CYPRIUM METALS LIMITED — Proxy Solicitation & Information Statement 2018

Apr 26, 2018

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ARC EXPLORATION LIMITED ACN 002 678 640

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NOTICE OF EXTRAORDINARY GENERAL MEETING

EXPLANATORY STATEMENT

PROXY FORM

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Date of Meeting Wednesday 30 May 2018

Time of Meeting 11.00 am (Sydney time)

Place of Meeting Nexia Australia Level 16 1 Market Street SYDNEY NSW 2000

NOTICE OF EXTRAORDINARY GENERAL MEETING

ARC EXPLORATION LIMITED ACN 002 678 640

Notice is hereby given that an Extraordinary General Meeting of Shareholders of ARC Exploration Limited ( Company ) will be held at 11.00 am (Sydney time) on Wednesday 30 May 2018 at Nexia Australia, Level 16, 1 Market Street, Sydney NSW 2000.

RESOLUTION 1 – ISSUE OF NEW CLASS OF SECURITIES (PERFORMANCE SHARES)

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

‘ That, subject to the passing of Resolution 2, for the purpose of section 246B(2) of the Corporations Act 2001 (Cth) and for all other purposes, approval is given for the Company to issue performance shares on the terms and conditions set out in the Explanatory Statement. ’

RESOLUTION 2 – ISSUE OF CONSIDERATION SECURITIES

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

‘ That, subject to the passing of Resolution 1, for the purpose of ASX Listing Rule 7.1 and for all other purposes, approval is given to the issue by the Company of 2,575,000 fully paid ordinary shares (preShare Split) and 515,000 performance shares (pre-Share Split) in consideration for the acquisition of all of the issued share capital of GNR Minerals Pty Ltd on the terms and conditions set out in the Explanatory Statement. ’

RESOLUTION 3 – ISSUE OF PLACEMENT SHARES

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

‘ That for the purpose of ASX Listing Rule 7.1 and for all other purposes, approval is given to the issue by the Company of 3,750,000 fully paid ordinary shares (pre-Share Split) at an issue price of $0.40 per share to raise $1,500,000 on the terms and conditions set out in the Explanatory Statement. ’

RESOLUTION 4 - ISSUE OF PLACEMENT SHARES TO MARCELLO CARDACI

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

‘ That, subject to the passing of Resolution 3, for the purpose of ASX Listing Rule 10.11 and for all other purposes, approval is given to the issue by the Company of up to 250,000 fully paid ordinary shares (pre-Share Split) to Mr Marcello Cardaci (or his nominee) at an issue price of $0.40 per share to raise up to $100,000 on the terms and conditions set out in the Explanatory Statement. ’

RESOLUTION 5 – SHARE SPLIT

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

‘That, for the purpose of section 254H of the Corporations Act 2001 (Cth), ASX Listing Rule 7.22 and for all other purposes, approval is given for the Company to subdivide the issued capital of the Company on the basis that:

• (a) every one fully paid ordinary share be subdivided into two fully paid ordinary shares;

• (b) every one option be subdivided into two options with the exercise price amended in inverse proportion to that ratio; and

• (c) every one performance share be subdivided into two performance shares,

on the terms and conditions set out in the Explanatory Statement.’

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DATED 19 APRIL 2018

BY ORDER OF THE BOARD ARC EXPLORATION LIMITED

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ANDREW J. COOKE COMPANY SECRETARY & NON-EXECUTIVE DIRECTOR

NOTES :

1. Explanatory Statement

The Explanatory Statement accompanying this Notice of Extraordinary General Meeting is incorporated in and comprises part of this Notice of Extraordinary General Meeting and should be read in conjunction with this Notice of Extraordinary General Meeting.

Shareholders are specifically referred to the Glossary in the Explanatory Statement which contains definitions of capitalised terms used in both this Notice of Extraordinary General Meeting and the Explanatory Statement.

2. Voting Exclusion Statements

• (a) Resolution 2

The Company will disregard any votes cast in favour of Resolution 2 by or on behalf of the vendors of GNR and/or their nominees including:

Vonross Nominees Pty Ltd Strata Nominees Pty Ltd Jet Capital Pty Ltd Ninety Three Pty Ltd 2428 Pty Ltd Waterox Pty Ltd Seventy Three Pty Ltd J & J Bandy Nominees Pty Ltd Surf Coast Capital Pty Ltd Justin & Sasha Tremain Steven Edward Daniel Siemieniuk Aaron Dean Bertolatti Travis Schwertfeger Garry Clark Christian Fredrick Jagd Carl

(and their associates) or a person (and their associates) who will obtain a material benefit as a result of the proposed issue, except a benefit solely by reason of being a holder of ordinary securities in the Company, if Resolution 2 is passed.

However, the Company need not disregard a vote 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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(b) Resolution 3

The Company will disregard any votes cast in favour of Resolution 3 by or on behalf of a person (and their associates) who is expected to participate in the proposed issue or a person (and their associates) who will obtain a material benefit as a result of the proposed issue, except a benefit solely by reason of being a holder of ordinary securities in the Company, if Resolution 3 is passed.

However, the Company need not disregard a vote 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.

(c) Resolution 4

The Company will disregard any votes cast in favour of Resolution 4 by or on behalf of Mr Marcello Cardaci (and his associates).

However, the Company need not disregard a vote if:

• it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or

• it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

3. Proxies

A Shareholder entitled to attend this Meeting and vote is entitled to appoint a proxy to attend and vote for the Shareholder at the Meeting. A proxy need not be a Shareholder. If the Shareholder is entitled to cast two or more votes at the Meeting, the Shareholder may appoint two proxies and may specify the proportion or number of votes which each proxy is appointed to exercise. A form of proxy accompanies this Notice.

To record a valid vote, a Shareholder will need to take the following steps:

• 3.1 cast the shareholder’s vote online by visiting

www.advancedshare.com.au/investors.aspx; or

• 3.2 complete and lodge a validly completed and signed paper proxy form at the share registry of the Company, Advanced Share Registry Services:

(a) in person at the following address: Advanced Share Registry 110 Stirling Highway NEDLANDS WA 6009

OR

(b) by post at the following address: Advanced Share Registry PO Box 1156 NEDLANDS WA 6909

OR

• (c) by facsimile on (08) 9262 3723 (within Australia) or +61 8 9262 3723 (outside Australia); or

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• 3.3 for Intermediary Online subscribers only (custodians), cast the shareholder’s vote online by visiting www.advancedshare.com.au/investors.aspx,

so that it is received no later than 11.00 am (Sydney time) on 28 May 2018.

The chair intends to vote undirected proxies in favour of each item of business.

4. ‘Snap Shot’ Time

The Company may specify a time, not more than 48 hours before the Meeting, at which a ‘snap shot’ of Shareholders will be taken for the purposes of determining Shareholder entitlements to vote at the Meeting. The Directors have determined that all Shares of the Company that are quoted on ASX as at 7.00 pm (Sydney time) on 28 May 2018 shall, for the purposes of determining voting entitlements at the Meeting, be taken to be held by the persons registered as holding the Shares at that time.

5. Corporate Representative

Any corporate Shareholder who has appointed a person to act as its corporate representative at the Meeting should provide that person with a certificate or letter executed in accordance with the Corporations Act authorising him or her to act as that company’s representative. The authority may be sent to the Company and/or registry in advance of the Meeting or handed in at the Meeting when registering as a corporate representative.

EXPLANATORY STATEMENT

This Explanatory Statement forms part of a Notice convening an Extraordinary General Meeting of Shareholders of ARC Exploration Limited to be held on 16 May 2018. This Explanatory Statement is to assist Shareholders in understanding the background to and the legal and other implications of the Notice and the reasons for the Resolutions proposed. Both documents should be read in their entirety and in conjunction with each other.

Other than the information set out in this Explanatory Statement, the Directors believe that there is no other information that could reasonably be required by Shareholders to consider Resolutions 1 to 5 (inclusive).

BACKGROUND

As announced to ASX on 27 February 2018, the Company has entered into a legally binding Term Sheet to acquire all the issued share capital of GNR in consideration for the issue of 2,575,000 Shares (pre-Share Split) and 515,000 Performance Shares (pre-Share Split).

Settlement of the Acquisition will deliver to the Company the Manitou Gold Project located in Ontario, Canada. Details of the project are contained in the Company’s announcement to ASX on 27 February 2018, a copy of which is contained in Annexure A to this Explanatory Statement.

Upon completion of the Acquisition, Mr Nicholas Rowley and Mr Marcello Cardaci will, subject to them consenting in writing to act, be appointed as directors of the Company, and Mr Simon O’Loughlin will resign as a director of the Company.

The conditions precedent to completion of the Acquisition are:

• (a) the Company conducting due diligence in respect of GNR and being satisfied in its absolute discretion with such due diligence;

• (b) the vendors of GNR conducting due diligence in respect of the Company and being satisfied in their absolute discretion with such due diligence; and

• (c) the Company obtaining all regulatory and shareholder approvals required for the Acquisition and the share placement referred to below.

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As at the date of lodgement of this Notice with ASX, none of the conditions precedent have been satisfied. However, one of the purposes of the Meeting is to seek Shareholder approval for the issue of the Consideration Securities in order for the Company to satisfy the condition precedent referred to in paragraph (c) above.

On or about completion of the Acquisition, the Company will undertake a placement of 3,750,000 Shares (pre-Share Split) at $0.40 per Share to raise $1,500,000. Another purpose of the Meeting is to seek Shareholder approval for the issue of the placement Shares in order for the Company to satisfy paragraph (c) above. Shareholder approval will also be sought for the issue of up to 250,000 placement Shares to one of the incoming directors, Mr Cardaci (or his nominee).

The Board has, subject to obtaining Shareholder approval, agreed to subdivide its capital on a 1:2 basis following the issue of the Consideration Securities and placement Shares. One of the purposes of the Meeting is to seek Shareholder approval for the subdivision.

RESOLUTION 1 – ISSUE OF NEW CLASS OF SECURITIES (PERFORMANCE SHARES)

As referred to above, on 27 February 2018 the Company entered into a legally binding Term Sheet to acquire all the issued share capital of GNR in consideration for the issue of 2,575,000 Shares (pre-Share Split) and 515,000 Performance Shares (pre-Share Split).

Section 246C(5) of the Corporations Act provides that if a company with one class of shares (which includes the Company) issues new shares, the issue is taken to vary the rights attached to the shares already on issue if the rights attaching to the new shares are not the same as the rights attached to shares already issued and those rights are not provided for in the company’s constitution or a notice, document or resolution that is lodged with the Australian Securities and Investments Commission.

Section 246B(2) of the Corporations Act relevantly provides that if a company (which includes the Company) has a constitution that does not set out the procedure for varying or cancelling rights attached to shares in a class of shares, those rights may be varied or cancelled only:

1. by special resolution of the Company; and

2. either:

3. (a) by special resolution passed at a meeting of the members holding shares in the class; or

4. (b) with the written consent of members with at least 75% of the votes in the class.

The rights attaching to the Performance Shares differ from those attaching to already issued Shares, and are set out in Annexure B to this Explanatory Statement. The purpose of Resolution 1 is to seek approval from Shareholders for the issue of the Performance Shares, being a new class of securities having different rights to existing Shares.

Resolution 1 is a special resolution .

The Directors recommend that Shareholders vote in favour of Resolution 1. The chair intends to vote undirected proxies in favour of Resolution 1.

The passing of Resolution 1 is conditional upon, and subject to, Resolution 2 being approved by Shareholders.

RESOLUTION 2 – ISSUE OF CONSIDERATION SECURITIES

As referred to above, on 27 February 2018 the Company entered into a legally binding Term Sheet to acquire all the issued share capital of GNR in consideration for the issue of 2,575,000 Shares (pre-Share Split) and 515,000 Performance Shares (pre-Share Split).

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ASX Listing Rule 7.1 sets out the basic prohibition on an entity issuing or agreeing to issue equity securities in any 12 month period which amount to more than 15% of its ordinary securities. However, an issue in excess of the 15% limit can be made with the approval of holders of ordinary securities.

Resolution 2 seeks approval by Shareholders for the issue of Consideration Securities in consideration for the acquisition of all of the issued share capital of GNR for the purpose of ASX Listing Rule 7.1.

The following additional information is provided pursuant to the requirements of ASX Listing Rule 7.3:

• The maximum number of securities that the Company will issue as consideration for all of the issued capital of GNR is 2,575,000 Shares (pre-Share Split) and 515,000 Performance Shares (pre-Share Split).

• The Consideration Securities will be issued no later than three months after the date of this Meeting or such later date as permitted by ASX. It is intended that all Consideration Securities will be issued on the same date.

• The Consideration Securities will not be issued for cash consideration.

• The Consideration Securities which are Shares will be issued to the vendors of GNR and/or their nominees.

• The Consideration Securities which are Performance Shares will be issued to two of the vendors of GNR and/or their nominees.

• The Consideration Securities which are Shares will be issued on the same terms as the Company’s existing issued Shares.

• The Consideration Securities which are Performance Shares will be issued on the terms set out in Annexure B to this Explanatory Statement. The Company has received confirmation from the ASX that the terms of the Performance Shares are appropriate and equitable under ASX Listing Rules 6.1 and 12.5.

• No funds will be raised from the issue of the Consideration Securities.

Resolution 2 is an ordinary resolution.

The Directors recommend that Shareholders vote in favour of Resolution 2. The chair intends to vote undirected proxies in favour of Resolution 2.

The passing of Resolution 2 is conditional upon, and subject to, Resolution 1 being approved by Shareholders.

RESOLUTION 3 – ISSUE OF PLACEMENT SHARES

As noted above, on or about completion of the Acquisition the Company will undertake a placement of 3,750,000 Shares (pre-Share Split) ( Placement Shares ) at $0.40 per Share to raise $1,500,000.

ASX Listing Rule 7.1 sets out the basic prohibition on an entity issuing equity securities in any 12 month period which amount to more than 15% of its ordinary securities. However, an issue made with the approval of holders of ordinary securities will not count towards this limit.

Resolution 3 seeks approval by Shareholders for the issue of the Placement Shares for the purpose of ASX Listing Rule 7.1.

The following additional information is provided pursuant to the requirements of ASX Listing Rule 7.3:

• The Company will issue a maximum of 3,750,000 Placement Shares (pre-Share Split).

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• The Placement Shares will be issued no later than three months after the date of this Meeting or such later date as permitted by ASX. It is intended that all Placement Shares will be issued on the same date.

• The issue price of the Placement Shares will be $0.40 per Placement Share (pre-Share Split).

• The Placement Shares will be issued to applicants for Placement Shares as determined by the Board, none of whom (except for Mr Marcello Cardaci (or his nominee) if Resolution 4 is passed) will be related parties of the Company.

• The Placement Shares will be issued on the same terms as the Company’s existing issued Shares.

• Funds raised from the issue of the Placement Shares will be used to explore the Manitou Gold Project in Canada which will be acquired by the Company as a result of the Acquisition, to explore the Company’s existing Trenggalek Gold Project in Indonesia and for general working capital.

Resolution 3 is an ordinary resolution.

The Directors recommend that Shareholders vote in favour of Resolution 3. The chair intends to vote undirected proxies in favour of Resolution 3.

RESOLUTION 4: ISSUE OF PLACEMENT SHARES TO MARCELLO CARDACI

One of the incoming directors, Mr Marcello Cardaci, intends to participate in the placement referred to above. Subject to Shareholder approval, it is proposed that Mr Cardaci (or his nominee) will be issued up to 250,000 Placement Shares (pre-Share Split) in the placement.

The proposed Share issue to Mr Cardaci (or his nominee) requires the approval of Shareholders pursuant to ASX Listing Rule 10.11. Shareholder approval is required under ASX Listing Rule 10.11 because Mr Cardaci is a proposed director of the Company and, as such, is a related party of the Company. If Shareholder approval is given under ASX Listing Rule 10.11, Shareholder approval is not required under ASX Listing Rule 7.1.

The following additional information is provided pursuant to the requirements of ASX Listing Rule 10.13:

• The Shares will be issued to Mr Cardaci (or his nominee).

• The Company will issue a maximum of 250,000 Shares (pre-Share Split).

• The Shares will be issued no later than one month after the date of this Meeting or such later date as permitted by ASX. It is intended that all Shares will be issued on the same date.

• The issue price of the Shares will be $0.40 per Share (pre-Share Split).

• The Shares will be issued on the same terms as the Company’s existing issued Shares.

• Funds raised from the issue of the Shares will be used to explore the Manitou Gold Project in Canada which will be acquired by the Company as a result of the Acquisition, to explore the Company’s existing Trenggalek Gold Project in Indonesia and for general working capital.

Resolution 4 is an ordinary resolution.

The Directors recommend that Shareholders vote in favour of Resolution 4. The chair intends to vote undirected proxies in favour of Resolution 4.

The passing of Resolution 4 is conditional upon, and subject to, Resolution 3 being approved by Shareholders.

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RESOLUTION 5 – SHARE SPLIT

5.1 Background

Resolution 5 seeks Shareholder approval to subdivide the number of Shares, Options and Performance Shares through the subdivision of every one Share, Option or Performance Share into two Shares, Options or Performance Shares (as the case may be) ( Share Split ).

Section 254H(1) of the Corporations Act relevantly provides that a company may, by resolution passed in general meeting, convert all or any of its Shares into a larger number.

This section of the Explanatory Statement provides the information required by ASX Listing Rule 7.20 to be provided to Shareholders in relation to the Share Split.

5.2 Purpose of the Proposed Resolution

The Directors propose the Share Split for the following reasons:

• (a) the Company currently has 6,300,366 Shares on issue, and will have 12,625,366 Shares on issue if Resolutions 1, 2, 3 and 4 are passed. This represents a relatively small number when compared to its peer group on ASX; and

• (b) the Share Split will result in a more appropriate and effective capital structure for the Company, and will benefit Shareholders by increasing the liquidity and affordability to retail investors of the Company’s shares.

5.3 Effect of the Share Split

(a) Shares

If Resolution 5 is approved, every Share on issue will be subdivided into two Shares. Overall, this will result in the number of Shares on issue increasing from 6,300,366 to 12,600,732 (12,625,366 to 25,250,732 if Resolutions 1, 2, 3 and 4 are passed).

As the Share Split applies equally to all Shareholders, individual shareholdings will be increased in the same ratio as the total number of Shares. Accordingly, after the Share Split a Shareholder will still hold the same proportion of the Company’s share capital and its assets as before the Share Split. The current rights attaching to the Shares will not be affected.

(b)

Options

The Company currently has 209,545 unlisted Options.

In the case of a subdivision of Share capital of the Company, ASX Listing Rule 7.22.2 requires that the number of Options on issue be subdivided in the same ratio as the ordinary capital and the exercise price be amended in inverse proportion to that ratio.

Accordingly, the Options on issue will be subdivided, and the exercise price of the Options amended, as follows:

Existing Options and expiry date	Existing number of Options on issue	Existing exercise price	Number of Options on issue after ShareSplit	Exercise price of Options after Share Split
Options (expiry date 31 December 2018)	109,545	$4.50	219,090	$2.25
Options (expiry date 10 October 2019)	100,000	$0.75	200,000	$0.375
Total	209,545		419,090

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The Share Split will not result in any change to the rights and obligations of existing holders of Options.

(c) Performance Shares

The Company does not currently have any Performance Shares, but will have 515,000 Performance Shares if Resolutions 1 and 2 are passed.

If Resolution 5 is also passed, every Performance Share on issue will be subdivided into two Performance Shares. Overall, this will result in the number of Performance Shares on issue increasing from 515,000 to 1,030,000.

The Share Split will not result in any change to the rights and obligations of existing holders of Performance Shares.

5.4 Fractional entitlements

The subdivision ratio is 1:2. No fractional entitlements will arise as a result of the Share Split.

5.5 Taxation

The Company considers that no taxation implications will arise for Shareholders, Optionholders or Performance Shareholders from the Share Split. However, Shareholders, Optionholders and Performance Shareholders are advised to seek their own taxation advice on the effect of the Share Split and neither the Company nor the Directors (or the Company’s advisers) accept any responsibility for the individual taxation implications arising from the Share Split.

5.6 Holding Statements, Option Certificates and Performance Share Certificates

From the date of the Share Split:

• (a) all holding statements for the Shares will cease to have any effect, except as evidence of entitlement to a certain number of Shares on a pre-Share Split basis;

• (b) all certificates (if any) for the Options will cease to have any effect, except as evidence of entitlement to a number of Options on a pre-Share Split basis; and

• (c) all certificates (if any) for the Performance Shares will cease to have any effect, except as evidence of entitlement to a number of Performance Shares on a pre-Share Split basis.

After the Share Split becomes effective, the Company will arrange for new holding statements for Shares to be issued to holders of those securities and, to the extent required, new certificates for unlisted Options to be issued to Optionholders and new certificates for Performance Shares to be issued to Performance Shareholders.

5.7 Effect on Capital Structure

The effect of the Share Split on the capital structure of the Company will be as follows:

		Pre-ShareSplit			Post-ShareSplit
	Shares	Options	Performance	Shares	Options	Performance
			Shares			Shares
Current capital structure	6,300,366	209,545	Nil	12,600,732	419,090	Nil
Issue of Shares (Resolutions 2, 3 and 4)	6,325,000	Nil	515,000	12,650,000	Nil	1,030,000
Total	12,625,366	209,545	515,000	25,250,732	419,090	1,030,000

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5.8 Expected timetable for share split

Expected timetable for share split
Companytells ASX that securityholders have approved reorganisation	30 May2018
Last dayfor tradinginpre-reorganised securities	31 May2018
Tradingin the reorganised securities on a deferred settlement basis commences	1 June 2018
Last dayfor Companyto register transfers on apre-reorganisation basis	4 June 2018
First dayfor the Companyto register securities on apost re-organised basis	5 June 2018
Company dispatches new holding statements to security holders and trading in the reorganised securities on a deferred settlement basis ends	12 June 2018
Normal trading (i.e. with an obligation to settle on T+2 business days) in the reorganised securities commences	13 June 2018

Resolution 5 is an ordinary resolution.

The Directors do not have an interest in the outcome of Resolution 5 and recommend that Shareholders vote in favour of Resolution 5. The chair intends to vote undirected proxies in favour of Resolution 5.

GLOSSARY

In this Explanatory Statement and Notice of Extraordinary General Meeting the following expressions have the following meanings unless stated otherwise or unless the context otherwise requires:

$ means Australian dollars.

Acquisition means the acquisition by the Company of all of the issued shares in GNR.

ASX means ASX Limited ACN 008 624 691 or the Australian Securities Exchange, as the context requires.

ASX Listing Rules means the Listing Rules of ASX.

Board means the current board of directors of the Company.

Company means ARC Exploration Limited ACN 002 678 640.

Consideration Securities means 2,575,000 Shares (pre-Share Split) and 515,000 Performance Shares (pre-Share Split).

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

Explanatory Statement means the explanatory statement accompanying the Notice.

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

GNR mean GNR Minerals Pty Ltd ACN 618 235 895.

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

Option means an option to acquire a Share.

Optionholder means the holder of an Option.

Performance Share means a right to be issued for no consideration a Share upon the satisfaction of a specified performance condition with the terms set out in Annexure B to this Explanatory Statement.

Performance Shareholder means the holder of a Performance Share.

Proxy Form means the proxy form accompanying the Notice.

Resolution means a resolution contained in the Notice.

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

Shareholder means the holder of a Share.

Share Split means the subdivision of the securities of the Company on a 1:2 basis.

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ANNEXURE A

ASX ANNOUNCEMENT 27 FEBRUARY 2018

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ANNEXURE B

TERMS OF PERFORMANCE SHARES

1. Terms of Performance Shares

• (a) ( Performance Shares ): Each Performance Share is a share in the capital of Arc Exploration Limited ( Company ).

• (b) ( General Meetings ): The Performance Shares shall confer on the holder ( Holder ) the right to receive notices of general meetings and financial reports and accounts of the Company that are circulated to the Company's shareholders. Holders have the right to attend general meetings of the Company.

• (c) ( No Voting Rights ): The Performance Shares do not entitle the Holder to vote on any resolutions proposed at a general meeting of the Company, subject to any voting rights under the Corporations Act 2001 (Cth) ( Corporations Act ) or the ASX Listing Rules where such rights cannot be excluded by these terms.

• (d) ( No Dividend Rights ): The Performance Shares do not entitle the Holder to any dividends (cumulative, preferential or otherwise).

• (e) ( No Rights on Winding Up ): The Performance Shares do not confer on the Holder any right to participate in the surplus profits or assets of the Company upon the winding up of the Company.

• (f) ( No Rights to Return of Capital ): The Performance Shares do not confer on the Holder any right to a return of capital, whether in a winding up, upon a reduction of capital or otherwise.

• (g) ( Transfer of Performance Shares ): The Performance Shares are not transferable.

• (h) ( Reorganisation of Capital ): In the event that the issued capital of the Company is reconstructed, all rights of a Holder will be changed to the extent necessary to comply with the ASX Listing Rules at the time of reorganisation provided that, subject to compliance with the ASX Listing Rules, following such reorganisation the economic and other rights of the Holder are not diminished or terminated.

• (i) ( Application to ASX ): The Performance Shares will not be quoted on ASX. If the Company is listed on the ASX at the time, upon conversion of the Performance Shares into Company shares in accordance with these terms, the Company must within seven days after the conversion, apply for and use its best endeavours to obtain the official quotation on ASX of the Company shares arising from the conversion.

• (j) ( Participation in Entitlements and Bonus Issues ): Subject always to the rights under paragraph (h) (Reorganisation of Capital) above, holders of Performance Shares will not be entitled to participate in new issues of capital offered to holders of the Company's shares such as bonus issues and entitlement issues.

• (k) ( Amendments required by ASX ): The terms of the Performance Shares may be amended as necessary by the Company's board in order to comply with the ASX Listing Rules, or any directions of ASX regarding the terms provided that, subject to compliance with the ASX Listing Rules, following such amendment, the economic and other rights of the Holder are not diminished or terminated.

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• (l) ( No Other Rights ): The Performance Shares give the Holders no rights other than those expressly provided by these terms and those provided at law where such rights at law cannot be excluded by these terms.

2. Conversion of the Performance Shares

• (a) ( Milestone ): The Performance Shares will convert upon the release of a Canadian National Instrument 43-101 report or equivalent Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code) report announcing an inferred mineral resource of at least 1 million ounces of gold with a minimum cut-off grade of 0.5 grams / tonne gold in relation to the Company's Manitou gold project located in Canada ( Milestone ).

• (b) ( Expiry Date ): Any Performance Shares not converted into a Company share will expire on or before 5.00 pm (EST) on the date five years after the date of issue of the Performance Shares ( Expiry Date ).

• (c) ( Conversion of Performance Shares ): Subject to paragraph (d) below, in the event the Milestone is satisfied, all of the Performance Shares held by the Holder will convert into an equal number of fully paid ordinary Company shares.

• (d) ( No Conversion if Corporations Act Contravention ): In the event that:

• (i) the conversion of the Performance Shares into Company shares would result in the Holder being in contravention of section 606(1) of the Corporations Act, then the conversion of such number of Performance Shares that would cause the contravention will be deferred until such time or times thereafter the conversion would not result in such a breach; and

• (ii) the above paragraph (d)(i) applies, the Holder may, by notice in writing, require the Company to call a meeting of its shareholders for the purposes of seeking approval under item 7, section 611 of the Corporations Act for the conversion of the Performance Shares, in which case the Company must as soon as practicable, and in any event no later than 60 days of the Holder providing such notice to the Company, call a meeting of its shareholders for the purposes of seeking approval under item 7, section 611 of the Corporations Act for the conversion of the Performance Shares into Shares.

• (e) ( No Conversion if Milestone not achieved ): In respect of any Performance Shares not converted into a Company share on or before 5.00 pm (EST) on the Expiry Date, the Company will, as soon a reasonably practical and in any event no later than 90 days after the Expiry Date, convert the total number of Performance Shares held by each Holder into one fully paid ordinary Company share.

• (f) ( After Conversion ): The Company shares issued on conversion of the Performance Shares will, as and from 5.00 pm (EST) on the date of issue, rank equally with and confer rights identical with all other Company shares then on issue and, if the Company is listed on ASX at the time, application will be made by the Company to ASX for official quotation of the Company shares issued upon conversion.

• (g) ( Conversion Procedure ) The Company will issue the Holder with a new holding statement for the Company shares as soon as practicable following the conversion of the Performance Shares into Company shares.

• (h) ( Ranking of Shares ) The Company shares into which the Performance Shares will convert will rank pari passu in all respects with the Company's shares on issue at the date of conversion.

24

LODGE YOUR VOTE ONLINE

 ONLINE VOTE

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ACN 002 678 640

www.advancedshare.com.au/investor-login

MOBILE DEVICE VOTE

Lodge your proxy by scanning the QR code below, and enter your registered postcode. It is a fast, convenient and a secure way to lodge your vote.

2018 EXTRAORDINARY GENERAL MEETING - VOTING/PROXY FORM

I/We being shareholder(s) of ARC Exploration Limited and entitled to attend and vote hereby:

APPOINT A PROXY

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The Chairman of  PLEASE NOTE: If you leave the section blank, OR the meeting the Chairman of the Meeting will be your proxy.

or failing the individual(s) or body corporate(s) named, or if no individual(s) or body corporate(s) are named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf, including to vote in accordance with the following directions (or, if no directions have been given, and to the extent permitted by law, as the proxy sees fit), at the Extraordinary General Meeting of the Company to be held at Nexia Australia, Level 16, 1 Market Street, Sydney NSW 2000 on Wednesday 30 May 2018 at 11.00am (Sydney time) and at any adjournment or postponement of that Meeting.

CHAIR’S VOTING INTENTION IN RELATION TO UNDIRECTED PROXIES:

The Chair intends to vote undirected proxies in favour of all Resolutions. In exceptional circumstances the Chair may change his/her voting intention on any Resolution. In the event this occurs an ASX announcement will be made immediately disclosing the reasons for the change.

VOTING DIRECTIONS

Agenda Items

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For Against Abstain
1 Issue of New Class of Securities (Performance Shares)
2 Issue of Consideration Securities
3 Issue of Placement Shares
4 Issue of Placement Shares to Marcello Cardaci
5 Share Split
 * If you mark the Abstain box for a particular Item, you are directing your proxy not to vote on your behalf on a show of hands or on
a poll and your votes will not be counted in computing the required majority on a poll.
SIGNATURE OF SHAREHOLDERS – THIS MUST BE COMPLETED
Shareholder 1 (Individual) Joint Shareholder 2 (Individual) Joint Shareholder 3 (Individual)
Sole Director and Sole Company Secretary Director/Company Secretary (Delete one) Director
This form should be signed by the shareholder. If a joint holding, all the shareholder should sign. If signed by the shareholder’s attorney,
the power of attorney must have been previously noted by the registry or a certified copy attached to this form. If executed by a company,
the form must be executed in accordance with the company’s constitution and the Corporations Act 2001 (Cth).
Email Address
Please tick here to agree to receive communications sent by the company via email. This may include meeting notifications, dividend
remittance, and selected announcements.
STEP 2
STEP 3
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HOW TO COMPLETE THIS SHAREHOLDER PROXY FORM

IF YOU WOULD LIKE TO ATTEND AND VOTE AT THE MEETING, PLEASE BRING THIS FORM WITH YOU. THIS WILL ASSIST IN REGISTERING YOUR ATTENDANCE.

CHANGE OF ADDRESS

This form shows your address as it appears on 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.

CORPORATE REPRESENTATIVES

If a representative of a nominated corporation is to attend the meeting the appropriate “Certificate of Appointment of Corporate Representative” should be produced prior to admission in accordance with the Notice of Meeting. A Corporate Representative Form may be obtained from Advanced Share Registry.

APPOINTMENT OF A PROXY

If you wish to appoint the Chairman as your proxy, mark the box in Step 1. If you wish to appoint someone other than the Chairman, please write that person’s name in the box in Step 1. A proxy need not be a shareholder of the Company. A proxy may be an individual or a body corporate.

SIGNING INSTRUCTIONS ON THE PROXY FORM

Individual:

Where the holding is in one name, the security holder must sign.

Joint Holding:

DEFAULT TO THE CHAIRMAN OF THE MEETING

If you leave Step 1 blank, or if your appointed proxy does not attend the Meeting, then the proxy appointment will automatically default to the Chairman of the Meeting.

Where the holding is in more than one name, all of the security holders should sign.

Power of Attorney:

If you have not already lodged the Power of Attorney with Advanced Share Registry, please attach the original or a certified photocopy of the Power of Attorney to this form when you return it.

Companies:

VOTING DIRECTIONS – PROXY APPOINTMENT

You may direct your proxy on 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 a given item, your proxy may vote as they choose to the extent they are permitted by law. If you mark more than one box on an item, your vote on that item will be invalid.

PLEASE NOTE: If you appoint the Chairman as your proxy (or if he is appointed by default) but do not direct him how to vote on an item (that is, you do not complete any of the boxes “For”, “Against” or “Abstain” opposite that item), the Chairman may vote as he sees fit on that item.

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 sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please sign in the appropriate place to indicate the office held.

LODGE YOUR VOTE

This Proxy Form (and any power of attorney under which it is signed) must be received at an address given below by 11.00am (Sydney time) on 28 May 2018, being not later than 48 hours before the commencement of the Meeting. Proxy Forms received after that time will not be valid for the scheduled meeting.

• ONLINE VOTE

www.advancedshare.com.au/investor-login

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 Advanced Share Registry Limited or you may copy this form and return them both together.

To appoint a second proxy you must:

(a) On each 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; and

(b) Return both forms together.

• BY MAIL Advanced Share Registry Limited 110 Stirling Hwy, Nedlands WA 6009; or PO Box 1156, Nedlands WA 6909

• BY FAX +61 8 9262 3723

• BY EMAIL admin@advancedshare.com.au

• IN PERSON Advanced Share Registry Limited 110 Stirling Hwy, Nedlands WA 6009; or

• ALL ENQUIRIES TO Telephone: +61 8 9389 8033