Celsius Resources Limited — Proxy Solicitation & Information Statement 2013

Apr 17, 2013

CELSIUS COAL LIMITED ACN 009 162 949

NOTICE OF GENERAL MEETING

TIME : 2.30pm (Perth time) DATE : 17 May 2013 PLACE : Level 1, 12 Kings Park Road West Perth, Western Australia

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting.

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on (+61 8) 9226 4500.

CONTENTS PAGE

Business of the Meeting (setting out the proposed resolutions) 3 Explanatory Statement (explaining the proposed resolutions) 4 Glossary 9

IMPORTANT INFORMATION

TIME AND PLACE OF MEETING

Notice is given that the meeting of the Shareholders to which this Notice of Meeting relates will be held at 2.30pm (Perth time) on 17 May 2013 at:

Level 1 12 Kings Park Road West Perth, Western Australia

YOUR VOTE IS IMPORTANT

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

VOTING ELIGIBILITY

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered Shareholders at the close of business on 14[th] May 2013.

VOTING IN PERSON

To vote in person, attend the Meeting at the time, date and place set out above.

VOTING BY PROXY

To vote by proxy, please complete and sign the enclosed Proxy Form and return by the time and in accordance with the instructions set out on the Proxy Form.

In accordance with section 249L of the Corporations Act, members are advised that:

• each member has a right to appoint a proxy;

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

• a member who is entitled to cast 2 or more votes may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If the member appoints 2 proxies and the appointment does not specify the proportion or number of the member’s votes, then in accordance with section 249X(3) of the Corporations Act, each proxy may exercise one-half of the votes.

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New sections 250BB and 250BC of the Corporations Act came into effect on 1 August 2011 and apply to voting by proxy on or after that date. Shareholders and their proxies should be aware of these changes to the Corporations Act, as they will apply to this Meeting. Broadly, the changes mean that:

• if proxy holders vote, they must cast all directed proxies as directed; and

• any directed proxies which are not voted will automatically default to the Chair, who must vote the proxies as directed.

Further details on these changes is set out below.

Proxy vote if appointment specifies way to vote

Section 250BB(1) of the Corporations Act provides that an appointment of a proxy may specify the way the proxy is to vote on a particular resolution and, if it does :

• the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way (i.e. as directed); and

• if the proxy has 2 or more appointments that specify different ways to vote on the resolution – the proxy must not vote on a show of hands; and

• if the proxy is the chair of the meeting at which the resolution is voted on – the proxy must vote on a poll, and must vote that way (i.e. as directed); and

• if the proxy is not the chair – the proxy need not vote on the poll, but if the proxy does so, the proxy must vote that way (i.e. as directed).

Transfer of non-chair proxy to chair in certain circumstances

Section 250BC of the Corporations Act provides that, if:

• an appointment of a proxy specifies the way the proxy is to vote on a particular resolution at a meeting of the Company's members; and

• the appointed proxy is not the chair of the meeting; and

• at the meeting, a poll is duly demanded on the resolution; and

• either of the following applies:

• the proxy is not recorded as attending the meeting;

• the proxy does not vote on the resolution,

the chair of the meeting is taken, before voting on the resolution closes, to have been appointed as the proxy for the purposes of voting on the resolution at the meeting.

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BUSINESS OF THE MEETING

AGENDA

1. RESOLUTION 1 – RATIFICATION OF PRIOR ISSUE OF SHARES

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

“That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify the allotment and issue of 227,272,727 Shares on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by a person who participated in the issue and any associates of those persons. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

2. RESOLUTION 2 – ISSUE OF CONVERTIBLE NOTES

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

“That, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to allot and issue Convertible Notes to Blumont Group Limited with an aggregate face value of up to $5,000,000 and otherwise on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by any person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed and any associates of those persons. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

DATED: 11 APRIL 2013

BY ORDER OF THE BOARD

RANKO MATIC COMPANY SECRETARY

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EXPLANATORY STATEMENT

This Explanatory Statement has been prepared to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions which are the subject of the business of the Meeting.

1. BACKGROUND TO TRANSACTION

On 7 February 2013, the Company announced that it had secured $10,000,000 of new financing from Blumont Group Limited ( Blumont ) to fully fund the Company’s 2013 exploration and development program.

Key elements of the arrangement include:

• (a) Ordinary share placement: A placement of 227,272,727 Shares to Blumont for an aggregate subscription of $5,000,000 (i.e. $0.022 per Share).

• (b) Convertible Notes: Blumont has agreed to make a convertible note facility available to the Company, which will enable the Company to draw down between $3,000,000 and $5,000,000 (at the Company’s election) after 30 June 2013.

• (c) Strategic Alliance: Blumont and the Company will cooperate to review potential projects in Central Asia. Blumont will nominate one director to the board of directors of the Company (subject to it maintaining a shareholding in excess of 10%) and the Company will nominate Alexander Molyneux to the board of directors of Blumont.

2. RESOLUTION 1 – RATIFICATION OF PRIOR ISSUE – SHARES 227,272,727

2.1 General

On 12 March 2013, the Company issued 227,272,727 Shares to Blumont at an issue price of $0.022 per Share to raise $5,000,000.

Resolution 1 seeks Shareholder ratification pursuant to ASX Listing Rule 7.4 for the issue of those Shares ( Ratification ).

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

ASX Listing Rule 7.4 sets out an exception to ASX Listing Rule 7.1. It provides that where a company in general meeting ratifies the previous issue of securities made pursuant to ASX Listing Rule 7.1 (and provided that the previous issue did not breach ASX Listing Rule 7.1) those securities will be deemed to have been made with shareholder approval for the purpose of ASX Listing Rule 7.1.

By ratifying this issue, the Company will retain the flexibility to issue equity securities in the future up to the 15% annual placement capacity set out in ASX Listing Rule 7.1 without the requirement to obtain prior Shareholder approval.

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2.2 Technical information required by ASX Listing Rule 7.4

Pursuant to and in accordance with ASX Listing Rule 7.5, the following information is provided in relation to the Ratification:

• (a) 227,272,727 Shares were allotted on 12 March 2013;

• (b) the issue price was $0.022 per Share;

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

• (d) the Shares were allotted and issued to Blumont, who is not a related party of the Company; and

• (e) the funds raised from this issue were used to fund the Company’s 2013 exploration and development program.

3. RESOLUTION 2 – ISSUE OF CONVERTIBLE NOTES

3.1 General

Resolution 2 seeks Shareholder approval for the allotment and issue of Convertible Notes to Blumont Group Limited with an aggregate face value of up to $5,000,000 ( Note Issue ).

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

The effect of Resolution 2 will be to allow the Company to issue the Convertible Notes pursuant to the Note Issue, without using the Company’s 15% annual placement capacity.

3.2 Terms of Convertible Notes

The key terms of the Convertible Notes are as follows:

• (a) the term of the Convertible Notes is ten (10) years;

• (b) the aggregate face value of the Convertible Notes is to be no more than $5,000,000;

• (c) the Convertible Notes will carry an interest rate of 12.5% per annum payable half-yearly. Blumont may elect for the interest to be paid in;

• (i) cash; or

• (ii) Shares (which will be issued at the 20 Trading Day VWAP prior to the interest payment being made, and subject to a floor price of $0.025 per share and a cap of $0.030 per share);

• (d) the Convertible Notes will be convertible into Shares at the 20 Trading Day VWAP prior to conversion and subject to a floor price of $0.025 per share and a cap of $0.030 per share;

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• (e) Blumont will have a right to call conversion anytime from 12 months after the issue of the Convertible Notes, with any conversion subject to the condition that it does not result Blumont acquire a voting power in the Company in excess of 19.9%;

• (f) the Company may draw down on the Convertible Note facility during the availability period, which commences on 1 July 2013 and ceases on a date that is no later than 10 years from the date of issue of the first Convertible Note;

• (g) prior to 31 December 2013, the Company has agreed to issue notices of drawing to Blumont seeking to draw down, in aggregate, not less than $3,000,000;

• (h) the Company does not intend to list the Convertible Notes for quotation on ASX and it is not obliged to do so; and

• (i) the Convertible Notes are unsecured.

3.3 Technical information required by ASX Listing Rule 7.1

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to the Note Issue:

• (a) the Convertible Notes will be issued with a total face value of no more than $5,000,000 and are convertible into Shares at the 20 day VWAP prior to conversion and subject to a floor price of $0.025 per Share and a cap of $0.030 per Share;

• (b) the Convertible Notes will carry an interest rate of 12.5% per annum payable half-yearly in either cash or Shares (at Blumont’s election). Any Shares issued pursuant to the interest carried on the Convertible Notes will be issued at the 20 day VWAP prior to the interest payment being made, and subject to a floor price of $0.025 per Share and a cap of $0.030 per Share;

• (c) the Convertible Notes will be issued no later than the Company’s next Annual General Meeting, and it is intended they will be issued progressively as the Company draws down on the Convertible Note facility. In this regard, the Company has applied for and obtained a waiver from ASX to permit the Convertible Notes to be issued outside of the normal three month time frame contemplated by ASX Listing Rule 7.1. If at the time of the next Annual General Meeting the Company wishes to further extend the issue of the Convertible Notes, the Company will be required to apply for a further waiver before seeking another Shareholder approval;

• (d) the allottee of the Convertible Notes will be Blumont, who is not a related party of the Company;

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

• (f) the Company intends to use the funds raised from the Convertible Notes to fund the Company’s 2013 exploration and development program.

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3.4 Risk of voting dilution

The conversion of Convertible Notes into Shares will dilute the interests of Shareholders who do not receive any Shares under the issue.

If Resolution 2 is approved by Shareholders and the Company issues the Convertible Notes, the economic and voting dilution of existing Shares would be as shown in the table below.

The table below shows the dilution of existing Shareholders calculated on the basis of:

• (a) the floor price, being $0.025 per Share and a cap of $0.030 per Share; and

• (b) the current number of Equity Securities on issue as at the date of this Notice.

Number of Shares currently on issue	Draw down amount	Dilution	Dilution
		$0.025 (floor price)	$0.030 (cap)
1,979,976,397	$3,000,000 (minimum draw down amount)	120,000,000Shares	100,000,000Shares
	Dilution (%)	5.71%	4.81%
	Interest per half-year period	7,500,000 Shares	6,250,000 Shares
	Dilution (%)	0.38%	0.31%
	Year 10 maximum aggregate number of Shares on conversion of interest	150,000,000 Shares	124,000,000 Shares
	Dilution (%)	7.04%	5.89%
	$5,000,000 (maximum draw down amount)	200,000,000 Shares	166,666,667 Shares
	Dilution (%)	9.17%	7.76%
	Interest per half year period	12,500,000 Shares	10,416,667 Shares
	Dilution (%)	0.63%	0.52%
	Year 10 maximum aggregate number of Shares on conversion of interest	250,000,000 Shares	208,333,334 Shares
	Dilution (%)	11.21%	9.52%

*The number of Shares on issue could increase as a result of the issue of Shares that do not require Shareholder approval (such as under a pro-rata rights issue or scrip issued under a takeover offer) or that are issued with Shareholder approval under Listing Rule 7.1.

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The table above uses the following assumptions:

1. There are currently 1,979,976,397 Shares on issue as at the date of this Notice of Meeting.

2. The Company has not issued any Equity Securities in the 12 months prior to the Meeting that were not issued under an exception in ASX Listing Rule 7.2 or with approval under ASX Listing Rule 7.1.

3. The conversion of Convertible Notes consists only of Shares. It is assumed that no Options are exercised into Shares before the date of issue of the Equity Securities.

4. The calculations above do not show the dilution that any one particular Shareholder will be subject to. All Shareholders should consider the dilution caused to their own shareholding depending on their specific circumstances.

5. This table does not set out any dilution pursuant to approvals under ASX Listing Rule 7.1.

6. The table does not show an example of dilution that may be caused to a particular Shareholder by reason of conversion of Convertible Notes into Shares, based on that Shareholder’s holding at the date of the Meeting.

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GLOSSARY

$ means Australian dollars.

20 Trading Day VWAP means the average of the volume weighted average share prices of Ordinary Shares traded on ASX (excluding special crossings, crossing made prior to the commencement of normal trading, crossings made during the closing phase or the after hours adjust phase, overseas trades and overnight crossings or trades pursuant to the exercise of any options or other securities convertible into Ordinary Shares) over the period of 20 Trading Days

Annual General Meeting means the Annual General Meeting of the Company which is to be held in 2013.

ASIC means the Australian Securities and Investments Commission.

ASX means ASX Limited.

ASX Listing Rules means the Listing Rules of ASX.

Board means the current board of directors of the Company.

Business Day means Monday to Friday inclusive, except New Year’s Day, Good Friday, Easter Monday, Christmas Day, Boxing Day, and any other day that ASX declares is not a business day.

Chair means the chair of the Meeting.

Company means Celsius Coal Limited (ACN 009 162 949).

Constitution means the Company’s constitution.

Convertible Notes means the convertible notes to be allotted by the Company to Blumont with an aggregate face value not exceeding $5,000,000.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

Explanatory Statement means the explanatory statement accompanying the Notice.

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

Notice or Notice of Meeting means this notice of meeting including the Explanatory Statement and the Proxy Form.

Proxy Form means the proxy form accompanying the Notice.

Resolutions means the resolutions set out in the Notice, or any one of them, as the context requires.

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

Shareholder means a holder of a Share.

WST means Western Standard Time as observed in Perth, Western Australia.

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Lodge your vote:

ABN 95 009 162 949



By Mail:

Celsius Coal Limited Level 1, 12 Kings Park Road West Perth WA 6005

T 000001 000 CLA MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

Alternatively you can fax your form to (within Australia) (08) 9226 4300 (outside Australia) +61 8 9226 4300

For all enquiries call:

(within Australia) 1300 850 505 (outside Australia) +61 3 9415 4000

Proxy Form

 For your vote to be effective it must be received by 2.30pm (Perth time) Wednesday, 15 May 2013

How to Vote on Items of Business

All your securities will be voted in accordance with your directions.

Appointment of Proxy

Voting 100% of your holding: Direct your proxy how to vote by marking one of the boxes opposite each item of business. If you do not mark a box your proxy may vote as they choose. If you mark more than one box on an item your vote will be invalid on that item.

Voting a portion of your holding: Indicate a portion of your voting rights by inserting the percentage or number of securities you wish to vote in the For, Against or Abstain box or boxes. The sum of the votes cast must not exceed your voting entitlement or 100%.

Appointing a second proxy: You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you appoint two proxies you must specify the percentage of votes or number of securities for each proxy, otherwise each proxy may exercise half of the votes. When appointing a second proxy write both names and the percentage of votes or number of securities for each in Step 1 overleaf.

A proxy need not be a securityholder of the Company.

Signing Instructions

Individual: Where the holding is in one name, the securityholder must sign.

Joint Holding: Where the holding is in more than one name, all of the securityholders should sign.

Power of Attorney: If you have not already lodged the Power of Attorney with the registry, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: Where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please sign in the appropriate place to indicate the office held. Delete titles as applicable.

Attending the Meeting

Bring this form to assist registration. If a representative of a corporate securityholder or proxy is to attend the meeting you will need to provide the appropriate “Certificate of Appointment of Corporate Representative” prior to admission. A form of the certificate may be obtained from Computershare or online at www.investorcentre.com under the information tab, "Downloadable Forms".

Comments & Questions: If you have any comments or questions for the company, please write them on a separate sheet of paper and return with this form.

 Turn over to complete the form

 www.investorcentre.com

View your securityholder information, 24 hours a day, 7 days a week:

Review your securityholding

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SRN/HIN: I9999999999

Update your securityholding

 PLEASE NOTE: For security reasons it is important that you keep your SRN/HIN confidential.

Samples/000001/000001/i

MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

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Change of address. If incorrect, mark this box and make the correction in the space to the left. Securityholders sponsored by a broker (reference number commences with ’ X ’) should advise your broker of any changes.

I 9999999999 I ND

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Proxy Form

Please mark

to indicate your directions

Appoint a Proxy to Vote on Your Behalf

XX

I/We being a member/s of Celsius Coal Limited hereby appoint

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the Chairman of the meeting

OR

 PLEASE NOTE: Leave this box blank if you have selected the Chairman of the Meeting. Do not insert your own name(s).

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf 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 of Celsius Coal Limited to be held at Level 1, 12 Kings Park Road, West Perth, Western Australia on Friday, 17 May 2013 at 2.30pm (Perth time) and at any adjournment of that meeting.

Items of Business

 PLEASE NOTE: If you mark the Abstain box for an item, you are directing your proxy not to vote on your behalf on a show of hands or a poll and your votes will not be counted in computing the required majority.

1. Ratification of Prior Issue of Shares

2. Issue of Convertible Notes

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The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business.

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SIGN
Signature of Securityholder(s) This section must be completed.
Individual or Securityholder 1 Securityholder 2 Securityholder 3
Sole Director and Sole Company Secretary Director Director/Company Secretary
Contact
Contact Daytime
Name Telephone Date / /
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