CARAVEL MINERALS LIMITED — Proxy Solicitation & Information Statement 2008

Mar 19, 2008

SILVER SWAN GROUP LIMITED A B N 4 1 1 2 0 0 6 9 0 8 9

NOTICE OF GENERAL MEETING

The General Meeting of the Company will be held at Celtic Club, 48 Ord Street, West Perth, Western Australia on Tuesday, 22 April 2008 at 10.00AM (WST).

Part 1 of 4

SILVER SWAN GROUP LIMITED A B N 4 1 1 2 0 0 6 9 0 8 9

NOTICE OF GENERAL MEETING

Notice is hereby given that the general meeting of shareholders of Silver Swan Group Limited ( "Company" ) will be held at the Celtic Club, 48 Ord Street, West Perth, Western Australia on Tuesday, 22 April 2008 at 10.00AM (WST) ( "Meeting" ).

The Explanatory Memorandum enclosed with this Notice (“ Explanatory Memorandum ”) provides additional information on matters to be considered at the Meeting. The Explanatory Memorandum and the Proxy Form forms part of this Notice.

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 as Shareholders on Sunday, 20 April 2008 at 10.00AM (WST).

Terms and abbreviations used in this Notice and the Explanatory Memorandum are defined in Schedule 1.

AGENDA

1. Resolution 1 – Authority to issue and allot the Consideration Shares to Mercator under item 7 of section 611 of the Corporations Act

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

“That, for the purpose of item 7 of section 611 of the Corporations Act and all other purposes, approval and authority is given for the Company to issue and allot up to 10,000,000 Shares (" Mercator Shares ") and 4,000,000 Shares on conversion of 4,000,000 performance shares (" Performance Shares ") to Mercator (irrespective of the voting power in the Company held by Mercator at the time of the issue of the Shares on conversion of the Performance Shares) on the terms and conditions in the Explanatory Memorandum.”

2. Resolution 2 – Appointment of Director – Dr Susan Vearncombe

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

“That, subject to the passing of Resolution 1 and completion of the acquisition of the Meekatharra Project, in accordance with article 6.2(c) of the Constitution, Dr Susan Vearncombe, having consented to act and being eligible, be appointed as a Director.”

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3. Resolution 3 – Appointment of Director – Mr Michael Elias

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

“That, subject to the passing of Resolution 1 and completion of the acquisition of the Meekatharra Project, in accordance with article 6.2(c) of the Constitution, Mr Michael Elias, having consented to act and being eligible, be appointed as a Director.”

4. Resolution 4 – Approve Incentive Options to Dr Susan Vearncombe

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

“That, subject to the passing of Resolutions 1 and 2 and completion of the acquisition of the Meekatharra Project and for the purpose of Listing Rule 10.11 and all other purposes, Shareholders approve the issue of:

• (i) 1,000,000 $0.20 Incentive Options;

• (ii) 1,000,000 $0.30 Incentive Options; and

• (iii) 1,000,000 $0.50 Incentive Options,

to Dr Susan Vearncombe (or her nominee) on the terms and conditions in the Explanatory Memorandum.”

Voting Exclusion:

The Company will disregard any votes cast on this Resolution by Dr Susan Vearncombe or any of her associates.

The Company need not disregard a vote on this Resolution 4 if:

• (a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• (b) 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.

5. Resolution 5 – Approve Options to Mr Michael Elias

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

“That, subject to the passing of Resolutions 1 and 3 and completion of the acquisition of the Meekatharra Project, for the purpose of Listing Rule 10.11 and all other purposes, Shareholders approve the issue of 500,000 $0.20 Options and 500,000 $0.30 Options to Mr Michael Elias (or his nominee) on the terms and conditions in the Explanatory Memorandum.”

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Voting Exclusion:

The Company will disregard any votes cast on this Resolution by Mr Michael Elias or any of his associates.

The Company need not disregard a vote on this Resolution 5 if:

• (a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• (b) it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

6. Resolution 6 – Approve Options to Mr Simon Robertson

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

“That for the purpose of Listing Rule 7.1 and all other purposes, Shareholders approve the issue of 250,000 $0.20 Options and 250,000 $0.30 Options to Mr Simon Robertson or his nominee on the terms and conditions in the Explanatory Memorandum.”

Voting Exclusion:

The Company will disregard any votes cast on this Resolution by a person who may participate in the issue of options under this Resolution 6 except a benefit solely in the capacity of a holder of ordinary securities, if the resolution is passed or an associate of that person.

The Company need not disregard a vote on this Resolution 6 if:

• (a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• (b) 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.

7. Resolution 7 – Approve Employee Option Scheme

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

"That in accordance with Exception 9 of Listing Rule 7.2 Shareholders approve the establishment of an employee option scheme to be called the "Silver Swan Employee Option Scheme" and the issue of shares pursuant to this scheme on the terms and conditions in the Explanatory Memorandum".

Dated 18 March 2008 By Order of the Board

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James Harris Chairman

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SILVER SWAN GROUP LIMITED A B N 4 1 1 2 0 0 6 9 0 8 9

EXPLANATORY MEMORANDUM

Introduction

This Explanatory Memorandum has been prepared for the information of Shareholders in connection with the business to be conducted at the general meeting to be held at the Celtic Club, 48 Ord Street, West Perth, Western Australia at 10.00AM (WST) on Tuesday, 22 April 2008 (WST) ( "Meeting" ).

1. Resolution 1 – Authority to issue and allot the Consideration Shares to Mercator under item 7 of section 611 of the Corporations Act

1.1 Background

• (a) On 19 February 2008 the Company and Mercator Gold Australia Pty Ltd entered into the Heads of Agreement whereby the Company agreed to purchase the Meekatharra Project, which is prospective for gold and base metals. The material terms of the Heads of Agreement are summarised in Schedule 7.

• (b) The Independent Expert's Report contains as an annexure an independent geologist's report on the Meekatharra Project, which is contained in Schedule 8.

• (c) Consideration for the purchase of the tenements is the issue of the Mercator Shares and the Performance Shares (" Consideration Shares "). The Performance Shares will convert into Shares upon the satisfaction of the Milestone. The terms of the Performance Shares are in Schedule 5.

• (d) The Heads of Agreement is subject to and conditional upon the Company undertaking and being satisfied with due diligence on the mining assets of the Meekatharra Project and obtaining shareholder approval for the issue of the Consideration Shares (including the issue of Shares upon conversion of the Performance Shares).

• (e) The issue of the Mercator Shares and Shares on the conversion of the Performance Shares will increase Mercator’s voting power in the Company to more than 20% and would make Mercator breach certain prohibitions in the Corporations Act.

• (f) Under item 7 of Section 611 of the Corporations Act, Shareholders can approve the issue of the Consideration Shares and the issue of Shares upon conversion of the Performance Shares to Mercator (if to do so would increase its voting power in the Company to more than 20%) without breaching the Corporations Act. Such approval would exempt Mercator from the prohibitions in the Corporations Act.

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• (g) The Company is seeking Shareholder approval under item 7 of Section 611 of the Corporations Act so that Mercator can be issued all of the Consideration Shares and 4,000,000 Shares upon conversion of the Performance Shares irrespective of whether the conversion of the Performance Shares to Shares increases Mercator's or another person’s voting power in the Company from:

• (i) 20% or below to more than 20%; or

• (ii) a starting point that is above 20% and below 90%.

• (h) If Shareholders give approval under item 7 of section 611 of the Corporations Act there is no assurance that Mercator will satisfy the Milestone enabling the Performance Shares to convert into Shares.

• (i) The capital structure of the Company at the date of this Notice is in Schedule 2.

• (j) The Company is currently seeking confirmation from the ASX that the terms of the Performance Shares are acceptable to the ASX under Listing Rule 6.1. The Company expects to obtain this confirmation from the ASX prior to the meeting. The issue of the Performance Shares will not be considered if the ASX does not approve the terms of the Performance Shares.

1.2 Section 611 Corporations Act

• (a) Section 606 of the Corporations Act prohibits a person acquiring a relevant interest in the issued voting shares of the Company if, because of the acquisition, that person’s or another person’s voting power in the Company increases from:

• (i) 20% or below to more than 20%; or

• (ii) a starting point that is above 20% and below 90%.

• (b) The voting power of a person in the Company is determined by reference to section 610 Corporations Act. A person’s voting power in the Company is the total of the votes attaching to the Shares in the Company in which that person and that person’s associates (within the meaning of the Corporations Act) have a relevant interest.

• (c) Under section 608 Corporations Act a person will have a relevant interest in Shares if:

• (i) the person is the registered holder of the Shares;

• (i) the person has the power to exercise or control the exercise of votes or disposal of the Shares; or

• (ii) the person has over 20% of the voting power in a company that has a relevant interest in Shares, then the person has a relevant interest in said Shares.

• (d) For the purpose of determining who is an associate you need to consider section 12 of the Corporations Act. Any reference in chapters 6 to 6C of the Corporations Act to an associate is as that term is defined in section 12. The definition of 'associate' in section 12 is exclusive. If a person is an associate under section 11, 13 or 15 of the Corporations Act then it does not apply to

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chapters 6 to 6C. A person is only an associate for the purpose of chapter 6 to 6C if he is an associate under section 12.

• (e) Under section 12 of the Corporations Act associates of Mercator are as follows:

• (i) A body corporate that Mercator controls.

• (ii) A body corporate that controls Mercator.

• (iii) A body corporate that is controlled by an entity that controls Mercator.

• (iv) A person with whom Mercator has, or proposes to enter into, a relevant agreement for the purpose of controlling or influencing the composition of the Board or affairs of the Company.

• (v) A person with whom Mercator is acting, or proposing to act, in concert in relation to the affairs of the Company.

• (f) The Corporations Act defines 'control' and 'relevant agreement' very broadly as follows:

• (i) Under section 50AAA of the Corporations Act control means the capacity to determine the outcome of decisions about the financial and operating policies of the Company. In determining the capacity you need to take into account the practical influence a person can exert and any practice or pattern of behaviour affecting the financial or operating policies of the Company.

• (ii) Under section 9 of the Corporations Act relevant agreement means an agreement, arrangement or understanding:

  • (A) whether formal or informal or partly informal and partly informal;

  • (B) whether written or oral or partly written and partly oral; and

  • (C) whether or not having legal or equitable force and whether or not based on legal or equitable rights.

• (g) Associates are determined as a matter of fact. For example where a person controls or influences the Board or the conduct of the Company’s business affairs, or acts in concert with a person in relation to the entity’s business affairs.

• (h) Section 611 of the Corporations Act has exceptions to the prohibition in section 606 of the Corporations Act. Item 7 of section 611 of the Corporations Act provides a mechanism by which Shareholders may approve an issue of Shares to a person which results in that person’s or another person’s voting power in the Company increasing from:

• (i) 20% or below to more than 20%; or

• (ii) a starting point that is above 20% and below 90%.

• (i) To comply with the requirements of the Corporations Act (as contained in ASIC Regulatory Guide 74), the Company provides the information in this

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section 1 of the Explanatory Memorandum to Shareholders in relation to Resolution 1.

1.3 Information required by item 7 of section 611 of the Corporations Act and ASIC Regulatory Guide 74

The information that Shareholders require under item 7 of section 611 of the Corporations Act and ASIC Regulatory Guide 74 is as follows:

• (a) The identity of the allottee and any person who will have a relevant interest in the Shares to be allotted

Mercator is going to acquire the Consideration Shares (and Shares upon conversion of the Performance Shares if the Milestone is satisfied).

Mercator is listed on the alternative investment market operated by London Stock Exchange plc.

Mercator wholly owns an Australian subsidiary, Mercator Gold Australia Pty Ltd.

Refer to www.mercatorgold.com for more information on Mercator.

• (b) Full particulars (including the number and percentage) of the Shares in which Mercator has or will have a relevant interest immediately before and after the acquisition

Neither Mercator nor any of its subsidiaries has a relevant interest in any securities in the Company at the date of this Notice.

Following completion of the acquisition of the Meekatharra Project, Mercator will hold 10,000,000 Shares and 4,000,000 Performance Shares.

At the date of this Notice the Company has on issue 23,350,001 Shares and 10,000,000 Options and as such:

• (i) The 10,000,000 Mercator Shares to be issued to Mercator gives Mercator 30% of the voting power in the Company.

• (ii) Assuming that the Mercator Shares are issued and assuming that Mercator satisfies the Milestone enabling conversion of the Performance Shares into Shares, Mercator will have a maximum of 37.5% of the voting power in the Company.

If on or before the conversion of the Performance Shares the Company issues any securities then Mercator's voting power will be less.

Mercator's voting power in the Company may change as follows:

• (iii) Increased as follows:

• (A) Acquisition of Shares by Mercator on and off market. Mercator could increase its shareholding under the creeping provisions allowing it to acquire 3% every 6 months.

• (B) Cancellation of Shares held by Shareholders other than Mercator.

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• (iv) Decreased as follows:

  • (A) Disposal of Shares by Mercator.

  • (B) Issue of Shares by the Company to Shareholders other than Mercator.

  • (C) Exercise of Options by Shareholders other than Mercator.

• (c) The identity, associations (with Mercator and any of its associates) and qualifications of any person who is intended to become a director if Shareholders agree to the acquisition

• (i) Subject to the passing of Resolution 1, it is proposed to appoint Dr Susan Vearncombe as the managing Director and Mr Michael Elias as a non-executive Director. Dr Susan Vearncombe and Mr Michael Elias are seeking to be appointed Directors pursuant to Resolutions 2 and 3, respectively.

• (ii) Dr Susan Vearncombe is a former general manager – geology and director of Mercator and she has an interest in 360,000 shares and 750,000 options in Mercator. A brief CV of Dr Susan Vearncombe is in section 2 of this Explanatory Memorandum.

• (iii) Mr Michael Elias is a current non-executive director of Mercator and he has an interest in 20,000 shares and 200,000 options in Mercator. A brief CV of Mr Michael Elias is in section 3 of this Explanatory Memorandum.

• (d) Mercator’s intentions regarding the future of the Company if Shareholders agree to the allotment

Mercator intends to continue to grow the value of the Company for the benefit of all Shareholders, by providing strong support as a Shareholder and through its nominated managing director, Dr Vearncombe, and in particular other than as disclosed in the Explanatory Memorandum:

• (i) There is no intention to change the business of the Company.

• (ii) There is no intention to inject further capital into the Company.

• (iii) There is no intention to change the future employment of the present employees of the Company.

• (iv) There is no proposal whereby any property will be transferred between the Company and Mercator or any person associated with Mercator.

• (v) There is no intention to otherwise redeploy any of the fixed assets of the Company.

• (e) Particulars of the terms of the proposed allotment of Shares and any contract or proposed contract between Mercator and the Company or any of their associates which is conditional upon, or directly or indirectly dependent on, Shareholders agreement to the allotment

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The completion of the Heads of Agreement is the only agreement that is conditional on shareholder approval. The material terms of the Heads of Agreement is contained in Schedule 7.

• (f)

• When the allotment is to be made

The Consideration Shares will be issued 5 business days after Shareholder approval for the issue of the Consideration Shares has been obtained.

• (g)

An explanation of the reasons for the proposed allotment

The Consideration Shares will be issued to Mercator as consideration for the sale of the Meekatharra Project.

• (h)

• The interests of the Directors in Resolution 1.

• None of the Directors have an interest in Mercator or Mercator Gold Australia Pty Ltd.

• (i) Identity of the Directors who approved or voted against the proposal to put Resolution 1 to Shareholders and the Explanatory Memorandum.

All of the Directors approved the proposal to put Resolution 1 to Shareholders.

• (j) Recommendation or otherwise of each Director as to whether non-associated Shareholders should agree to the allotment and the reasons for the recommendation

• (i) All of the Directors recommend that Shareholders vote in favour of Resolution 1 because they believe that the issue of the Consideration Shares as consideration for the acquisition of the Meekatharra Project under the Heads of Agreement is in the best interests of the Company.

• (ii) All of the Directors recommend that Shareholders vote in favour of Resolution 1 because they each believe that the Consideration Shares represents a fair market value for the Meekatharra Project.

• (k) Intention of Mercator to change significantly the financial or dividend policies of the Company

Mercator has no present intention to change the financial or dividend policies of the Company.

• (l) Analysis of whether the acquisitions of the Shares the subject of Resolution 1 is fair and reasonable when considered in the context of the interests of the Shareholders other than Mercator.

• (i) All of the current Directors resolved to appoint BDO as an independent expert and commissioned it to prepare a report to provide an opinion as to whether or not the proposal in Resolution 1 is fair and reasonable to the Shareholders.

• (ii) BDO has concluded that the proposed transaction is fair and reasonable to the Shareholders. The Company strongly recommends that you read the Independent Expert's Report in full, a copy of which is in Schedule 8 to this Explanatory Statement.

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2. Resolution 2 - Appointment of Director – Dr Susan Vearncombe

Article 6.2(c) of the Constitution states that the Company, in general meeting, may appoint a person as a Director.

As announced on 21 February 2008 the Board seeks shareholder approval for the appointment of Dr Susan Vearncombe as Director.

A brief CV of Dr Vearncombe is as follows:

Dr Susan Vearncombe ( B.Soc.Sci, MScHons, PhD, RPGeo, MAIG ) is a Geologist with more than 20 years experience in the mining/exploration industry and has worked internationally in Australasia, Africa, Indonesia, North & South America on a range of commodity styles.

Dr Vearncombe has also published articles in international journals.

Dr Vearncombe was a founding member of Mercator and General Manager-Geology. She has also developed key spatial analysis technology.

The Board unanimously recommends the appointment of Dr Vearncombe as Director.

3. Resolutions 3 – Appointment of Director – Mr Michael Elias

Article 6.2(c) of the Constitution states that the Company, in general meeting, may appoint a person as a Director.

As announced on 21 February 2008 the Board seeks shareholder approval for the appointment of Mr Michael Elias as Director.

A brief CV of Mr Elias is as follows:

Mr Michael Elias ( BScHons, FAusIMM, CPGeo) has more than 30 years experience in the mining industry including working as Chief Geologist Resource Development, Nickel Division at Western Mining Corporation Ltd and at GSWA.

Mr Elias is currently a director of Braemore Resources Ltd, Australian Mines Ltd and CSA Australia Pty Ltd and a non-executive director of Mercator Gold plc.

The Board unanimously recommends the appointment of Mr Elias as Director.

4. Resolution 4 – Approve Incentive Options to Dr Susan Vearncombe

Subject to the passing of Resolutions 1 and 2, Resolution 4 seeks Shareholder approval in accordance with Listing Rule 10.11 for the issue of the Incentive Options to Dr Susan Vearncombe.

Shareholder approval is required for the grant of the Incentive Options under Listing Rule 10.11 because the proposed Directors are related parties of the Company. Furthermore, Shareholder authorisation of the issue of the Incentive Options means

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that this issue will not reduce the Company's 15% placement capacity under Listing Rule 7.1.

The Incentive Options are not transferable and no application for quotation of the Incentive Options will be made currently.

4.1 Specific information required by Listing Rule 10.13

For the purposes of Listing Rule 10.13 information regarding the Incentive Options is provided as follows:

• (a) 3,000,000 Incentive Options will be issued to Dr Susan Vearncombe (or her nominee) of which 1,000,000 are $0.20 Incentive Options, 1,000,000 are $0.30 Incentive Options and 1,000,000 are $0.50 Incentive Options.

• (b) Subject to the passing of Resolutions 1 and 2, Dr Susan Vearncombe will become a Director.

• (c) The issue price of each Incentive Option is nil.

• (d) All Incentive Options entitle the holder to subscribe for one Share and are exercisable on or before 31 March 2013. Of the 3,000,000 Incentive Options being granted, the 1,000,000 $0.20 Incentive Options have an exercise price of $0.20, the 1,000,000 $0.30 Incentive Options have an exercise price of $0.30 and the 1,000,000 $0.50 Incentive Options have an exercise price of $0.50. The Incentive Options will not be quoted on ASX. Further terms and conditions of the Incentive Options are in Schedule 3.

• (e) The Company will issue the Incentive Options no later than one month after the date of the Meeting or such longer period of time as ASX may in its discretion allow.

• (f) It is anticipated that allotment will occur on one date.

• (g) No funds will be raised by the issue of the Incentive Options as they are being issued for nil consideration.

• (h) A voting exclusion statement is included in the Notice.

• (i) Shareholder approval is being sought under Listing Rule 10.11 and as such approval is not required under Listing Rule 7.1.

5. Resolution 5 – Approve Options to Mr Michael Elias

5.1 General

Subject to the passing of Resolutions 1 and 3, Resolution 5 seeks Shareholder approval in accordance with Listing Rule 10.11 for the issue of 500,000 $0.20 Options and 500,000 $0.30 Options to Mr Michael Elias.

Shareholder approval is required for the grant of the Options under Listing Rule 10.11 because Mr Elias is a proposed Director of the Company. Furthermore, Shareholder authorisation of the issue of the Options means that this issue will not reduce the Company's 15% placement capacity under Listing Rule 7.1.

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5.2 Specific information required by Listing Rule 10.13

For the purposes of Listing Rule 10.13 information regarding the Options to be granted to Mr Elias is provided as follows:

• (a) 1,000,000 Options will be granted to Mr Michael Elias (or his nominee), comprising 500,000 $0.20 Options and 500,000 $0.30 Options (and 1,000,000 Shares on exercise of the Options).

• (b) Subject to the passing of Resolutions 1 and 3, Mr Michael Elias will become a Director of the Company.

• (c) The issue price of each Option is nil.

• (d) All Options entitle the holder to subscribe for one Share and expire on 31 March 2013. Of the 1,000,000 Options being granted, the 500,000 $0.20 Options have an exercise price of $0.20 and the 500,000 $0.30 Options have an exercise price of $0.30. The Options will not be quoted on ASX. Further terms and conditions of the Options are in Schedule 6.

• (e) The Company will issue the Options no later than one month after the date of the Meeting or such longer period of time as ASX may in its discretion allow.

• (f) It is anticipated that allotment will occur on one date.

• (g) No funds will be raised by the issue of the Options as they are being issued for nil consideration.

• (h) A voting exclusion statement is included in the Notice.

• (i) Shareholder approval is being sought under Listing Rule 10.11 and as such approval is not required under Listing Rule 7.1.

6. Resolution 6 – Approve Options to Mr Simon Robertson

6.1 General

Resolution 6 seeks Shareholder approval in accordance with Listing Rule 7.1 for the issue of a total of 250,000 $0.20 Options and 250,000 $0.30 Options to Mr Simon Robertson, Company Secretary of Silver Swan (or his nominee).

Listing Rule 7.1 provides, subject to certain exceptions, that Shareholder approval is required for any issue of securities by a listed company, where the securities proposed to be issued represent more than 15% of the Company’s securities then on issue.

While the $0.20 Options and the $0.30 Options proposed to be granted under this Resolution 6 do not exceed the 15% limit, Shareholder approval is being sought such that the grant of the $0.20 Options and $0.30 Options do not reduce the Company's 15% capacity.

6.2 Specific Information Required by Listing Rule 7.1

Listing Rule 7.3 contains certain requirements as to the contents of a notice sent to Shareholders for the purposes of Listing Rule 7.1 and the following information is included in this Explanatory Statement for that purpose:

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• (a) The maximum number of securities to be issued pursuant to Resolution 6 is 500,000 Options comprising 250,000 $0.20 Options and 250,000 $0.30 Options (and 500,000 Shares on exercise of the Options).

• (b) The $0.20 Options and the $0.30 Options are being issued for nil consideration.

• (c) No funds raised will raised under this Resolution 6.

• (d) The $0.20 Options and the $0.30 Options will be issued no later than 3 months after the date of the Meeting, or such later date as approved by ASX.

• (e) It is anticipated that allotment will occur on one date.

• (f) The $0.20 Options and the $0.30 Options will be allotted to Mr Simon Robertson (or his nominee).

• (g) The terms of the $0.20 Options and the $0.30 Options are in Schedule 6 to the Notice.

• (h) A voting exclusion statement is included in the Notice.

7. Resolution 7 – Approve Employee Option Scheme

Resolution 7 seeks Shareholder approval in accordance with the Listing Rule 7.2 for the establishment of the Silver Swan Employee Option Scheme and the issue of Options pursuant to this Scheme.

The Directors are not eligible to participate in the Employee Option Scheme.

The two main purposes of the Scheme are to give an incentive to Eligible Employees to provide dedicated and ongoing commitment and effort to the Company aligning the interests of both employees and Shareholders and for the Company to reward Eligible Employees for their efforts. The Scheme contemplates the issue to Eligible Employees of Options and Shares upon exercise of the Options.

Listing Rule 7.1 places restrictions on the number of equity securities, including Options, which a listed company may issue in any 12 months. However, certain issues are exempt from this Listing Rule and are effectively disregarded for the purposes of counting the number of securities which a company may issue.

Exempt issues include an issue of securities to persons participating in an employee option scheme where shareholders have approved the issue of securities under the scheme as an exemption from Listing Rule 7.1. Shareholder approval must be given in a general meeting held not more than 3 years before the date of issue where the Notice contains or is accompanied by certain prescribed information (set out below).

In order to take advantage of the exemption from Listing Rule 7.1 and allow the Company greater flexibility to issue securities, Shareholders are requested to approve the Scheme as an exemption from Listing Rule 7.1.

This approval will be effective for a period of 3 years from the date the passing by Shareholders of Resolution 7.

For the purpose of Listing Rule 7.2 Exception 9 the terms of the Scheme are in Schedule 4.

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8. Action to be taken by Shareholders

Shareholders should read the Explanatory Memorandum carefully before deciding how to vote on the Resolutions.

A Proxy Form is attached to the Notice. This is to be used by Shareholders if they wish to appoint a representative (a "proxy") to vote in their place. All Shareholders are invited and encouraged to attend the Meeting or, if they are unable to attend in person, sign and return the Proxy Form to the Company in accordance with the instructions provided. Lodgement of a Proxy Form will not preclude a Shareholder from attending and voting at the Meeting in person.

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Schedule 1 - Definitions

In this Explanatory Memorandum and the Notice terms and phrases defined in the Corporations Act 2001 (Cth) shall have the same meaning and:

"$0.20 Option" means an Option exercisable at $0.20 and having the terms and conditions in Schedule 6.

"$0.30 Option" means an Option exercisable at $0.30 and having the terms and conditions in Schedule 6.

"$0.20 Incentive Option" means an Option exercisable at $0.20, expiring on 31 March 2013 and having the terms and conditions in Schedule 3.

"$0.30 Incentive Option" means an Option exercisable at $0.30, expiring on 31 March 2013 and having the terms and conditions in Schedule 3.

"$0.50 Incentive Option" means an Option exercisable at $0.50, expiring on 31 March 2013 and having the terms and conditions in Schedule 3.

ASIC" means the Australian Securities and Investments Commission.

"ASX" means ASX Limited (ABN 98 008 624 691) and, where the context permits, the Australian Securities Exchange operated by ASX Limited.

"BDO" means BDO Kendalls Corporate Finance (WA) Pty Ltd.

"Board" means the board of Directors.

"Company" means Silver Swan Group Limited ABN 41 120 069 089.

"Consideration Shares" has the meaning given in Section 1.1 of the Explanatory Memorandum.

"Constitution" means the Constitution of the Company.

"Corporations Act" means the Corporations Act 2001 (Cth).

"Director" means a director of the Company.

"Eligible Employee" means an employee of the Company entitled to participate in the Company's employee option scheme.

"Explanatory Memorandum" has the meaning given in the introduction of the Notice.

"Heads of Agreement" means the heads of agreement between the Company and Mercator Gold Australia Pty Ltd dated 19 February 2008.

"Incentive Options" means the $0.20 Incentive Options, the $0.30 Incentive Options and the $0.50 Incentive Options.

"Independent Expert's Report" means the independent expert's report in Schedule 8.

"Listing Rules" means the listing rules of ASX.

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"Meekatharra Project" means the tenements, mining information and mining assets being purchased by the Company from Mercator Gold Australia Pty Ltd as contemplated by the Heads of Agreement.

"Meeting" has the meaning given in the introduction of the Notice.

"Mercator" means Mercator Gold plc a company listed on the alternative investment market operated by London Stock Exchange plc.

"Mercator Shares" has the meaning in Resolution 1.

"Milestone" means the verification milestone as defined in item 1 of Schedule 5.

"Notice" means the notice convening the Meeting and includes the Explanatory Memorandum and Proxy Form.

"Option" means an option to acquire a Share on the terms and conditions in Schedule 6 and includes the $0.20 Options and the $0.30 Options.

"Performance Shares" has the meaning given in Resolution 1 and having the terms and conditions in Schedule 5.

"Proxy Form" means the proxy form attached to the Notice.

"Resolution" means a resolution contained in the Notice.

"Schedule" means a schedule to the Explanatory Memorandum.

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

"Shareholder" means a shareholder of the Company.

"WST" means Western Standard Time, being the time in Perth, Western Australia.

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Schedule 2 – Capital Structure

Shares	Number
Shares (Listed) currently on issue	23,350,001
Shares to be issued to Mercator	10,000,000
Total	33,350,001
Performance Shares to be issued to Mercator	4,000,000
Options	Number
Current Options
Unlisted Options ($0.20)	5,000,000
Unlisted Options ($0.30)	5,000,000
Options to be issued under the Resolutions in this Notice
Unlisted Options ($0.20)	1,750,000
Unlisted Options ($0.30)	1,750,000
Unlisted Options ($0.50)	1,000,000
Total Options	14,500,000

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Schedule 3 - Terms and Conditions of Incentive Options

The Incentive Options (as defined in Schedule 3 of the Explanatory Memorandum) have the following terms and conditions:

1. Each Incentive Option shall be issued for no consideration.

2. Each Incentive Option entitles the holder ( "Holder" ) to subscribe for one Share in Silver Swan Group Limited ABN 41 120 069 089 (" Company ").

3. The exercise price of the Incentive Options are:

4. (a) $0.20 for the $0.20 Incentive Options.

5. (b) $0.30 for the $0.30 Incentive Options.

6. (c) $0.50 for the $0.50 Incentive Options.

7. The Incentive Options expire at 5.00 pm (WST) on 31 March 2013 (" Expiry Date

8. The Incentive Options are not transferable and will not be listed for official quotation on ASX.

9. There are no participating rights or entitlements inherent in the Incentive Options and the Holder is not entitled to participate in new issues of capital that may be offered to shareholders during the currency of the Incentive Option.

10. A Holder has the right to exercise the Incentive Options prior to the date of determining entitlements to any capital issues to the then existing shareholders of the Company made during the currency of the Incentive Options, and will be granted a period of at least 10 business days before books closing date to exercise the Incentive Options.

11. In the event the Company proceeds with a pro rata issue (except a bonus issue) of securities to the holders of Shares after the date of issue of the Incentive Options, the exercise price of the Incentive Options will be adjusted in accordance with the formula Listing Rule 6.22.2.

12. In the event of any re-organisation (including reconstruction, consolidation, subdivision, reduction or return of capital) of the issued capital of the Company, the Incentive Options will be re-organised as required by the Listing Rules, but in all other respects the terms of exercise will remain unchanged.

14. The Incentive Options will expire as follows:

15. (i) the date the Holder is disqualified from holding the office of director or officer of the Company; or

16. (ii) the date the Holder ceases to be a director or officer of the Company because of:

17. (A) retirement;

18. (B) voluntary cessation, or

19. (C) by mutual agreement of the Company and Holder.

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1. Incentive Options are only exercisable during the period from and including the date the Incentive Options are granted to and including the Expiry Date (" Exercise Period ") by the delivery to the registered office of the Company of a notice in writing (" Notice ") stating the intention of the Holder to exercise all or a specified number of options accompanied by an Incentive Option certificate and a cheque made payable to the Company for the subscription monies for the Shares. The Notice and cheque must be received by the Company during the Exercise Period. An exercise of only some Incentive Options shall not affect the rights of the Holder to the balance of the Incentive Options held.

2. On exercise of an Incentive Option:

3. (a) Company shall issue the Share within 5 Business Days of receipt of the Notice. (b) Share issued on the exercise of an option shall rank equally with the then Shares of the Company.

4. (c) Share issued on the exercise of an option will not be offered for sale by the Holder unless:

   • (i) the offer is made under circumstances that do not require disclosure to investors under Part 6D.2 of the Corporations Act; or

   • (ii) one of the following occurs:

     • (A) the Company gives ASX a notice that complies with section 708A(6) of the Corporations Act;

     • (B) the Company lodges a prospectus with ASIC that qualifies the Shares for resale under section 708A(11) of the Corporations Act; or

     • (C) expiry of 12 months after issue of the Shares.

5. (d) Application will be made by the Company to ASX for official quotation of the Share issued on the exercise of an Incentive Option.

6. (e) Unless prohibited under the Corporations Act the Company will:

   • (i) give ASX a notice that complies with section 708A(6) of the Corporations Act; or

   • (ii) lodge a prospectus with ASIC that qualifies the Shares for resale under section 708A (11) of the Corporations Act.

7. Shares allotted shall rank, from the date of allotment, equally with the existing ordinary shares of the Company in all respects.

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Schedule 4 – Terms and Conditions of Employee Option Scheme

The Directors are empowered to operate the Scheme in accordance with the Listing Rules and on the following terms and conditions:

1. Subject to paragraph (d), the Directors may offer to issue Options to Eligible Employees in accordance with Class Order 03/184, the Scheme and in such manner and on such terms and conditions as they in their absolute discretion determine.

2. If the Company has offered you Options, to accept the offer complete the Acceptance Form or accept in such other form as the Directors may in their absolute discretion approve from time to time.

3. The Eligible Employees to participate in the Scheme shall be as the Directors in their absolute discretion determine and shall take into account skills, experience, length of service with the Company, remuneration level and such other criteria as the Directors consider appropriate in the circumstances.

4. Options may not be offered under this Scheme without the issue of a prospectus in accordance with Chapter 6D of the Corporations Act, if the aggregate of:

5. (a) the number of Options to be issued;

6. (b) the number of Shares which would be issued if all the current Options issued under any employment incentive scheme were exercised;

7. (c) the number of Shares which have been issued as a result of the exercise of Options issued under any employee incentive scheme, where the Options were issued during the preceding five years; and

8. (d) all other Shares issued pursuant to any employee incentive scheme during the preceding five years;

9. but disregarding any offer made, Options or Shares issued by way of or as a result of:

10. (e) an offer to a person situated at the time of receipt of the offer outside Australia;

11. (f) an offer that was an excluded offer or invitation within the meaning of the Corporations Act as it stood prior to the commencement of schedule 1 of the Corporate Law Economic Reform Program Act 1999;

12. (g) an offer that did not need disclosure to investors because of section 708 of the Corporations Act; or

13. (h) an offer under a disclosure document,

would exceed 5% of the then current number of Shares on issue.

1. The Directors may, in their absolute discretion, offer to Eligible Employees Options under the Scheme, notwithstanding that it has previously issued more than the 5% limit in paragraph (d), up to a maximum of 10%, provided that the issue is made in accordance with the requirements of Chapter 6D of the Corporations Act.

2. Options will be issued free of charge to Eligible Employees. The exercise price of the Options shall be as the Directors in their absolute discretion determine, provided that it shall not be less than that amount which is equal to 80% of the average market price of

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the Shares in the 5 days in which sales in the Shares were recorded immediately preceding the day on which the Directors resolve to offer the Options.

1. The Directors may limit the total number of Options which may be exercised under the Scheme in any year.

2. The Directors, in their absolute discretion, having regard to skills, experience, length of service with the Company, remuneration level and such other criteria as the Directors consider appropriate in the circumstances, shall determine criteria to establish the periods during which the Options may be exercised.

3. All Options with a common expiry date shall have the same exercise price and rights to participate in issues of securities by the Company.

4. Unless the Directors in their absolute discretion determine otherwise, Options shall lapse upon the earlier of:

5. (a) the expiry of the exercise date;

6. (b) the resignation of the Eligible Employee;

7. (c) the Option holder ceasing to be an Eligible Employee by reason of dismissal, termination of employment, office or services as a result of breach of terms of appointment;

8. (d) a determination by the Directors that the Option holder has acted fraudulently, dishonestly or in breach of his or her obligations to the Company or an Associated Body Corporate;

9. If an Eligible Employee accepts an offer from the Company to participate in the Scheme then the Company will evidence the issue of an Option to an Eligible Employee by issuing that Eligible Employee a Certificate for that Option.

10. Each Option entitles the holder to subscribe for and be issued with one Share.

11. Shares issued pursuant to the exercise of Options will in all respects, including bonus issues and new issues, rank equally and carry the same rights and entitlements as other Shares on issue.

12. There are no participating 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. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least 7 business days after the issue is announced. This will give Option holders the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue.

13. The Options will not be quoted on the ASX. However, application will be made to the ASX for official quotation of the Shares issued on the exercise of the Options if the Shares are listed on the ASX at that time.

14. An application to be issued Options may be made by Eligible Employees invited to participate in the Scheme in such form and on such terms and conditions concerning the closing date for applications as the Directors in their absolute discretion determine.

15. If at any time the issued capital of the Company is reconstructed, all rights of Option holders are to be changed in a manner consistent with the Listing Rules.

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1. Subject to and in accordance with the Listing Rules (including any waiver issued under such Listings Rules), the Directors (without the necessity of obtaining the prior or subsequent consent of shareholders of the Company in a general meeting) may from time to time amend (including the power to revoke, add to or vary) all or any provisions of the Terms and Conditions in any respect whatsoever, by an instrument in writing, provided that rights or entitlements in respect of any Option issued before the date of amendment shall not be reduced or adversely affected unless prior written approval from the affected holder(s) is obtained.

2. At the absolute discretion of the Directors, the terms upon which Options will be issued may incorporate performance related factors. Such factors may reflect, inter alia, profitability levels, increases in production or decreases in production costs and may, subject to clause (r) above, be amended from time to time in a manner favourable to the Option holder. However such performance related factors, if included in the Option terms or so amended shall not act in any way to constitute a breach of the Terms and Conditions.

3. Notwithstanding the Terms and Conditions, upon the occurrence of a Trigger Event the Directors may determine:

4. (a) that the Options may be exercised at any time from the date of such determination, and in any number until the date determined by the Directors acting bona fide so as to permit the holder to participate in any change of control arising from a Trigger Event provided that the Directors will forthwith advise in writing each holder of such determination. Thereafter, the Options shall lapse to the extent they have not been exercised; or

5. (b) to use their reasonable endeavours to procure that an offer is made to holders of Options on like terms (having regard to the nature and value of the Options) to the terms proposed under the Trigger Event in which case the Directors shall determine an appropriate period during which the holder may elect to accept the offer and, if the holder has not so elected at the end of that period, the Options shall immediately become exercisable and if not exercised within 10 days, shall lapse.

6. An Option may not be transferred or assigned except that a legal personal representative of a holder of an Option who has died or whose estate is liable to be dealt with under laws relating to mental health will be entitled to be registered as the holder of that Option after the production to the Directors of such documents or other evidence as the Directors may reasonably require to establish that entitlement.

7. An Option is exercisable by the holder lodging with the Company a Notice of Exercise of Option together with a cheque for the exercise price of each Option to be exercised and the relevant Option Certificate. If not all of the holder's Options are being exercised, a holder must exercise Options in multiples of 1,000.

8. Neither participation in the Scheme by the Company or an Associated Body Corporate or any Eligible Employees or Option holders or anything contained in these Terms and Conditions shall in any way prejudice or affect the right of the Company or an Associated Body Corporate to dismiss any Eligible Employees or Option holder or to vary the terms of employment of any Eligible Employees or Option holder. Nor shall participation or the rights or benefits of an Eligible Employees or Option holder under the Terms and Conditions be relevant to or be used as grounds for granting or increasing damages in any action brought by an Eligible Employees or Option holder against the Company or an Associated Body Corporate whether in respect of any alleged wrongful dismissal or otherwise.

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1. At all times during which Eligible Employees may subscribe for or purchase Shares upon exercise of an Option issued pursuant to the Scheme, the Company shall provide, within a reasonable period of a request by Eligible Employees, the current market price of the Shares. Contact the Company Secretary to obtain this information.

2. The Scheme shall be administered by the Directors who shall have power to:

3. (a) determine appropriate procedures for administration of the Scheme consistent with these Terms and Conditions;

4. (b) resolve conclusively all questions of fact or interpretation or dispute in connection with the Scheme and settle as the Directors in their absolute discretion determine expedient any difficulties or anomalies howsoever arising with or by reason of the operation of the Scheme;

5. (c) delegate to any one or more persons for such period and on such conditions as it may determine the exercise of any of the Directors' powers or discretions arising under the Scheme; and

6. (d) subject to the Listing Rules, waive strict compliance with, amend or add to the Terms and Conditions of the Scheme except for the provisions of clause (d), and where such actions are taken such actions shall be conclusive, final and binding on Option holders.

26. Definitions

In this Schedule the following terms shall bear the following meanings:

"Acceptance Form" means the Acceptance Form which will accompany the invitation to the Eligible Employee to participate in the Scheme.

"Associated Body Corporate" means:

• (a) a related body corporate (as defined in the Corporations Act) of the Company;

• (b) a body corporate which has an entitlement to not less than 20% of the voting shares of the Company; and

• (c) a body corporate in which the Company has an entitlement to not less than 20% of the voting shares.

"ASX" means the Australian Stock Exchange Limited.

"Business Day" means those days other than a Saturday, Sunday, New Year's Day, Australia Day, Good Friday, Easter Monday, Anzac Day, Christmas Day, Boxing Day and any other day which the ASX shall declare and publish is not a business day.

"Certificate" means a certificate for any Option issued to Eligible Employees which will include all of the terms and conditions of the Option and the Notice of Exercise of Option or such other evidence of ownership that the Directors may in their absolute discretion determine from time to time.

"Company" means Silver Swan Group Limited.

"Company Group" means the Company and its Associated Bodies Corporate.

"Corporations Act" means the Corporations Act 2001 (Commonwealth).

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"Directors" mean the directors from time to time of the Company.

"Eligible Employees" means any full or part time employees of the Company or its Associated Bodies Corporate excluding Directors.

"Listing Rules" means the official listing rules of ASX as amended from time to time.

"Notice of Exercise of Option" means the Notice of Exercise of Option which will accompany the invitation to the Eligible Employee to participate in the Scheme.

"Offer Period" means the period referred to in the definition of that expression in Section 624 of the Corporations Act, provided that where a takeover bid is publicly announced prior to the service of an off-market bidder's statement on the Company in relation to that takeover bid the Offer Period shall be deemed to have commenced at the time of that announcement.

"Option" means an option to acquire a Share issued in accordance with the Scheme.

"Scheme" means the Silver Swan Group Limited Employee Option Scheme in which Eligible Employees may be invited to participate in accordance with the Terms and Conditions.

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

"Terms and Conditions" means the terms and conditions of the employee options plan in this Schedule 4, as amended from time to time.

"Trigger Event" means:

• (a) the despatch of a notice of meeting to consider a scheme of arrangement between the Company and its creditors or members or any class thereof pursuant to section 411 of the Corporations Act;

• (b) the service of a bidder's statement or a like document on the Company; or

• (c) the date upon which a person or a group of associated person becomes entitled, subsequent to the date of issue of the Option, to sufficient Shares to give it or them the ability, in general meeting to replace all, or allow a majority, of Directors in circumstances where such ability was not already held by a person associated with such person or group of associated persons.

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Schedule 5 – Terms and Conditions of Performance Shares

1. Definitions

In these terms and conditions:

ASX means ASX Limited (ABN 98 008 624 691) and, where the context permits, the Australian Securities Exchange operated by ASX Limited.

Company means Silver Swan Group Limited ABN 41 120 069 089.

Corporations Act means the Corporations Act 2001 .

Directors mean the directors from time to time of the Company.

Expiry Date means five years from the date of issue of the Performance Shares.

Heads of Agreement means the heads of agreement between the Company and Mercator Gold Australia Pty Ltd dated 19 February 2008.

Indicated Mineral Resource has the meaning given in the JORC Code .

Issue Price means $0.0001.

JORC Code means the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (2004) current at the date of the issue of the Performance Shares.

Listing Rules means the official listing rules of ASX, as amended, added to or replaced from time to time.

Performance Shareholder means the holder of a Performance Share.

Performance Share means a performance share issued on the terms and conditions in this Schedule.

Section 606(1) means section 606(1) of the Corporations Act.

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

Shareholder means a holder of Shares.

Takeover Bid means an off-market bid or market bid under Chapter 6 of the Corporations Act for Shares.

Tenement means the tenements as defined in the Heads of Agreement.

Verification Milestone means the identification of an independently calculated Indicated Mineral Resource of 350,000 ounces of gold or such amount of a metal other than gold that has an equivalent value at the time of determination as 350,000 ounces of gold from the tenements acquired under the Heads of Agreement.

2. Dividend

Performance Shareholders are not entitled to a dividend.

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3. Conversion

(a) Conversion

The Performance Shares will convert into Shares in accordance with this clause 3.

(b) Conversion formula

One Performance Share will convert into one Share upon the satisfaction, prior to the Expiry Date, of the Verification Milestone.

(c) After conversion

The Shares issued on conversion of any Performance Share will as and from 5.00pm (WST) on the date of allotment rank equally with and confer rights identical with all other Shares then on issue and application will be made by the Company to ASX for official quotation of the Shares issued upon conversion.

4. Issue of Shares for No Consideration

The Company shall not allot and issue Shares for no consideration and shall record the allotment and issue in the manner required by the Corporations Act.

5. Reconstruction

In the event of any reconstruction, consolidation or division into (respectively) a lesser or greater number of securities of the Shares the Performance Shares shall be reconstructed, consolidated or divided in the same proportion as the Shares are reconstructed, consolidated or divided and, in any event, in a manner which will not result in any additional benefits being conferred on the Performance Shareholders which are not conferred on the Shareholders.

6. Winding up

If the Company is wound up prior to conversion of all of the Performance Shares into Shares then the Performance Shareholders shall have:

• (a) No right to be paid cash for the Issue Price; and

• (b) No right to participate in surplus assets or profits of the Company on winding up.

7. Non-transferable

The Performance Shares are not transferable.

8. Conversion after Expiry Date

If prior to the Expiry Date the Verification Milestone is not met then after the Expiry Date the Company will, as soon as reasonably practical and in any event no later than 90

23

days after the Expiry Date, convert the total number of Performance Shares on issue into one Share.

9. Copies of Notices and Reports

The Performance Shareholders have the same right as Shareholders to receive notices, reports and audited accounts and to attend general meetings of the Company but are only entitled to vote in the circumstances referred to in clause 10.

10. Voting Rights

The Performance Shareholders shall have no right to vote, subject to the Corporations Act 2001 (Cth).

11. Participation in new issues

There are no participation rights or entitlements inherent in the Performance Shares and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Performance Shares.

12. Quotation

The Performance shares are unquoted. No application for quotation of the Performance Shares will be made by the Company.

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Schedule 6 – Terms and Conditions of Options

(a) Entitlement

The Options entitle the holder to subscribe for one Share upon exercise of each Option.

(b) Exercise Price

The exercise price of the Options are:

• (i) $0.20 for the $0.20 Options.

• (ii) $0.30 for the $0.30 Options.

(c) Expiry Date

The expiry date of the Options is 31 March 2013.

(d)

Exercise Period

The Options are only exercisable during the exercise period (being from the date of issue to the expiry date set out above).

(e)

Notice of Exercise

The Options may be exercised by notice in writing to the Company. Any notice of exercise of an Option received by the Company will be deemed to be a notice of the exercise of that Option as at the date of receipt.

(f)

Timing of Issue of Shares

After an Option is validly exercised, the Company must as soon as possible:

• (i) issue and allot the Share; and

• (ii) do all such acts matters and things to obtain the grant of quotation for the Share on ASX no later than 5 days from the date of exercise of the Option.

The listing of any Shares issued following exercise of an Option shall be subject to the Option holder complying with all requirements imposed by ASX as a condition to listing (including entering into any required restriction agreement regulating the sale of Shares issued on exercise of an Option).

(g)

Shares issued on exercise

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

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(h) Quotation of Shares on exercise

Application will be made by the Company to ASX for official quotation of the Shares issued upon the exercise of the Options.

(i)

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.

However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least ten business days after the issue is announced. This will give holders of Options the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue.

(j)

Adjustment for bonus issues of Shares

If the Company makes a bonus issue of Shares or other securities to existing Shareholders (other than an issue in lieu or in satisfaction, of dividends or by way of dividend reinvestment):

• (i) the number of Shares which must be issued on the exercise of a Option will be increased by the number of Shares which the Option holder would have received if the Option holder had exercised the Option before the record date for the bonus issue; and

• (ii) no change will be made to the Exercise Price.

(k) Adjustment for rights issue

If the Company makes an issue of Shares pro rata to existing Shareholders (other than an issue in lieu of in satisfaction of dividends or by way of dividend reinvestment) the Exercise Price of an Option will be reduced according to the following formula:

• New exercise price = O–E[P (S+D)] N+1

• O = the old Exercise Price of the Option.

• E = the number of underlying Shares into which one Option is exercisable.

• P = average market price per Share weighted by reference to volume of the underlying Shares during the 5 trading days ending on the day before the ex rights date or ex entitlements date.

• S = the subscription price of a Share under the pro rata issue.

• D = the dividend due but not yet paid on the existing underlying Shares (except those to be issued under the pro rata issue).

• N = the number of Shares with rights or entitlements that must be held to receive a right to one new Share.

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(l) Adjustments for reorganisation

If there is any reconstruction of the issued share capital of the Company, the rights of the Option holders will be varied to comply the Listing Rules which apply to the reconstruction at the time of the reconstruction.

(m)

Quotation of Options

No application for quotation of the Options will be made by the Company.

(n) Options non-transferable

The Options are non-transferable.

(o) Lodgement Instructions

Cheques shall be in Australian currency made payable to the Company and crossed "Not Negotiable". The application for shares on exercise of the Options with the appropriate remittance should be lodged at the Company's Registered Office.

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Schedule 7 – Summary of Heads of Agreement

1. Silver Swan and Mercator Gold Australia Pty Ltd have entered into a heads of agreement whereby Mercator Gold Australia Pty Ltd has agreed to sell to Silver Swan a 100% interest in mining tenements, mining information and mining assets (" Heads of Agreement ") in respect of Mercator Gold Australia Pty Ltd's Meekatharra Project.

2. Consideration for the sale and purchase of the Meekatharra Project is 10,000,000 fully paid ordinary shares in Silver Swan and 4,000,000 performance shares in Silver Swan. The performance shares will convert into fully paid ordinary shares if there is an Indicated Mineral Resource (as defined in the JORC Code) of 350,000 ounces of gold. The performance shares expire 5 years after they are issued and convert into 1 Share. The performance shares have the terms and conditions in Schedule 5.

3. The Heads of Agreement is conditional upon Silver Swan being satisfied with due diligence on the mining assets and Silver Swan obtaining shareholder approval required under the Corporations Act and Listing Rules to complete the sale and purchase of the mining assets (" Conditions ").

4. Completion takes place 5 business days after satisfaction of the Conditions.

5. Under the Heads of Agreement, Mercator Gold Australia Pty Ltd warrants that:

6. (a) it is the legal and beneficial owner of the mining information in respect of the Meekatharra Project.

7. (b) at the date of the Heads of Agreement it is the registered holder of the Meekatharra Project tenements.

8. (c) where an Meekatharra Project tenement is an application, all requirements under the Mining Act have been met to make it a valid and first in time application (to the best of Mercator Gold Australia Pty Ltd 's knowledge).

9. (d) to the best of Mercator Gold Australia Pty Ltd 's knowledge the Meekatharra Project mining assets are free from all encumbrances.

10. (e) to the best of Mercator Gold Australia Pty Ltd 's knowledge the Meekatharra Project tenements are in good standing.

11. (f) to the best of Mercator Gold Australia Pty Ltd 's knowledge all environmental laws have been complied with.

12. (g) Mercator Gold Australia Pty Ltd is not engaged in any dispute relating to the Meekatharra Project mining assets.

13. Each party gives standard warranties as to execution, performance and delivery of the Heads of Agreement.

14. There is provision in the Heads of Agreement for Mercator Gold Australia Pty Ltd to provide toll treating facilities if there is sufficient resources on the Meekatharra Project tenements to justify commercial production.

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Schedule 8 – Independent Expert's Report

Refer to part 2 of 4

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SILVER SWAN GROUP LIMITED ABN 4 1 1 2 0 0 6 9 0 8 9

P R O X Y F O R M

The Company Secretary Silver Swan Group Limited

By delivery: 15 Ord Street WEST PERTH WA 6005,

By post: By facsimile: PO Box 1812 (08) 9485 1633 WEST PERTH WA 6872

I/We[1] ________________

of ______________

being a Shareholder/Shareholders of the Company and entitled to

---

votes in the Company, hereby appoint[2 ] ______________

or failing such appointment the chairman of the general meeting as my/our proxy to vote for me/us on my/our behalf at the general meeting of the Company to be held at the Celtic Club, 48 Ord Street, West Perth, Western Australia on Tuesday, 22 April 2008 at 10.00AM (WST) and at any adjournment thereof in the manner indicated below or, in the absence of indication, as he thinks fit. If 2 proxies are appointed, the proportion or number of votes of this proxy is authorised to exercise is * [ ]% of the Shareholder’s votes*/ [ ] of the Shareholder’s votes. (An additional Proxy Form will be supplied by the Company, on request).

INSTRUCTIONS AS TO VOTING ON RESOLUTIONS

IMPORTANT:

By marking this box, you acknowledge that the Chair of the meeting may exercise your proxy even if he has an interest in the outcome of the Resolution/s and that votes cast by the Chair of the meeting for those Resolutions other than as proxy holder will be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy how to vote, the Chair will not cast your votes on the Resolution and your votes will not be counted in calculating the required majority if a poll is called on the Resolution.

The chairman of the general meeting intends to vote undirected proxies in favour of all Resolutions.

The proxy is to vote for or against the Resolution referred to in the Notice as follows:

			For	Against Abstain	Against Abstain
Resolution	1	Authority to issue and allot the Consideration Shares to Mercator
		under item 7 of section 611 of the Corporations Act
Resolution	2	Appointment of Director – Dr Susan Vearncombe
Resolution	3	Appointment of Director – Mr Michael Elias
Resolution	4	Approve Incentive Options to Dr Susan Vearncombe
Resolution	5	Approve Options to Mr Michael Elias
Resolution	6	Approve Options to Mr Simon Robertson
Resolution	7	Approve Employee Option Scheme

Authorised signature/s This section must be signed in accordance with the instructions overleaf to enable your voting instructions to be implemented. Individual or Shareholder 1 Shareholder 2 Shareholder 3 Sole Director and Sole Company Director Director/Company Secretary Secretary

____ ____ _____ Contact Name Contact Daytime Telephone Date 1Insert name and address of Shareholder 2 Insert name and address of proxy *Omit if not applicable

*Omit if not applicable

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Proxy Notes:

A Shareholder entitled to attend and vote at the annual general meeting may appoint a natural person as the Shareholder's proxy to attend and vote for the Shareholder at that annual general meeting. If the Shareholder is entitled to cast 2 or more votes at the annual general meeting the Shareholder may appoint not more than 2 proxies. Where the Shareholder appoints more than one proxy the Shareholder may specify the proportion or number of votes each proxy is appointed to exercise. If such proportion or number of votes is not specified each proxy may exercise half of the Shareholder's votes. A proxy may, but need not be, a Shareholder of the Company.

If a Shareholder appoints a body corporate as the Shareholder’s proxy to attend and vote for the Shareholder at that annual general meeting, the representative of the body corporate to attend the annual general meeting must produce the Certificate of Appointment of Representative prior to admission. A form of the certificate may be obtained from the Company’s share registry.

You must sign this form as follows in the spaces provided:

Joint Holding: where the holding is in more than one name all of the holders must sign. Power of Attorney: if signed under a Power of Attorney, you must have already lodged it with the registry, or alternatively, attach a certified photocopy of the Power of Attorney to this Proxy Form when you return it.

Companies: a Director can sign jointly with another Director or a Company Secretary. A sole Director who is also a sole Company Secretary can also sign. Please indicate the office held by signing in the appropriate space.

If a representative of the corporation is to attend the annual general meeting the appropriate "Certificate of Appointment of Representative" should be produced prior to admission. A form of the certificate may be obtained from the Company’s Share Registry.

Proxy Forms (and the power of attorney or other authority, if any, under which the Proxy Form is signed) or a copy or facsimile which appears on its face to be an authentic copy of the Proxy Form (and the power of attorney or other authority) must be deposited at or received by facsimile transmission at the Perth office of the Company or by post to PO Box 1812, West Perth, WA 6872, or Facsimile (08) 9485 1633 if faxed from within Australia or +61 8 9485 1633 if faxed from outside Australia) not less than 48 hours prior to the time of commencement of the general meeting (WST).

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