CAZALY RESOURCES LIMITED — Proxy Solicitation & Information Statement 2010

May 16, 2010

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ACN 101 049 334

NOTICE OF GENERAL MEETING

– and – – and –

EXPLANATORY MEMORANDUM

PROXY FORM

TIME : 11.30 am WST DATE : Wednesday 16 June 2010 PLACE : The Celtic Club 48 Ord Street WEST PERTH WA 6005

This Notice of General Meeting and Explanatory Memorandum should be read in their entirety. If Shareholders are in any doubt as to how they should vote, they should seek advice from their accountant, solicitor or other professional advisor without delay.

Cazaly Resources Limited Notice of General Meeting ABN 23 101 049 334

NOTICE OF MEETING

Notice is hereby given that the General Meeting of the members of Cazaly Resources Limited ( “Cazaly” or the “Company” ) will be held at the Celtic Club, 48 Ord Street, West Perth, Western Australia at 11.30am WST on 16 June 2010.

The attached Explanatory Memorandum is provided to supply Shareholders with information to enable them to make an informed decision regarding the resolutions set out in this Notice. The Explanatory Memorandum is intended to be read in conjunction with and forms part of this Notice. Terms and abbreviations used in this Notice are defined in the Glossary contained in the Explanatory Memorandum.

AGENDA

SPECIAL BUSINESS

To consider and, if thought fit, to pass, with or without modification, the following ordinary resolutions:-

1. Resolution 1: “Ratification and Approval of Allotment and Issue of Shares to Carbine Resources Ltd”

“That for the purposes of Listing Rule 7.4 and for all other purposes, the Shareholders hereby ratify and approve the allotment and issue by the Company of 823,801 Shares to Carbine Resources Ltd, on the date and on the terms and conditions and in the manner set out in the Explanatory Memorandum that accompanies this Notice of Meeting.”

Voting Exclusion Statement

• For the purposes of Listing Rule 7.4, the Company will disregard any votes cast on the Resolution by Carbine Resources Ltd, and any of its associates.

• However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form or it is cast by a person as chair of the meeting as a proxy for a person who is entitled to vote, in accordance with the direction on the proxy form to vote as the proxy decides.

2. Resolution 2: “Ratification and Approval of Placement of Shares and Placement Options to New Page Investments Limited”

“That for the purposes of Listing Rule 7.4 and for all other purposes, the Shareholders hereby ratify and approve the allotment and issue by the Company of 4,000,000 Shares and 4,000,000 Placement Options to New Page Investments Limited, on the date and on the terms and conditions and in the manner set out in the Explanatory Memorandum.”

Voting Exclusion Statement

• For the purposes of Listing Rule 7.4, the Company will disregard any votes cast on the Resolution by any New Page Investments Limited, and any of its associates.

• However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form or it is cast by a person as chair of the meeting as a proxy for a person who is entitled to vote, in accordance with the direction on the proxy form to vote as the proxy decides.

3. Resolution 3: “Ratification and Approval of Placement of Shares”

“That for the purposes of Listing Rule 7.4 and for all other purposes, the Shareholders hereby ratify and approve the allotment and issue by the Company of 3,000,000 Shares to the persons, on the date and on the terms and conditions and in the manner set out in the Explanatory Memorandum.”

Voting Exclusion Statement

• For the purposes of Listing Rule 7.4, the Company will disregard any votes cast on the Resolution by any person who participated in the issue, as set out in the Explanatory Memorandum and any associate of such person.

• 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 a person as chair of the meeting as a proxy for a person who is entitled to vote, in accordance with the direction on the proxy form to vote as the proxy decides.

Cazaly Resources Limited Notice of General Meeting ABN 23 101 049 334

NOTICE OF MEETING

4. Resolution 4: “Ratification an Approval of Issue of Options to Mr Philip Kirchlechner”

“That for the purposes ASX Listing Rule 7.4 and all other purposes, the Shareholders hereby ratify and approve the allotment and issue by the Company of 500,000 Options to Mr Philip Kirchlechner (and/or his nominee(s)), on the date and on the terms and conditions and in the manner set out in the Explanatory Memorandum.”

Voting Exclusion Statement

• For the purposes of Listing Rule 7.4, the Company will disregard any votes cast on the Resolution by Mr Kirchlechner and any of its associates.

• However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form or it is cast by a person as chair of the meeting as a proxy for a person who is entitled to vote, in accordance with the direction on the proxy form to vote as the proxy decides.

5. Resolution 5: “Ratification and Approval of Placement of Shares”

“That for the purposes of Listing Rule 7.4 and for all other purposes, the Shareholders hereby ratify and approve the allotment and issue by the Company of 1,195,000 Shares to the persons, on the date and on the terms and conditions and in the manner set out in the Explanatory Memorandum.”

Voting Exclusion Statement

• For the purposes of Listing Rule 7.4, the Company will disregard any votes cast on the Resolution by any person who participated in the issue, and any associate of such person.

• 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 a person as chair of the meeting as a proxy for a person who is entitled to vote, in accordance with the direction on the proxy form to vote as the proxy decides.

6. Resolution 6 – Equity capital raising

“That for the purposes of Listing Rule 7.1 and for all other purposes, the Shareholders approve the allotment and issue of up to 4,259,546 Shares by way of private placement at a price of $0.55 per Share in order to raise up to A$2,342,750, on the terms and conditions and in the manner set out in the Explanatory Memorandum.”

Voting Exclusion Statement

• The Company will disregard any votes cast on the resolution by any person who may participate in the proposed issue, as set out in the Explanatory Memorandum, and any person who may obtain a benefit in the capacity as holder of ordinary shares or an associate of such person.

• 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.

Cazaly Resources Limited Notice of General Meeting ABN 23 101 049 334

NOTICE OF MEETING

To consider and, if thought fit, to pass, with or without modification, the following special resolutions:

7. Resolution 7 – Approval of Employee Share Option Plan

“That for the purposes of ASX Listing Rule 7.2 Exception 9(b), and for all other purposes, approval is given for the establishment of the Cazaly Resources Limited Employee Share Option Plan on the terms and conditions summarised in the Explanatory Memorandum and to the grant of options from time to time under the Plan as an exception to ASX Listing Rule 7.1.”

V oting Exclusion Statement

• The Company will disregard any votes cast on the resolution by any Director (except a Director who is ineligible to participate in the Employee Share Option Plan) and any of their associates.

• However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form, or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

8. Resolution 8 – Approval of Proportional Takeover Provision

“That pursuant to sections 136 and 648G of the Corporations Act 2001 (Cth), the Company’s Constitution be amended by inserting a new Clause 26 (Proportional Takeover Rule) in the form set out in the Explanatory Memorandum.”

Cazaly Resources Limited Notice of General Meeting ABN 23 101 049 334

PROXIES

1. A member entitled to attend and vote at a meeting of the Company is entitled to appoint any person as his or her proxy to attend and vote for the member at the meeting. If a member is entitled to cast two or more votes at a meeting of the Company the member may appoint not more than two proxies to attend and vote instead of the member. If two proxies are appointed, and a member does not specify the proportion or number of the member's votes each proxy may exercise, each proxy may exercise half the votes. A proxy need not be a member of the Company. The appointment of the proxy may specify the proportion or number of votes that the proxy may exercise.

2. A body corporate, which is a member, may appoint an individual (by valid Power of Attorney in the name of the individual) as a representative to exercise all or any of the powers the body corporate may exercise at the meeting. The appointment may be a standing one and must be either lodged with the Company prior to the Meeting, or be presented at the Meeting before registering on the attendance register for the Meeting.

3. Forms to appoint proxies, and the Power of Attorney (if any) under which they are appointed, must be lodged at the registered office of the Company, at Level 2, 38 Richardson Street, WEST PERTH, WA, 6005, or by facsimile (61 8) 9322 6398 not less than 48 hours before the time of the Meeting or resumption of an adjourned meeting at which the person named in the instrument proposes to vote.

5. An instrument appointing a proxy:

6. a) shall be in writing under the hand of the appointor or of his attorney, or if the appointor is a corporation, either under seal or under the hand of a duly authorised officer or attorney;

7. b) may specify the manner in which the proxy is to vote in respect of a particular resolution and, where an instrument of proxy so provides, the proxy is not entitled to vote on the resolution except as specified in the instrument;

8. c) shall be deemed to confer authority to demand or join in demanding a poll; and

9. d) shall be in such form as the Directors determine and which complies with Section 250A of the Corporations Act and the Listing Rules;

VOTING EXCLUSION

Where a voting exclusion applies, 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.

ATTENDANCE AND VOTING ELIGIBILITY

For the purpose of regulation 7.11.37 of the Corporations Regulations 2001 (Cth), the Directors have determined that Shares held at 11.30am WST on 14 June 2010 will be taken, for the purposes of this General Meeting, to be held by the persons who held them at that time.

BY ORDER OF THE BOARD

Clive Jones Managing Director Cazaly Resources Limited Dated: 12 May 2010

ENQUIRIES

All enquiries in relation to the contents of the Notice of Meeting or Explanatory Memorandum should be directed to the Company’s Joint Managing Directors, Mr Clive Jones, and Mr Nathan McMahon, or Company Secretary, Ms Lisa Wynne (telephone +618 9322 6283)

Cazaly Resources Limited Notice of General Meeting ABN 23 101 049 334

EXPLANATORY MEMORANDUM

INTRODUCTION

This Explanatory Memorandum has been has been prepared for the information of shareholders of Cazaly Resources Limited (“Cazaly” or the “Company”) in connection with Resolutions 1 to 8, to be considered at the General Meeting to be held at the Celtic Club, 48 Ord Street, West Perth at 11.30am WST, 16 June 2010.

If you have any questions regarding the matters set out in this Explanatory Memorandum or the preceding Notice, please contact the Company, your stockbroker or other professional advisor.

GENERAL INFORMATION

This Explanatory Memorandum has been prepared to assist Shareholders to understand the business to be put to Shareholders at the forthcoming General Meeting to be held on 16 June 2010.

The purpose of this Explanatory Memorandum is to provide Shareholders with information that the Board believes to be material to Shareholders in deciding whether or not to approve the above resolutions in the Notice (of which this Explanatory Memorandum forms a part).

AGENDA

1. RESOLUTIONS 1 – 5 RATIFICATION AND APPROVAL OF ISSUE OF SHARES AND OPTIONS

ASX Listing Rule 7.4

ASX Listing Rule 7.1 prohibits a listed company from issuing, or agreeing to issue, equity securities (which include shares) that exceed 15% of the total number of ordinary securities on issue in any 12 month period, unless approval is obtained from the holders of the company’s ordinary securities.

ASX Listing Rule 7.4 provides that the approval of holders of the company’s ordinary shares may be obtained after the issue of equity securities. The effect of such ratification is to restore the company’s discretionary power to issue further Shares up to 15% of the number of ordinary shares on issue at the beginning of the relevant 12 month period without obtaining shareholder approval.

The approval of Resolutions 1 to 5 will enable the Company at any time during the next 12 months to issue equity securities up to the 15% threshold set out in ASX Listing Rule 7.1 without the Shares and Options described below the subject of Resolutions 1 to 5 counting towards that 15% threshold.

Cazaly Resources Limited Notice of General Meeting ABN 23 101 049 334 EXPLANATORY MEMORANDUM

2. RESOLUTION 1 – RATIFICATION AND APPROVAL OF ISSUE OF SHARES TO CARBINE RESOURCES LTD

In July 2009, the Company entered into an agreement (“Carbine Agreement”) with Carbine Resources Ltd (“CRB”) to terminate the royalty arrangement between the Company, Hayes Mining Pty Ltd and CRB. Consideration under the Carbine Agreement was CRB undertaking a selective buy-back and cancellation of the 6,635,949 ordinary shares held by Cazaly in CRB for nil consideration and Cazaly issuing to CRB 823,801 Cazaly Shares valued at $200,000.

Resolution 1 has been included so that Shareholders may approve and ratify pursuant to ASX Listing Rule 7.4 the issue of these Shares. This is to limit the restrictive effect of ASX Listing Rule 7.1 on any further issues of equity securities in the next 12 months and restore the Company's ability to issue equity securities within the 15% annual limit under that ASX Listing Rule, to the extent of the 823,801 Ordinary Shares.

ASX Listing Rule Disclosure Requirements

The following information is provided in accordance with ASX Listing Rule 7.5:

• (a) Number of securities allotted

823,801 Shares were issued on 25 November 2009.

• (b) Price at which the securities were issued

• Deemed price of $0.2428 per Share .

• (c) Terms of the securities

The 823,801 Shares issued are fully paid ordinary shares ranking equally in all respects with all other Shares on issue and are listed on the ASX.

• (d) Names of the allottees or the basis on which allottees were determined

• The Shares were issued to Carbine Resources Limited

• (e) Use (or intended use) of the funds raised

The allotment and issue of the Shares did not raise any funds. However, the issue was for the termination of the royalty arrangement between Cazaly Resources Ltd, Hayes Mining Pty Ltd and Carbine Resources Ltd.

Directors' Recommendation

The Board believes that the proposed resolution is beneficial for the Company. The Board recommends Shareholders vote in favour of Resolution 1 as it allows the Company greater flexibility to issue further securities.

Cazaly Resources Limited Notice of General Meeting ABN 23 101 049 334 EXPLANATORY MEMORANDUM

3. RESOLUTION 2 – RATIFICATION AND APPROVAL OF PLACEMENT OF SHARES AND PLACEMENT OPTIONS TO NEW PAGE INVESTMENTS LIMITED

On 30 December 2009 the Company announced it had successfully raised $2,240,000 (before costs) by way of a placement of 4,000,000 Shares with 4,000,000 free attaching options exercisable at $0.28 on or before 1 February 2010 on the terms and conditions set out in Annexure A (“Placement Options”) to institutional investors at a price of $0.28 per Share (“Placement”). The Placement was made to raise funds to provide for continued exploration and to fund working capital.

Under Resolution 2, the Company seeks from Shareholders ratification and approval of the issue of the equity securities being the 4,000,000 Shares and 4,000,000 Placement Options issued under the Placement. This is so as to limit the restrictive effect of ASX Listing Rule 7.1 on any further issues of equity securities in the next 12 months, and restore the Company's ability to issue equity securities within that 15% annual limit, to the extent of the 4,000,000 Shares and 4,000,000 Placement Options.

ASX Listing Rule disclosure requirements

The following information is provided in accordance with ASX Listing Rule 7.5:

• (a) Number of securities allotted

4,000,000 Shares and 4,000,000 Placement Options were issued on 31 December 2009

• (b) Price at which the securities were issued $0.28 per Share

• (c) Terms of the securities The 4,000,000 Shares issued are fully paid ordinary shares ranking equally in all respects with all other Shares on issue and are listed on ASX

The 4,000,000 Placement Options are exercisable at $0.28 on or before 1 February 2010. The full terms of the options are outlined in Annexure A to this Notice.

• (d) Names of the allottees or the basis on which allottees were determined The Shares and Placement Options were issued to New Page Investments Limited.

• (e) Use (or intended use) of the funds raised

• The allotment and issue of the Shares and subsequent exercise of the Placement Options raised $2,240,000 before costs of the Placement; the net funds raised have been used to advance the Company’s Parker Range iron ore project and for the further exploration over the Company’s various Iron Ore projects and to fund working capital.

Directors' Recommendation

The Directors recommend Shareholders vote in favour of Resolution 2, as it allows the Company to ratify the above issue of securities and retain the flexibility to issue further securities representing up to 15% of the Company's share capital during the next 12 months.

Cazaly Resources Limited Notice of General Meeting ABN 23 101 049 334

EXPLANATORY MEMORANDUM

4. RESOLUTION 3 – RATIFICATION AND APPROVAL OF PLACEMENT OF SHARES

On 31 March 2010 the Company announced it had successfully raised $1,200,000 (before costs) by way of a placement of 3,000,000 Shares to institutional investors at $0.40 per Share, which was undertaken by Lead Manager Patersons Securities Limited (“Second Placement”). The Second Placement was made to raise funds to provide for the ongoing development of the Company’s Parker Range and Hamersley projects and to fund working capital.

Under Resolution 3, the Company seeks from Shareholders, ratification and approval of the issue of the equity securities being the 3,000,000 Shares issued under the Second Placement. This is so as to limit the restrictive effect of ASX Listing Rule 7.1 on any further issues of equity securities in the next 12 months, and restore the Company's ability to issue equity securities within that 15% annual limit, to the extent of the 3,000,000 Shares.

ASX Listing Rule disclosure requirements

The following information is provided in accordance with ASX Listing Rule 7.5:

• (a) Number of securities allotted 3,000,000 Shares were issued on 7 April 2010

• (b) Price at which the securities were issued $0.40 per Share

• (c) Terms of the securities

The 3,000,000 Shares issued are fully paid ordinary shares ranking equally in all respects with all other Shares on issue and are listed on ASX

• (d) Names of the allottees or the basis on which allottees were determined The Shares were issued to clients of Patersons Securities Limited.

• (e) Use (or intended use) of the funds raised

The allotment and issue of the Shares raised $1,200,000 before costs of the Second Placement; the net funds raised have been used to provide for the ongoing development of the Company’s Parker Range and Hamersley projects and to fund working capital.

Directors' Recommendation

The Directors recommend that Shareholders vote in favour of Resolution 3, as it allows the Company to ratify the above issue of securities and retain the flexibility to issue further securities representing up to 15% of the Company's share capital during the next 12 months.

Cazaly Resources Limited Notice of General Meeting ABN 23 101 049 334

EXPLANATORY MEMORANDUM

5. RESOLUTION 4 – RATIFICATION AND APPROVAL OF ISSUE OF OPTIONS TO MR PHILIP KIRCHLECHNER

Under Resolution 4, the Company seeks from Shareholders, ratification and approval of the issue of the equity securities being the 500,000 Options exercisable at $0.40 on or before 11 February 2012 on the terms and conditions set out in Annexure B issued to Mr Kirchlechner, Marketing Consultant of the Company or his nominee(s).

As announced by the Company on 6 July 2009, Mr Philip Kirchlechner, iron ore and steel industry veteran, was appointed as Marketing Consultant of the Company. Mr Kirchlechner has 20 years experience in marketing and business development in the iron ore and steel industry, gained through positions with Hamersley Iron, Rio Tinto Iron Ore, Voest-Alpine (VAI) and J.P. Morgan.

Prior to taking on this role with Cazaly Mr Kirchlechner worked for Australian iron ore company Aurox Resources, where he successfully identified, negotiated with and ultimately secured off-take agreements with Chinese partners for its Balla Balla Iron Ore Project in Western Australia.

Mr Kirchlechner was also formerly Head of Marketing at Fortescue Metals Group (FMG) and was instrumental in the company building relationships with key decision makers in the Asian steel industry, including iron ore end users in Japan, Korea, Taiwan and mainland China.

Mr Kirchlechner lived in China for 16 years and is fluent in Mandarin Chinese, German, and Dutch. He earned a Masters of Science from the Massachusetts Institute of Technology, a Bachelor of Arts from Reed College, and a diploma in Chinese language from the Beijing Languages Institute.

In addition to fixed remuneration, the Company granted to Mr Kirchlechner 500,000 Options to subscribe for Shares, the Options are exercisable at $0.40 on or before 11 February 2012 on the terms and conditions set out in Annexure B.

ASX Listing Rule disclosure requirements

The following information is provided in accordance with ASX Listing Rule 7.5:

• (a) Maximum number of securities the entity is to issue 500,000 Options

• (b) Date by which the entity will issue the securities 11 February 2010

• (c) The issue price of securities Nil

• (d) The names of the allottees Mr Philip Kirchlechner (or his Nominee (s))

• (e) The terms of the securities

The Options are exercisable at $0.40 on or before 11 February 2012. The full terms of the options are outlined in Annexure B to this Notice.

• (f) The intended use of the funds raised The Options were issued for nil consideration

Directors' Recommendation

The Board recommends that Shareholders vote in favour of Resolution 4 as it allows the Company to ratify the above issue of securities and retain the flexibility to issue further securities representing up to 15% of the Company's share capital during the next 12 months.

Cazaly Resources Limited Notice of General Meeting

ABN 23 101 049 334

EXPLANATORY MEMORANDUM

6. INFORMATION RELATING TO RESOLUTION 5 AND RESOLUTION 6

On 6 May 2010 the Company announced it had successfully completed a book build for a placement of 5,454,546 Shares at $0.55 per Share to raise $3,000,000 (before costs) (“Third Placement”). The Third Placement was undertaken by Patersons Securities Limited, Foster Stockbroking and other Institutions and sophisticated investors in accordance with section 708 of the Australian Corporations Act 2001 (C’wth). 4,259,546 Shares to be issued under the Third Placement, are subject to Shareholder approval. At the time of the announcement, the Company had 1,195,000 Shares available within the Company’s 15% annual limit in accordance with ASX Listing Rule 7.1, these Shares were issued on 11 May 2010.

Resolution 5 seeks from Shareholders, ratification and approval of the issue of 1,195,000 Shares and Resolution 6 seeks approval from Shareholders to issue the remaining 4,259,546 Shares under the Third Placement. The Third Placement was to raise funds to provide for the ongoing development of the Company’s Parker Range and Hamersley projects and to fund working capital.

7. RESOLUTION 5 – RATIFICATION AND APPROVAL OF PLACEMENT OF SHARES

Under Resolution 5, the Company seeks from Shareholders, ratification and approval of the issue of equity securities being the 1,195,000 Shares issued under the Third Placement on 11 May 2010. This is so as to limit the restrictive effect of ASX Listing Rule 7.1 on any further issues of equity securities in the next 12 months, and restore the Company's ability to issue equity securities within that 15% annual limit, to the extent of the 1,195,000 Shares.

ASX Listing Rule disclosure requirements

The following information is provided in accordance with ASX Listing Rule 7.5:

• (a) Number of securities allotted 1,195,000 Shares were issued on 11 May 2010.

• (b) Price at which the securities were issued $0.55 per Share

• (c) Terms of the securities

The 1,195,000 Shares issued are fully paid ordinary shares ranking equally in all respects with all other Shares on issue and are listed on ASX

• (d) Names of the allottees or the basis on which allottees were determined The Shares were issued to clients of Patersons Securities Limited and Fosters Stockbroking.

• (e) Use (or intended use) of the funds raised

The net funds raised are intended to be used to provide for the ongoing development of the Company’s Parker Range and Hamersley projects and to fund working capital.

Directors' Recommendation

The Directors recommend Shareholders vote in favour of Resolution 5, as it allows the Company to ratify the above issue of securities and retain the flexibility to issue further securities representing up to 15% of the Company's share capital during the next 12 months.

Cazaly Resources Limited Notice of General Meeting ABN 23 101 049 334

EXPLANATORY MEMORANDUM

8. RESOLUTION 6 – EQUITY CAPTIAL RAISING

In order to maintain maximum flexibility to do so, and to preserve the Company’s ability to issue Equity Securities within the 15% annual limit under Listing Rule 7.1, the Company seeks Shareholder approval under Listing Rule 7.1 for the proposed equity capital raising outlined in Section 6 of this Notice (the Third Placement). This raising will provide the Company with increased financial flexibility and enable the Company to more aggressively pursue the development of the Parker Range and Hamersley Projects. It would also supplement the Company’s working capital requirements.

ASX Listing Rule 7.1 approval

ASX Listing Rule 7.1 requires the Company to obtain Shareholder approval in order to issue Equity Securities representing more than 15% of the Company’s Shares on issue (unless one of the exceptions in ASX Listing Rule 7.2 applies). The Company’s proposed equity capital raising falls within this requirement as none of the exceptions apply. Under ASX Listing Rule 7.3, the notice of meeting to approve the issue of the Equity Securities must include certain information, which information is set out below.

• a) The maximum number of Equity Securities the entity is to issue (if known) or the formula for calculating the number of Shares the entity is to issue

4,259,546 Shares

• b) The date by which the entity will issue the Equity Securities (which must be no later than 3 months after the date of the meeting)

The date of the General Meeting

• c) The issue price of the Equity Securities, which must be either a fixed price or a minimum price $0.55 per Share

• d) The names of the allottees (if known) or the basis upon which the allottees will be identified or selected Investors who participate in the placement, who will not be related parties of the Company or their associates

• e) The terms of the Equity Securities

The Shares will rank equally in all respects with existing Shares on issue

• f) The intended use of the funds raised

Funds raised are intended to be used to provide for the ongoing development of the Company’s Parker Range and Hamersley projects and to fund working capital.

• g) The dates of allotment or a statement that allotment will occur progressively

The Shares will be allotted progressively.

Directors' Recommendation

The Board recommends that Shareholders vote in favour of Resolution 6.

Cazaly Resources Limited Notice of General Meeting ABN 23 101 049 334

EXPLANATORY MEMORANDUM

9. RESOLUTION 7 – APPROVAL OF EMPLOYEE OPTION PLAN

At the General Meeting held on 6 November 2009, members approved the issue of Options (“Plan Options”) under the Cazaly Resources Limited Employee Incentive Scheme (“EIS”). The Company now proposes to adopt a new Employee Share Option Plan (“ESOP”) to replace the previously approved EIS. The Board believes that the future success of the Company will depend in large on the skills and motivation of the people employed in the business and the ownership of shares in the Company by its employees.

The ESOP is aimed specifically at driving long term performance for Shareholders, a culture of employee share ownership in the business and retention of executives and employees. Accordingly, the ESOP will form an important part of a comprehensive remuneration strategy for the Company’s employees, aligning their interest with those of Shareholders by linking their rewards to the long term success of the Company and its financial performance. Non-Executive Directors are not eligible to participate in the ESOP.

Requirement for Shareholder approval

The Board is seeking Shareholder approval for the ESOP in accordance with the ASX Corporate Governance Council’s Best Practice Recommendations. In addition approval is also sought under ASX Listing Rule 7.2 (Exception 9(b)) which will exempt the issue of Plan Options under the ESOP from the 15% annual limit on the issue of new securities without prior Shareholder approval for a period of three years from the date of the passing of Resolution 7. In the absence of such approval, the issue can still occur but is counted as part of the 15% limit which would otherwise apply during a 12 month period.

Key Features of the Proposed Employees Share Option Plan (ESOP)

The ESOP is targeted at Cazaly’s employees (as determine by the Board from time to time). There are currently approximately 10 employees who will participate in the ESOP and this number is expected to grow when the Company’s primary asset, the Parker Range Iron Ore Project, is developed.

The vesting terms for Plan Options to be offered under the ESOP will be decided by the Board from time to time. Where appropriate, and where employees (i.e. senior management) can exercise significant influence over the business, the Board will establish policies on vesting of Plan Options using performance hurdles linked over the long term to encourage employees to focus on performance over the long term.

The number of Plan Options to be issued under the ESOP will be decided by the Board from time to time. However the applicable ASIC Class Order limits the maximum number of securities which may be issued to employees under incentive plans in a 5 year period to 5% of the issued share capital of the Company (calculated at the date of the offer under the ESOP), subject to a range of exclusion, including securities issued under a disclosure document, to certain senior executives or issues of securities outside of Australia.

Under the terms of the ESOP the Board has discretion to determine the exercise price, the expiry date and vesting conditions of the Plan Options.

Plan Options automatically vest in the event that a takeover bid is made for Cazaly, or where there is a change in control of more than 50% of Cazaly.

The Plan Options carry no dividend or voting rights.

ASX Listing Rule 7.1

ASX Listing Rule 7.1 prohibits a listed company from issuing, or agreeing to issue, equity securities (which include shares) that exceed 15% of the total number of ordinary securities on issue in any 12 month period, unless approval is obtained from the holders of the company’s ordinary securities. However certain issues are exempt from the restrictions of ASX Listing Rule 7.1 and will not be counted as reducing the number of equity securities which the company can issue without shareholder approval under the limit imposed by ASX Listing Rule 7.1.

Exempt issues include an issue of securities to persons participating in an employee incentive plan where shareholders have approved the issue of securities under the plan as an exemption from ASX Listing Rule 7.1. Shareholder approval must be given in a general meeting held not more than 3 years before the date of the issue of such securities. In order to take advantage of the exemption from ASX Listing Rule 7.1 and allow the Company flexibility to issue securities, Shareholders are requested to approve the issue of Plan Options as an exemption from ASX Listing Rule 7.1. This approval will be effective for a period of 3 years from the date of the Meeting.

As at the date of the Meeting, no Options will have been issued under the proposed ESOP.

Cazaly Resources Limited Notice of General Meeting ABN 23 101 049 334 EXPLANATORY MEMORANDUM

If Resolution 7 is passed the Company will cease to issue Options under the existing EIS. The total number of Options issued under the existing EIS since it was approved are:

No. of Options	Exercise Price	Expiry Date
850,000	$0.33	12 January 2015
100,000	$0.49	5 February 2015

The Company has also issued a total of 2,500,000 Options to senior executives on terms outside the existing Scheme, which are linked to significant performance hurdles.

A summary of the terms of the proposed ESOP are set out in Annexure C to this Notice. A copy of the full terms of the ESOP can be obtained by either contacting the Company Secretary on +6189322 6283 or by email to admin@cazalyresoruces.com.au .

Directors' Recommendation

The Board recommends Shareholders vote in favour of Resolution 7.

Cazaly Resources Limited Notice of General Meeting ABN 23 101 049 334 EXPLANATORY MEMORANDUM

10. RESOLUTION 8 – APPROVAL OF PROPORTIONAL TAKEOVER PROVISION

The Corporations Act permits a company’s constitution to include a provision that enables it to refuse to register the transfer of shares acquired under a proportional takeover bid unless shareholders in a general meeting approve the bid.

The Directors consider it in the interest of Shareholders to introduce a proportional takeover provision for the maximum period permitted by law, being three years. The form of the proposed rule to be inserted in the Company’s constitution is set out in Annexure D to this Explanatory Memorandum.

Resolution 8 would, if passed, amend the constitution of the Company to insert the rule set out in Annexure D concerning proportional takeover approval under section 648D of the Corporations Act. The amendment would operate for three years and would then cease to apply unless renewed by a further special resolution of Shareholders. Resolution 8 is a special resolution which means that a vote to pass this Resolution is decided on a 75% majority of the votes cast by Shareholders entitled to vote on this Resolution. If Resolution 8 is passed, then for 21 days after the Meeting the holders of 10% of the Company’s shares would have the right to apply to the court to have the Resolution set aside. The court may set aside the Resolution if the court is satisfied in all the circumstances that it is appropriate to do so.

The Corporations Act requires certain information to be included in the notice of meeting where the approval of members is sought to adopt proportional takeover provisions. That information is set out below.

Proportional Takeover Bid

A proportional takeover bid is a takeover bid where the offer made to each shareholder is only for a proportion of that shareholder’s shares (i.e. less than 100%).

Effect of a Proportional Takeover Bid Provision

If a proportional takeover bid is made, the Directors must ensure that a meeting of Shareholders is held and the Shareholders vote on a resolution to approve the takeover bid at least 14 days before the last day of the bid period. Each Shareholder has one vote for each fully paid Share held. The vote is decided on a simple majority. The bidder and its associates are not allowed to vote. If the resolution is not passed, no transfer will be registered as a result of the takeover bid and the offer will be taken to have been withdrawn. If the resolution is not voted on by the deadline, the resolution approving the bid is taken to have been passed. If the bid is approved (or taken to have been approved) all valid transfers must be registered, providing they comply with the other provisions of the Company’s constitution.

The proportional takeover approval provisions do not apply to full takeover bids and will only apply for 3 years after the date of the adoption of the proposed Constitution (i.e. until 16 June 2013) unless again renewed by Shareholders.

Knowledge of any Acquisition Proposals

At the date of this Notice, no Director of executive officer is aware of any current proposal by any person to acquire or to increase the extent of a substantial interest in the Company.

Reasons for and Potential Advantages and Disadvantages of Rule

The Directors consider that the takeover approval provisions have no potential advantages for them. The reasons for and potential advantages of the proposed proportional takeover approval rule for Shareholder include:

• Shareholder have the right to decide by majority vote whether to accept a proportional takeover bid;

• It may help Shareholders to avoid being locked in as a minority and avoid the bidder acquiring control of the Company without paying an adequate control premium (i..e not being required to pay for all of the Shares on issue);

• It increases Shareholders’ bargaining power and may assist in ensuring that any proportional takeover bid is adequately priced; and

• Knowing the view of the majority of Shareholders may help each individual Shareholder to form and opinion on whether to accept or reject an offer under the bid.

Cazaly Resources Limited Notice of General Meeting ABN 23 101 049 334

EXPLANATORY MEMORANDUM

The potential disadvantages of the proposed proportional takeover approval rule for Shareholders include:

• Proportional takeover bids for Shares in the Company may be discouraged;

• Shareholders may lose an opportunity too sell some of their Shares at a premium; and

• the likelihood of a proportional takeover succeeding may be reduced.

The Directors do not believe the possible disadvantages outweigh the advantages or the proportional takeover provisions operating for the next three years.

Directors' Recommendation

The Board recommends that Shareholders vote in favour of Resolution 8. The Chairman intends to vote undirected proxies in favour of this Resolution. Each Director intends to vote any Shares that he or she holds or controls (directly or indirectly) “FOR” the Resolution.

Enquiries

All enquiries in relation to the contents of the Notice of Meeting or Explanatory Memorandum should be directed to the Company’s Joint Managing Directors, Mr Clive Jones and Mr Nathan McMahon or Company Secretary, Ms Lisa Wynne (telephone: +61 8 9322 6283).

Cazaly Resources Limited Notice of General Meeting ABN 23 101 049 334

ANNEXURE A

Terms and Conditions Placement Options

The options entitle the holders to subscribe for fully paid ordinary shares in the Company on the following terms:

• a) Each New Option entitles the holder to acquire one fully paid ordinary share in the Company.

• b) The New Option may be exercised at any time until 1 February 2010. Each Option may be exercised by forwarding to the Company at its registered office the exercise notice, duly completed together with payment of the sum of twenty eight cents (28c) per Option exercised. The Options will lapse at 5.00pm WST on 1 February 2010.

• c) The Options are not transferable.

• d) Option holders shall be permitted to participate in new issues of securities on the prior exercise of options in which case the Option holders shall be afforded the period of at least nine (9) business days prior to and inclusive of the record date (to determine entitlements to the issue) to exercise the Option.

• e) Shares issued on the exercise of Options will be issued not more than fourteen (14) days after receipt of a properly executed exercise notice and application moneys. Shares allotted pursuant to the exercise of an Option will rank equally with the then issued ordinary shares of the Company in all respects. Official Quotation of the shares will be sought.

• f) In the event of any reconstruction (including consolidation, sub-division, reduction or return) of the issued capital of the Company, all rights of the option holder will be changed to the extent necessary to comply with the Listing Rules applying to the reconstruction of capital at the time of the reconstruction.

• g) If there is a bonus issue to shareholders, the number of shares over which the Option is exercisable may be increased by the number of shares which the holder of the Option would have received if the Option had been exercised before the record date for the bonus issue.

• h) In the event that a pro rata issue (except a bonus issue) is made to the holders of the underlying securities in the Company, the exercise price of the Option may be reduced in accordance with Listing Rule 6.22.

Cazaly Resources Limited Notice of General Meeting ABN 23 101 049 334

ANNEXURE B

Terms & Conditions of Options issued to Philip Kirchlechner

• a) Each Option entitles the holder, on exercise, to one Share.

• b) The Options are exercisable at $0.40 on or before expire on 11 February 2012.

• c) Subject to paragraph (d) below, the Options are exercisable at any time on or prior to the Expiry Date at 5.00pm (WST) by completing an Option exercise form and delivering it together with the payment for the number of Shares in respect of which the Options are exercised to the registered office of the Company.

• d) An Option Holder may exercise some of that person's Options, which does not affect that holder's right to exercise the remainder of their Options by the deadline in paragraph (b) above. Options must be exercised in multiples of 100 at a time, unless the Option Holder exercises all Options able to be exercised at that time.

• e) The Options are non transferable save for the provisions of clause (f) hereof.

• f) Subject to the Corporations Act, the ASX Listing Rules and the Company's Constitution, the Options are transferable to a nominee of the Option Holder. Application will not be made to ASX for official quotation of the Options.

• g) All Shares issued upon exercise of the Options will, from the date they are issued, rank pari passu in all respects with the Company’s then issued Shares. The Company will apply for official quotation by ASX of all Shares issued upon exercise of the Options.

• h) Option Holders cannot participate in new issues of capital offered to Shareholders of the Company during the currency of the Options without exercising the Options. However, the Company will ensure that for the purpose of determining entitlements to any such issue, the books closing date will be at least 10 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.

• i) Subject to paragraph (j), if the Company makes a bonus share issue, a rights issue or any other similar issue of rights or entitlements, there will be no adjustment to the exercise price, the number of Shares per Option or any other terms of those Options.

• j) In the event of any reorganisation (including consolidation, subdivision, reduction or return) of the issued capital of the Company prior to the expiry dates of the Director Options, the rights of Option Holders, including the number of Options or the exercise price of the Options or both will be changed to the extent necessary to comply with the ASX Listing Rules applying to a reorganisation of capital at the time of the reorganisation.

• k) Option Holders will be sent all communications sent to Shareholders of the Company, but Options do not confer any rights to attend or vote at meetings of Shareholders of the Company. Notice may be given by the Company to Option holders in the manner provided by the Company's Constitution for the giving of notices to shareholders, and the relevant provisions of the Company's Constitution apply with all necessary modification to notices to Option Holders.

• l) If the Board determines that:

• a) the Option Holder has acted fraudulently, dishonestly or in breach of the Option Holder's obligations to any company in the Group; and

• b) Options issued in relation to the Option Holder are to be forfeited,

the Options will immediately lapse.

• n) The provisions of the Cazaly Resources Limited Employee Incentive Scheme apply to the options under this document, save that where there is an inconsistency the provisions of this document shall prevail.

• o) Notwithstanding the terms and conditions in this Appendix the Options may only be issued or exercised within the limitations imposed by the Corporations Act 2001 and the Australian Stock Exchange Listing Rules.

Cazaly Resources Limited Notice of General Meeting ABN 23 101 049 334

ANNEXURE C

Cazaly Resources Ltd Employee Share Option Plan

The key features of the Cazaly Resources Limited Employee Share Option Plan (‘ESOP’), and the proposed terms of the Options to be issued, are set out below.

Eligible persons

Full and part time employees (and their Associates) of any Cazaly group company (wherever they reside) will be eligible to be issued Options. However, there may be some further regulatory requirements for executive directors or employees residing outside Australia.

Entitlement

Subject to the terms of the ESOP, each Option entitles the holder to subscribe for and be allotted one fully paid ordinary share in Cazaly on the exercise of the Option.

Exercise price

The Board, or its authorised delegate, is able to determine the exercise price of an Option issued under the ESOP at the time of grant. Without limiting the ways in which the exercise price may be specified, it may include:

• (a) a fixed amount;

• (b) the market Price of a Share on the date the invitation is made;

• (c) the market Price of a Share on the date the Option is granted;

• (d) the market Price of a Share on a specified date which is after the date the Option is granted;

• (e) a percentage above the amount in (b), (c) or (d).

Vesting conditions

The Board has the discretion at the time of grant of Options to determine what (if any) vesting conditions need to be satisfied before the Options become capable of exercise.

Vesting on change of control

Options automatically vest, and may become transferable, in the event that a takeover bid is made for Cazaly, or another corporate transaction is pursued (such as a scheme of arrangement, selective capital return etc) which results in the bidder acquiring voting power to more than 50% of Cazaly.

The Board also has a general discretion to allow Options to vest if the then Board determines, acting in good faith and consistent with its fiduciary duties, that a person has obtained voting power which is sufficient to control the composition of the Board of Cazaly.

Once vested, the Options will lapse on their expiry date.

Vesting in other circumstances

The Board may permit a participant to exercise or transfer of Options in other limited situations, such as where a resolution is passed approving the disposal of Cazaly's main undertaking or on a winding up of Cazaly.

Expiry Date

The ESOP provides the expiry date will be not later than 7 years after the date of issue.

Cazaly Resources Limited Notice of General Meeting

ABN 23 101 049 334

ANNEXURE C

Impact of cessation of employment

Treatment of Options on Cessation of Employment

Cause			Unvested ESOP Options	Vested ESOP Options
Fraud, dishonesty	or material breach		Immediately lapse	Immediately lapse if Board notifies holder, otherwise expires 30 days after cessation
Death			Immediately lapse unless Board determines otherwise	Expire at Expiry Date
Total and Permanent Disablement			Immediately lapse unless Board determines otherwise	Expire at Expiry Date
Separation (eg			Immediately lapse unless Board	Expires 30 days after cessation of
resignation)			determines otherwise	employment or longer period allowed by
				the Board
Redundancy,	constructive	dismissal,	Vest automatically. Expire 30 days after	Expires 30 days after cessation of
retirement, other	termination by	Company	cessation of employment or longer	employment or longer period allowed by
not dealt with above			period allowed by Board	the Board

Maximum Number of Options

At any particular point of time the total of:

• (a) the number of Shares the subject of Options which are both unexercised and unexpired; and

• (b) the number of Shares issued as a result of the exercise of Options,

must not exceed 5% of the number of Shares on issue at that time.

Exercise into bidder shares

The ESOP provides flexibility for Cazaly to agree with any successful acquirer of Cazaly to an arrangement whereby Options will become exercisable into acquirer shares as opposed to Cazaly shares.

Transferability

Options are only transferable in the event that a change of control of Cazaly occurs or by force of law upon death of the option holder or upon bankruptcy of the option holder, or otherwise with the consent of the Board,

Bonus issues, rights issues, reconstruction

The ESOP contains rules providing for adjustments to options granted under the ESOP in the event of a bonus issue, rights issue or reorganisation of the Cazaly*s issued capital.

Listing

The Plan Options will not be listed on the ASX or any other stock exchange.

Commencement and Termination of the Plan

The Plan may at any time be terminated by resolution of the Directors.

Cazaly Resources Limited Notice of General Meeting ABN 23 101 049 334

ANNEXURE D

Insertion of proportional takeover approval rule Takeover approval provisions

26.1 Definitions

approving resolution has the same meaning as in section 648D of the Corporations Act;

approving resolution deadline has the same meaning as in section 648D of the Corporations Act;

associate has the meaning specified in section 9 of the Corporations Act for the purposes of Chapter 6 of the Corporations Act;

proportional takeover bid has the meaning specified in section 9 of the Corporations Act.

26.2 Prohibition on registration of transfers without approval

Where a proportional takeover bid in respect of shares included in a class of shares in the Company has been made:

• a) the registration of a transfer giving effect to a contract resulting from the acceptance of an offer made under the proportional takeover bid is prohibited unless and until a resolution to approve the proportional takeover bid is passed in accordance with this Constitution;

• b) a person (other than the bidder or an associate of the bidder) who, as at the end of the day on which the first offer under the proportional takeover bid was made, held shares included in that class is entitled to vote on an approving resolution and, for the purposes of so voting, is entitled to 1 vote for each such share;

• c) neither the bidder nor an associate of the bidder may vote on an approving resolution;

• d) an approving resolution must be voted on at a meeting, convened and conducted by the Company, of the persons entitled to vote on the resolution under the Corporations Act; and

• e) an approving resolution is taken to have been passed if the proportion which the number of votes in favour of the resolution bears to the total number of votes on the resolution is greater than 50%, and otherwise is taken to have been rejected.

Subject to the Corporations Act, the Directors may determine that the provisions of this Clause 26 apply to the registration of a transfer giving effect to a contract resulting from the acceptance of an offer made under a proportional takeover bid that is made prior to the date that this Constitution is adopted or this Clause 26 is renewed.

26.3 Meetings

• a) The provisions of this Constitution relating to a general meeting of the Company apply, with such modifications as the circumstances require (including, without limitation, to the requisite notice period to ensure that the meeting is convened on or before the approving resolution deadline), in relation to a meeting that is convened for the purposes of this Clause 26.

• b) Where takeover offers have been made under a proportional takeover bid, then the Directors must ensure that a resolution to approve the proportional takeover bid is voted on in accordance with this Clause 26 before the approving resolution deadline in relation to the proportional takeover bid.

• c) Where a resolution to approve a proportional takeover bid is voted on in accordance with this Clause 26 before the approving resolution deadline in relation to the proportional takeover bid, the Company must, on or before the approving resolution deadline: i) give to the bidder; and ii) serve on the Exchange,

A written notice stating that a resolution to approve the proportional takeover bid has been voted on and that the resolution has been passed or has been rejected, as the case requires.

26.4 Approving resolution deemed to have been passed

Where, as at the end of the day before the approving resolution deadline in relation to a proportional takeover bid under which offers have been made, no resolution to approve the proportional takeover bid has been voted on in accordance with this Clause 26, then a resolution to approve the proportional takeover bid is, for the purposes of this Clause 26, deemed to have been passed in accordance with this rule.

Cazaly Resources Limited Notice of General Meeting ABN 23 101 049 334

26.5 Proportional takeover bid rejected

Where an approving resolution is voted on and is rejected then:

• a) despite section 652A of the Corporations Act, all offers under the proportional takeover bid that have not, as at the end of the approving resolution deadline, resulted in binding contracts are deemed to be withdrawn at the end of the approving resolution deadline;

• b) the bidder must immediately, after the end of the approving resolution deadline, return to each Member any documents that were sent by the Member to the bidder with the acceptance of the offer;

• c) the bidder may rescind and must, as soon as practicable after the end of the approving resolution deadline, rescind each contract resulting from the acceptance of an offer made under the proportional takeover bid; and

• d) A Member who has accepted an offer made under the proportional takeover bid is entitled to rescind the contract (if any) resulting from that acceptance.

26.6 Effect of this Clause

This Clause 26 ceases to have effect on the third anniversary of the later of the date of its adoption or of its most recent renewal.

Cazaly Resources Limited Notice of General Meeting ABN 23 101 049 334

GLOSSARY OF TERMS

In this Explanatory Memorandum the following terms, abbreviations and acronyms have the following meaning:

“ACN”	Australian Company Number
“Annual Report”	The Company's report including the reports of the Directors and
	auditor of the Company and the financial statements of the Company
	for the year ended 30 June 2009.
“ASIC”	Australian Securities and Investments Commission.
“ASX”	ASX Limited (ACN 008 624 691) and the market operated by it, as the
	context requires.
“ASX Listing Rules”or“Listing Rules”	The Official Listing Rules of ASX as amended from time to time.
“Board”	The board of Directors.
“Cazaly”or“Company”	Cazaly Resources Limited (ABN: 23 101 049 334).
“Corporations Act”	The Corporations Act 2001 (Cth).
“Director”	A director of Cazaly.
“Explanatory Memorandum”	The explanatory memorandum that accompanies and forms part of the
	Notice of Meeting.
“EIS”	Means the Cazaly Resources Ltd Employee Incentive Scheme
	approved by Shareholders at the Company’s Annual General Meeting
	held 6 November 2009
“ESOP”	Means the Cazaly Resources Ltd Employee Share Option Plan
	outlined in Annexure C to the Notice of Meeting.
“Meeting”or“General Meeting”	The general meeting of the Company convened by this Notice of
	Meeting.
“Notice of Meeting”	The notice of General Meeting, which accompanies this Explanatory
	Memorandum and of which this Explanatory Memorandum forms a
	part.
“Option”	Means an option to subscribe for a Share
“Related Party”	Has the meaning set out in the ASX Listing Rules.
“Remuneration Report”	The remuneration report appearing in the Annual Report
“Resolutions”	Resolutions in the Notice of Meeting.
“Share”	A fully paid ordinary share in the capital of the Company.
“Shareholder”or“member”	The registered holder of a Share.
“WST”	Australian Western Standard Time

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PROXY FORM

APPOINTMENT OF PROXY CAZALY RESOURCES LTD ABN 23 101 049 334

I/We

being a shareholder of Cazaly Resources Ltd entitled to attend and vote at the General Meeting, hereby

Appoint

Name of proxy

or failing the person so named or, if no person is named, the Chairman of the General Meeting, as my/our proxy to act generally for me/us and to vote in accordance with the following directions or, if no directions have been given, as the proxy sees fit at the General Meeting to be held at the Celtic Club, 48 Ord Street, West Perth, Western Australia at 11.30am WST on 16 June 2010 and at any adjournment thereof. If no directions are given, the Chairman will vote in favour of all of the resolutions.

FOR AGAINST ABSTAIN

Resolution 1 Ratification and Approval of Allotment and issue of Shares Resolution 2 Ratification and Approval of Placement of Shares and Options Resolution 3 Ratification and Approval of Placement of Shares Resolution 4 Ratification and Approval of Issue of Options Resolution 5 Ratification and Approval of Placement of Shares Resolution 6 Equity Capital Raising Resolution 7 Approval of Employee Share Option Plan Resolution 8 Approval of Proportional Takeover Provision

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

Signed this day of 2010

By:

Individuals and joint holders

Companies (affix common seal if appropriate)

Signature Director Signature Director/Company Secretary Signature Sole Director and Sole Company Secretary

CAZALY RESOURCES LIMITED ABN 23 101 049 334

Instructions for Completing "Appointment of Proxy’ Form

A shareholder entitled to attend and vote at a meeting is entitled to appoint not more than two proxies to attend and vote on their behalf. Where more than one proxy is appointed, such proxy must be allocated a proportion of the shareholder’s voting rights. If the shareholder appoints two proxies and the appointment does not specify this proportion, each proxy may exercise half the votes. Where more than one proxy is to be appointed or voting intentions cannot be adequately expressed using this form an additional form of proxy is available from the Company or you may copy this form.

1. A duly appointed proxy need not be a shareholder of the Company. In the case of joint holders, all must sign.

2. Corporate shareholders should comply with the execution requirements set out on the proxy form or otherwise with the provisions of Section 127 of the Corporations Act. Section 127 of the Corporations Act provides that a company may execute a document without using its common seal if the document is signed by:

3. Directors of the company;

4. a Director and a company secretary of the company; or

5. for a proprietary company that has a sole Director who is also the sole company secretary – that Director.

For the Company to rely on the assumptions set out in Section 129(5) and (6) of the Corporations Act, a document must appear to have been executed in accordance with Section 127(1) or (2). This effectively means that the status of the persons signing the document or witnessing the affixing of the seal must be set out and conform to the requirements of Section 127(1) or (2) as applicable. In particular, a person who witnesses the affixing of a common seal and who is the sole Director and sole company secretary of the company must state that next to his or her signature.

1. Completion of a proxy form will not prevent individual shareholders from attending the meeting in person if they wish. Where a shareholder completes and lodges a valid proxy form and attends the meeting in person, then the proxy’s authority to speak and vote for that shareholder is suspended while the shareholder is present at the meeting.

2. Where a proxy form or form of appointment of corporate representative is lodged and is executed under power of attorney, the power of attorney must be lodged in like manner as this proxy.

To vote by proxy, please complete and sign the proxy form enclosed and either:

• (a) send the proxy form by post to Cazaly Resources Ltd, Level 2, 38 Richardson Street, West Perth, Western Australia 6005; or

• (b) send the proxy form by facsimile to the Company on facsimile number (08) 9322 6398,

so that it is received not later than 11.30 am WST on Monday, 14 June 2010.

Proxy forms received later than this time will be invalid.