CARNABY RESOURCES LIMITED — Proxy Solicitation & Information Statement 2019

Mar 18, 2019

BERKUT MINERALS LIMITED

ACN 610 855 064

NOTICE OF GENERAL MEETING

Notice is given that the Meeting will be held at:

TIME : 10:00 am DATE : Thursday, 18 April 2019 PLACE : Level 2, 18 Kings Park Road, West Perth WA 6005

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

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.

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 5:00pm on Tuesday, 16 April 2019.

BUSINESS OF THE MEETING

AGENDA

1. RESOLUTION 1 – ISSUE OF SHARES AND OPTIONS TO VENDORS

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 21,153,846 Shares and 9,000,000 Options on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast in favour of the Resolution by or on behalf of a person who is expected to participate in, or who will obtain a material benefit as a result of, the proposed issue (except a benefit solely by reason of being a holder of ordinary securities in the Company) or an associate of that person (or 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 – ISSUE OF CAPITAL RAISING SHARES

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 20,512,820 Shares on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast in favour of the Resolution by or on behalf of a person who is expected to participate in, or who will obtain a material benefit as a result of, the proposed issue (except a benefit solely by reason of being a holder of ordinary securities in the Company) or an associate of that person (or 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.

3. RESOLUTION 3 – ELECTION OF DIRECTOR – MR PETER BOWLER

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

“That, subject to and conditional on the passing of Resolution 1 for the purposes of clause 13.3 of the Constitution and for all other purposes, Mr Peter Bowler, a proposed director who being eligible and having consented to act, be appointed as a Director of the Company on and from Settlement.”

4. RESOLUTION 4 – ELECTION OF DIRECTOR – MR ROBERT WATKINS

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

“That, subject to and conditional on the passing of Resolution 1, for the purposes of clause 13.3 the Constitution and for all other purposes, Mr Robert Watkins, a proposed director who being eligible and having consented to act, be appointed as a Director of the Company on and from Settlement.”

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5. RESOLUTION 5 – CHANGE OF COMPANY NAME TO CARNABY RESOURCES LIMITED

To consider and, if thought fit, to pass the following resolution as a special resolution :

“That, subject to and conditional on the passing of Resolution 1, for the purposes of section 157(1)(a) and for all other purposes, approval is given for the name of the Company to be changed to ‘Carnaby Resources Limited’ with effect from Settlement .”

Dated: 19 March 2019

By order of the Board

Aaron Bertolatti Company Secretary

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, Shareholders are advised that:

• each Shareholder has a right to appoint a proxy;

• the proxy need not be a Shareholder of the Company; and

• a Shareholder 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.

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on + 61 8 9320 2320.

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EXPLANATORY STATEMENT

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.

1. BACKGROUND TO RESOLUTIONS

1.1 General Background

As announced on 12 March 2019, the Company has conditionally agreed to acquire 100% of the issued capital in Carnaby Resources Limited ( Carnaby ) from the shareholders of Carnaby ( Carnaby Shareholders ) ( Carnaby Acquisition ). Carnaby is an Australian exploration company holding interests or applications for interests in gold and copper projects in Western Australia, being the Throssel Project and the Malmac Project and Tick Hill Project in Queensland.

In conjunction with the Carnaby Acquisition, the Company has conditionally agreed to acquire (through Carnaby as the Company’s nominee):

• (a) an 82.5% legal and beneficial interest in twelve exploration permits located in the Tick Hill region in Queensland which are held by Syndicated Metals Limited ( Syndicated ); and

• (b) a 100% legal and beneficial interest in three mining leases located in the Tick Hill region in Queensland, which are held by Diatreme Resources Limited ( Diatreme ) and Superior Resources Limited ( Superior ),

(together, the Other Acquisitions ).

Refer to the announcement released on 12 March 2019 for further details in respect of Carnaby and the Tick Hill Project, the Throssel Project and the Malmac Project. To complete the Carnaby Acquisition and the Other Acquisitions, the Company has entered into a share sale agreement with the Carnaby Shareholders ( Share Sale Agreement ) and asset sale agreements with each of Syndicated, Superior and Diatreme ( Tenement Sale Agreements ).

The consideration payable under the Share Sale Agreement and the Tenement Sale Agreements at settlement of the Carnaby Acquisition and the Other Acquisitions ( Settlement ) is set out below:

Vendor	Shares	Options $0.09 5 Year Expiry	Options $0.10 5 Year Expiry
Share Sale Agreement
Carnaby Shareholders	6,410,256 Shares	6,000,000 Options	3,000,000 Options
Tenement Sale Agreements
Syndicated	5,128,205 Shares	Nil	Nil
Diatreme	7,211,539 Shares	Nil	Nil
Superior	2,403,846 Shares	Nil	Nil
TOTAL	21,153,846 Shares	6,000,000 Options	3,000,000 Options

The Shares and Options issued to the Vendors other than Superior are expected to be subject to voluntary escrow for a period of 12 months.

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Resolution 1 seeks Shareholder approval for the issue of an aggregate of 21,153,846 Shares and 9,000,000 Options to the Carnaby Shareholders, Syndicated, Diatreme and Superior (together, the Vendors ).

The Carnaby Acquisition and Other Acquisitions are inter-conditional, meaning that settlement of the Carnaby Acquisition and the Other Acquisitions must occur on or around the same time.

The conditions precedent which must be satisfied (or waived by Berkut) prior to Settlement are:

• (a) the satisfactory completion of the due diligence review of Carnaby and the tenements to be acquired;

• (b) the Company obtaining all necessary shareholder; and

• (c) the Company and Vendors obtaining all necessary third party and regulatory approvals which includes indicative approval under the Mineral and Energy Resources (Common Provisions) Act 2014 (Qld) to the transfer of tenements to allow the Company to lawfully complete the Carnaby Acquisition and the Other Acquisitions.

If the conditions precedent are not satisfied or waived by 30 April 2019 (or such other date as agreed between the parties) then a party may elect to terminate the relevant agreement and Settlement will not occur.

1.2 Syndicated Joint Venture

As noted above, the Company has entered into an asset sale agreement to acquire an 82.5% legal and beneficial interest in twelve exploration permits held by Syndicated ( Syndicated Tenements ) ( Syndicated Agreement ).

Pursuant to the Syndicated Agreement, at Settlement the Company will establish a joint venture with Syndicated for the purpose of exploration and development on the Syndicated Tenements ( Joint Venture ). The Company (through Carnaby) will have an initial interest of 82.5% in the Joint Venture and be appointed as the Manager.

The Company will be required to free carry Syndicated until such time as a decision to mine is made, at which time, the Company will have first right of refusal to acquire Syndicated’s interest in the Joint Venture at fair market value.

1.3 Board Appointments

Following Settlement, it is proposed that the following changes will occur to the board of directors of the Company:

• (a) Peter Bowler and Robert Watkins, representatives of Carnaby, will be appointed to the Board, with Mr Bowler appointed as Non-Executive Chairman and Mr Watkins appointed as Managing Director; and

• (b) existing directors, Justin Tremain and Neil Inwood, will transition from their respective roles to hold positions as Non-Executive Directors. For the avoidance of doubt Paul Payne will remain as a Non-Executive Director.

Resolutions 3 and 4 seek Shareholder approval for the election of Mr Peter Bowler and Mr Robert Watkins ( Proposed Directors ), to be appointed as Directors on and from Settlement.

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1.4 Capital Raising

Concurrent with the Carnaby Acquisition and the Other Acquisitions, the Company intends to raise up to $1.6 million through the issue of up to 20,512,820 Shares at an issue price of $0.078 per Share ( Capital Raising ). The current intention is that entities associated with the Carnaby Shareholders and the Proposed Directors will participate up to $500,000 in the Capital Raising. The Company is not seeking approval for the participation of the Proposed Directors in the Capital Raising as the Company considers that that the Exception 6 to ASX Listing Rule 10.11 applies to the participation.

Resolution 2 seeks shareholder approval for the issue of Shares pursuant to the Capital Raising.

1.5 Change of Name

Subject to obtaining shareholder approval pursuant to Resolution 5, the Company also intends to change its name to “Carnaby Resources Ltd” with effect from Settlement.

2. RESOLUTION 1 – ISSUE OF SHARES AND OPTIONS TO VENDORS

2.1 General

Resolution 1 seeks Shareholder approval for the issue of an aggregate of 21,153,846 Shares and 9,000,000 Options to the Vendors in consideration for the Carnaby Acquisition and the Other Acquisitions. Further details of the consideration to be issued under the Share Sale Agreement and each of the Tenement Sale Agreements is set out in Section 1.1.

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue more equity securities during any 12 month period than that amount which represents 15% of the number of fully paid ordinary securities on issue at the commencement of that 12 month period.

The effect of Resolution 1 will be to allow the Company to issue the Shares and the Options the subject of Resolution 1 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.

2.2 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 21,153,846 and the maximum number of Options to be issued is 9,000,000;

• (b) the Shares and 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 Shares and Options will occur on the same date;

• (c) the Shares and Options will be issued for nil cash consideration;

• (d) the Shares and Options will be issued to the Vendors (or their nominees), who are not related parties of the Company and no Vendor will have a relevant interest of above 10% in the voting power of the Company following the issue;

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• (e) the Options will be issued on the terms and conditions set out in Schedule 1;

• (f) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares; and

• (g) no funds will be raised from the issue as the Shares are being issued in consideration for the Carnaby Acquisition and the Other Acquisitions.

3. RESOLUTION 2 – ISSUE OF CAPITAL RAISING SHARES

3.1 General

Resolution 2 seeks Shareholder approval for the issue of up to 20,512,820 Shares at an issue price of $0.078 per Share to raise up to $1,600,000 under the Capital Raising.

As noted above, entities associated with the Carnaby Shareholders and the Proposed Directors intend to participate up to $500,000 in the Capital Raising. The Company is not seeking approval for the participation of the Proposed Directors in the Capital Raising as the Company considers that that the Exception 6 to ASX Listing Rule 10.11 applies to the participation.

A summary of ASX Listing Rule 7.1 is set out in Section 2.1 above.

The effect of Resolution 2 will be to allow the Company to issue the Shares pursuant to the Capital Raising 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.

3.2 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 the Capital Raising:

• (a) the maximum number of Shares to be issued is 20,512,820;

• (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 of the Shares will occur on the same date;

• (c) the issue price will be $0.078 per Share;

• (d) the Directors will determine to whom the Shares will be issued but these persons will not be related parties of the Company (with the exception of the Proposed Directors). The Company considers that Exception 6 to ASX Listing Rule 10.11 applies to the issue of Shares to the Proposed Directors;

• (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; and

• (f) the Company intends to use the funds raised from the Capital Raising towards exploration and development of the projects proposed to be acquired as part of the Carnaby Acquisition and the Other Acquisitions.

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4. RESOLUTIONS 3 AND 4 – ELECTION OF DIRECTORS – MR PETER BOWLER AND MR ROBERT WATKINS

In accordance with clause 13.3 of the Constitution, the Company may elect a person as a Director by resolution passed at a general meeting. A Director elected at a general meeting is taken to have been elected with effect immediately after the end of that general meeting unless the resolution by which the Director is appointed or elected specifies a different time.

No person other than a Director seeking re-election shall be eligible for election to the office of Director at any general meeting unless the person or some Shareholder intending to proposed his or her nomination has, at least 30 Business Days before the meeting, left at the registered office of the Company a notice in writing duly signed by the nominee giving his or her consent to the nomination and signifying his or her candidature for the office or the intention of the Shareholder to propose the person. Such nominations have been received by the Company.

The Proposed Directors, having been nominated as candidates for election by a Shareholder of the Company and having consented to such nomination, are eligible for election in accordance with clause 13.3 of the Constitution.

Resolutions 3 and 4 seek Shareholder approval for the election of Mr Peter Bowler and Mr Robert Watkins, to be appointed on and from Settlement.

4.1 Resolution 3 – Election of Mr Peter Bowler

(a) Qualifications and other material directorships

Mr Bowler was the founding Managing Director of Beadell Resources Ltd (ASX:BDR) from 2007 to 2015. He was also the founding Managing Director of Agincourt Resources from 2003 to 2007 and was instrumental in driving its rapid growth. As Managing Director of Agincourt Resources Ltd, he facilitated the acquisition of the Martabe gold project in Indonesia and the subsequent takeover by Oxiana Ltd in April 2007. Mr Bowler was also a founding Director of Nova Energy Ltd.

(b) Independence

Mr Bowler has no interests, position, association or relationship that might influence, or reasonably be perceived to influence, in a material respect his capacity to bring an independent judgement to bear on issues before the board and to act in the best interest of the entity and its security holders generally.

As noted above, an entity controlled by Mr Bowler is a Carnaby Shareholder which will accordingly receive 2,136,752 Shares, 2,000,000 Options with exercise price of $0.09 and 1,000,000 Options with exercise price of $0.10 as part of the consideration for the Carnaby Acquisition. Mr Bowler, through an associated entity, also intends to participate up to $167,000 (being 2,141,026 Shares) in the Capital Raising.

If elected the board considers Mr Bowler will be an independent director.

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4.2 Resolution 4 – Election of Mr Robert Watkins

(a) Qualifications and other material directorships

Mr Watkins is a member of the Australian Institute of Mining and Metallurgy. He has over 20 years exploration experience with a track record of exploration success in Australia, Africa, Brazil and Indonesia. Mr Watkins was a founding Executive Director of Geology for Beadell Resources Ltd. He is the former Exploration Manager for Agincourt. He also held positions with Placer Dome Asia Pacific Limited and Delta Gold Limited.

(b) Independence

Mr Watkins has no interests, position, association or relationship that might influence, or reasonably be perceived to influence, in a material respect his capacity to bring an independent judgement to bear on issues before the board and to act in the best interest of the entity and its security holders generally.

As noted above, an entity controlled by Mr Watkins is a Carnaby Shareholder which will accordingly receive 2,136,752 Shares, 2,000,000 Options with exercise price of $0.09 and 1,000,000 Options with exercise price of $0.10 as part of the consideration for the Carnaby Acquisition. Mr Watkins, through an associated entity, also intends to participate up to $167,000 (being 2,141,026 Shares) in the Capital Raising.

It is intended that Mr Watkins will be appointed as Managing Director of the Company and will therefore enter an executive services agreement with the Company on market terms.

If elected and appointed as Managing Director, the board does not consider Mr Watkins will be an independent director.

4.3 Board Recommendation

The Board supports the election of each of Mr Peter Bowler and Mr Robert Watkins and recommends that Shareholders vote in favour of Resolution 3 and 4.

5. RESOLUTION 5 – CHANGE OF COMPANY NAME TO CARNABY RESOURCES LIMITED

Section 157(1)(a) of the Corporations Act provides that a company may change its name if the company passes a special resolution adopting a new name.

Resolution 5 seeks the approval of Shareholders for the Company to change its name to ‘Carnaby Resources Limited’ with effect from Settlement.

If Resolution 5 is passed the change of name will take effect when ASIC alters the details of the Company’s registration.

If Resolution 5 is passed, the Company will lodge a copy of the special resolution with ASIC at Settlement in order to effect the change.

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GLOSSARY

$ means Australian dollars.

ASIC means the Australian Securities & 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.

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.

Company means Berkut Minerals Limited (ACN 610 855 064).

Constitution means the Company’s constitution.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

Explanatory Statement means the explanatory statement accompanying the Notice.

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

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.

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.

Section means a section of the Explanatory Statement.

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.

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SCHEDULE 1 - TERMS AND CONDITIONS OF OPTIONS

(a) Entitlement

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

(b) Exercise Price and Expiry Date

Subject to paragraph (h), the amount payable upon exercise of each Option (each, an Exercise Price ) and the date of expiry of each Option (each, an Expiry Date ) is set out in the table below. An Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

Options	Exercise Price	Expiry Date
6,000,000	$0.09	5:00 pm (WST) on the date that is five years from the date of issue
3,000,000	$0.10	5:00 pm (WST) on the date that is five years from the date of issue

(c) Exercise Period

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

(d) 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.

(e) 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 ).

(f) Timing of issue of Shares on exercise

Within 15 Business Days after the Exercise Date, the Company will:

• (i) 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;

• (ii) 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

• (iii) 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.

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If a notice delivered under (f)(ii) 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.

(g) Shares issued on exercise

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

(h) 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.

(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 without exercising the Options.

(j) 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.

(k) Transferability

The Options are transferable subject to any restriction or escrow arrangements imposed by an agreement with the Company, ASX or under applicable Australian securities laws.

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