Celsius Resources Limited

ACN 009 162 949

NOTICE OF GENERAL MEETING

Notice is given that the Meeting will be held at:

TIME : 1:00 pm (WST) DATE : 20 December 2019 PLACE : The Celtic Club 48 Ord Street West Perth WA 6005

The Directors unanimously recommend Shareholders

VOTE AGAINST

all Resolutions set out in the Notice of Meeting. Directors do not consider the Resolutions to be in the best interests of the Company or its Shareholders.

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

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

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered Shareholders at 4:00 pm (WST) on 18 December 2019.

PURPOSE OF THE MEETING

On 25 October 2019, the Company received a notice to call a general meeting to consider various resolutions relating to the removal of two of the directors of the Company and the election of new directors of the Company ( 249D Notice ). The 249D Notice was issued under section 249D of the Corporations Act by the shareholders listed in Schedule 1 ( Requisitioning Shareholders ).

On 28 October 2019, the Requisitioning Shareholders lodged an Initial Substantial Holder Notice with ASX. The Requisitioning Shareholders hold a total of 6.75% of the Company’s shares as at the date of this Notice of Meeting.

As noted in the Company’s announcement of 29 October 2019, three of the Requisitioning Shareholders failed to give the necessary notice of intention to seek removal of directors under section 203D of the Corporations Act. Accordingly, the 249D Notice is invalid insofar as it relates to those Shareholders and the Resolutions to remove directors.

The Company has, however, confirmed that Requisitioning Shareholders holding the necessary number of Shares have properly given notice under sections 203D and 249D of the Corporations Act. Accordingly, the Company is convening the Meeting in response to the 249D Notice, despite the technical deficiency noted above.

On 4 November 2019, the Company received notice from Mr John Westdorp, one of the nominees of the Requisitioning Shareholders, withdrawing his consent to be appointed as a director of the Company. Accordingly, the proposed resolution to appoint Mr Westdorp as a director of the Company has not been included in this Notice.

Resolutions 1 and 2 are for the appointment of Hui (Michelle) Palleson and Carl Gerald Swensson as directors of the Company and Resolutions 3 and 4 are for the removal of Bill Oliver and Brendan Borg as directors of the Company.

The Notice of Meeting and Explanatory Statement are important documents and should be read in their entirety. The resolutions to be considered at the Meeting are important and have significant implications for the future of your Company and investment.

If you are unable to attend the Meeting, you are encouraged to complete and return the enclosed Proxy Form by 4:00 pm (WST) on 18 December 2019.

THE CHAIRMAN OF THE MEETING INTENDS TO VOTE ALL UNDIRECTED PROXIES AGAINST RESOLUTIONS 1 to 4.

Biographies of Directors proposed to be removed

Biographies for Messrs Oliver and Borg are set out in Section 2 of the Explanatory Statement.

Statement of Directors proposed to be appointed

Section 249P of the Corporations Act permits the shareholders who have requisitioned the meeting to submit a statement for circulation to shareholders regarding the resolutions and any other matter that may be properly considered at the meeting.

The Company has requested a statement from the Requisitioning Shareholders but no such statement has been provided to the Company for dispatch with the Notice.

The Directors recommend Shareholders vote AGAINST Resolutions 1 to 4.

CHAIRMAN’S LETTER

13 November 2019

Dear Shareholders,

As announced on 25 October 2019, Celsius Resources Limited ( Celsius or the Company ) received a notice from a group of shareholders ( Requisitioning Shareholders ) that held at the time over 5% of votes in Celsius to requisition an extraordinary general meeting ( Meeting ) under section 249D of the Corporations Act.

The Meeting will be held on 20 December 2019 at The Celtic Club, 48 Ord Street, West Perth WA 6005 at 1:00 pm (WST) .

A Notice of Meeting accompanies this letter. The issues to be considered at the Meeting are important and have significant implications for the future of the Company and your investment.

The Requisitioning Shareholders are asking the Company’s shareholders ( Shareholders ) to remove two of the three existing directors of the Company, being Brendan Borg and myself, and to elect in our place two nominee directors of the Requisitioning Shareholders.

Your Board strongly recommends that you VOTE AGAINST the appointment of the Requisitioning Shareholders’ nominees as directors of the Company for the reasons set out below and in the accompanying Explanatory Statement.

If you are unable to attend the meeting in person we recommend that you appoint the Chairman of the Company as your proxy to vote against all of the resolutions.

Celsius’ history under the existing Board

Celsius Resources was recapitalised in late 2016 and resumed trading in December 2016. Your Company’s Board had an immediate strategy to identify a battery minerals project based on its assessment of future commodity demands. In early 2017, your Company acquired the greenfield Opuwo Cobalt Project and set about defining what is now one of the world’s largest cobalt resources during a time that saw the price of the commodity rise rapidly in response to surging global demand projections.

This timely acquisition and subsequent rapidly executed work programmes allowed the Company to raise funds on three occasions culminating in the most recent raise, during what is now recognised as the peak of the cycle, in May 2018.

The Company’s drilling programmes resulted in the delineation of a substantial Mineral Resource of 112 million tonnes at 0.11% cobalt, 0.41% copper and 0.43% zinc on 16 April 2018, approximately one year after drilling commenced at Opuwo.[1]

A preliminary Scoping Study was delivered in November 2018, with further work required to allow the Company to have a “reasonable basis” to report financial metrics and

11 The Company confirms that it is not aware of any new information or data that materially affects the information contained in its announcement of 16 April 2018, and that all material assumptions and technical parameters underpinning the mineral resource estimates contained in that announcement continue to apply and have not materially changed. Celsius confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement. Work programs aimed at updating the Mineral Resource are in progress and incomplete as at the date of this notice.

production targets under the applicable regulation and guidance published by ASX and ASIC.

As this work progressed into early 2019, the cobalt price deteriorated further, and the Company elected to make the difficult but prudent decision to suspend further work until such time as markets improved, based on the preliminary information from the Scoping Study. The result of this decision is that the Company remains in the enviable position of being well-funded to pursue other opportunities complementary to Opuwo, or to diversify into other commodities.

Conduct of operations under the existing Board

As announced on 1 March 2019, the Company has recently been implementing the following strategy in response to the fall in the price of cobalt:

reducing the costs of the Company;
progressing low cost programs at the Opuwo Project until such time as the cobalt price improves markedly from current levels; and
sourcing additional project opportunities to take advantage of our strong cash position.

Mr Brendan Borg and I continue to make significant contributions to these efforts, with no additional remuneration or fees for services being paid charged to the Company beyond our Non-Executive Director fees. Contrast with the nominee directors of the Requisitioning Shareholders, who have not given any indication as to how they expect to be remunerated or how much time they intend to devote to the Company should they be elected at the Meeting.

Assessment of proposed Board changes

We consider that this Meeting convened at the instigation of the Requisitioning Shareholders is completely inconsistent with the strategy and future objectives of the Company. The Company has been required, at significant expense, to print and post this Notice, together with legal fees for the preparation of the documentation, when those funds could be used for the benefit of Shareholders in pursuing the opportunities described above.

It is the belief of the Board that the current Directors are significantly better placed to implement the strategy than the nominees of the Requisitioning Shareholders for the following reasons:

your current Board members have a significant equity stake in the Company, a significant portion which was purchased on market;
your current Board members each have executive management level experience at ASX and TSX listed companies;
only one of the proposed directors put forward by the Requisitioning Shareholders has any experience of being the director of an ASX listed company; and
the Company understands that:
Ms Palleson is in senior finance management with a large multinational white goods company; and

Mr Swensson is involved with several companies based in Vancouver, Canada and New South Wales, in the areas of mineral exploration, investment and consulting in relation to project generation and exploration management services,

the Board is concerned as to the capacity of the proposed directors to commit the necessary time to Company affairs.

Our assessment of the Requisitioning Shareholders’ proposal to remove two of the existing directors of the Company is that:

it is a poorly crafted attempt to gain control of the Company with no specific short or long term strategy for growth in the Company or its assets other than to review existing projects, review expenditure to conserve cash and consider new acquisitions – all of which the existing Board is already doing;
the purpose of the proposal appears to be to review historical expenditure which has already been audited and disclosed to all Shareholders in the Company’s Annual Report and other financial reports;
if successful, it will result in two thirds of the Board having little or no understanding of the assets of the Company ;
if successful, it will result in the loss of established Company contacts developed over recent years in Namibia and strategic relationships with industry consultants in the mineral exploration and cobalt sectors, as well as the Namibian and relevant local governments – this could have an adverse impact on the Company’s relationships and tenure in Namibia and other jurisdictions where it operates; and
in the opinion of your Board, it will not result in any net overall benefit to the Company or its Shareholders.

Accordingly, we recommend that you read the accompanying material carefully and that you VOTE AGAINST all Resolutions in the attached Notice.

The Company acknowledges that the evaluation of the Opuwo Project has been more complex than was initially anticipated. The geology and mineralisation of the Project is uniform and drilling results have been consistent as released to ASX throughout the various drilling programmes in 2017 and 2018. Cobalt mineralisation is hosted in sulphides which means that the first stage of processing (flotation) is relatively simple and well understood, however the sulphide concentrate does not attract a premium in the current market. In 2018, the Company identified the opportunity to add substantial value to the project by further refining the sulphide concentrate into cobalt, copper and zinc products. This would enable premium pricing to be obtained, however, to date the optimum method of refining has not been clearly identified.

The results of the studies completed to date do not have a high enough level of certainty to allow for the publishing of definitive financial metrics associated with those studies, and additional work is required to bring the study up to a sufficient level of certainty so that further information can be released. The Company has released all information in relation to the results of the Opuwo Scoping Study that it was permitted to release under the relevant ASIC and ASX policies.

All work on the Opuwo Project relating to Mineral Resource Estimates and Metallurgical testwork has been completed by suitably qualified and experienced independent third party consulting groups. Given the significant fall in the price in cobalt, the Board has

deemed that the significant additional expenditure required to advance these studies is not warranted at this time.

Since the decision to suspend work on the Project was taken the Company has reduced costs in Australia and in Namibia, with care taken that appropriate notice is given to the various stakeholders in Namibia and that the Company’s interest in the Opuwo Cobalt Project is not at risk. All of the Company’s expenditure in Australia and Namibia has been audited by independent, external auditors and released to all Shareholders in the Company’s Annual Report and other financial reports. This includes all related party payments which are detailed in note 16(d) to the financial statements in the Company’s 2019 Annual Report.

The Board has reviewed numerous projects and corporate opportunities to add value for Shareholders and continues to pursue several active opportunities. Whilst we understand that Shareholders have had to be patient waiting for one of these opportunities to crystallise, the Board considers that it is prudent to ensure that careful evaluation of opportunities is undertaken to ensure the optimum outcome for Shareholders. The Board also notes that part of this strategy involves recruitment of new executive management to the Company.

The Board wishes to thank the majority of Shareholders for their patience and ongoing support during this difficult period for the Company.

Yours sincerely

Mr Bill Oliver Non-Executive Chairman

BUSINESS OF THE MEETING

AGENDA

1. RESOLUTION 1 – APPOINTMENT OF HUI (MICHELLE) PALLESON

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

“That, pursuant to the Company’s Constitution, Hui (Michelle) Palleson is hereby appointed as a director of the Company, with effect from the close of the Meeting.”

2. RESOLUTION 2 – APPOINTMENT OF CARL GERALD SWENSSON

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

“That, pursuant to the Company’s Constitution, Carl Gerald Swensson is hereby appointed as a director of the Company, with effect from the close of the Meeting.”

3. RESOLUTION 3 – REMOVAL OF MR BILL OLIVER

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

“That, pursuant to section 203D of the Corporations Act and the Company’s Constitution, Mr Bill Oliver be and is hereby removed as a director of the Company, with effect from the close of the Meeting.”

4. RESOLUTION 4 – REMOVAL OF MR BRENDAN BORG

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

“That, pursuant to section 203D of the Corporations Act and the Company’s Constitution, Mr Brendan Borg be and is hereby removed as a director of the Company, with effect from the close of the Meeting.”

Dated: 13 November 2019

By order of the Board pursuant to requisitions under section 249D of the Corporations Act 2001 (Cth).

MS MELANIE ROSS COMPANY SECRETARY

Voting in person

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

Voting by proxy

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

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

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

Shareholders and their proxies should be aware that changes to the Corporations Act made in 2011 mean that:

if proxy holders vote, they must cast all directed proxies as directed; and
any directed proxies which are not voted will automatically default to the Chair, who must vote the proxies as directed.

THE CHAIRMAN OF THE MEETING INTENDS TO VOTE ALL UNDIRECTED PROXIES AGAINST RESOLUTIONS 1 to 4.

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on +61 8 6188 8181 .

EXPLANATORY STATEMEN T

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

1. RESOLUTIONS 1 AND 2 – APPOINTMENT OF PROPOSED DIRECTORS

The Company’s Constitution provides that the Company may appoint a person as a director by resolution passed in general meeting.

The Requisitioning Shareholders have given notice of their intentions to move the following resolutions:

(a) Resolution 1 - Appointment of Hui (Michelle) Palleson;

(b) Resolution 2 - Appointment of Carl Gerald Swensson.

Subject to the passing of Resolutions 1 and 2, the appointment of Ms Palleson and Mr Swensson as Directors will take effect from the close of the Meeting.

The Company has requested a statement from the Requisitioning Shareholders but no such statement has been provided to the Company for dispatch with the Notice.

The Directors recommend Shareholders vote AGAINST Resolutions 1 and 2.

2. RESOLUTIONS 3 AND 4 – REMOVAL OF EXISTING DIRECTORS

2.1 Background

Under section 203D of the Corporations Act, a company may by resolution remove a director from office.

The Company’s Constitution provides that the Company may remove any director from office by resolution passed in general meeting.

The Requisitioning Shareholders have given notice of their intentions to move the following resolutions:

(a) Resolution 3 – Removal of Mr Bill Oliver; and

(b) Resolution 4 – Removal of Mr Brendan Borg.

Subject to the passing of Resolutions 3 and 4, the removal of Messrs Oliver and Borg as Directors will take effect from the close of the Meeting.

Biographies for Messrs Oliver and Borg are set out below.

2.2 Mr Bill Oliver

Mr Oliver was appointed to the position of director on 23 December 2011 as part of the recapitalisation of View Resources Ltd. Mr Oliver has acted as the Company’s representative on the Carnilya Hill JV Committee with Mincor Resources since his appointment and has also been responsible for the exploration of the Company’s WA nickel assets.

Mr Oliver has over 20 years’ experience in the international resources industry working for both major and junior companies. Mr Oliver holds an honours degree in Geology from the University of Western Australia as well as a postgraduate diploma in finance and investment from FINSIA.

Mr Oliver has led large scale resource definition projects for Rio Tinto and previously worked in near mine exploration/resource definition roles for New Hampton Goldfields and Harmony Gold. Mr Oliver managed exploration in Portugal for Iberian Resources Limited including target generation and grassroots exploration across a range of commodities.

More recent roles include Bellamel Mining, BC Iron, Signature Metals and Orion Gold NL. He is currently Managing Director of Vanadium Resources Ltd (ASX: VR8) and Non-Executive Director of Minbos Resources Ltd (ASX: MNB), Aldoro Resources (ASX: ARN) and Koppar Resources Ltd (ASX: KRX) Mr Oliver has wideranging exploration experience including expertise in near mine exploration/resource extension and resource definition as well as significant experience in the technical and economic evaluation of resources projects.

2.3 Mr Brendan Borg

Mr Borg has over 20 years’ experience gained working in management, operational and project development roles in the Exploration and Mining industries, with companies including Rio Tinto Iron Ore, Magnis Resources Limited, IronClad Mining Limited, Lithex Resources Limited and Sibelco Australia Limited.

Mr Borg was appointed Managing Director by the board in March 2017 after a period working as a consultant to the Company to identify and evaluate projects for the Company. Mr Borg was responsible for overseeing all of the Company’s exploration work programmes as well as negotiating the increase of the Company’s interest to 95% of the Opuwo Cobalt Project.

Mr Borg is a Director of geological consultancy Borg Geoscience Pty Ltd and Director of ASX-listed companies Tempus Resources Limited and Mali Lithium Limited.

The Directors recommend Shareholders vote AGAINST Resolutions 3 and 4.

GLOSSARY

$ means Australian dollars.

249D Notice means the section 249D notice received by the Company from the Requisitioning Shareholders on 25 October 2019.

ASIC means the Australian Securities & Investments Commission.

Association means the group of Shareholders known as the “Association of Like Minded Holders Acting in Concert”, who lodged a notice of ceasing to be a substantial shareholder on 2 October 2019.

ASX means ASX Limited (ACN 008 624 691) or the financial market operated by ASX Limited, as the context requires.

ASX Listing Rules means the Listing Rules of ASX.

Board means the current board of directors of the Company.

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

Chair means the chair of the Meeting.

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

Constitution means the Company’s constitution.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

Explanatory Statement means the explanatory statement accompanying the Notice.

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

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

Notice of AGM means the Company’s notice of annual general meeting dated 23 October 2019.

Proxy Form means the proxy form accompanying the Notice.

Requisitioning Shareholders means the parties set out in Schedule 1.

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

Section means a section of the Explanatory Statement.

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

Shareholder means a registered holder of a Share.

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

SCHEDULE 1 – REQUISITIONING SHARE HOLDERS

(a) Robert David Lurie (The RDL A/C);
(b) Christopher Flood;
(c) Gregory George Davis;
(d) Dean Andrew Kent (Wattle A/C);
(e) Mathew Benjamin Emy;
(f) Mbemy Pty Ltd;
(g) Andrew Graham Palleson;
(h) Kerry Michelle Jiali Palleson;
(i) Amanda Elizabeth Zhao Palleson;
(j) Andrew Graham Palleson and Hui Palleson as trustees of the Palleson Superfund;
(k) John Stuart McGowan;
(l) JSMIndustries Super Pty Ltd (JSMINDUSTRIES Super S/F A/C);
(m) Peter Paul Kozlowski;
(n) Kozlowski Nominees Pty Ltd as trustee Kozlowski Family Super Fund;
(o) Guarino Holdings Pty Ltd;
(p) Simon Michael Guarino;
(q) Warren John Quinn;
(r) Daniel Peter Washburn;
(s) Natalie McPherson;
(t) Kurt Josef Linghor and Lucy Loinghor as trustees of the Lingo Superfund; and
(u) KJLA Pty Ltd.

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Celsius Resources Limited Proxy Solicitation & Information Statement 2019

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