CONNECTED MINERALS LIMITED — Capital/Financing Update 2019

Feb 28, 2019

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

CONNECTED IO LIMITED

ABN

99 009 076 233

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of+securities issued or to be issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued 3 Principal terms of the+securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)	Convertible Notes
	Convertible Notes with a face value of $1,351,000 (convertible on the basis of $0.003 per share) on the terms set out in Annexure A.
	Convertible Notes with a face value of $1,351,000 on the terms set out in Annexure A as approved by shareholders at the Company’s Annual General Meeting held on 28 November 2018.

• See chapter 19 for defined terms.

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4 Do the[+] securities rank equally No, Convertible Notes may convert into ordinary in all respects from the[+] issue shares upon conversion (at the election of the date with an existing[+] class of noteholders). quoted[+] securities? If the additional[+] securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration Convertible Notes issued in full satisfaction and discharge of Loan Facility of $1,351,000, as approved by Shareholders at the Company’s AGM held on 28 November 2018. 6 Purpose of the issue Convertible Notes issued in full satisfaction and (If issued as consideration for discharge of Loan Facility of $1,351,000. the acquisition of assets, clearly identify those assets) 6a Is the entity an[+] eligible entity Yes that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h in relation to the[+] securities the subject of this Appendix 3B , and comply with section 6i 6b The date the security holder 28 November 2018 resolution under rule 7.1A was passed 6c Number of[+] securities issued Nil without security holder approval under rule 7.1 6d Number of[+] securities issued Nil with security holder approval under rule 7.1A

6e Number of[+] securities issued Convertible Notes with a face value of with security holder approval $1,351,000 (convertible at a conversion price of under rule 7.3, or another $0.003) as approved by shareholders at the specific security holder approval Annual General Meeting held on 28 November (specify date of meeting) 2018. 6f Number of[+] securities issued Nil under an exception in rule 7.2 6g If[+] securities issued under rule Not applicable 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation. 6h If[+] securities were issued under Not applicable rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining Listing Rule 7.1 – 216,399,734 issue capacity under rule 7.1 and Listing Rule 7.1A – 176,476,938 rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates 28 February 2019 Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B. Number +Class 8 Number and +class of all 1,813,085,059 Fully paid ordinary +securities quoted on ASX shares ( including the +securities in section 2 if applicable)

• See chapter 19 for defined terms.

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9 Number and +class of all +securities not quoted on ASX (_including_the +securities in section 2 if applicable)	Number	+Class
	100,000,000 50,000,000 75,000,000 Various	Class A Performance Shares which will convert into Ordinary Shares on a 1:1 basis on achievement of milestone. Class B Performance Shares which will convert into Ordinary Shares on a 1:1 basis on achievement of milestone. Unlisted Options (exercisable at $0.01; expiring 20 December 2020). Convertible Notes with a face value of $1,351,000 (convertible on the basis of $0.003 per share).

10 Dividend policy (in the case of a Not applicable trust, distribution policy) on the increased capital (interests)

Part 2 - Pro rata issue

11 Is security holder approval Not applicable required? 12 Is the issue renounceable or nonNot applicable renounceable? 13 Ratio in which the[+] securities Not applicable will be offered 14 +Class of +securities to which the Not applicable offer relates 15 +Record date to determine Not applicable entitlements 16 Will holdings on different Not applicable registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements Not applicable in relation to fractions

18 Names of countries in which the entity has security holders who will not be sent new offer documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of acceptances or renunciations 20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of security holders 25 If the issue is contingent on security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and offer documents will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do security holders sell	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable

• See chapter 19 for defined terms.

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their entitlements in full through a broker?

31 How do security holders sell part Not applicable of their entitlements through a broker and accept for the balance?

• 32 How do security holders dispose of their entitlements (except by sale through a broker)?

Not applicable

33 +Issue date Not applicable

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of[+] securities ( tick one )

• (a) +Securities described in Part 1.

• (b)[All other ][+][securities ]

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

• 35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders

36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories

• 1 - 1,000

• 1,001 - 5,000

5,001 - 10,000

10,001 - 100,000 100,001 and over

• 37 A copy of any trust deed for the additional[+] securities

Entities that have ticked box 34(b)

38 Number of[+] securities for which +quotation is sought 39 +Class of +securities for which quotation is sought 40 Do the[+] securities rank equally in all respects from the[+] issue date with an existing[+] class of quoted +securities? If the additional[+] securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another[+] security, clearly identify that other[+] security)

Number +Class 42 Number and +class of all +securities quoted on ASX ( including the[+] securities in clause 38)

• See chapter 19 for defined terms.

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Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted +quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

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Sign here: ............................................................Date: 28 February 2019 (Company secretary)

Print name: Nicki Farley

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Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1

Rule 7.1 – Issues exceeding 15% of capital

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

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Insert number of fully paid [+] ordinary 887,916,052
securities on issue 12 months before the
+ issue date or date of agreement to issue
Add the following: 133,187,333 – Placement Shares
• Number of fully paid [+] ordinary securities 131,594,009 – Right Issue Shares
issued in that 12 month period under an
exception in rule 7.2 578,738,659 – Underwritten Shortfall
• Number of fully paid [+] ordinary securities 33,333,333 – Director Fee Shares
issued in that 12 month period with
shareholder approval
• Number of partly paid [+] ordinary
securities that became fully paid in that
12 month period
Note:
• Include only ordinary securities here –
other classes of equity securities cannot
be added
• Include here (if applicable) the securities
the subject of the Appendix 3B to which
this form is annexed
• It may be useful to set out issues of
securities on different dates as separate
line items
Subtract the number of fully paid [+] ordinary 0
securities cancelled during that 12 month
period
“A” 1,764,769,386
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• See chapter 19 for defined terms.

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Step 2: Calculate 15% of “A”

Step 2: Calculate 15% of “A”	Step 2: Calculate 15% of “A”
“B”	0.15 [Note: this value cannot be changed]
Multiply“A” by 0.15	264,715,407
Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used
Insertnumber of+equity securities issued or agreed to be issued in that 12 month period_not counting_those issued: • Under an exception in rule 7.2 • Under rule 7.1A • With security holder approval under rule 7.1 or rule 7.4 Note: • This applies to equity securities, unless specifically excluded – not just ordinary securities • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items	43,315,673 – Placement and Underwriting Shares 5,000,000 – Loan Agreement Shares
“C”	48,315,673
Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1
“A” x 0.15 Note: number must be same as shown in Step 2	264,715,407
Subtract“C” Note: number must be same as shown in Step 3	48,315,673
Total[“A” x 0.15] – “C”	216,399,734 [Note: this is the remaining placement capacity under rule 7.1]

placement capacity under rule 7.1
“A” x 0.15	264,715,407
Note: number must be same as shown in
Step 2
Subtract“C”	48,315,673
Note: number must be same as shown in
Step 3
Total[“A” x 0.15] – “C”	216,399,734
	[Note: this is the remaining placement
	capacity under rule 7.1]

Part 2

Rule 7.1A – Additional placement capacity for eligible entities

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

“A” 1,764,769,386 Note: number must be same as shown in Step 1 of Part 1 Step 2: Calculate 10% of “A” “D” 0.10 Note: this value cannot be changed Multiply “A” by 0.10 176,476,938

Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used

Insert number of[+] equity securities issued 0 or agreed to be issued in that 12 month period under rule 7.1A

Notes:

• This applies to equity securities – not just ordinary securities

• • Include here – if applicable – the securities the subject of the Appendix 3B to which this form is annexed

• • Do not include equity securities issued under rule 7.1 (they must be dealt with in Part 1), or for which specific security holder approval has been obtained

• • It may be useful to set out issues of securities on different dates as separate line items

• “E” 0

• See chapter 19 for defined terms.

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Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A	Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A
“A” x 0.10 Note: number must be same as shown in Step 2	176,476,938
Subtract“E” Note: number must be same as shown in Step 3	0
Total[“A” x 0.10] – “E”	176,476,938 Note: this is the remaining placement capacity under rule 7.1A

ANNEXURE – TERMS OF CONVERTIBLE NOTES

The material terms of the Convertible Notes are as follows:

Convertible Notes
Face Value	The face value in respect of a Convertible Note.
Conditions	The issue and conversion of a Note into Shares is conditional on the Company obtaining Shareholder approval for the issue of Convertible Notes and conversion of Convertible Notes into Shares. Shareholder approval is not needed for the purposes of: • section 208 of the Corporations Act (related party approval); and • item 7 of section 611 of the Corporations Act (takeover approval).
Maturity Date	30 June 2019.
Interest rate	9% per annum payable on each 6 month anniversary after the issue date. Interest to be paid in cash or shares at the election of the noteholder.
Conversion Price	$0.003 per Share
Conversion	A noteholder may elect to convert a Convertible Note into securities at any time on or before the Maturity Date. If converted, the Face Value and accrued interest will convert into Shares at the Conversion Price. An unconverted Convertible Note must be converted into Shares by the Company within 10 business days of the Maturity Date.
No quotation	A Convertible Note will not be quoted or listed on any stock exchange.
Voting rights	A Convertible Note will not provide any voting rights at Shareholder meetings of the Company.
Terms of Shares	Share issued upon the conversion of a Convertible Note will rank equally with existing Shares on issue.
Compliance with laws	Despite any other provision of the Convertible Note Agreement, if an issue of Shares would contravene the Corporations Act or any other applicable laws then, to the extent that such issue would contravene such law, the Company’s obligation to issue the relevant securities will be deferred until such time or times as the issue of Shares would not contravene the relevant law.
Other provisions	The Convertible Note Agreement contains warranties and undertakings considered standard for an agreement of this nature. The Company gives a number of undertakings considered standard for a borrower in an agreement of this nature. The Convertible Note Agreement sets out a number of default events considered standard for an agreement of this nature, including breach of the Agreement and insolvency. If a default event occurs, a noteholder can declare all money owing under the Convertible Note Agreement to be immediately due and payable.