarding the inputs required for the option pricing module:

Input		Note
Number of options to related parties:	8,000,000
Underlying security spot price:	6.9 cents	1
Exercise price:	8.7 cents	2
Dividend rate:	Nil	3
Volatility rate:	85%	4
Risk free interest rate:	2.95	5
Expiry Date:	8 January 2017	6

Note 1 The underlying security spot price used for the purposes of this valuation is based on the closing price of Shares on the valuation date of 9 January 2014 which was 6.9 cents.
Note 2 The exercise price is 150% of the volume weighted average closing price for the 5 trading days prior to issue of the options. This example uses the 5 trading days prior to the date of this Notice.
Note 3 As at the date of the valuation, the Company had not forecast any future dividend payments. For the purposes of the valuation it is therefore assumed that the Company's share price is "ex-dividend", If dividend payments were forecast, the value of the Director Options would be reduced.
Note 4 A volatility rate of 85% has been adopted. This rate has been calculated by reference to the closing price volatility for the Shares of the Company for the previous two years.
Note 5 The risk free rate is 2.95% based on the current Reserve Bank Treasury Bond rates.

Note 6 The Expiry Date is three years from the date of grant. This example uses the date of this Notice as the grant date.

As the Director Incentive Options are not listed, a 30% marketability discount has been applied to the values.

Based on the above assumptions the Options proposed to be issued to Directors have been valued as follows:

Number and Value of Director Incentive Options

Number and Value of Director Incentive Options	Number and Value of Director Incentive Options
	Director Incentive Options
Phillip Gallagher	3,000,000 Director Incentive Options – 2.44 cents per Director Option (total value - $73,161)
Matthew Shackleton	1,500,000 Director Incentive Options – 2.44 cents per Director Option (total value - $36,580)
Rhoderick Grivas	2,000,000 Director Incentive Options – 2.44 cents per Director Option (total value - $48,774)
David Netherway	1,500,000 Director Incentive Options – 2.44 cents per Director Option (total value - $36,580)

(i) Other Information

The Directors are not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision as to whether it is in the best interests of the Company to pass Resolutions 3, 4, 5 and 6.

3.3 ASX Listing Rule 10.11

Phillip Gallagher, Rhoderick Grivas and Matthew Shackleton are Directors and David Netherway is a proposed Director and as such are related parties of the Company.

It is the view of the Company that the exceptions set out in ASX Listing Rule 10.12 do not apply in the current circumstances. Accordingly, Shareholder approval is sought for the grant of Director Incentive Options to the Related Parties.

If approval to grant the Director Incentive Options to the Related Partied is obtained under ASX Listing Rule 10.11, approval is not required under ASX Listing Rule 7.1. Accordingly, the issue of the Incentive Director Options to the Related Partied will not be included in the Company’s 15% annual placement capacity calculation.

ASX Listing Rule 10.13 provides that the notice of meeting to approve the issue of securities under ASX Listing Rule 10.11 must include certain information.

For the purposes of ASX Listing Rule 10.13, the following information is provided to Shareholders in relation to Resolutions 3, 4, 5 and 6:

(a) The Director Incentive Options will be granted to Phillip Gallagher (Resolution 3), Matthew Shackleton (Resolution 4), Rhoderick Grivas (Resolution 5) and David Netherway (Resolution 6) or their nominees;
(b) The maximum number of securities the Company will grant is:
3,000,000 Director Incentive Options to Phillip Gallagher (or his nominees);
1,500,000 Director Incentive Options to Matthew Shackleton (or his nominees);
2,000,000 Director Incentive Options to Rhoderick Grivas (or his nominees); and
1,500,000 Director Incentive Options to David Netherway (or his nominees);
(c) The Director Incentive Options will be granted no later than 1 month after the date of this Meeting (or a later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that issue of the Options will occur on the same date;
(d) Phillip Gallagher, Rhoderick Grivas and Matthew Shackleton as Directors are related parties;
(e) David Netherway as a proposed Director is a related party;
(f) The Director Incentive Options are granted for nil consideration;
(g) The exercise price of the Director Incentive Options is 150% of the 5 day volume weighted average closing price of Shares prior to the date of the Meeting. The Director Incentive Options expire on 22 February 2017 and have no vesting criteria. The full terms of the Director Options are set out in Schedule 2; and
(h) No funds will be raised from the grant of the Director Options.

4. RESOLUTION 7 – APPROVAL TO ISSUE BROKER OPTIONS

4.1 General

Resolution 7 seeks Shareholder approval for the issue of up to 5,500,000 Options to selected supporting brokers (or their nominees) as part consideration for supporting the Company with the Entitlement Issue and placement of any shortfall from the Entitlement Issue ( Broker Options ).

To assist the Company with the completion of the capital raising under the Entitlement Issue and the placement of any shortfall, the Company has entered into arrangements with certain brokers who assist the Company with the placement of Shares and Options under the Entitlement Issue and associated shortfall. The Broker Options that the Company seeks approval for under Resolution 7 is the maximum number of Broker Options that the Company may be required to issue under this arrangements.

A summary of ASX Listing Rule 7.1 is contained in section 2.1 above.

Should Resolution 7 not be passed, the Company will still be obligated to issue these Broker Options and will need to do so under its 15% placement capacity under Listing Rule 7.1. The use of this 15% placement capacity for this purpose may hinder the Company’s future ability to raise funds in a timely manner without Shareholder approval until the previous issue had been ratified or 12 months, whichever is the sooner.

The effect of Resolution 7 will be to allow the Company to issue the Broker Options during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity or additional 10% annual placement capacity.

4.2 Technical information required by ASX Listing Rule 7.1

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to Resolution 7:

(a) the maximum number of Broker Options to be issued pursuant to this resolution is up to 5,500,000;
(b) the Broker Options will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that issue of the Broker Options will occur on the same date;
(c) the Broker Options will be issued for nil cash consideration, as they are being issued as part consideration for the assistance of the various brokers in the completion of the Entitlement Issue and placement of the associated shortfall;
(d) the Broker Options will be issued to selected brokers assisting the Company with the Entitlement Issue and the placement of any shortfall from the Entitlement Issue, or their nominees, who are not a related parties of the Company;
(e) the Broker Options will be issued on the terms and conditions set out in Schedule 1; and
(f) no funds will be raised from the issue of the Broker Options as they are being issued in consideration for services provided by selected brokers.

5. RESOLUTION 8 – APPROVAL TO ISSUE OPTIONS TO ZENIX NOMINEES

5.1 General

Resolution 8 seeks Shareholder approval for the issue of up to 3,000,000 Broker Options to Zenix Nominees Pty Ltd ( Zenix ) as part consideration for the ongoing capital raising advice and support including their role in assisting the Company with the completion of the Agreement and as acting as the Lead Manager for the Entitlement Issue.

A summary of ASX Listing Rule 7.1 is contained in section 2.1 above.

Should Resolution 8 not be passed, the Company will still be obligated to issue these Broker Options and will need to do so under its 15% placement capacity under Listing Rule 7.1. The use of this 15% placement capacity for this purpose may hinder the Company’s future ability to raise funds in a timely manner

without Shareholder approval until the previous issue had been ratified or 12 months, whichever is the sooner.

The effect of Resolution 8 will be to allow the Company to issue the Broker Options during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity or additional 10% annual placement capacity.

5.2 Technical information required by ASX Listing Rule 7.1

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to Resolution 8:

(a) the maximum number of Broker Options to be issued to is 3,000,000;
(b) the Broker Options will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that issue of the Broker Options will occur on the same date;
(c) the Broker Options will be issued for nil cash consideration, as they are being issued as part consideration for the purpose set out in section 5.1 above;
(d) the Broker Options will be issued to Zenix, who is not a related party of the Company;
(e) the Broker Options will be issued on the terms and conditions set out in Schedule 1; and
(f) no funds will be raised from the issue of the Broker Options as they are being issued in consideration for services provided to the Company.

6. RESOLUTION 9 – APPROVAL OF EMPLOYEE INCENTIVE SCHEME

6.1 Background

In April 2010 the Board adopted the Canyon Resources Limited Employee Share Option Plan ( Option Plan ) to enable the Company to issue Options to eligible participants including employees and consultants. The terms of the Option Plan were included in the prospectus dated 20 April 2010 for the Company’s initial public offering and listing on ASX.

The Option Plan is intended to provide an opportunity to eligible participants to participate in the Company's future growth and provide an incentive to contribute to that growth. The Option Plan is further designed to assist in retaining employees.

A copy of the Option Plan is available for review by Shareholders at the registered office of the Company until the date of the Meeting and can be sent to Shareholders upon request to the Company Secretary (Phillip Macleod). In addition, a copy of the Option Plan will be made available for inspection at the Meeting. A summary of the Option Plan is set out in Schedule 3.

Resolution 9 seeks Shareholders approval for the grant of Options (and any issue of Shares upon the exercise of those Options) under the Option Plan for a period of 3 years from the date of this Meeting in accordance with ASX Listing Rule 7.2 (Exception 9(b)).

6.2 Regulatory Requirements

Shareholder approval is not required under the Corporations Act or the ASX Listing Rules for the establishment or operation of the Option Plan. However, Shareholder approval is being sought to allow the Company to rely on an exception to the calculation of the 15% limit imposed by ASX Listing Rule 7.1 on the number of securities that may be issued without shareholder approval.

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue more equity securities during any 12 month period than that amount which represents 15% of the number of fully paid ordinary securities on issue at the commencement of that 12 month period. ASX Listing Rule 7.2 (Exception 9(b)) provides an exception to ASX Listing Rule 7.1 which provides that issues of securities under an employee incentive scheme that has been approved by shareholders are exempt for a period of 3 years from the date of shareholder approval of the issue of securities under the employee incentive scheme.

If Resolution 9 is passed, the Company will be able to issue Shares under the Option Plan to eligible participants over a period of 3 years without impacting on the Company’s ability to issue up to 15% of its total ordinary securities without Shareholder approval in any 12 month period.

Shareholders should note that no Options have previously been issued under the Option Plan.

The objective of the Plan is to attract, motivate and retain key employees and it is considered by the Company that the adoption of the Plan and the future issue of Shares under the Plan will provide selected employees with the opportunity to participate in the future growth of the Company.

If an offer is made to a related party or person whose relation with the Company is, in ASX’s opinion, such that approval should be obtained, to participate in the Option Plan then separate Shareholder approval will need to be obtained under ASX Listing Rule 10.14. Recommendation.

The Board recommends that Shareholders approve the Option Plan. It will allow the Company to issue securities for the benefit of participants of the Option Plan whilst preserving the Company's 15% limit of issuing securities and provide flexibility in the manner in which the Option Plan is managed.

GLOSSARY

$ means Australian dollars.

ASIC means the Australian Securities and Investments Commission.

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

ASX Listing Rules means the Listing Rules of ASX.

Board means the current board of directors of the Company.

Broker Options means an Option granted pursuant to Resolution 7 or 8 with the terms and conditions set out in Schedule 1.

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

Chair means the chair of the Meeting.

Closely Related Party of a member of the Key Management Personnel means:

(a) a spouse or child of the member;
(b) a child of the member’s spouse;
(c) a dependent of the member or the member’s spouse;
(d) anyone else who is one of the member’s family and may be expected to influence the member, or be influenced by the member, in the member’s dealing with the entity;
(e) a company the member controls; or
(f) a person prescribed by the Corporations Regulations 2001 (Cth) for the purposes of the definition of ‘closely related party’ in the Corporations Act.

Company means Canyon Resources Limited (ACN 140 087 261).

Constitution means the Company’s constitution.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

Director Incentive Option means an Incentive Option granted pursuant to Resolutions 3, 4, 5 and 6 with the terms and conditions set out in Schedule 2.

Explanatory Statement means the explanatory statement accompanying the Notice.

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

Key Management Personnel has the same meaning as in the accounting standards issued by the Australian Accounting Standards Board and means those persons having authority and responsibility for planning, directing and controlling the activities of the Company, or if the Company is part of a consolidated entity, of the consolidated entity,

directly or indirectly, including any director (whether executive or otherwise) of the Company, or if the Company is part of a consolidated entity, of an entity within the consolidated group.

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

Option means an option to acquire a Share.

Optionholder means a holder of an Option or Director Option as the context requires.

Proxy Form means the proxy form accompanying the Notice.

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

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

Shareholder means a registered holder of a Share.

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

Zenix means Zenix Nominees Pty Ltd (ACN 107 391 908), a wholly owned subsidiary of Hartleys Limited (AFSL 230052).

SCHEDULE 1 – TERMS AND CONDITION S OF OPTIONS (RESOLU TIONS 2, 7 AND 8 )

(a) Entitlement

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

(b) Exercise Price

Subject to paragraph (j), the amount payable upon exercise of each Option will be $0.06 ( Exercise Price ).

(c) Expiry Date

Each Option will expire at 5:00 pm (WST) on 31 January 2017 ( Expiry Date ). An Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

(d) Exercise Period

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

(e) Notice of Exercise

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

(f) Exercise Date

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

(g) Timing of issue of Shares on exercise

Within 15 Business Days after the later of the following:

(i) the Exercise Date; and

(ii) when excluded information in respect to the Company (as defined in section 708A(7) of the Corporations Act) (if any) ceases to be excluded information,

but in any case no later than 20 Business Days after the Exercise Date, the Company will:

(iii) allot and issue the number of Shares required under these terms and conditions in respect of the number of Options specified in the Notice of Exercise and for which cleared funds have been received by the Company;

(iv) if required, give ASX a notice that complies with section 708A(5)(e) of the Corporations Act, or, if the Company is unable to issue such a

notice, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors; and

(v) if admitted to the official list of ASX at the time, apply for official quotation on ASX of Shares issued pursuant to the exercise of the Options.

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

(h)

Shares issued on exercise

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

(i) Quotation of Shares issued on exercise

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

(j) Reconstruction of capital

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

(k) Participation in new issues

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

(l)

Change in exercise price

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

(m) Quotation

The Company will apply for quotation of the Options on ASX.

(n) Transferability

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

SCHEDULE 2 – TERMS AND CONDITIONS OF DIRECTOR INCENTIVE OPTIONS ( RESOLUTIONS 3, 4, 5 AND 6 )

(a) Entitlement

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

(b) Exercise Price

Subject to paragraph (k), the amount payable upon exercise of each Director Incentive Option will be 150% of the volume weighted average closing price for the 5 trading days prior to issue of the Director Incentive Options ( Exercise Price ).

(c) Expiry Date

Each Director Incentive Option will expire at 5.00pm (WST) on 22 February 2017 ( Expiry Date ). A Director Incentive Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

(d) Exercise Period

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

(e) Notice of Exercise

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

(f)

Exercise Date

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

(g) Timing of issue of Shares on exercise

Within 15 Business Days after the later of the following:

(i) the Exercise Date; and
(ii) when excluded information in respect to the Company (as defined in section 708A(7) of the Corporations Act) (if any) ceases to be excluded information,

but in any case no later than 20 Business Days after the Exercise Date, the Company will:

(iii) issue the number of Shares required under these terms and conditions in respect of the number of Director Options specified in the Notice of Exercise and for which cleared funds have been received by the Company; and

(iv) if admitted to the official list of ASX at the time, apply for official quotation on ASX of Shares issued pursuant to the exercise of the Director Options.

(h)

Shares issued on exercise

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

(i)

No Quotation of the Options

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

(j) Quotation of Shares issued on exercise

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

(k) Reconstruction of capital

(l)

Participation in new issues

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

(m) Change in exercise price

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

(n)

Transferability

The Director Incentive Options are only transferable with the consent of the Board of the Company.

SCHEDULE 3 – SUMMARY OF TERMS AND CONDITIONS OF OPTION PLAN ( RESOLUTION 9 )

Under the terms of the Company’s employee share option plan ( Option Plan ), the Board may offer free options to persons ( Participants ) who are full-time or part-time employees (including a person engaged by the Company under a consultancy agreement); or any of its subsidiaries based on a number of criteria including contribution to the Company, period of employment, potential contribution to the Company in the future and other factors the Board considers relevant. Upon receipt of such an offer, the Participant may nominate an associate to be issued with the options.

The maximum number of Options issued under the Option Plan at any one time is 5% of the total number of Shares on issue in the Company provided that the Board may increase this percentage, subject to the Corporations Act and the Listing Rules.

Each Option entitles the holder, on exercise, to one fully paid ordinary share in the capital of the Company.

There is no issue price for the Options. The exercise price for the Options will be such price as determined by the Board (in its discretion) on or before the date of issue provided that in no event shall the exercise price be less that the weighted average sale price of Shares sold on ASX during the five Business Days prior to the date of issue or such other period as determined by the Board (in its discretion).

Shares issued on exercise of Options will rank equally with other ordinary shares of the Company.

Options may not be transferred other than to a nominee of the holder or with the prior consent of the Board. Quotation of Options on ASX will not be sought. However, the Company will apply to ASX for official quotation of Shares issued on the exercise of the Options.

An Option may only be exercised after that Option has vested and any other conditions imposed by the Board on exercise have been satisfied. The Board may determine the vesting period (if any). An Option will lapse upon the first to occur of the expiry date, the holder acting fraudulently or dishonestly in relation to the Company, the employee ceasing to be employed by the Company or on certain conditions associated with a party acquiring a 90% interest in the Shares of the Company.

If, in the opinion of the Board any of the following has occurred or is likely to occur, the Company entering into a scheme of arrangement, the commencement of a takeover bid for the Company’s Shares, or a party acquiring a sufficient interest in the Company to enable them to replace the Board, the Board may declare an Option to be free of any conditions of exercise. Options which are so declared may, subject to the lapsing conditions set out above, be exercised at any time on or before their expiry date and in any number.

There are no participating rights or entitlements inherent in the Options and Optionholders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options without exercising the Options. Optionholders shall be afforded the opportunity to exercise all Options which they are entitled to exercise pursuant to the Option Plan prior to the date for determining entitlements to participate in any such issue.

If the Company makes an issue of Shares to Shareholders by way of capitalisation of profits or reserves ( Bonus Issue ), each Optionholder holding any Options which have not expired at the time of the record date for determining entitlements to the Bonus Issue

shall be entitled to have issued to him upon exercise of any of those Options the number of Shares which would have been issued under the Bonus Issue ( Bonus Shares ) to a person registered as holding the same number of Shares as that number of Shares to which the Optionholder may subscribe pursuant to the exercise of those Options immediately before the record date determining entitlements under the Bonus Issue (in addition to the Shares which he or she is otherwise entitled to have issued to him or her upon such exercise). The Bonus Shares will be paid by the Company out of profits or reserves (as the case may be) in the same manner as was applied in relation to the Bonus Issue and upon issue rank pari passu in all respects with the other Shares issued upon exercise of the Options.

In the event of any reconstruction (including a consolidation, subdivision, reduction or return) of the issued capital of the Company prior to the expiry of any Options, the number of Options to which each Optionholder is entitled or the exercise price of his or her Options or both or any other terms will be reconstructed in a manner determined by the Board which complies with the provisions of the Corporations Act and the ASX Listing Rules at the time of the reconstruction.

Under current taxation laws any taxation liability in relation to the Options, or the Shares issued on exercise of the Options, will fall on the participants. The Company will not be liable to fringe benefits tax in relation to Options or Shares issued under the Plan.

Although Directors may be eligible to be offered Options under the Plan if they are employees, this first requires specific Shareholder approval due to the requirements of the ASX Listing Rules and the Corporations Act.

PROXY FORM

APPOINTMENT OF PROXY CANYON RESOURCES LIMITED ACN 140 087 261 GENERAL MEETING

I/We of being a Shareholder entitled to attend and vote at the Meeting, hereby appoint Name: OR : the Chair as my/our proxy,

or failing the person so named or, if no person is named, the Chair, or the Chair’s nominee, to vote in accordance with the following directions, or, if no directions have been given, and subject to the relevant laws as the proxy sees fit, at the Meeting to be held at 9:00am (Perth time), on 24 February 2014 at The Park Business Centre, 45 Ventnor Avenue, West Perth, Western Australia, and at any adjournment thereof.

The Chair intends to vote undirected proxies in favour of all Resolutions in which the Chair is entitled to vote.

Voting on business of the Meeting	FOR	AGAINST	ABSTAIN
Resolution 1 – Approval to Issue Shares for Cameroon Project
Resolution 2 – Approval to Issue Shares and Options to Proposed Director
Resolution 3 – Approval of Issue of Incentive Options to P Gallagher
Resolution 4 – Approval of Issue of Incentive Options to M Shackleton
Resolution 5 – Approval of Issue of Incentive Options to R Grivas
Resolution 6 –Approval of Incentive Options to D Netherway
Resolution 7 –To Issue Broker Options
Resolution 8 –To issue Options to Zenix Nominees
Resolution 9 – Approval of Employee Incentive Scheme

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

Important for Resolutions 2, 3, 4, 5, 6 and 9

If you have not directed your proxy how to vote as your proxy in respect of Resolutions 2, 3, 4, 5, 6 or 9 and the Chair is, or may by default be, appointed your proxy, you must mark the box below.

I/we direct the Chair to vote in accordance with his/her voting intentions (as set out above) on Resolutions 2, 3, 4, 5, 6 or 9 (except where I/we have indicated a different voting intention above) and expressly authorise that the Chair may exercise my/our proxy even though Resolutions 2, 3, 4, 5, 6 or 9 are connected directly or indirectly with the remuneration of a member of the Key Management Personnel and acknowledge that the Chair may exercise my/our proxy even if the Chair has an interest in the outcome of Resolutions 2, 3, 4, 5, 6 or 9 and that votes cast by the Chair for Resolutions 2, 3, 4, 5, 6 or 9, other than as proxy holder, will be disregarded because of that interest.

If the Chair is, or may by default be, appointed your proxy and you do not mark this box and you have not directed the Chair how to vote, the Chair will not cast your votes on Resolutions 2, 3, 4, 5, 6 or 9 and your votes will not be counted in calculating the required majority if a poll is called on Resolutions 2, 3, 4, 5, 6 or 9.

Signature of Shareholder(s):

Signature of Shareholder(s): Individual or Shareholder 1 Sole Director/Company Secretary	Shareholder 2 Director	Date: ______ Shareholder 3

		Director/Company Secretary

Contact Name: _____ Contact Ph (daytime): _____

Instructions for Completin g ‘Appointment of Proxy’ Form

( Appointing a proxy ): A Shareholder entitled to attend and cast a vote at the Meeting is entitled to appoint a proxy to attend and vote on their behalf at the Meeting. If a Shareholder is entitled to cast 2 or more votes at the Meeting, the Shareholder may appoint a second proxy to attend and vote on their behalf at the Meeting. However, where both proxies attend the Meeting, voting may only be exercised on a poll. The appointment of a second proxy must be done on a separate copy of the Proxy Form. A Shareholder who appoints 2 proxies may specify the proportion or number of votes each proxy is appointed to exercise. If a Shareholder appoints 2 proxies and the appointments do not specify the proportion or number of the Shareholder’s votes each proxy is appointed to exercise, each proxy may exercise one-half of the votes. Any fractions of votes resulting from the application of these principles will be disregarded. A duly appointed proxy need not be a Shareholder.

2.

( Direction to vote ): A Shareholder may direct a proxy how to vote by marking one of the boxes opposite each item of business. The direction may specify the proportion or number of votes that the proxy may exercise by writing the percentage or number of Shares next to the box marked for the relevant item of business. Where a box is not marked the proxy may vote as they choose subject to the relevant laws. Where more than one box is marked on an item the vote will be invalid on that item.

3. ( Signing instructions ):

( Individual ): Where the holding is in one name, the Shareholder must sign.
( Joint holding ): Where the holding is in more than one name, all of the Shareholders should sign.
( Power of attorney ): If you have not already provided the power of attorney with the registry, please attach a certified photocopy of the power of attorney to this Proxy Form when you return it.
( Companies ): Where the company has a sole director who is also the sole company secretary, that person must sign. Where the company (pursuant to Section 204A of the Corporations Act) does not have a company secretary, a sole director can also sign alone. Otherwise, a director jointly with either another director or a company secretary must sign. Please sign in the appropriate place to indicate the office held. In addition, if a representative of a company is appointed pursuant to Section 250D of the Corporations Act to attend the Meeting, the documentation evidencing such appointment should be produced prior to admission to the Meeting. A form of a certificate evidencing the appointment may be obtained from the Company.
( Attending the Meeting ): Completion of a Proxy Form will not prevent individual Shareholders from attending the Meeting in person if they wish. Where a Shareholder completes and lodges a valid Proxy Form and attends the Meeting in person, then the proxy’s authority to speak and vote for that Shareholder is suspended while the Shareholder is present at the Meeting.
( Return of Proxy Form ): To vote by proxy, please complete and sign the enclosed Proxy Form and return by:
(a) post to Canyon Resources Limited, PO Box 270, West Perth WA 6872; or
(b) facsimile to the Company on facsimile number +61 8 9389 1464; or
(c) email to the Company at [email protected],

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

Proxy Forms received later than this time will be invalid.

AI assistant

CANYON RESOURCES LIMITED — Proxy Solicitation & Information Statement 2014

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