CLARA RESOURCES AUSTRALIA LTD — AGM Information 2012

Oct 24, 2012

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Notice of Annual General Meeting and Explanatory Memorandum

AusNiCo Limited (ACN 122 957 322)

Date of Meeting: Wednesday, 28 November 2012 Time of Meeting: 11.30am (Brisbane time) Place of Meeting: Level 7, Waterfront Place, 1Eagle Street, Brisbane, Qld, 4000

Notice of Annual General Meeting (Final)

Notice of Annual General Meeting

Notice is given that the Annual General Meeting of shareholders of AusNiCo Limited ACN 122 957 322 ( Company ) will be held at the offices of HopgoodGanim Lawyers, Level 7, Waterfront Place, 1 Eagle Street, Brisbane, Qld, 4000, on Wednesday, 28 November 2012 at 11.30am (Brisbane time).

Agenda

Ordinary business

Annual Financial Report

To receive and consider the Company’s Annual Report comprising the Directors’ Report and Auditors’ Report, Directors’ Declaration, Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows and notes to and forming part of the financial statements for the Company for the financial year ended 30 June 2012.

See Explanatory Statement below for further information.

Resolution 1 – Remuneration Report

To consider and, if thought fit, pass the following Advisory Resolution:

“That, the Remuneration Report for the year ended 30 June 2012 (as set out in the Directors’ Report) is adopted.”

The vote on Resolution 1 is advisory only and does not bind the Directors of the Company.

Voting Restriction pursuant to Section 250R(4) of the Corporations Act

Terms used in this Notice of Meeting are defined in the Interpretation section of the accompanying Explanatory Memorandum.

A vote on Resolution 1 must not be cast (in any capacity) by or on behalf of either of the following persons:
(a) a member of the Key Management Personnel (“KMP”) details of whose remuneration are included
in the Remuneration Report; or
(b) a Closely Related Party of a KMP.
However, a votemaybe cast on Resolution 1 by a KMP or a Closely Related Party of a KMP, if:
(a) the KMP or a Closely Related Party of a KMP does so as a proxy appointed in writing;
(b) the vote is not cast on behalf of a member of the KMP details of whose remuneration are included
in the Remuneration Report or a Closely Related Party of a KMP; and
(c) either:
(1) the voter is appointed as a proxy by writing that specifies the way the proxy is to vote on the
resolution; or
(2) the voter is the Chairman of the meeting and the appointment of the Chairman as proxy:
(A) does not specify the way the proxy is to vote on the resolution; and
(B) expressly authorises the Chairman to exercise the proxy even if the resolution is
connected directly or indirectly with the remuneration of a KMP for the Company or, if
the Company is part of a consolidated entity, for the entity.
Shareholders should be aware that any undirected proxies given to the Chairman will be cast by the
Chairman and counted in favour of the resolutions the subject of this Meeting, including Resolution 1.

Notice of Annual General Meeting (Final)

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Notice of Annual General Meeting

Resolution 2 ‐ Re‐Election of Brian Moller as a Director

To consider and, if thought fit, pass the following resolution, as an Ordinary Resolution of the Company:

“That in accordance with Article 38.1(a) of the Company’s Constitution, Brian Moller, who retires in accordance with the Company’s Constitution and, being eligible for re‐election offers himself for re‐election, be re‐elected as a Director of the Company.”

See Explanatory Statement below for further information.

Resolution 3 – Issue of Director Shares in Lieu of Director Fees

To consider and, if thought fit, pass the following resolution as an Ordinary Resolution of the Company:

“That in accordance with Listing Rule 10.14 and for the purposes of Listing Rule 7.2 exception 9 the Company be authorised to issue fully paid ordinary shares to Mr John Downie, Mr Nicholas Mather, Mr Brian Moller and Mr Ben Harrison (or their nominees) ( Participating Directors ) under the Directors’ Fee Plan (for the issue of shares to Directors in lieu of fees) detailed in the Explanatory Memorandum be approved ( Directors’ Shares )”.

Notes

• The Company intends to issue the Directors’ Shares only to the Participating Directors as and when elections are made by Participating Directors under the Directors’ Fee Plan during each quarter, the intention being that Directors’ Shares would be issued to the Participating Directors in 4 tranches on the ending of each quarter (December 2012, March, June and September 2013) but in any event by no later than any event no later than twelve (12) months from the date of the Meeting;

• The rights attaching to the Directors’ Shares which may be issued will be identical in all respects to the existing ordinary shares on issue in the Company;

• No funds will be raised by the issue of any Directors’ Shares as they will be issued in lieu of fees owing from time to time to Participating Directors.

Voting Exclusion Statement

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

• (a) a Participating Director ; and

• (b) any associate of a Participating Director.

However, the Company need not disregard a vote if:

• (a) 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

• (b) it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with the direction on the proxy form to vote as the proxy decides.

Notice of Annual General Meeting (Final)

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Notice of Annual General Meeting

SPECIAL BUSINESS

Resolution 4 – Approval to issue an additional 10% of the issued capital of the Company over a 12 month period pursuant to Listing Rule 7.1A

To consider and, if thought fit, pass the following Resolution, as a Special Resolution, without amendment:

“That, pursuant to and in accordance with Listing Rule 7.1A, and for all other purposes, Shareholders approve the issue of Equity Securities of up to 10% of the issued capital of the Company (at the time of issue) calculated in accordance with the formula prescribed in Listing Rule 7.1A.2, over a 12 month period from the date of the Meeting, at a price not less than that determined pursuant to Listing Rule 7.1A.3 and otherwise on the terms and conditions described in the Explanatory Memorandum ( Placement Securities ).”

Voting Exclusion Statement

The Company will disregard any votes cast on this Resolution by a person and any associates of that person who: (a) may participate in the issue of the Placement Securities; and

(b) might obtain a benefit if this Resolution is passed, except a benefit solely in their capacity as a holder of Shares if the Resolution is passed. However, the Company need not disregard a vote if:

(a) 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

(b) it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with the direction on the proxy form to vote as the proxy decides.

Important Note

The proposed allottees of any Placement Securities are not as yet known or identified. In these circumstances (and in accordance with the note set out in Listing Rule 14.11.1 relating to Listing Rules 7.1 and 7.1A), for a person’s vote to be excluded, it must be known that that person will participate in the proposed issue. Where it is not known who will participate in the proposed issue (as is the case in respect of the Placement Securities), shareholders must consider the proposal on the basis that they may or may not get a benefit and that it is possible that their holding will be diluted and there is no reason to exclude their votes.

Resolution 5 – Amendment of Constitution

To consider and, if thought fit, pass the following resolution, as a special resolution of the Company:

“That, in accordance with section 136(2) of the Corporations Act 2001 (Cth) the Constitution of the Company be amended by Inserting new Articles 5A and 5B as follows:

5A Rights attaching to Performance Shares

5A.1 For the purposes of this Article and Article 5B;

Conversion means conversion of a Performance Share into an ordinary share and Convert shall have a corresponding meaning.

End Date means the last day by which the Performance Criteria applying to a Performance Share shall be met.

Issue Date means the date of issue of a Performance Share.

Notice of Annual General Meeting (Final)

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Notice of Annual General Meeting

Performance Criteria means such criteria as may be determined by the Board in its absolute discretion to apply to a Performance Share.

Performance Share means a share issued pursuant to Article 5A.2.

• 5A.2 The Company shall be entitled to issue a share in the Company to any employee, director, officer or consultant of the Company (Recipient) upon terms which require the Recipient to satisfy certain Performance Criteria.

• 5A.3 A Performance Share must be issued in the name of the Recipient or such nominee nominated by the Recipient not less than 2 Business Days prior to the Issue Date. (Nominee)

• 5A.4 The Company shall not be required to issue a Performance Share to a Nominee appointed by a Recipient unless the Recipient agrees to be bound by the provisions in this Article and Article 5B.

• 5A.5 A Performance Share shall:

• (a) not have any voting rights at any general meeting of the Company;

• (b) entitle the holder to receive notices of all general meetings and financial reports and accounts that are circulated;

• (c) entitle the holder to attend all general meetings of the Company;

• (d) not have any dividend entitlements;

• (e) only be capable of being disposed of by the holder upon achievement of the Performance Criteria applying to the Performance Shares;

• (f) on winding up entitle the holder to participate in surplus profits or assets of the Company only to the extent of such amount per Performance Share determined by the Board at the Issue Date;

• (g) have no entitlement to participate in new issues of equity securities offered to ordinary shareholders of the Company;

• (h) in the event of listing of the Company on the Exchange, not be quoted on the Exchange;

• (i) convert into ordinary shares upon the basis set forth in Article 5B.

• 5A.6 In the event of the Company seeking a listing on the Exchange, the terms of any Performance Share may be amended as necessary by the Board in order to comply with the Listing Rules or any directions of the Exchange regarding the terms of the Performance Share.

5B. Conversion of Performance Share

• 5B.1 A Performance Share shall be automatically converted into an ordinary share upon satisfaction of the Performance Criteria applying to the Performance Share.

• 5B.2 Unless otherwise determined by the Board, a Performance Share shall convert into an ordinary share on the basis of one (1) Performance Share for every one (1) ordinary share.

• 5B.3 An ordinary share issued upon conversion of a Performance Share will rank equally with other ordinary shares on issue in the Company and will;

Notice of Annual General Meeting (Final)

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Notice of Annual General Meeting

• (a) participate with all other ordinary shares on issue in the capital of the Company for dividends as from the date of Conversion ;

• (b) be entitled to vote at all general meetings of the Company at all times.

• 5B.4 Unless otherwise determined by the Board, in the event that the Performance Criteria applying to any Performance Share held by a Recipient is not satisfied by the End Date all of the Performance Shares held by that Recipient or its Nominee shall convert into one (1) ordinary share.”

GENERAL BUSINESS

To consider any other business as may be lawfully put forward in accordance with the Constitution of the Company.

By Order of the Board

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Karl Schlobohm Company Secretary 20 October 2012

Notice of Annual General Meeting (Final)

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Explanatory Memorandum

EXPLANATORY STATEMENT

This Explanatory Memorandum is provided to Shareholders of AusNiCo Ltd ACN 122 957 322 (Company) to explain the resolutions to be put to Shareholders at the Annual General Meeting to be held at Level 7, Waterfront Place, 1 Eagle Street on Wednesday 28 November 2012 at 11.30am (Brisbane time).

This Explanatory Memorandum is intended to provide Shareholders with sufficient information to assess the merits of Resolutions 1 to 5 contained in the Notice of Meeting material.

The Directors recommend Shareholders read the accompanying Notice of Meeting and this Explanatory Memorandum in full before making any decision in relation to the resolutions.

ORDINARY BUSINESS

1. Consider the Company’s 2012 Annual Report

The Corporations Act requires the Company’s Annual Report comprising the Directors’ Report, the Auditor’s Report, Directors’ Declaration, Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows and notes to and forming part of the financial statements to be laid before the Annual General Meeting. There is no requirement either in the Corporations Act or in the Constitution of the Company for Shareholders to approve the Company’s Annual Report. The Company’s 2012 Annual Report is placed before the Shareholders for discussion. No voting is required for this item.

Shareholders can obtain a copy of the Company’s 2012 Annual Report by sending a request to info@ausnico.com.au or by downloading a copy from the Company’s website: www.ausnico.com.au

2. Resolution 1 ‐ Remuneration Report

The Board has submitted its Remuneration Report (included in the 2012 Annual Report) to Shareholders for consideration and adoption by way of a non‐binding Advisory Resolution.

The Remuneration Report is set out in the Directors’ Report section of the 2012 Annual Report. The Report:

• (a) explains the Board’s policy for determining the nature and amount of remuneration of executive Directors and senior executives of the Company;

• (b) explains the relationship between the Board’s remuneration policy and the Company’s performance;

• (c) sets out remuneration details for each Director and the most highly remunerated senior executives of the Company; and

• (d) details and explains any performance conditions applicable to the remuneration of executive Directors and senior executives of the Company.

A reasonable opportunity will be provided for discussion of the Remuneration Report at the meeting.

Voting restrictions on Key Management Personnel and their proxies and Closely Related Parties

Members of the Key Management Personnel (“KMP”) and their proxies and Closely Related Parties are restricted from voting on a resolution (“Voting Restriction”) put to Shareholders that the remuneration report of the Company be adopted. Key Management Personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity.

Notice of Annual General Meeting (Final)

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Explanatory Memorandum

The Voting Restriction does not apply where:

• (a) the Chairman or any other KMP is appointed in writing (by a Shareholder who is not a KMP or a Closely Related Party of a KMP) as a proxy with specific instructions on how to vote on a resolution to adopt the remuneration report of the Company; or

• (b) the Chairman is appointed in writing (by a Shareholder who is not a KMP or a Closely Related Party of a KMP) as a proxy with no specific instructions on how to vote on a resolution to adopt the remuneration report, where the Shareholder provides express authorisation for the Chairman to vote on the resolution.

Shareholders should be aware that any undirected proxies given to the Chairman will be cast by the Chairman and counted in favour of the resolutions the subject of this Meeting, including this Resolution 1, subject to compliance with the Corporations Act and Listing Rules.

3. Resolution 2 – Re‐Election of Brian Moller as a Director

Mr Moller was originally appointed to the Board of Directors on 1 December 2006. In accordance with Article 38.1(a) of the Company’s Constitution, Mr Moller will retire at the Annual General Meeting, and in accordance with Article 38.8 of the Company’s Constitution, will stand for re‐election.

Mr Moller acts for many publicly listed resource and industrial companies and brings a wealth of experience and expertise to the board particularly in the corporate regulatory and governance areas. Mr Moller is currently a Non‐Executive Director of ASX‐listed DGR Global Ltd, Navaho Gold Ltd, Platina Resources Ltd and SolGold plc, which is listed on AIM.

The Directors (with Mr Moller abstaining) recommend that you vote in favour of this Ordinary Resolution.

4. Resolution 3 – Issue of Director Shares in Lieu of Director Fees

Introduction

The Directors have resolved to refer to Shareholders for approval of the proposed grant of up to a maximum of 6,000,000 fully paid ordinary shares to Mr John Downie, Mr Nicholas Mather, Mr Brian Moller and Mr Ben Harrison, Directors of the Company, or their nominee (Participating Director). The terms of the Shares to be issued to the Participating Director (Director Shares) are set out in more detail below.

Approval for the issue of the Director Shares is sought in accordance with the Listing Rule 10.14. As approval is being sought under Listing Rule 10.14, approval will not be required under Listing Rule 10.11.

Background to the Proposal

The Directors wish to implement an employee incentive scheme in the form of a Director’s Fee Plan which will allow for the issue of shares to all Directors in lieu of fees. All Non‐Executive Directors have agreed to have approximately 50% of their remuneration paid in cash and approximately 50% payable in Shares (pending this approval) for the ensuing 12 months.

The Company’s Managing Director, Mr John Downie and Company Secretary, Karl Schlobohm have also agreed to receive part of their accrued and unpaid remuneration by way of share allotment.

Approval is sought for the issue of the Directors Shares to the Participating Directors in lieu of their Director’s fees and salary sacrifice for the previous financial year and for the forthcoming financial year. As such the Directors Shares will be granted for nil cash consideration and no funds will be raised.

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Explanatory Memorandum

Because each of the Participating Directors is a related party of the Company for the purposes of Listing Rule 10.14, the proposed issue of Directors Shares to Participating Directors under the plan must be approved under Listing Rule 10.14.

The Company also seeks approval of the issue of shares under the Plan as an exception to Listing Rule 7.1, (specifically Listing Rule 7.2 exception 9) which limits the securities that the Company may issue without shareholder approval to 15% of its issued capital over 12 months.

If approved, the issue of the Directors Shares pursuant to Listing Rule 10.14 (and for the purposes of Listing Rule 7.2 exception 9) will not be counted towards the Company’s 15% for the purpose of Listing Rule 7.1. As a result, the Directors of the Company will be able to consider additional funding initiatives consistent with the provisions of ASX Listing Rule 7.1 without diminishing its issue capacity under Listing Rule 7.1.

Information on the Directors Fee Plan and Issue of Directors Shares

The terms of the Director’s Fee Plan under which Directors may be issued shares in lieu of fees, including the formula for calculating the issue price, are set out in Schedule 1.

The aggregate amount of Director Shares issued is limited to a value of shares calculated by application of the issue price which does not exceed $120,000 (including the aggregate amount owning at the date of this Notice of Meeting).

Directors’ Recommendation

The Participating Directors, being Directors of the Company, have a material personal interest in the outcome of this Resolution, as it is proposed that Director Shares be granted to them (or their nominee).

Each of Mr John Downie, Mr Nicholas Mather, Mr Brian Moller and Mr Ben Harrison having a material personal interest in the Resolution abstain and do not make any recommendations in respect of this Resolution.

Directors’ Interest and Other Remuneration

Excluding the Director Shares, details of the Shares and Options held by the Directors in the Company are set out in the table below.

Details of the Director's remuneration for each of the Directors (inclusive of superannuation) per annum (total cost to the Company) is set out in the following table:

Directors		Short term	Post‐	Share based payments	Share based payments	Total
		benefits	employment	Equity settled
		Salary & fees	Superannuation	Options	Shares
		$	$	$	$	$
Brian Moller
-	2012	40,000	‐	‐	‐	40,000
-	2011	34,726	‐	‐	‐	34,726
John Downie
-	2012	96,976	50,437	‐	‐	147,413
-	2011	177,519	28,538	265,151	‐	471,208
Nicholas Mather
-	2012	30,000	‐	‐	‐	30,000
-	2011	27,872	‐	‐	‐	27,872
Ben Harrison
-	2012	30,000	‐	‐	‐	30,000
-	2011	24,945	‐	‐	‐	24,945

Under the Director’s Fee Plan all Shares which may be issued to a Director shall be issued at the Market Price for Shares as at the business day prior to the issue of Directors Shares.

Because the trading price for the Shares of the Company on ASX may fluctuate over the 12 month period, approval is sought for the issue of a maximum of 6,000,000 shares. (Maximum Shares)

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Explanatory Memorandum

If the Maximum Shares are issued then this would represent 4.1% of the issued Share capital of the Company, assuming no other Shares were issued.

At the date of this Notice of Meeting the sum of $29,167 is owing to the Directors in total, excluding any GST applicable. If each of the Directors participated in a grant of the Maximum Shares, proportional to their total remuneration over a 12 month period and taking into account any amounts owing as at the date of this Notice of Meeting to the Directors, then the following will be the effect on the holding of each of the Directors in the Company:

Director	Current Share Holding1	% of Total Share Capital2	Maximum Shares Issued3	Share Holding Upon Issue of Maximum Shares3	% of Total Share Capital
Nicholas Mather	2,762,917	1.9%	1,187,500	3,950,417	2.6%
Brian Moller	793,056	0.5%	1,583,350	2,376,406	1.6%
Ben Harrison	657,917	0.5%	1,187,500	1,845,417	1.2%
John Downie	695,000	0.5%	750,000	1,445,000	1.0%

Notes:

1. This assumes that none of the current options on issue in the Company are exercised and no further securities are issued.

2. This assumes that there are currently 144,994,142 Shares on issue.

3. This assumes the Shares would be issued at an issue price of $0.02 per Share, and includes any amount owing at the date of this Notice of Meeting.

ASX Listing Rule

In accordance with ASX Listing Rule 10.15 and for the benefit of shareholders in considering this Resolution, the Company advises as follows:

• Details of any Shares issued under the Directors Fee Plan will be published in the Annual Report in respect of the period in which shares under the plan are issued;

• The Director Shares are intended to be issued as and when elections are made by Participating Directors under the Directors’ Fee Plan, the intention being that Directors’ Shares would be issued to the Participating Directors in 4 tranches on the ending of each quarter (December 2012, March, June and September 2013) and in any event no later than twelve (12) months of the date of the Meeting;

• Directors Shares will only be issued to the Participating Directors under any approval obtained and will not be issued to any person not named in this Notice of Meeting without obtainment of further Shareholder approval to any such issue under Listing Rule 10.14;

• No funds are being raised by the grant of the Director Shares;

• There is no loan attaching to the issue of the Directors Shares; and

• Since the last approval to issue Shares under the Directors Fee Plan the following Shares were issued:

	Brian Moller	John Downie	Nicholas Mather	Ben Harrison
Number of Shares issued	743,056	675,000	322,917	322,917
Average Issue price	$0.035	$0.04	$0.035	$0.035

Save as set out in this Explanatory Statement, the Directors are not aware of any other information that will be reasonably required by Shareholders to make a decision in relation to benefits contemplated by this Resolution.

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Explanatory Memorandum

5. Resolution 4 ‐ Approval to Issue an Additional 10% of the Issued Capital of the Company Over a 12 Month Period Pursuant to Listing Rule 7.1A

Introduction

Pursuant to Resolution 4, the Company is seeking Shareholder approval to issue an additional 10% of its issued capital over a 12 month period pursuant to Listing Rule 7.1A. If passed, this Resolution will allow the Company to allot and issue up to the number of new Equity Securities calculated in accordance with Listing Rule 7.1A.2 (Placement Securities) each at an issue price of at least 75% of the volume weighted average price (VWAP) for the Company’s Equity Securities in that class (calculated over the last 15 days on which trades in the Equity Securities are recorded immediately before the date on which the price at which the Placement Securities are to be issued is agreed, or if the Placement Securities are not issued within five trading days of that date, the date on which the Placement Securities are issued) (Issue Price).

This approval is sought pursuant to Listing Rule 7.1A, which recently came into effect. Under Listing Rule 7.1A, small and mid cap listed entities that meet the eligibility threshold and have obtained the approval of their ordinary shareholders by special resolution at the annual general meeting, are permitted to issue an additional 10% of issued capital over a 12 month period from the date of the annual general meeting (Additional 10% Placement). The Additional 10% Placement under Listing Rule 7.1A is in addition to the ability of the Company to issue 15% of its issued capital without shareholder approval over a 12 month period pursuant to Listing Rule 7.1. The Company may issue the Placement Securities to raise funds for the Company and as non‐cash consideration (further details of which are set out below).

Funds raised from the issue of Placement Securities, if undertaken, would be applied towards the acquisition of new assets or investments (including expenses associated with such acquisitions), continued exploration and feasibility study expenditure on the Company’s current assets and general working capital.

The Directors unanimously recommend that Shareholders vote in favour of Resolution 4.

Listing Rule 7.1A

Eligibility

An entity is eligible to undertake an Additional 10% Placement if at the time of its annual general meeting it has a market capitalisation of $300 million or less and it is not included in the S&P/ASX300 Index.

For illustrative purposes only, on 12 October 2012, the Company’s market capitalisation was approximately $2.9 million based on the closing trading price on that date. The calculation of market capitalisation will be based on the closing price of the shares, on the last trading day on which trades in the shares were recorded before the date of the Annual General Meeting, multiplied by the number of Shares on issue (excluding restricted securities and securities quoted on a deferred settlement basis).

The Company is also not included in the S&P/ASX300 Index as at the time of this Annual General Meeting, however, it should be noted that the S&P/ASX300 Index is rebalanced twice a year in March and September.

The Company is therefore an Eligible Entity and able to undertake an Additional 10% Placement under Listing Rule 7.1A.

In the event that the Company for any reason ceases to be an Eligible Entity after the Company has already obtained Shareholder approval pursuant to this Resolution, the approval obtained will not lapse and the Company will still be entitled to issue the Placement Securities.

Special Resolution

Listing Rule 7.1A requires this Resolution to be passed as a Special Resolution, which means that it must be passed by at least 75% of the votes cast by members entitled to vote on the Resolution. Pursuant to Listing Rule 7.1A, no Placement Securities will be issued until and unless this Special Resolution is passed at the Meeting.

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Explanatory Memorandum

Shareholder Approval

The ability to issue the Placement Securities is conditional upon the Company obtaining Shareholder approval by way of a Special Resolution at the Meeting.

Listing Rules 7.1 and 7.1A

The ability of an entity to issue Equity Securities under Listing Rule 7.1A is in addition to the entity’s 15% capacity under Listing Rule 7.1.

At the date of this Notice of Meeting, the Company has on issue 144,994,142 Shares. The Company will have the capacity to issue the following Equity Securities on the date of the Meeting:

• (1) 21,741,621 Equity Securities under Listing Rule 7.1; and

• (2) subject to Shareholder approval being obtained under Resolution 4, 14,499,414 Placement Securities under Listing Rule 7.1A.

The actual number of Placement Securities that the Company will have the capacity to issue under Listing Rule 7.1A will be calculated at the date of issue of the Placement Securities in accordance with the formula prescribed in Listing Rule 7.1A.2 (as described above).

Formula for calculating 10% Placement Facility

Listing Rule 7.1A2 provides that eligible entities which have obtained shareholder approval at an annual general meeting may issue or agree to issue, during the 12 month period after the date of the annual general meeting, a number of Equity Securities calculated in accordance with the following formula:

(A x D) – E

A

• is the number of shares on issue 12 months before the date of issue or agreement:

• (A) plus the number of fully paid shares issued in the 12 months under an exception in Listing Rule 7.2;

• (B) plus the number of partly paid shares that became fully paid in the 12 months;

• (C) plus the number of fully paid shares issued in the 12 months with approval of holders of shares under Listing Rule 7.1 and 7.4. This does not include an issue of fully paid shares under the entity’s 15% placement capacity without shareholder approval;

• (D) less the number of fully paid shares cancelled in the 12 months.

Note that A is has the same meaning in Listing Rule 7.1 when calculating an entity’s 15% placement capacity.

• D is 10%

• E is the number of Equity Securities issued or agreed to be issued under Listing Rule 7.1A.2 in the 12 months before the date of the issue or agreement to issue that are not issued with the approval of shareholders under Listing Rule 7.1 or 7.4.

Specific Information Required by Listing Rule 7.3A

‐ Minimum price of securities issued under Listing Rule 7.1A Listing Rule 7.3A.1

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Explanatory Memorandum

Pursuant to and in accordance with Listing Rule 7.1A.3, the Placement Securities issued pursuant to approval under Listing Rule 7.1A must have an issue price of not less than 75% of the VWAP for the Equity Securities over the 15 trading days immediately before:

• (1) the date on which the price at which the Placement Securities are to be issued is agreed; or

• (2) if the Placement Securities are not issued within five trading days of the date in paragraph (1) above, the date on which the Placement Securities are issued.

The Company will disclose to the ASX the issue price on the date of issue of the Placement Securities.

‐ Risk of Economic and Voting Dilution Listing Rule 7.3A.2

As provided by Listing Rule 7.3A.2, if this Resolution is passed and the Company issues the Placement Securities, there is a risk of economic and voting dilution to the existing Shareholders. The Company currently has on issue 144,994,142 Shares. The Company could issue 36,241,035 Shares on the date of the meeting (however, it is important to note that the exact number of Placement Securities which may be issued will be calculated in accordance with the formula contained in Listing Rule 7.1A.2, details of which are set out above). Any issue of Placement Securities will have a dilutive effect on existing Shareholders.

There is a specific risk that:

• (1) the Market Price for the Company’s Equity Securities may be significantly lower on the date of the issue of any Placement Securities than it is on the date of the meeting; and

• (2) the Placement Securities may be issued at a price that is at a discount to the Market Price for the Company’s Equity Securities on the issue date,

which may have an effect on the amount of funds raised by the issue or the value of the Placement Securities.

As required by Listing Rule 7.3A.2, Table 1 below shows the potential economic and voting dilution effect, in circumstances where the issued share capital has doubled and the Market Price of the shares has halved. Table 1 also shows additional scenarios in which the issued share capital has increased (by both 50% and 100%) and the Market Price of the shares has:

• (1) decreased by 50%; and

• (2) increased by 100%.

Table 1

Issued Share Capital	50% decrease in Market Price $0.01	50% decrease in Market Price $0.01	Current Market Price $0.02	Current Market Price $0.02	100% increase in Market Price $0.04	100% increase in Market Price $0.04
	10% Voting Dilution	Capital Raised	10% Voting Dilution	Capital Raised	10% Voting Dilution	Capital Raised
Present Issued Share Capital = 144,994,142 Shares	14,499,414	$144,994	14,499,414	$289,988	14,499,414	$579,976
50% Increase in Share Capital = 217,491,213 Shares	21,749,121	$217,491	21,749,121	$434,982	21,749,121	$869,964
100% Increase in Share Capital = 289,988,284 Shares	28,998,828	$289,988	28,998,828	$579,976	28,998,828	$1,159,953

Page 7 of 13

Explanatory Memorandum

Assumptions and Explanations

• The Market Price is $0.02, based on the closing price of the Shares on ASX on 12 October 2012.

• The above table only shows the dilutionary effect based on the issue of the Placement Securities (assuming only Shares are issued), and not any Shares issued under the 15% capacity under Listing Rule 7.1.

• The above table assumes that the Shares previously issued and to be ratified under Resolutions 4 and 5 have been issued, and that the Shares to be issued subject to receiving Shareholder approval under Resolutions 6 and 7 have not yet been issued.

• The 10% voting dilution reflects the aggregate percentage dilution against the issued Share capital at the time of issue.

• The Company issues the maximum number of Placement Securities.

• The issued Share capital has been calculated in accordance with the formula in Listing Rule 7.1A(2) as at 15 October 2012.

• The issue price of the Placement Securities used in the table is the same as the Market Price and does not take into account the discount to the Market Price (if any).

Final Date for Issue ‐ Listing Rule 7.3A.3

As required by Listing Rule 7.3A.3, the Company will only issue and allot the Placement Securities during the 12 months after the date of this Meeting which the Company anticipates will end on 28 November 2013. The approval under this Resolution for the issue of the Placement Securities will cease to be valid in the event that Shareholders approve a transaction under Listing Rule 11.1.2 (a significant change to the nature or scale of activities of the Company) or Listing Rule 11.2 (the disposal of the main undertaking of the Company) before the anniversary of the Annual General Meeting.

‐ Purpose Listing Rule 7.3A.4

As noted above, the purpose for which the Placement Securities may be issued include to raise funds for the Company and as non‐cash consideration (further details of which are set out below). Funds raised from the issue of Placement Securities, if undertaken, would be applied towards the acquisition of new assets or investments (including expenses associated with such acquisitions), continued exploration and feasibility study expenditure on the Company’s current assets and general working capital.

Shares Issued for Non‐Cash Consideration ‐ Listing Rule 7.3A.4

The Company may issue Placement Securities for non‐cash consideration, such as the acquisition of new assets or investments. If the Company issues Placement Securities for non‐cash consideration, the Company will release to the market a valuation of the non‐cash consideration that demonstrates that the issue price of the Placement Securities complies with Listing Rule 7.1A.3.

’ ‐ Company s Allocation Policy Listing Rule 7.3A.5

The Company’s allocation policy is dependent on the prevailing market conditions at the time of any proposed issue of the Placement Securities. The identity of the allottees of Placement Securities will be determined on a case‐by‐case basis having regard to a number of factors including but not limited to the following:

• (1) the methods of raising funds that are available to the Company including, but not limited to, rights issue or other issue in which existing shareholders can participate;

• (2) the effect of the issue of the Placement Securities on the control of the Company;

• (3) the financial situation and solvency of the Company; and

• (4) advice from corporate, financial and broking advisers (if applicable).

Page 8 of 13

Explanatory Memorandum

The allottees of the Placement Securities have not been determined as at the date of this Notice but may include existing substantial Shareholders and new Shareholders who are not related parties or associates of a related party of the Company.

Furthermore, if the Company is successful in acquiring new assets or investments for which Placement Securities are issued as consideration, it is likely that the allottees of some of the Placement Securities will be the vendors of the new assets or investments.

Company Has Not Previously Obtained Shareholder Approval Under Listing Rule 7.1A

The Company has not previously obtained Shareholder approval under Listing Rule 7.1A.

Voting Exclusion Statement

A voting exclusion statement is included for this Resolution in the Notice of Meeting accompanying the Explanatory Memorandum. At the date of the Notice of Meeting, the proposed allottees of any Placement Securities are not as yet known or identified. In these circumstances (and in accordance with the note set out in Listing Rule 14.11.1 relating to Listing Rules 7.1 and 7.1A), for a person’s vote to be excluded, it must be known that that person will participate in the proposed issue. Where it is not known who will participate in the proposed issue (as is the case in respect of the Placement Securities), Shareholders must consider the proposal on the basis that they may or may not get a benefit and that it is possible that their holding will be diluted and there is no reason to exclude their votes.

6. Resolution 5 – Amendment to Constitution

6.1 Background

The Company wishes to amend its Constitution to enable the Directors to issue Performance Shares. The amendment would enable the Company to issue a new class of security however; the Company does not intend to seek quotation of the Performance Shares. Details of the rights attaching to the Performance Shares are set out below.

6.2 Details of Proposed Amendments to the Constitution

As previously noted, the Company intends, subject to Shareholder approval, to amend the Constitution in accordance with section 136(2) of the Corporations Act by inserting new Articles 5A and 5B as follows:

5A Rights attaching to Performance Shares

• 5A.1 For the purposes of this Article and Article 5B;

Conversion means conversion of a Performance Share into an ordinary share and Convert shall have a corresponding meaning.

End Date means the last day by which the Performance Criteria applying to a Performance Share shall be met.

Issue Date means the date of issue of a Performance Share.

Performance Criteria means such criteria as may be determined by the Board in its absolute discretion to apply to a Performance Share.

Performance Share means a share issued pursuant to Article 5A.2.

• 5A.2 The Company shall be entitled to issue a share in the Company to any employee, director, officer or consultant of the Company (Recipient) upon terms which require the Recipient to satisfy certain Performance Criteria.

• 5A.3 A Performance Share must be issued in the name of the Recipient or such nominee nominated by the Recipient not less than 2 Business Days prior to the Issue Date. (Nominee)

Page 9 of 13

Explanatory Memorandum

• 5A.4 The Company shall not be required to issue a Performance Share to a Nominee appointed by a Recipient unless the Recipient agrees to be bound by the provisions in this Article and Article 5B.

• 5A.5 A Performance Share shall:

• (a) not have any voting rights at any general meeting of the Company;

• (b) entitle the holder to receive notices of all general meetings and financial reports and accounts that are circulated;

• (c) entitle the holder to attend all general meetings of the Company;

• (d) not have any dividend entitlements;

• (e) only be capable of being disposed of by the holder upon achievement of the Performance Criteria applying to the Performance Shares;

• (f) on winding up entitle the holder to participate in surplus profits or assets of the Company only to the extent of such amount per Performance Share determined by the Board at the Issue Date;

• (g) have no entitlement to participate in new issues of equity securities offered to ordinary shareholders of the Company;

• (h) in the event of listing of the Company on the Exchange, not be quoted on the Exchange;

• (i) convert into ordinary shares upon the basis set forth in Article 5B.

• 5A.6 In the event of the Company seeking a listing on the Exchange, the terms of any Performance Share may be amended as necessary by the Board in order to comply with the Listing Rules or any directions of the Exchange regarding the terms of the Performance Share.

5B. Conversion of Performance Share

• 5B.1 A Performance Share shall be automatically converted into an ordinary share upon satisfaction of the Performance Criteria applying to the Performance Share.

• 5B.2 Unless otherwise determined by the Board, a Performance Share shall convert into an ordinary share on the basis of one (1) Performance Share for every one (1) ordinary share.

• 5B.3 An ordinary share issued upon conversion of a Performance Share will rank equally with other ordinary shares on issue in the Company and will;

• (a) participate with all other ordinary shares on issue in the capital of the Company for dividends as from the date of Conversion ;

• (b) be entitled to vote at all general meetings of the Company at all times.

• 5B.4 Unless otherwise determined by the Board, in the event that the Performance Criteria applying to any Performance Share held by a Recipient is not satisfied by the End Date all of the Performance Shares held by that Recipient or its Nominee shall convert into one (1) ordinary share.”

The Directors unanimously recommend that Shareholder vote in favour of the Resolution 5. Board means the board of Directors of the Company.

Closely Related Party (as defined in the Corporations Act) of a member of the Key Management Personnel for an entity means:

• (a) a spouse or child of the member; or

• (b) a child of the member’s spouse; or

• (c) a dependant of the member or the member’s spouse; or

• (d) anyone else who is one of the member’s family and may be expected to influence the member, or be influenced by the member, in the member’s dealings with the entity; or

• (e) a company the member controls; or

• (f) a person prescribed by the regulations for the purposes of this paragraph.

Company means AusNiCo Limited ACN 122 957 322.

Page 10 of 13

Explanatory Memorandum

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the directors of the Company.

Key Management Personnel or KMP has the definition given in the accounting standards as those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly and indirectly, including any director (whether executive or otherwise) of that entity.

Market Price means the closing price on a Trading Platform, excluding special crossings, overnight sales and exchange traded option exercises.

Meeting means this meeting.

Notice means the notice of meeting which accompanies this Explanatory Memorandum.

Option means an option to acquire a Share.

Shareholder means a holder of ordinary Shares in the Company.

Shares means ordinary fully paid shares in the issued capital of the Company.

ENQUIRIES

Any enquiries in relation to the Resolutions or the Explanatory Memorandum should be directed to Karl Schlobohm (Company Secretary), at Level 27, 111 Eagle Street Brisbane QLD 4000, or on (07) 3303‐0661.

Page 11 of 13

Explanatory Memorandum

SCHEDULE 1

Directors’ Fee Plan

Terms for issue of shares in lieu of Directors’ fees

1. All executive and Non‐executive Directors of the Company shall be entitled during the term of the Directors Fee Plan (Plan) to elect by notice in writing to the Company (Election Notice) to be paid some or all of the remuneration due and owing to them by the Company from time to time as fees for services (Outstanding Remuneration) by way of an issue of ordinary shares. (Plan Shares)

2. An Election Notice may be given by an Executive and/or Non‐executive Director (Participating Director) within 10 Business Days after each Quarter during the Plan and shall specify:

3. (a) The amount of any Outstanding Remuneration that a Participating Director wishes to be paid by way of Plan Shares under the Plan; and

4. (b) Whether the Participating Director wishes to have the Plan Shares issued in his or her own name or in the name of a nominee. ( Recipient )

5. An Election Notice may be given to the Company in any manner permitted under the Constitution for service by the Company of notices.

6. Upon receipt of an Election Notice, Plan Shares may be issued to each Participating Director who elects to be issued Plan Shares in lieu of any Outstanding Remuneration.

7. The obligation of the Company to issue any Plan Shares is subject to obtainment of any approvals which may be required under:

8. (a) the Listing Rules; and

9. (b) the Corporations Act 2001(Cth).

10. The issue price of each Plan Share will be the Market Price of ordinary shares in the Company on the Business Day before an Election Notice is given by a Participating Director and any fractional entitlement to be issued Plan Shares shall be rounded up to the nearest whole number.

11. The Company shall:

12. (a) issue the Plan Shares to a Recipient within three 3 Business Days of receipt of an Election Notice;

13. (b) forthwith deliver a statement of holding to the Recipient in respect of the Plan Shares; and

14. (c) cause the Plan Shares to be listed on ASX as soon as reasonable practicable at the Company’s cost and expense.

15. Unless otherwise approved by shareholders of the Company, the maximum number of Plan Shares which may be issued by the Company in each 12 months during the term of the Plan shall be 6,000,000 Plan Shares.

16. For the purposes of interpretation of this Plan:

17. (d) Constitution means the Constitution of the Company;

18. (e) Quarter means a period of three months commencing on 1 January, 1 April, 1 July or 1 October;

19. (f) Listing Rules means the Listing Rules of ASX Limited;

20. (g) Shares means ordinary shares in the Company; and

21. (h) Terms used herein shall have the meanings ascribed to them in the Listing Rule

Page 12 of 13

Explanatory Memorandum

Entitlement to Vote

The Board has determined, in accordance with the Corporations Regulations 2001 that for the purposes of determining those Shareholders entitled to attend and vote at the Annual General Meeting of the Company, shall be those persons recorded in the register of Shareholders as at 7.00pm (Brisbane Time) on 26 November 2012. Accordingly, transactions registered after that time will be disregarded in determining entitlements to attend and vote at the Meeting.

How to Vote

You may vote by attending the Annual General Meeting in person, by proxy or authorised representative.

Voting in Person

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

Voting by Proxy

A member entitled to attend and vote at the meeting is entitled to appoint a proxy to vote on their behalf. Where a member is entitled to cast two or more votes, they may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise. Where the appointment does not specify the proportion or number of votes each proxy may exercise, each proxy may exercise half of the votes. A proxy need not be a member of the Company.

Members who are a body corporate are able to appoint representatives to attend and vote at the meeting under Section 250D of the Corporations Act 2001 (Cth).

If a representative of the Company is to attend the meeting the appropriate “Certificate of Appointment of Corporate Representative” should be produced prior to admission. A form of the certificate may be obtained from the Company’s share registry.

Signing instructions

You must sign the proxy form as follows in the spaces provided:

Individual:	Where the holding is in one name, the holder must sign.
Joint Holding:	Where the holding is in more than one name, all of the security holders should sign.
Power of Attorney:	To sign under Power of Attorney, you must have already lodged this document with
	the registry. If you have not previously lodged this document for notation, 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 indicate the office held by signing in the appropriate place.

To vote by proxy, the proxy form provided with this notice (and the original or a certified copy of any power of attorney under which it is signed) must be received by the Company not less than forty eight (48) hours before the scheduled time for the meeting. Any proxy form received after that time will not be valid for the scheduled meeting.

Completed proxies can be returned to the Company Secretary by either mail to GPO Box 5261, Brisbane, Queensland 4001; or facsimile to (07) 3303‐0681, or scanned and emailed to kschlobohm@ausnico.com.au

Page 13 of 13

Proxy Form

Appointment of Proxy

I/We being Shareholder(s) of AusNiCo Limited (Company) hereby appoint:

the Chairman of the Meeting OR Write here the name of the person you (mark with an “X”) are appointing if this person is someone other than the Chairman of the Meeting

or failing the person named, or if no person 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 Annual General Meeting of AusNiCo Limited to be held at Level 7, Waterfront Place, 1 Eagle Street Brisbane, Qld on 28 November 2012 at 11.30am (Brisbane time) and at any adjournment of that meeting.

IMPORTANT NOTE

The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business . If the Chairman of the Meeting is your proxy (or becomes your proxy by default), you authorise the Chairman to exercise your proxy on Resolution One, that the Remuneration Report for the year ended 30 June 2012 (as set out in the Directors’ Report) be adopted, even though the Item is connected directly or indirectly with the remuneration of a member of key management personnel, which includes the Chairman. If you do not wish to authorise the Chairman to vote in this way, you should direct your vote by marking the For, Against or Abstain box for Resolution One below.

If no directions are given, the Proxy may vote as the Proxy thinks fit or may abstain. By signing this appointment you acknowledge that the Proxy (whether voting in accordance with your directions or voting in their discretion under an undirected Proxy) may exercise your proxy even if he/s he has an interest in the outcome of the resolution and even if votes cast by him/her other than as proxy holder will be disregarded because of that interest.

If two proxies are appointed, the proportion of voting rights this proxy is authorised to exercise is ………………%. (An additional proxy form will be supplied by the Company on request).

If you wish to appoint the proxy to exercise voting power over only some of your Shares, the number of Shares in respect of which this proxy is to operate is ……………….. Shares (Note: proxy will be over all Shares if left blank).

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

Resolution	For	Against	Abstain
1. Remuneration Report
2. Re‐election of Brian Moller as a Director
3. Approval for Director’s Share Plan
4. Approval for Additional 10% Placement Capacity
5. Amendment of Constitution

Individual or Security holder 1 Security holder 2 Security holder 3 Sole Director and Secretary Director Director/Company Secretary

Sole Director and Secretary (if appointed)

Contact Daytime Telephone

Contact Name

Date

Page 2 of 3

Proxy Form

How to complete this Proxy Form

1 Your Name and Address

This is your name and address as it appears on the company’s share register. If this information is incorrect, please make the correction on the form. Shareholders sponsored by a broker should advise their broker of any changes. Please note: you cannot change ownership of your Shares using this form.

2 Appointment of a Proxy

If you wish to appoint the Chairman of the Meeting as your proxy, mark the box in section A. If the person you wish to appoint as your proxy is someone other than the Chairman of the Meeting please write the name of that person in section A. If you leave this section blank, or your named proxy does not attend the meeting, the Chairman of the Meeting will be your proxy. A proxy need not be a Shareholder of the company. A proxy may be an individual or a body corporate.

3 Votes on Items of Business

You should direct your proxy how to vote by placing a mark in one of the boxes opposite each item of business. All your Shares will be voted in accordance with such a direction unless you indicate only a portion of voting rights are to be voted on any item by inserting the percentage or number of Shares you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on the items of business, your proxy may vote as he or she chooses. If you mark more than one box on an item your vote on that item will be invalid.

4 Appointment of a Second Proxy

You are entitled to appoint up to two persons as proxies to attend the meeting and vote on a poll. If you wish to appoint a second proxy, an additional Proxy Form may be obtained by telephoning the company or you may copy this form.

To appoint a second proxy you must:

• (a) on each of the first Proxy Form and the second Proxy Form state the percentage of your voting rights or number of Shares applicable to that form. If the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded.

• (b) Return both forms together.

5 Signing Instructions

You must sign this form as follows in the spaces provided:

Individual: where the holding is in one name, the holder must sign.

Joint Holding:

Power of Attorney:

Companies :

where the holding is in more than one name, either security holder may sign.

To sign under Power of Attorney, you must have already lodged the Power of Attorney with the registry. If you have not previously lodged this document for notation, please attach a certified photocopy of the Power of Attorney to this form when you return it.

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 indicate the office held by signing in the appropriate place.

6 Lodgement of a Proxy

This Proxy Form (and any Power of Attorney under which it is signed) must be received at the address given below by 11.30am on Monday 26 November 2012, being not later than 48 hours before the commencement of the meeting. Any Proxy Form received after that time will not be valid for the scheduled meeting.

Page 3 of 3