CAZALY RESOURCES LIMITED — Capital/Financing Update 2018

Jan 7, 2018

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8 January 2018

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

On 8 January 2018, Cazaly Resources Limited (“ the Company ”) issued a total of 7,898,657 fully paid ordinary shares in the Company. 1,083,455 fully paid ordinary shares were issued in lieu of services provided, 3,166,035 fully paid ordinary shares were issued as part of a placement and 3,649,167 fully paid shares were issued on the conversion of unlisted options.

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 and listed options 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 8 January 2018:

• a) The Company issued a total of 7,898,657 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 and listed options.

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

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 be issued 2 Number of+securities issued or to be issued (if known) or 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 outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)	1. Fully paid ordinary shares 2. Fully paid ordinary shares 3. Fully paid ordinary shares 4. Unquoted options
	1. 1,083,455 2. 3,166,035 3. 3,649,167 4. 7,300,000
	1. Fully paid ordinary shares 2. Fully paid ordinary shares 3. Fully paid ordinary shares 4. Unlisted options exercisable at $0.06 on or before 31 December 2019

• 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

  1. Yes – rank equally with existing fully paid ordinary shares.

  2. Yes – rank equally with existing fully paid ordinary shares.

  3. Yes – rank equally with existing fully paid ordinary shares

  4. No – shares issued upon exercise of options will rank equally with existing fully paid ordinary shares

• 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

5 Issue price or consideration 1. Nil 2. $0.056 3. $0.04 4. Nil 6 Purpose of the issue 1. Issued in lieu of services provided (If issued as consideration for the 2. Placement – funds used for further acquisition of assets, clearly exploration/development work on identify those assets) Company projects and working capital 3. Conversion of $0.04 options 4. Unlisted options as per terms of agreement 6a Is the entity an[+] eligible entity that Yes 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 24 November 2017 resolution under rule 7.1A was passed 6c Number of +securities issued 1,083,455 fully paid ordinary shares without security holder approval 7,300,000 unlisted options exercisable at $0.06 on under rule 7.1 or before 31 December 2019 6d Number of[+] securities issued with 3,166,035 fully paid ordinary shares security holder approval under rule 7.1A 6e Number of[+] securities issued with 3,649,167 fully paid ordinary shares (approved security holder approval under rule 12/8/16) 7.3, or another specific security holder approval (specify date of meeting)

• See chapter 19 for defined terms.

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6f Number of+securities issued under an exception in rule 7.2 6g If+securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation. 6h If+securities were issued under 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 issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates 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. 8 Number and+class of all+securities quoted on ASX (_including_the +securities in section 2 if applicable) 9 Number and+class of all+securities not quoted on ASX (_including_the securities in section 2 if applicable)	Nil	Nil	Nil
	Yes Issue price $0.056 15 day VWAP = $0.05913 (75% = $0.4435) Source – Acuity Capital
	N/A
	17,098,082
	8 January 2018
	Number		+Class
	195,931,002 18,913,847		Fully paid ordinary shares $0.11 Options exercisable on or before 21 August 2018
	Number	+Class
	175,000 1,450,000 2,500,000 2,500,000 5,000,000 7,300,000	$0.15 Options exercisable on or before 22 August 2018 $0.18 Options exercisable on or before 22 August 2019 $0.144 Options exercisable on or before 22 August 2019 $0.216 Options exercisable on or before 22 August 2020 $0.20 Options exercisable on or before 30 November 2018 $0.06 Options exercisable on or before 31 December 2019

• See chapter 19 for defined terms.

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10		Dividend policy (in the case of a	N/A
		trust, distribution policy) on the
		increased capital (interests)
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
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

• See chapter 19 for defined terms.

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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 ] 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

• See chapter 19 for defined terms.

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• 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 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 no-one 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: ............................................................ (Company Secretary)

Date: 8 January 2018

Print name: Mike Robbins

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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

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Insert number of fully paid ordinary 171,271,608
securities on issue 12 months before date
of issue or agreement to issue
Add the following:
• Number of fully paid ordinary securities 14,120,000 shares
issued in that 12 month period under an
800,000 shares
exception in rule 7.2
535,980 shares
• Number of fully paid ordinary securities
issued in that 12 month period with 3,649,167 shares
shareholder approval
• 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” 190,376,755
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• See chapter 19 for defined terms.

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Step 2: Calculate 15% of “A”

Step 2: Calculate 15% of “A”
“B”	0.15
	[Note: this value cannot be changed]
Multiply“A” by 0.15	28,556,513
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	1,304,757 shares
• Under rule 7.1A	17,441,860 shares (as per announcement dated 29/12/17)
• With security holder approval under rule 7.1 or rule 7.4	7,500,000 unlisted options
Note:	1,083,455 shares
• 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

• Insert number of equity securities issued or agreed to be issued in that 12 month period not counting those issued: 1,304,757 shares

• • Under an exception in rule 7.2 17,441,860 shares (as per announcement

• • Under rule 7.1A dated 29/12/17)

• • With security holder approval under rule 7,500,000 unlisted options

• 7.1 or rule 7.4 1,083,455 shares

• 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

• “C” 27,330,072 Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1

placement capacity under rule 7.1
“A” x 0.15	28,556,513
Note: number must be same as shown in
Step 2
Subtract“C”	27,330,072
Note: number must be same as shown in
Step 3
Total[“A” x 0.15] – “C”	1,226,441
	[Note: this is the remaining placement
	capacity under rule 7.1]

• See chapter 19 for defined terms.

Appendix 3B Page 10

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Part 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 1 190,376,755 of Part 1 Step 2: Calculate 10% of “A” “D” 19,037,676 Note: this value cannot be changed Multiply “A” by 0.10

Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used

has already been used
Insertnumber of equity securities issued or	3,166,035 fully paid ordinary shares
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
“E”	3,166,035
Step 4: Subtract “E” from [“A” x “D”] to calculate 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	19,037,676
Note: number must be same as shown inStep 2
Subtract“E”	3,166,035
Note: number must be same as shown inStep 3
Total[“A” x 0.10] – “E”	15,871,641
	Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

Appendix 3B Page 11

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