CHALLENGER GOLD LIMITED — Share Issue/Capital Change 2012

Feb 8, 2012

CHALLENGER ENERGY LIMITED ABN 45 123 591 382

NOTICE OF GENERAL MEETING

Notice is given that a General Meeting of Challenger Energy Limited (the “ Company ” or “ Challenger ”) will be held at The Institute of Chartered Accountants, level 3, 600 Bourke Street, Melbourne, VIC, 3000, at 11.00am (Melbourne, Victoria time) on 9[th] March 2012.

PROPOSED RESOLUTIONS

To consider and, if thought fit, to pass the following resolutions as ordinary resolutions:

Resolution 1: Approval of Prior Issue of Shares

"That for the purposes of ASX Listing Rule 7.4 and all other purposes, shareholders approve the prior issue of up to 30,000,000 fully paid ordinary shares in the capital of the Company to sophisticated and professional investors and clients of an Australian Financial Services Licence holder (who are not related parties of the Company) at an issue price of 5 cents ($0.05) as described in the Explanatory Memorandum which accompanied and formed part of the Notice of General Meeting."

Voting Exclusion

The Company will disregard any votes cast on Resolution 1 by:

• a person who participated in the issue; or

• any associate of those persons.

However, the Company need not disregard a vote on Resolution 1 if:

• it is cast by a person as 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.

Resolution 2: Proposed Share Placement – Approval to Issue Shares

"That for the purposes of ASX Listing Rule 7.1 and all other purposes, shareholders approve the issue of up to 26,000,000 fully paid ordinary shares in the capital of the Company to sophisticated and professional investors and clients of an Australian Financial Services Licence holder (who are not related parties of the Company) at an issue price of 5 cents ($0.05) as described in the Explanatory Memorandum which accompanied and formed part of the Notice of General Meeting."

Voting Exclusion

The Company will disregard any votes cast on Resolution 2 by:

• a 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 shares, if the resolution is passed; or

• any associate of those persons.

However, the Company need not disregard a vote on Resolution 2 if:

• it is cast by a person as 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.

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Resolution 3: Approval for Mr Bilston (a Director) to participate in Placement

"That for the purposes of ASX Listing Rule 10.11 and all other purposes, Shareholders approve the issue to Mr Paul Bilston, a director of the Company, (or his nominees) of up 1,000,000 ordinary shares in the capital of the Company at an issue price of 5 cents ($0.05) by way of participation in the share placement to which Resolution 2 relates as described in the Explanatory Memorandum which accompanied and formed part of the Notice of General Meeting."

Voting Exclusion

The Company will disregard any votes cast on Resolution 3 by:

• a person who is to receive securities in relation to the Company;

• persons who may participate in the proposed issue and persons who might obtain a benefit except a benefit solely in the capacity of a holder of ordinary shares, if the resolution is passed; or

• any associate of those persons.

However, the Company need not disregard a vote on Resolution 3 if:

• it is cast by a person as 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: 8 February 2012

By the order of the Board

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Adrien Wing Company Secretary Challenger Energy Limited

The accompanying Explanatory Memorandum and the Proxy and Voting Instructions form part of this Notice of General Meeting.

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PROXY AND VOTING INSTRUCTIONS

Proxy Instructions

A member who is entitled to vote at a meeting may appoint:

• (a) one proxy if the member is only entitled to one vote; and

• (b) one or two proxies if the member is entitled to more than one vote.

Where more than one proxy is appointed each proxy may be appointed to represent a specific proportion of the member’s voting rights. If the appointment does not specify the proportion or number of votes each proxy may exercise, each proxy may exercise half of the votes in which case any fraction of votes will be disregarded.

The proxy form (and the power of attorney or other authority, if any, under which the proxy form is signed) or a copy or facsimile which appears on its face to be an authentic copy of the proxy form (and the power of attorney or other authority) must be lodged at the registered office of the Company at Level 17, 500 Collins Street, Melbourne, Victoria, 3000 or sent by facsimile transmission to the Company’s registered office on (03) 9614 0550 not less than 48 hours before the time for holding the Meeting, or adjourned meeting as the case may be, at which the individual named in the proxy form proposes to vote.

The proxy form must be signed by the member or his/her attorney duly authorised in writing or, if the member is a corporation, in a manner permitted by the Corporations Act. A proxy given by a foreign corporation must be executed in accordance with the laws of that corporation’s place of incorporation.

The proxy may, but need not, be a member of the Company.

If you sign the proxy form and do not appoint a proxy, you will have appointed the Chairman of the meeting as your proxy

A proxy form is attached to this Notice.

How the Chairman will vote undirected proxies

The Chairman of the meeting will vote undirected proxies on, and in favour of, all of the proposed resolutions.

Corporate Representatives

Any corporation which is a member of the Company may appoint a proxy, as set out above, or authorise (by certificate under common seal or other form of execution authorised by the laws of that corporation’s place of incorporation, or in any other manner satisfactory to the chairperson of the Meeting) a natural person to act as its representative at any general meeting. Corporate representatives are requested to bring appropriate evidence of appointment as a representative in accordance with the constitution of the Company. If an attorney wishes to vote at the meeting the original power of attorney or certified copy must be produced to the Company by 11.00am on 7[th] March 2012. Proof of identity will also be required for corporate representatives and attorneys.

Voting Entitlement

For the purposes of the Corporations Act and Corporations Regulations shareholders entered on the Company’s Register of Members as at 10.00am on 7[h] March 2012 (Melbourne, Victoria time) are entitled to attend and vote at the meeting.

On a poll, members have one vote for every fully paid ordinary share held. Holders of options are not entitled to vote.

CHALLENGER ENERGY LIMITED ABN 45 123 591 382

("the Company")

GENERAL MEETING EXPLANATORY MEMORANDUM

PURPOSE OF INFORMATION

This Explanatory Memorandum ("this Memorandum ") is dated 8[th] February 2012 and accompanies and forms part of the Company's Notice of General Meeting to be held at The Institute of Chartered Accountants, level 3, 600 Bourke Street, Melbourne, VIC, 3000 at 11.00am (Melbourne, Victoria time) on 9[th] March 2012. The Notice of General Meeting incorporates, and should be read together with, this Memorandum.

Resolution 1: Approval of Prior Issue of Shares

Resolution 1 seeks shareholder approval in accordance with ASX Listing Rule 7.4 for the issue of up to 30,000,000 fully paid ordinary shares in the capital of the Company (” Shares ”), which the Company proposes to make following the date of this Notice of General Meeting but prior to the date of the General Meeting. The Shares will be issued to sophisticated and professional investors and clients of Patersons Securities Limited (ACN 008 896 311) (“ Patersons ”), an Australian Financial Services Licence holder [AFSL Number: 239 052] who are not related parties of the Company.

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue during any 12 month period any equity securities, or other securities with rights to conversion to equity (such as an option), if the number of those securities exceeds 15% of the number of securities in the same class on issue at the commencement of that 12 month period.

ASX Listing Rule 7.4 provides that where a company’s shareholders ratify the previous issue of securities made pursuant to ASX Listing Rule 7.1 (provided that the previous issue of securities did not breach ASX Listing Rule 7.1) those securities will be deemed to have been issued with shareholder approval for the purposes of ASX Listing Rule 7.1.

The Company has entered into a mandate arrangement with Patersons which outlines Patersons’ agreement to assist the Company to raise up to $2.8 million by way of share placement. The share placement comprises the issue of up to a total of 56,000,000 Shares over two (2) instalments (or Tranches) at an issue price of five (5) cents ($0.05) per share to sophisticated and professional investors and clients of Patersons. The first Tranche, to which this Resolution 1 relates, comprises the proposed issue of up to 30,000,000 Shares (“ First Tranche ”) and the second Tranche, to which Resolution 2 relates, will comprise the issue of up to a further 26,000,000 Shares (‘ Second Tranche ”). The shareholder approval sought by this Resolution 1 only relates to the First Tranche Shares and does not relate to approval of the Second Tranche Shares for which shareholder approval is sought by Resolution 2.

Any of the 30,000,000 First Tranche Shares issued by the Company as proposed following the date of this Notice of General Meeting and prior to the date of the General Meeting, will be made pursuant to ASX Listing Rule 7.1 within the Company’s 15% available annual share placement capacity. By obtaining shareholder approval for the prior issue of up to 30,000,000 Shares under the first Tranche, the Company will retain the flexibility to issue equity securities in the future up to the remaining 15% annual placement capacity without the requirement to obtain prior shareholder approval.

As at the date of this Notice of General Meeting the Company has not issued any of the First Tranche Shares. The Company will advise the ASX by way of market announcement of the First Tranche Shares that are issued prior to the date the General Meeting.

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

• (a) The number of securities that may be allotted by the Company prior to the date of the General Meeting for which shareholder approval is sought is the maximum total of the First Tranche Shares being up to 30,000,000 full paid ordinary shares in the capital of the Company;

• (b) The issue price of the securities comprising the First Tranche Shares is five cents ($0.05) per share;

• (c) The First Tranche Shares that are issued will have the same terms and rights as, and will rank equally with, the Company’s existing listed fully paid ordinary shares;

• (d) The First Tranche Shares the Company proposes to issue prior to the date of the General Meeting will be issued to sophisticated and professional investors and clients of Patersons, an Australian Financial Services Licence holder;

• (e) The funds raised from the allotment of the First Tranche Shares will be used to complete the development of the Mercury Stetson project and applied towards the Company's working capital requirements; and

• (f) A voting exclusion statement is included in the Notice of General Meeting accompanying this Explanatory Statement.

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Resolution 2: Proposed Share Placement - Approval to Issue Shares

Resolution 2 is proposed to obtain shareholder approval to issue up to 26,000,000 fully paid ordinary shares in the capital of the Company to sophisticated and professional investors and clients of Patersons, an Australian Financial Services Licence holder, who are not related parties of the Company. The proposed share issue to which this Resolution 2 relates comprises the Second Tranche pursuant to the mandate arrangement between the Company and Patersons as outlined in Resolution 1. The shareholder approval sought by this Resolution 2 only relates to the Second Tranche Shares and does not relate to approval of the First Tranche Shares for which shareholder approval is sought by Resolution 1.

The following information is provided in accordance with the requirements of ASX Listing Rule 7.3:

• (a) The maximum number of securities to be issued by the Company is the maximum total of the Second Tranche Shares being up to 26,000,000 fully paid ordinary shares in the capital of the Company.

• (b) The securities comprising the Second Tranche Shares (other than those to which Resolution 3) will be issued and allotted on a date, or progressively on dates, not more than three (3) months after the date of the General Meeting (or such other date as is permitted by an ASX waiver of the Listing Rules, the Corporations Act 2001 and/or the Australian Securities and Investments Commission). The Second Tranche Shares to which Resolution 3 relate will be issued and allotted no later than one (1) month after the date of the General Meeting (or such other date as is permitted by an ASX waiver of the Listing Rules, the Corporations Act 2001 and/or the Australian Securities and Investments Commission);

• (c) The issue price for the securities comprising the Second Tranche Shares will be 5 cents ($0.05) per share;

• (d) The Second Tranche Shares will be issued to sophisticated and professional investors and clients of Patersons, an Australian Financial Services licence holder;

• (e) The Second Tranche Shares to be issued in accordance with this Resolution 2 will be fully paid ordinary shares in the capital of the Company having the same terms and rights as, and will rank equally with the Company's existing listed fully paid ordinary shares. The Company will apply to ASX for quotation of the shares on the ASX.

• (f) The funds raised by the issue of the Second Tranche Shares will be used to complete the development of the Mercury Stetson project and applied towards the Company’s working capital requirements.

Shareholder approval for the proposed issue of the Second Tranche Shares is required pursuant to ASX Listing Rule 7.1. ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue during any twelve (12) month period, any equity securities or other securities with rights to conversion to equity (such as an option), if the number of those securities exceeds 15% of the number of securities in the same class on issue at the commencement of that twelve (12) month period. One circumstance where an issue is not taken into account in the calculation of this 15% threshold, is where the issue has the prior approval of shareholders at a general meeting. By obtaining shareholder approval to issue the shares the subject of this Resolution 2, the Company maintains the ability to issue further securities up to the 15% limit without further shareholder approval to take advantage of opportunities which may arise to raise additional capital.

Resolutions 3: Approvals for Directors to participate in Placement – Mr Paul Bilston

ASX Listing Rule 10.11 requires a company to obtain the approval of shareholders before issuing securities to a related party of the Company. A related party includes a director of the Company. Resolution 3 is proposed to obtain shareholder approval for the issue of ordinary shares in the capital of the Company to a Director of the Company, Mr Paul Bilston and/or their nominee. The shares are to be issued to the director as part of the issue of the Second Tranche Shares to which Resolution 2 relates. The shares will only be issued to a director or his nominee once shareholder approval is received pursuant to Resolution 3. Resolution 3 will be proposed and voted upon separately. Resolution 3 is conditional upon the other being passed.

The following information is provided in accordance with the requirements of ASX Listing Rule 10.13:

• (a) The maximum number of securities to be issued by the Company to:

• Mr Bilston is up to 1,000,000 ordinary shares in the capital of the Company.

Subject to shareholders passing Resolution 3, the quantity of ordinary shares issued to Mr Bilston will be included as part of the maximum total of Second Tranche Shares to be issued by the Company in accordance with Resolution 2. That is, if the shareholders pass Resolution 2 the maximum number of Second Tranche Shares the Company may issue to sophisticated and professional investors and clients of Patersons, being 40,000,000 Shares, will be reduced by the total quantity of Shares the Company issues to Mr Bilston.

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• (b) The securities to be issued in accordance with Resolution 3 will be fully paid ordinary shares in the capital of the Company, having the same terms and rights as and will rank equally with the Company's existing listed fully paid ordinary shares. The Company will apply to ASX for quotation of the shares on the ASX.

• (c) The shares will be issued to Mr Paul Bilston and/or his nominees (respectively);

• (d)

• The issue price for the shares will be 5 cents ($0.05) per share;

• (e) The shares will be issued to the director (or their nominees) not later than one (1) month after the date of the General Meeting or such later date as is permitted by an ASX waiver of the ASX Listing Rule, the Corporations Act 2001 and/or the Australian Securities Investment Commission.

• (f) The funds raised by the issue of the ordinary shares to which Resolution 3 relate will be used for the same purpose as that outlined under Resolution 2. That is, to complete the development of the Mercury Stetson project and applied towards the Company’s working capital requirements; and

• (g) A voting exclusion statement is included in the Notice of General Meeting accompanying this Explanatory Statement for Resolution.

The table below sets out the current relevant interest (direct and indirect) of Mr Paul Bilston (Refer to column 2) together with those if Resolution 3 are passed and the ordinary shares for issue in accordance with Resolution 3 are issued (Refer to column 4):

Name	Current Holding	Current Holding	Securities proposed to be issued pursuant to **Resolution 3 ***	Securities proposed to be issued pursuant to **Resolution 3 ***	Total holding held if **Resolution 3 approved ***	Total holding held if **Resolution 3 approved ***
	Shares	Options	Shares	Options	Shares	Options
Mr Paul Bilston	4,840,549	21,440,134	1,000,000	nil	5,840,549	21,440,134

*This is the maximum number of shares that may be issued.

ASX Listing Rule 7.1 requires the prior approval of shareholders at a general meeting to issue securities if the number of securities exceeds 15% of the number of same class of securities at the commencement of the relevant twelve (12) month period. This rule does not apply in respect of an issue made to related parties of the Company with the approval of holders of ordinary securities under ASX Listing Rule 10.11. If approval is given under ASX Listing Rule 10.11, approval is not required under ASX Listing Rule 7.1.

CHALLENGER ENERGY LIMITED (ABN 45 123 591 382) (the “ Company ”) PROXY FORM

If you do not wish to direct your proxy how to vote as your proxy in respect of a resolution, please place a mark in this box:

I/We ________ of _________ being a member(s) of Challenger Energy Limited and entitled to ___ shares appoint: Name of Proxy: ______ [write the name of the person you are appointing if this person is someone other than the Chair of the meeting] Address of Proxy: _________

By marking this box you acknowledge that the Chair of the meeting may exercise your proxy even if he or she has an interest in the outcome of the resolution(s) and that votes cast by the Chair of the meeting for those resolutions other than as proxy holder will be disregarded because of that interest.

The Chairman intends voting undirected proxies in favour of the resolutions in which he or she is permitted to vote.

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or in his/her absence, the Chair of the meeting as my/our proxy to act generally at the meeting on my/our behalf and to vote on my/our behalf at the General Meeting of the Company to be held The Institute of Chartered Accountants, level 3, 600 Bourke Street, Melbourne, VIC, 3000 at 11.00am (Melbourne, Victoria time) on 9th March 2012 and at any adjournment of that meeting.

If two proxies are appointed, complete the following sentence:

This proxy is authorised to exercise ……………….. votes/ ……….. % of my/our total voting rights.

Proxy Instructions

To instruct your proxy how to vote, tick or insert an ‘X’ in the appropriate column against each resolution set out below. If you do not instruct your proxy how to vote on a resolution, your proxy may vote as he/she thinks fit or abstain from voting.

I/We direct my/our proxy to vote as indicated below:

For Against Abstain*

Resolution 1. Approval of prior issue of shares Resolution 2. Proposed Share Placement – Approval to Issue Shares Resolution 3. Approval for Mr P. Bilston (a Director) to participate in placement

* If you tick or insert an 'X' in the Abstain box for a resolution, you are directing your proxy not to vote on your behalf on that resolution and your votes will not be counted in determining the number of votes cast on, or the majority required to pass, that resolution.

	If a person: ____ (Signature) ____ Name (print) Date: _//__	If a company: EXECUTED by: ___ Name of company (print) In accordance with the Corporations Act __ __ (Signature) (Signature) Date: _//__

This proxy and any power of attorney or other authority under which it is signed (or a certified copy) must be lodged at: (a) Level 17, 500 Collins Street, Melbourne, Victoria, 3000; or

• (b) Facsimile number (03) 9614 0550 by 11.00am, 7[th] March 2012, being not less than 48 hours before the time for holding the meeting or adjourned meeting as the case may be.