CAZALY RESOURCES LIMITED — Capital/Financing Update 2018

Dec 17, 2018

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18 December 2018

SECONDARY TRADING NOTICE PURSUANT TO SECTION 708A(5) OF THE CORPORATIONS ACT 2001 (“Act”)

On 18 December 2018, Cazaly Resources Limited (“ the Company ”) issued a total of 2,452,459 fully paid ordinary shares (‘Shares’) in lieu of services provided to the Company.

The Act restricts the on-sale of securities issued without disclosure, unless the sale is exempt under section 708 or 708A of the Act. By giving this notice, the on sale of the Shares noted above will fall within the exemption in section 708A(5) of the Act.

The Company hereby notifies ASX under paragraph 708A(5)(e) of the Act that, as at 18 December 2018:

• a) The Company issued a total of 2,452,459 Shares without disclosure to investors under Part 6D.2 of the Act;

• b) The Company has complied with the provisions of Chapter 2M of the Act as they apply to the Company, and section 674 of the Act; and

• c) There is no information:

• a. That has been excluded from a continuous disclosure notice in accordance with the ASX Listing Rules; and

• b. That investors and their professional advisers would reasonably require for the purpose of making an informed assessment of:

  • i. The assets and liabilities, financial position and performance, profits and losses and prospects of the Company; or

  • ii. The rights and liabilities attaching to the Shares.

An Appendix 3B is attached in respect of the issue of the total number of Shares.

Yours faithfully

Mike Robbins Company Secretary

Level 2, 38 Richardson Street West Perth Western Australia, 6005. PO Box 396, West Perth, Western Australia, 6872 Phone: +61 8 9322 6283 Fax: +61 8 9322 6398 email: admin@cazalyresources.com.au ACN 101 049334 www.cazalyresources.com.au

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

Cazaly Resources Limited

ABN

23 101 049 334

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of +securities issued or to 1. Unlisted options be issued 2. Fully paid ordinary shares 2 Number of[+] securities issued or 1. 29,920,000 to be issued (if known) or 2. 2,452,459 maximum number which may be issued 3 Principal terms of the[+] securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount 1. Unlisted options exercisable at $0.02745 on or before 31 December 2021 outstanding and due dates for payment; if +convertible 2. Fully paid ordinary shares securities, the conversion price and dates for conversion)

• See chapter 19 for defined terms.

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4 Do the+securities rank equally in all respects from the+issue date with an existing+class of quoted +securities? If the additional+securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 6a Is the entity an+eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h in relation to the+securities the subject of this Appendix 3B, and comply with section 6i 6b The date the security holder resolution under rule 7.1A was passed 6c Number of+securities issued without security holder approval under rule 7.1 6d Number of+securities issued with security holder approval under rule 7.1A 6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting)	1. No – shares issued upon exercise of options will rank equally with existing fully paid ordinary shares 2. Yes - rank equally with existing fully paid ordinary shares
	1. Nil 2. Nil
	1. Issued under terms and conditions of agreement 2. Issued in lieu of services to the Company
	Yes
	23 November 2018
	29,920,000 unlisted options
	2,452,459 fully paid ordinary shares
	Nil

• See chapter 19 for defined terms.

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6f Number of[+] securities issued Nil under an exception in rule 7.2 6g If[+] securities issued under rule Yes 7.1A, was issue price at least 75% Issue price $0.0183 of 15 day VWAP as calculated 15 trading days VWAP = $0.0207 (75% = under rule 7.1A.3? Include the $0.015525) +issue date and both values. Source – Advanced Share Registry Include the source of the VWAP calculation. 6h If[+] securities were issued under 18 December 2018 rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining 25,219,191 issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates 18 December 2018 Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B. Number +Class 8 Number and +class of all 232,819,058 Fully paid ordinary shares +securities quoted on ASX ( including the +securities in section 2 if applicable) Number +Class 9 Number and +class of all +securities not quoted on ASX 1,450,000 $0.18 Options exercisable on or ( including the securities in before 22 August 2019 section 2 if applicable) 2,500,000 $0.144 Options exercisable on or before 22 August 2019 2,500,000 $0.216 Options exercisable on or before 22 August 2020 7,300,000 $0.06 Options exercisable on or before 31 December 2019 6,500,000 $0.06 Options exercisable on or before 26 November 2020

• See chapter 19 for defined terms.

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10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	29,920,000	$0.02745 Options exercisable on or before 31 December 2021
	N/A

Part 2 - Bonus issue or pro rata issue

11	Is security holder approval
	required?
12	Is the issue renounceable or non-
	renounceable?
13	Ratio in which the+securities will
	be offered
14	+Class of+securities to which the
	offer relates
15	+Record date to determine
	entitlements
16	Will holdings on different
	registers (or subregisters) be
	aggregated for calculating
	entitlements?
17	Policy for deciding entitlements in
	relation to fractions
18	Names of countries in which the
	entity has+security holders who
	will not be sent new issue
	documents
	Note: Security holders must be told how their
	entitlements are to be dealt with.
	Cross reference: rule 7.7.
19	Closing date for receipt of
	acceptances or renunciations
20	Names of any underwriters
21	Amount of any underwriting fee
	or commission
22	Names of any brokers to the issue

• See chapter 19 for defined terms.

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23	Fee or commission payable to the
	broker to the issue
24	Amount of any handling fee
	payable to brokers who lodge
	acceptances or renunciations on
	behalf of+security holders
25	If the issue is contingent on
	+security holders’ approval, the
	date of the meeting
26	Date entitlement and acceptance
	form and prospectus or Product
	Disclosure Statement will be sent
	to persons entitled
27	If the entity has issued options,
	and the terms entitle option
	holders to participate on exercise,
	the date on which notices will be
	sent to option holders
28	Date rights trading will begin (if
	applicable)
29	Date rights trading will end (if
	applicable)
30	How do+security holders sell
	their entitlements_in full_through a
	broker?
31	How do+security holders sell_part_
	of their entitlements through a
	broker and accept for the balance?
32	How do+security holders dispose
	of their entitlements (except by
	sale through a broker)?
33	+Despatch date

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of securities ( tick one )

• (a)  Securities described in Part 1

• (b)[All other securities ]

• See chapter 19 for defined terms.

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Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

• 35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders

36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

37 A copy of any trust deed for the additional[+] securities

Entities that have ticked box 34(b)

38 Number of securities for which +quotation is sought

39 Class of +securities for which quotation is sought

40 Do the[+] securities rank equally in all respects from the date of allotment with an existing[+] class of quoted[+] securities?

If the additional securities do not rank equally, please state:

• the date from which they do

• the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment

• the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

• See chapter 19 for defined terms.

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41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another security, clearly identify that other security)

Number +Class 42 Number and +class of all +securities quoted on ASX ( including the securities in clause 38)

• See chapter 19 for defined terms.

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Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the +securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted[+] quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

  • Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that noone has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the[+] securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before[+] quotation of the[+] securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: ............................................................ Date: 18 December 2018 (Company Secretary)

Print name: Mike Robbins

== == == == ==

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for +eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1

Rule 7.1 – Issues exceeding 15% of capital

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

Insert number of fully paid ordinary 188,032,345 securities on issue 12 months before date of issue or agreement to issue

Add the following:

• Number of fully paid ordinary securities 3,649,167 shares (option conversions) issued in that 12 month period under an 1,083,455 shares

• exception in rule 7.2 3,166,035 shares

• • Number of fully paid ordinary securities issued in that 12 month period with 6,000,000 shares shareholder approval 28,435,597 shares (placement)

• • Number of partly paid ordinary securities that became fully paid in that 12 month period

• Note: • Include only ordinary securities here – other classes of equity securities cannot be added

• • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed

• • It may be useful to set out issues of securities on different dates as separate line items

• Subtract the number of fully paid ordinary 0 securities cancelled during that 12 month period “A” 230,366,599

• See chapter 19 for defined terms.

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Step 2: Calculate 15% of “A”
“B”	0.15 [Note: this value cannot be changed]
Multiply“A” by 0.15	34,554,990
Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used
Insertnumber of equity securities issued or agreed to be issued in that 12 month period not counting_those issued: • Under an exception in rule 7.2 • Under rule 7.1A • With security holder approval under rule 7.1 or rule 7.4 _Note: • This applies to equity securities, unless specifically excluded – not just ordinary securities • Include here (if applicable ) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items	29,920,000 unlisted options
“C”	29,920,000
Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1
“A” x 0.15 Note: number must be same as shown in Step 2	34,554,990
Subtract“C” Note: number must be same as shown in Step 3	29,920,000
Total[“A” x 0.15] – “C”	4,634,990 [Note: this is the remaining placement capacity under rule 7.1]

• See chapter 19 for defined terms.

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Part 2

Rule 7.1A – Additional placement capacity for eligible entities

art 2	art 2
Rule 7.1A – Additional placement capacity for eligible entities
Step 1: Calculate “A”, the base figure from which the placement capacity is calculated
“A” Note: number must be same as shown in Step 1 of Part 1	230,366,599
Step 2: Calculate 10% of “A”
“D”	0.10 Note: this value cannot be changed
Multiply“A” by 0.10	23,036,660
Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used
Insertnumber of equity securities issued or agreed to be issued in that 12 month period under rule 7.1A Notes: • This applies to equity securities – not just ordinary securities • Include here – if applicable – the securities the subject of the Appendix 3B to which this form is annexed • Do not include equity securities issued under rule 7.1 (they must be dealt with in Part 1), or for which specific security holder approval has been obtained • It may be useful to set out issues of securities on different dates as separate line items	2,452,459 shares
“E”	2,452,459
Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A
“A” x 0.10 Note: number must be same as shown in Step 2	23,036,660
Subtract“E” Note: number must be same as shown in Step 3	2,452,459
Total[“A” x 0.10] – “E”	20,584,201 Note: this is the remaining placement capacity under rule 7.1A

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity	Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity
under rule 7.1A
“A” x 0.10	23,036,660
Note: number must be same as shown in Step 2
Subtract“E”	2,452,459
Note: number must be same as shown in Step 3
Total[“A” x 0.10] – “E”	20,584,201
	Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

Appendix 3B Page 12

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