EASTERN RESOURCES LIMITED — AGM Information 2012

Oct 22, 2012

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NOTICE OF ANNUAL GENERAL MEETING

To be held at the Offices of BDO East Coast Partnership at Level 10, No. 1 Margaret Street, Sydney on Friday 23 November 2012 at 2:00pm

NOTICE IS HEREBY GIVEN that the 2012 Annual General Meeting of Eastern Iron Limited (The Company) will be held at 2:00pm on Friday, 23 November 2012 at the offices of BDO East Coast Partnership, Level 10, No.1 Margaret Street Sydney, New South Wales.

The business to be considered at the meeting is set out below. This Notice of Meeting should be read in conjunction with the accompanying Explanatory Memorandum, which contains information in relation to each of the following resolutions. A proxy form also accompanies this Notice of Meeting.

ORDINARY BUSINESS

1. Financial Statement and Report

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

“That Shareholders receive the Reports of the Directors and the Auditors, and the Financial Report for the period ended 30 June 2012.”

A copy of the Company’s 2012 Annual Report (including the Reports of the Directors and Auditors, and the Financial Report for the period ended 30 June 2012) has not been mailed to all shareholders with this Notice of Meeting. Shareholders may access these documents electronically at the following website: www.easterniron.com.au.

2. Adoption of the Remuneration Report

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

“That the Remuneration Report for the financial period ended 30 June 2012, as contained in the Directors’ Report, be adopted”.

3. Re-election of Mr Greg Jones as a Director

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

“That Mr Greg Jones who retires as a Director in accordance with the Company’s Constitution and, being eligible and offering himself for re-election, be elected as a Director of the Company”.

The Directors (Mr Jones excepted) recommend that Shareholders vote in favour of the election of Mr Jones.

4. Re-election of Mr Steve Gemell as a Director

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

“ That Mr Steve Gemell who retires as a Director in accordance with the Company’s Constitution and, being eligible and offering himself for re-election, be elected as a Director of the Company”.

The Directors (Mr Gemell excepted) recommend that Shareholders vote in favour of the election of Mr Gemell.

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Notice of Annual General Meeting 23 November 2012

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5. Election of Mr Adrian Critchlow as a Director

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

“That Mr Adrian Critchlow who was appointed to the Board on 1 October 2012 in accordance with the Company’s Constitution to hold office until the next AGM, being eligible and offering himself for election is elected as a Director of the Company”.

The Directors (Mr Critchlow excepted) recommend that Shareholders vote in favour of the election of Mr Critchlow.

6. Ratification of a previous issue of shares

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

“That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, ratification be given to the Company for the issue of 1,000,000 fully paid ordinary shares in the Company at an issue price of $0.068 per share to the company nominated in, and on the terms and conditions set out in, the Explanatory Memorandum accompanying this Notice.”

7. Grant of Options to Directors

To consider and, if thought fit, to pass the following resolutions (Resolution 7(a) to Resolution 7(f) as ordinary resolutions :

“ That, for the purposes of Section 208 of the Corporations Act and ASX Listing Rule 10.11 and for all other purposes, approval is given to grant a maximum of 3,250,000 options to Directors for nil cash consideration, and subject to the exercise of those options and payment of the Exercise Price, the issue of that number of fully paid ordinary shares of the Company to the Directors (or their nominee) as follows:

a)	Ms Wendy Corbett	450,000
b)	Mr Greg Jones	450,000
c)	Mr Steve Gemell	450,000
d)	Mr Ivo Polovineo	450,000
e)	Mr Adrian Critchlow	450,000
f)	Mr Greg De Ross	1,000,000”

Item 7 will be put to the meeting as 6 separate resolutions – Resolution 7(a) to Resolution 7(f) - one resolution for each proposed issue of options. See explanatory memorandum for further information.

SPECIAL BUSINESS

8. Issue of Shares up to 10% of the Company’s Issued Capital

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

"That pursuant to ASX Listing Rule 7.1A the Directors be authorised to issue and allot additional ordinary fully paid shares up to 10% of the Company’s issued ordinary fully paid capital by placement(s) within twelve months from the date hereof at an issue price not less than 75% of the volume weighted average price for the Company’s existing shares over the fifteen trading days prior to the date of issue thereof”.

See explanatory memorandum for further information on the terms of issue and allotment of such shares.

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Notice of Annual General Meeting 23 November 2012

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VOTING EXCLUSION STATEMENT

Resolution 2

A vote on Resolution 2 must not be cast (in any capacity) by or on behalf of any of the following persons:

• A member of the Key Management Personnel ( KMP ) details of whose remuneration are included in the Remuneration Report; or

• A Closely Related Party of such a member.

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

• it is cast by a person for a person who is permitted to vote, in accordance with the directions on the proxy form; or

• it is cast by the Chairman of the Meeting as proxy for a person who is permitted to vote, where the proxy form does not specify the way the Chairman of the Meeting is to vote and which expressly authorises the Chairman of the Meeting to vote even though the resolution is connected directly or indirectly with the remuneration of a KMP and even though the Chairman of the Meeting is a member of the KMP.

The Chair will not vote any undirected proxies in relation to Resolution 2 unless the shareholder specifically authorises the Chair to vote in accordance with the Chair’s stated voting intentions. If a shareholder wishes to nominate the Chair as their proxy for the purpose of Resolution 2 the shareholder must either tick the ‘for’ or ‘against’ box, directing the Chair how to vote, or tick the box authorising the Chair to vote in accordance with his or her stated voting intentions, on the enclosed proxy form in order for their proxy vote to be counted. Alternatively, shareholders can nominate as their proxy for the purpose of Resolution 2 a proxy who is not a member of the Company’s KMP. That person would be permitted to vote undirected proxies.

Resolution 6

Under ASX Listing Rule 7.4, the Company will disregard any votes cast on Resolution 6 by a person who participated in the issue and any associate of that person.

However, the Company need not disregard a vote on Resolution 6 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.

Resolutions 7 (a) to (f)

In accordance with section 224 of the Corporations Act and ASX Listing Rule 10.11, the following Directors who are to receive options in relation to the entity, and their associates may not vote on Resolutions 7 (a) to (f):

Resolution 7 (a) Ms Wendy Corbett Resolution 7 (d) Mr Ivo Polovineo Resolution 7 (b) Mr Greg Jones Resolution 7 (e) Mr Adrian Critchlow Resolution 7 (c) Mr Steve Gemell Resolution 7 (f) Mr Greg De Ross

However, the Company need not disregard any vote by any such persons on Resolutions 7 (a) to (f) if:

• It is cast by any of them as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form, or

• It is cast by any of them who is chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Resolution 8

The Company will disregard any votes cast on Resolution 8 by:

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

• An associate of those persons.

However, the Company need not disregard any vote by any such persons on Resolution 8 if:

• It is cast by any of them as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form, or

• It is cast by any of them who is 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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Notice of Annual General Meeting 23 November 2012

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VOTING ENTITLEMENT

In accordance with Regulation 7.11.37 of the Corporations Regulations 2001 , the Board has determined that, for the purposes of the Annual General Meeting, shares will be taken to be held by the persons who are registered holders at close of business (7pm Sydney time) on 21st November 2012. Only those persons will be entitled to vote at the Annual General Meeting on 23rd November 2012.

ADMISSION TO MEETING

Corporate representatives are required to bring appropriate evidence of appointment as a representative in accordance with the constitution of the Company. Attorneys are requested to bring the original or certified copy of the power of attorney pursuant to which they were appointed. Proof of identity will also be required for corporate representatives and attorneys.

PROXIES

• Votes at the Annual General Meeting may be given personally or by proxy, attorney or representative;

• Each shareholder has a right to appoint one or two proxies;

• A proxy need not be a shareholder of the Company;

• If a shareholder is a company it must execute under its common seal or otherwise in accordance with its constitution;

• Where a shareholder is entitled to cast two or more votes, the Shareholder may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise;

• If a shareholder appoints two proxies, and the appointment does not specify the proportion or number of the Shareholder’s votes, each proxy may exercise half of the votes. If a shareholder appoints two proxies, neither proxy may vote on a show of hands;

• A proxy must be signed by the Shareholder or his or her power of attorney who has not received any notice of revocation of the authority. Proxies given by corporations must be signed in accordance with the Company’s Constitution and the Corporations Act.

To be effective, proxy forms must be received by the Company’s share registry (Boardroom Pty Limited) no later than 24 hours before the commencement of the Annual General Meeting, that is no later than 2.00pm Sydney time on 22[nd] November 2012. Any proxy form received after that time will not be valid for the scheduled meeting.

Hand Delivery

By Mail By Facsimile

Boardroom Pty Limited Boardroom Pty Limited (02) 9290 9655 Level 7, GPO Box 3993 207 Kent St SYDNEY NSW 2001 SYDNEY NSW 2000

BY ORDER OF THE BOARD

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Ian K White Company Secretary 4 October 2012

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Explanatory Memorandum

This Explanatory Memorandum sets out information in connection with the business to be considered at the 2012 Annual General Meeting.

ORDINARY BUSINESS

Resolution 1 – Financial Statement and Report

This item of business relates to the receipt of the Company’s Financial Statements and Reports for the period ended 30 June 2012. These documents were released to the ASX on 27 September 2012 as part the Company’s 2012 Annual Report. As a result of the legislative changes, the 2012 Annual Report has not been automatically mailed to all Shareholders. The 2012 Annual Report can be accessed on the Company’s website at www.easterniron.com.au.

Resolution 2 – Adoption of the Remuneration Report

The Remuneration Report for the year ended 30 June 2012 is set out in the Directors’ Report on pages 20 to 24 of the Financial Report.

The Remuneration Report:

• Explains the Board’s policies relating to remuneration of directors, secretaries and executives of the Company;

• Discusses the relationship between such policies and the Company’s performance;

• Provides details of any performance conditions attached to such remuneration; and

• Sets out remuneration details for each director and certain named executives.

The Chair of the meeting will allow a reasonable opportunity for shareholders to ask questions about or make comments on the Remuneration Report at the meeting.

In addition, shareholders will be asked to vote on the Remuneration Report. The vote on this resolution is advisory only and does not bind the Directors or the Company. However, if at least 25% of the votes cast are against the adoption of the Remuneration Report, the Company's next Remuneration Report must explain the Board’s proposed action in response or explain why no action has been taken.

In the following year, if at least 25% of the votes cast on the resolution that the Remuneration Report be adopted are against adoption, shareholders will then vote to determine whether the Directors, excluding the Managing Director, will need to stand for re-election. If more than 50% of the votes cast on the resolution are in favour, a separate re-election meeting must be held within 90 days.

A vote on the resolution must not be cast (in any capacity) by or on behalf of either of the following classes of persons:

• A member of the Key Management Personnel details of whose remuneration are included in the Remuneration Report;

• A closely related party of such a member.

However such a person may cast a vote on the resolution if:

• The person does so as a proxy appointed by writing that specifies how the proxy is to vote on the proposed resolution; and

• The vote is not cast on behalf of such a person.

The Chair will not vote any undirected proxies in relation to Resolution 2 unless the shareholder specifically authorises the Chair to vote in accordance with the Chair’s stated voting intentions. If a shareholder wishes to nominate the Chair as their proxy for the purpose of Resolution 2 the shareholder must either tick the ‘for’ or ‘against’ box directing the Chair how to vote, or tick the box authorising the Chair to vote in accordance with his or her stated voting intentions, on the enclosed proxy form in order for their proxy vote to be counted. Alternatively, shareholders can nominate as their proxy for the purpose of Resolution 2 a proxy who is not a member of the Company’s Key Management Personnel. That person would be permitted to vote undirected proxies.

The Chair will vote all undirected proxies in favour of Resolution 2.

Resolution 3 – Re-election of Mr Greg Jones as a Director

Mr Jones has been a Director since April 2009. He is a geologist with 32 years of exploration and operational experience gained in a broad range of metalliferous commodities both within Australia and overseas. Mr Jones has held senior positions in a number of resource companies including Western Mining Corporation and Sino Gold Mining Limited and his experience spans the spectrum of exploration activity from grass-roots exploration through to resource definition and new project generation, as well as mine geology, ore resource/reserve generation and new mine development.

Mr Jones was awarded the Institute Medal for academic excellence whilst at university and is credited with several economic discoveries including the Blair nickel and the Orion gold deposits in Western Australia.

During the past three years Mr Jones has also served as a director of the following listed companies:

• PlatSearch NL - appointed April 2009

• Silver City Minerals Limited – appointed April 2009

• Thomson Resources Ltd – appointed July 2009

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Notice of Annual General Meeting 23 November 2012

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Resolution 4 – Re-election of Mr Steve Gemell as a Director

Mr Gemell has been a Director since January 2010. Mr Gemell is a consulting mining engineer with more than 30 years of experience in the mining industry, both in Australia and overseas. He has previously held senior operating roles including CEO positions, and executive and non-executive directorships in ASX-listed mining companies and unlisted mine operations or joint ventures. His experience has included a variety of roles in areas covering resource development, feasibility studies, mine planning, and operations in a large range of commodities including base and precious metals and uranium.

During the past three years Mr Gemell has also served as a director of the following listed companies:

• UXA Resources Limited - appointed March 2005, retired December 2011

• Argent Minerals Limited - appointed July 2010

• Indochine Mining Limited – appointed March 2011

• UCL Resources Limited (formally Union Resources Limited) – appointed September 2011

Resolution 5 – Election of Mr Adrian Critchlow as a Director

On 27 September, the Board announced to the ASX that Mr Adrian Critchlow had been appointed as a NonExecutive Director of the Company effective 1 October 2012.

Under article 9.1 of the Company’s Constitution, Directors can appoint a qualified person to be a Director provided that the total number of directors in office does not exceed 9. Under article 9.2 of the Company’s Constitution and ASX Listing Rule 14.4, any Director appointed to fill a casual vacancy or as an addition to the Board, holds office only until the end of the next Annual General Meeting, but is eligible for election at that meeting. Mr Critchlow was appointed in accordance with article 9.1 and being eligible, now offers himself for election. All of the other Directors support the election of Mr Critchlow.

Mr Critchlow is a qualified mechanical engineer and has a background in the development of start-up technology companies including founding Active Hotels/Booking.com which is now a significant part of Priceline.com, the largest hotel online booking engine in the world. He is also the founder of the Australian Solar Group Ltd which is developing alternative energy projects in Australia. Mr Critchlow brings to the Board connections to various financial institutions in Australia and the UK and will be valuable in assisting the Company to secure funding for future developments.

Resolution 6 – Ratification of a previous issue of shares

Resolution 6 seeks that for the purposes of ASX Listing Rule 7.4 and for all other purposes, ratification be given to the Company for the issue of 1,000,000 fully paid ordinary shares in the Company at an issue price of

$0.068 per share for the acquisition of the Nowa Nowa Project as announced to the ASX on 14 February 2012.

The Nowa Nowa project area is located north of the township of Nowa Nowa in eastern Victoria, which is in turn 270km east of Melbourne. The project area is well serviced with respect to infrastructure including a rail link from Melbourne to the major regional centre of Bairnsdale, 50km via sealed road from Nowa Nowa.

Magnetite iron deposits at Nowa Nowa were drilled in 1955 by the Victorian Mines Department as a follow up to regional magnetic surveys. Most drilling was centred on the largest of the magnetic targets, the Five Mile Deposit, with 27 cored drill holes completed. Massive magnetite with lesser hematite occurs at 30-50m depth below tertiary sands and Devonian volcanic rocks. These deposits appear to have formed mantos 40-80m in thickness associated with lesser coarse pyrite within altered sediments and are possibly skarns related to a nearby but as yet unidentified intrusive. Other nearby magnetic targets including the Seven Mile, Six Mile and Three Mile deposits have received some exploratory drilling but not to the same extent as Five Mile. Nevertheless these are also potential sources of additional resource and will be explored further

The Company is investigating the potential to develop the iron deposits at Nowa Nowa primarily as a source of feed for steelmaking operations. The deposits lend themselves to a number of potential development routes including DSO magnetite where untreated ore is exported with possibly further processing closer to the end user. Other possibilities include coarse crushing and dry magnetic separation at site to produce an upgraded product; or finer grinding to produce a high iron product suitable as a blast furnace feed or with finer grinding product suitable for coal washing applications.

The shares were issued to the following party:

Waygara Mines Pty Ltd 1,000,000

Resolutions 7(a) – (f) – Grant of Options to Directors

The Company proposes to grant a total of 3,250,000 options ( Options ) to Directors as follows:

Ms Wendy Corbett Mr Greg Jones Mr Steve Gemell Mr Ivo Polovineo Mr Adrian Critchlow Mr Greg De Ross	450,000 450,000 450,000 450,000 450,000 1,000,000
	3,250,000

The grant of Options is designed to incentivise the Directors by participating in the future growth and prosperity of the Company through share ownership and in recognition of the contribution made to the

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Company by the Directors and their ongoing responsibility.

The full terms and conditions attaching to the grant of Options are contained in Annexure A to this Notice of Meeting.

Shareholder approval of the grant of Options is being sought for all purposes including for the purposes of Chapter 2E of the Corporations Act and ASX Listing Rule 10.11.

a) Shareholder approval under Chapter 2E of the Corporations Act

Resolutions 7 (a) – (f) seek shareholder approval under Chapter 2E of the Corporations Act.

Chapter 2E of the Corporations Act prohibits a public company from giving a financial benefit to a related party of the public company unless an exception applies or shareholder approval is obtained. The financial benefit must be given to the related party within 15 months after shareholder approval is obtained.

Section 228 of the Corporations Act defines “related party” widely and incudes a director of a public company and specified members of the director’s family.

Section 229 of the Corporation Act also defines “financial benefit” widely and for the purpose of Resolutions 7 (a) – (f) includes a public company issuing shares or granting options to a director.

Requirements under section 219 of the Corporations Act for the grant of Options to the Non-Executive Directors

In accordance with section 219 of the Corporations Act, the following information is given to shareholders:

If all or any of Resolutions 7 (a) – (f) are passed, it will permit the giving of a financial benefit to the relevant Director, the subject of the Resolution. The following persons will be eligible to receive a benefit if the corresponding resolution is passed:

• Ms Wendy Corbett - Resolution 7(a);

• Mr Greg Jones - Resolution 7(b);

• Mr Steve Gemell - Resolution 7(c);

• Mr Ivo Polovineo - Resolution 7(d);

• Mr Adrian Critchlow - Resolution 7(e); and

• Mr Greg De Ross - Resolution 7(f),

all of whom, are Directors, and are related parties of the Company.

The nature of the financial benefit is the grant of the number of Options set out above for nil consideration, exercisable at $0.10 and an expiry date of 23 November 2015. The Options will vest immediately.

If the Company’s Shares are trading on the ASX at a higher price than the exercise price of the Options at the time of exercise, the effect will be to give an

immediate financial benefit to the Directors at the time the Options are exercised.

Where a Director is participating in one of Resolutions 7 (a) to (f) they do not make a recommendation because of their personal interest in the subject matter of those Resolutions.

All other information reasonably required by Shareholders for the purposes of Chapter 2E of the Corporations Act is set out below.

Additional information regarding Resolutions 7 (a) – (f) for the purpose of Chapter 2E of the Corporations Act

Reasons for grant of Options

The Company has been fortunate to attract a highly regarded management team, and given the relatively small size of the Company it is important that the Company retain its key people and, in particular, its leadership.

The grant of the Options has been chosen to retain those key people, provide an incentive to the Directors to increase shareholder wealth by increasing the price of the Company’s Shares and to enable the Directors to participate in that wealth increase.

Dilution effect on existing Shareholders’ interests If the Options to be granted pursuant to Resolutions 7 (a) – (f) are exercised, the effect will be to dilute the interests of existing shareholders. The table below sets out the impact on the number of Shares and Options on an undiluted and fully diluted basis:

	Number of Shares
Shares on issue at date of Notice	114,679,032
Add: Options already on issue (upon exercise)	9.700,000
Totalpotential issued capital	124,379,032
Options to begranted to Directors	3,250,000
Potential issued capital fully diluted	127,629,032
Dilution effect(undiluted capital)	2.83%
Dilution effect (fully diluted capital)	2.55%

If all the Options are exercised, a further 3,250,000 Shares will be on issue and $325,000 (based on an exercise price of $0.10 per Share) will be raised by the Company.

Trading History

The market price of the Company’s Shares during the period the Options are issued and unexercised may be one factor in determining whether or not the Directors

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Notice of Annual General Meeting 23 November 2012

will exercise the Options. The Company’s Shares may be trading on the ASX at a price which is higher than the exercise price of the Options. In these circumstances, if the Directors then sell the Shares arising from the exercise of the Options, they would realise an immediate profit.

As at 4 October 2012, the Company’s closing share price was $0.042. Over the twelve months immediately preceding this date, the Company’s lowest and highest share prices traded on the ASX were:

	Lowest	$0.040
	Highest	$0.135
	Last	$0.042

Opportunity costs and taxation consequences to the Company

A-IFRS requires the Company to expense options granted to directors with the expense being transferred to an Options Expense Reserve. The amount to be expensed and transferred to the Options Expense Reserve in relation to Resolutions 7 (a) – (f) is estimated at $25,350 for the financial year ended 30 June 2013. This amount will be transferred from the Option Expense Reserve to Issued Capital based on the exercise of the Options. If the Options lapse, the amount will remain as Options Expense Reserve.

Valuation of Options

The Options to be granted have been valued using the Binomial Methodology, as recommended in the Accounting Standard AASB 2 “Share Based Payments”.

The Binomial methodology calculated the average value of the Options in relation to Resolutions 7 (a) – (f) at $0.0078 with a total value of $25,350. The value for each Director is as follows:

Director	Value
Ms Wendy Corbett	$3,510
Mr Greg Jones	$3,510
Mr Steve Gemell	$3,510
Mr Ivo Polovineo	$3,510
Mr Adrian Critchlow	$3,510
Mr Greg De Ross	$7,800
Total	$25,350

This valuation assumes an exercise price of $0.10. In calculating the Option valuation the following inputs were used in the Binomial methodology:

Exercise Price	$0.10
Expected Life	3 years
Volatility	60.44%
Risk free rate (3 year Government Bond Rate)	2.38%
Base share price	$0.042

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Directors Remuneration and Equity holdings in the Company

In addition to the Options proposed to be granted, the Chairman receives Directors fees of $54,000 per annum and Non-Executive Directors receive $36,000 per annum.

The current Share and Option holdings of the Directors and their associates are as follows:

Director	Shares Directly and Indirectly Held	Options
Ms W Corbett	75,000	450,000
Mr G Jones	698,975	450,000
Mr S Gemell	-	450,000
Mr I Polovineo	-	450,000
Mr A Critchlow	22,843,106	-
Mr G De Ross	45,000	1,800,000

Further Information

Apart from the information set out in this Explanatory Memorandum there is no other information that is known to the Company or any of its directors that is reasonably required by shareholders to decide whether or not it is in the Company’s interests to pass Resolutions 7 (a) – (f).

b) Information required by the ASX Listing Rules for Resolutions 7 (a) – (f)

Listing Rule 10.11 requires shareholder approval for an issue of securities to a related party. Approval is therefore being sought for the proposed grant of Options to Directors.

Listing Rule 10.13 requires this Notice of Meeting to include the following specified information in relation to the Options to be granted to Directors:

• The maximum number of securities to be issued to the Directors is 3,250,000 Options and is allocated as follows:

Director	Number of Options
Ms Wendy Corbett	450,000
Mr Greg Jones	450,000
Mr Steve Gemell	450,000
Mr Ivo Polovineo	450,000
Mr Adrian Critchlow	450,000
Mr GregDe Ross	1,000,000

• The date by which the Company will issue the securities, which must be no later than 1 month after the meeting – the Company intends to grant the Options to Directors as soon as practicable after the date of the Annual General Meeting but in any event, no later than 23rd December 2012.

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23 November 2012

• The issue price of the securities - the Options are issued for nil consideration with an exercise price of $0.10 and expiry date of 23 November 2015.

• A voting exclusion statement – see “Voting Exclusion Statement” under Resolutions 7 (a) – (f) in the Notice of Meeting.

• The intended use of funds on the exercise of Options – the funds will be to increase working capital.

The full terms and conditions attaching to the grant of Options are contained in Annexure A to this Notice of Meeting.

In accordance with ASX Listing Rule 6.16, in the event of any reconstruction (including consolidation, subdivision, reduction or return) of the issued capital of the Company, the number and exercise price of options will be reconstructed in the same proportion as the issued capital of the Company is reconstructed and in a manner which will not result in any additional benefits being conferred on option holders which are not conferred on shareholders (subject to the same provisions with respect to round off of entitlements as sanctioned by the meeting of shareholders at which the reconstruction of capital is approved), but in all other respects the terms of exercise will remain unchanged.

The terms of the Options, including provisions relating to any reorganisation or reconstruction of capital, shall be in accordance with the Listing Rules of ASX.

In accordance with ASX Listing 6.19 it is noted that there are no participating rights or entitlements inherent in the Options to be considered at the meeting, and the other options on issue, and that the holder of Options will not be entitled to participate in new issues of capital which may be offered to shareholders during the currency of the Options, and the option holder can only participate in new issues by exercising the option.

In accordance with ASX Listing Rule 6.22.2, a pro rata issue to the holders of the underlying securities may reduce the exercise price of the Option in accordance with the formula set out in this Listing Rule.

With regard to Resolutions 7 (a) to (f), and in accordance with ASX Listing Rule 7.2, Exception 14, if approval is given under listing rule 10.11, approval is not required under listing rule 7.1.

In accordance with the Corporations Act and the Company’s Constitution, in order for the resolution to be effective it must be passed as an ordinary resolution. This means that the resolution must be passed by shareholders who are the registered holders of more than 50% of the Shares and who attend the meeting (either in person or by proxy) and are entitled to vote on the resolution.

The non-participating Directors in each of Resolutions 7 (a) to (f) recommend that shareholders vote in favour of Resolution 7 (a) to (f) as the grant of Options is designed to incentivise the Directors by participating in

the future growth and prosperity of the Company through share ownership and in recognition of the contribution made to the Company by the Directors and their ongoing responsibility.

Where a Director is participating in one of Resolutions 7 (a) to (f) they do not make a recommendation in respect of that resolution due to their personal interest in the matter being considered.

SPECIAL BUSINESS

Resolution 8 - Issue of Shares up to 10% of the Company’s Issued Capital

Listing Rule 7.1A enables an eligible entity to seek shareholder approval to issue Equity Securities up to 10% of its issued share capital over a 12-month period commencing from the Annual General Meeting where shareholder approval is received. The 10% issue capacity allowed under Listing Rule 7.1A (“7.1A 10% Capacity”) is in addition to the Company’s 15% annual placement capacity under Listing Rule 7.1.

An eligible entity for the purposes of Listing Rule 7.1A is an entity that is not included in the S&P/ASX 300 Index and has a market capitalisation of $300 million or less. The Company is an eligible entity.

The Company is now seeking shareholder approval by way of a special resolution to have the ability to issue Equity Securities under the 7.1A 10% Capacity.

The exact number of Equity Securities to be issued under the 7.1A 10% Capacity will be determined in accordance with the formula prescribed in Listing Rule 7.1A.2.

The Company may use the 7.1A 10% Capacity to acquire new resource assets or investments to carry out further exploration on the Company’s tenements, as part of the consideration for the acquisition of further tenements and/or for the working capital needs of the Company.

Resolution 8 is a special resolution and therefore requires approval of 75% of the votes cast by Shareholders present and eligible to vote (in person, by proxy, by attorney or, in the case of a corporate Shareholder, by a corporate representative).

a) Listing Rule 7.1A

Shareholder approval required

The ability to issue Equity Securities under Listing Rule 7.1A is subject to shareholder approval by way of special resolution at an Annual General Meeting.

Class of equity securities issued

Any Equity Securities issued under the 7.1A 10% Capacity must be in the same class as an existing quoted class of Equity Securities of the Company.

The Company, as at the date of the Notice, has on issue one class of Equity Securities - fully paid ordinary shares.

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Notice of Annual General Meeting

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23 November 2012

Calculating 7.1A 10% Capacity

Listing Rule 7.1A.2 provides that eligible entities which have obtained shareholder approval at an Annual General Meeting may issue or agree to issue during the period of the approval a number of Equity Securities calculated in accordance with the following formula:

(AxD)-E

Where:

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

• Plus the number of fully paid shares issued in the 12 months under an exception in Listing Rule 7.2;

• Plus the number of partly paid shares that became fully paid in the 12 months;

• 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;

• Less the number of fully paid shares cancelled in the 12 months.

A has the same meaning in Listing Rule 7.1 when calculating an entity’s 15% issue capacity.

• D is 10%.

E is the number of Equity Securities issued or agreed to be issued under Listing Rule 7.1.A.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.

Effect of Listing Rule 7.1 with 7.1A

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

At the date of this Notice, the Company has on issue 114,679,032 shares and therefore will have a capacity to issue:

• (i) 17,201,855 Equity Securities under Listing Rule 7.1; and

• (ii) Subject to shareholder approval being sought under Resolution 8, 11,467,903 Equity Securities under Listing Rule 7.1A

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

Minimum Issue Price

The issue price of Equity Securities issued under Listing Rule 7.1A must be not less than 75% of the VWAP of Equity Securities in the same class calculated over the 15 Trading Days immediately before:

• The date on which the price at which the Equity Securities are to be issued is agreed; or

• If the Equity Securities are not issued within 5 Trading Days of the date referred to above, the date on which the Equity Securities are issued.

Approval Validity Period

Shareholder approval of the 7.1A 10% Capacity under Listing Rule 7.1A is valid from the date of the Annual General Meeting at which the approval is obtained and expires on the earlier to occur of:

• The date that is 12 months after the date of the Annual General Meeting at which the approved is obtained; or

• The date of the approval by shareholders of a transaction under Listing Rules 11.1.2 (a significant change to the nature or scale of activities) or 11.2 (disposal of main undertaking).

• b) Specific Information required by Listing Rule 7.3A

The Equity Securities will be issued at an issue price of not less than 75% of the VWAP for the Company’s Equity Securities over the 15 Trading Days immediately before: (i) The date on which the price at which the Equity Securities are to be issued is agreed; or

• (ii) If the Equity Securities are not issued within 5 Trading Days of the date in paragraph (i) above, the date on which the Equity Securities are issued.

If Resolution 8 is approved by Shareholders and the Company issues Equity Securities under the 7.1A 10% Capacity, the existing Shareholders’ voting power in the Company will be diluted as shown in the table below. There is a risk that:

• (i) The market price for the Company’s Equity Securities may be significantly lower on the date of the issue of the Equity Securities than on the date of the Meeting; and

• (ii) The Equity 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 or the Equity Securities are issued as part of consideration for the acquisition of a new asset, which may have an effect on the amount of funds raised by the issue of the Equity Securities.

The following table shows the dilution of existing Shareholders on the basis of the current market price of Shares and the current number of ordinary securities for variable ‘A’ calculated in accordance with the formula in Listing Rule 7.1A(2) as at the date of this Notice.

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Notice of Annual General Meeting 23 November 2012

The table also shows:

• Two examples where variable ‘A’ has increased, by 50% and 100%. Variable ‘A’ is based on the number of ordinary securities the Company has on issue. The number of ordinary securities on issue may increase as a result of issues of ordinary securities that do not require Shareholder approval (for example, a pro rata entitlements issue or scrip issued under a takeover offer) or specific placements under Listing Rule 7.1 that are approved at a future Shareholders’ meeting; and

• Two examples of where the issue price of ordinary securities has decreased by 50% and increased by 100% as against the current market price.

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the issue of the Equity 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 or Listing Rule 11.2 (disposal of main undertaking).

The Company may seek to issue the Equity Securities for the following purposes:

• Non-cash consideration for the acquisition of new resources assets and investments. In such circumstances the Company will provide a valuation of the non-cash consideration as required by Listing Rule 7.1A.3; or

• Cash consideration. In such circumstances, the Company intends to use the funds raised towards an acquisition of new assets or

Variable ‘A’ in Listing Rule 7.1A2		Issue Price Assumptions	Issue Price Assumptions	Issue Price Assumptions
		Less: 50% $0.0215	Base $0.0430	Plus: 100% $0.0860
Current 114,679,032	10% issue Funds raised	11,467,903 $246,560	11,467,903 $493,120	11,467,903 $986,240
Plus 50% 172,018,548	10% issue Funds raised	17,201,855 $369,840	17,201,855 $739,680	17,201,855 $1,479,360
Plus 100% 229,358,064	10% issue Funds raised	22,935,806 $493,120	22,935,806 $986,240	22,935,806 $1,972,479

The table has been prepared on the following assumptions

• The Company issues the maximum number of Equity Securities available under the 7.1A 10% Capacity.

• The 10% voting dilution reflects the aggregate percentage dilution against the issued share capital at the time of issue. This is why the voting dilution is shown in each example as 10%.

• The table does not show an example of dilution that may be caused to a particular shareholder by reason of placements under the 7.1A 10% Capacity, based on that Shareholder’s holding at the date of the Meeting.

• The table shows only the effect of issues of Equity Securities under Listing Rule 7.1A and not under the 15% placement capacity under Listing Rule 7.1.

• The issue price is $0.043 being the closing price of the Shares on ASX on 28 September 2012.

The Company will only issue and allot the Equity Securities during 12-months following the approval of Resolution 8. The approval under Resolution 8 for

• investments (including expenses associated with such acquisition), continued exploration and feasibility study expenditure on the Company’s current assets and/or general working capital.

The Company will comply with the disclosure obligations under Listing Rules 7.1A (4) and 3.10.5A upon issue of any Equity Securities.

The Company’s allocation policy is dependent on the prevailing market conditions at the time of any proposed issue pursuant to the 7.1A 10% Capacity. The identity of the allottees of Equity Securities will be determined on a case-by-case basis having regard to the factors including but not limited to the following:

• The methods of raising funds that are available to the Company, including but not limited to, rights issues or other issues in which existing securities holders can participate;

• The effect of the issue of the Equity Securities on the control of the Company;

• The financial situation and solvency of the Company; and

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

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Notice of Annual General Meeting

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23 November 2012

The allottees under the 7.1A 10% Capacity have not been determined as at the date of this Notice but may include existing substantial Shareholders and/or new Shareholders who are not related parties or associates of a related party of the Company.

Further, if the Company is successful in acquiring new resources assets or investments, it is likely that the allottees under the 7.1A 10% Capacity will be the vendors of the new resources assets of investments.

The following table shows details of all issues of Equity Securities in the 12 – months preceding the

Annual General Meeting and other information required under Listing Rule 7.3A.

The Company has not previously obtained Shareholder approval under Listing Rule 7.1A. Voting exclusion statement is included in this Notice of Meeting. At the date of this Notice, the Company has not approached any particular existing Shareholder or security holder or an identifiable class of existing security holder to participate in the issue of the Equity Securities. No existing Shareholder’s votes will therefore be excluded under the voting exclusion in the Notice

Date	Details	Consideration	Number	Class	Issue Price	Market	- Discount/ + Premium
01-Feb-12	Shares issued for purchase of tenements - Nowa Nowa	Purchase of tenement	1,000,000	Fully paid ordinary	$0.068	$0.111	-39%
05-Jul-12	Rights issue (2 for 3 as at 30 May 2012)	Cash - develop Nowa Nowa	23,028,507	Fully paid ordinary	$0.055	$0.043	+28%
27-Sep-12	Shortfall placement	Cash - develop Nowa Nowa	22,843,106	Fully paid ordinary	$0.055	$0.043	+28%

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Notice of Annual General Meeting 23 November 2012

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ANNEXURE A

Terms of Options - Resolutions 7(a) – 7(f)

• (a) Each Option entitles the holder to one Share in the capital of the Company.

• (b) The Options are to be exercised by completing an Option exercise form and providing payment for the number of Shares in respect of which the Options are exercised, to the registered office of the Company.

• (c) The exercise price of the Options is $0.10 each and the Options expire 23 November 2015 ( Expiry Date ).

• (d) The Options are not transferable.

• (e) All Shares issued upon exercise of Options will rank pari passu in any respects with the Company’s then issued Shares. The Company will apply for Official Quotation by the ASX of all Shares issued upon exercise of Options.

• (f) There are no participating rights and entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options without exercising their Options. However, the Company will ensure that option holders will be allowed ten business days’ notice to convert their Options to Shares to participate in an entitlement issue on the same basis as Shareholders.

• (g) If any takeover bid (including by way of scheme of arrangement or otherwise) is publicly announced in respect of the Company, then the following provisions apply in relation to the takeover bid:

• (i) the Company must promptly give written notice of the takeover bid to the option holder whereupon all Options (which have not lapsed or expired), notwithstanding anything to the contrary, must be exercised at any time prior to the expiry of the later of:

  • A. 60 days after receiving such notice; and

  • B. the date that a takeover bid (which is recommended for acceptance by the Board) becomes unconditional,

• ("Takeover Exercise Period") or, if applicable, within the further seven day period referred to in (iv) below.

• (ii) The dates referred to in paragraph (g)(i)(A) and (B) above only apply where they occur before the Expiry Date. For the avoidance of doubt, where the Expiry Date occurs before a date referred to in (g)(i)(A) or (B), the Options must be exercised on or before the Expiry Date.

• (iii) If, during the Takeover Exercise Period, the person making the takeover bid ("bidder") offers to grant options in the capital of the bidder ("Replacement Options") to the option holder (and, for the avoidance of doubt, this does not obligate the Company in any way to procure such an offer from the bidder) in consideration for the cancellation or acquisition of the Options, the option holder may, in their discretion, accept such Replacement Options instead of exercising their Options.

  • accepted, the option holder has (other than in the case of a scheme of arrangement) a further seven days' grace after the expiry of the Takeover Exercise Period within which to exercise their Options (Grace Period), whereupon unexercised Options will lapse. For the avoidance of doubt, where the Expiry Date occurs before the end of the Grace Period, the Options must be exercised on or before the Expiry Date. In the case of a scheme of arrangement, the Options will lapse at the end of the Takeover Exercise Period.

• (v) If the takeover bid lapses or is withdrawn or closes without being recommended for acceptance by the Board, whether the bid is conditional or unconditional, then the provisions of all the paragraphs hereof will revive in respect of any unexercised Options which Options will remain on foot.

• (h) In the event of any reconstruction (including consolidation, sub-division, reduction or return) of the issued capital of the Company prior to the Expiry Date of the Options, the number of Options or the exercise price of the Options, or both, shall be reconstructed in accordance with the Listing Rules.

• (i) Adjustment for bonus issues

If the Company makes a bonus issue of Shares or other securities to existing Shareholders (other than an issue in lieu of, or in satisfaction of, dividends or by way of dividend reinvestment):

• (i) the number of Shares which must be issued on the exercise of an Option will be increased by the number of Shares which the option holder would have received if the option holder had exercised the Option before the record date for the bonus issue; and

• (ii) no change will be made to the exercise price of the Options.

• (j) Adjustment for pro rata issue

If the Company makes a pro rata issue of Shares or other securities to existing Shareholders (other than a bonus issue or an issue in lieu of in satisfaction of dividends or by way of dividend reinvestment) the exercise price of an Option will be reduced according to the following formula:

New exercise price = O - E [P-(S+D)]

N+1

O = the old Exercise Price of the Option.

E = the number of underlying Shares into which one Option is exercisable.

P = average market price per Share weighted by reference to volume of the underlying Shares during the five trading days ending on the day before the exrights date or ex entitlements date.

S = the subscription price of a Share under the pro rata issue.

D = the dividend due but not yet paid on the existing underlying Shares (except those to be issued under the pro rata issue).

N = the number of Shares with rights or entitlements that must be held to receive a right to one new share.

• (iv) If no offer of Replacement Options is made during the Takeover Exercise Period and

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