EMMERSON RESOURCES LIMITED — AGM Information 2012

Oct 24, 2012

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ABN 53 117 086 745

NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS

EXPLANATORY MEMORANDUM

AND

PROXY FORM

4:00 PM (CST) TUESDAY 27 NOVEMBER 2012

AT

TENNANT CREEK BATTERY HILL AND MINING CENTRE PEKO ROAD, TENNANT CREEK, NT

This Notice of Annual General Meeting, Explanatory Memorandum and Proxy Form should be read in its entirety. If shareholders are in doubt as to how they should vote, they should seek advice from their accountant, solicitor or other professional adviser without delay.

NOTICE OF MEETING EMMERSON RESOURCES LIMITED

Notice is hereby given that the Annual General Meeting of Emmerson Resources Limited (“Company” or “Emmerson”) will be held at Tennant Creek Battery Hill and Mining Centre, Peko Road, Tennant Creek, Northern Territory on Tuesday 27 November 2012 commencing at 4:00 pm (CST) for the purpose of transacting the following business:

AGENDA

ANNUAL ACCOUNTS

To receive and consider the Annual Financial Report, Directors' Report, Directors' Declaration and Audit Report for the year ended 30 June 2012. The Annual Financial Report is available at the website of the Company (www.emmersonresources.com.au) under “Shareholders”, “Annual Reports”.

RESOLUTION 1 - RE-ELECTION OF MR ANDREW MCILWAIN

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

" That Mr Andrew McIlwain who retires by rotation in accordance with the Company's Constitution and, being eligible, offers himself for re-election, be re-elected as a Director of the Company. ”

RESOLUTION 2 - RE-ELECTION OF MR SIMON ANDREW

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

" That Mr Simon Andrew who retires by rotation in accordance with the Company's Constitution and, being eligible, offers himself for re-election, be re-elected as a Director of the Company. ”

RESOLUTION 3 - ADOPTION OF REMUNERATION REPORT

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

“That the Remuneration Report (included from page 21 to page 29 of the Directors Report of the Company’s 2012 Annual Report) for the year ended 30 June 2012 be adopted.”

Note that the vote on this item is advisory only and does not bind the Directors or the Company.

In accordance with section 250R of the Corporations Act, a vote on this Resolution must not be cast by, or on behalf of, a member of the Key Management Personnel whose remuneration details are included in the remuneration report, or a Closely Related Party of such member. However, a vote may be cast by such person if the person is acting as proxy and the proxy form specifies how the proxy is to vote, and the vote is not cast on behalf of a person who is otherwise excluded from voting on this Resolution as described above; or the person is the Chair voting an undirected proxy which expressly authorises the Chair to vote the proxy on a resolution connected with the remuneration of a member of the Key Management Personnel.

RESOLUTION 4 - APPROVAL OF PERFORMANCE RIGHTS PLAN

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

"That, for the purposes of Exception 9 of Rule 7.2 of the ASX Listing Rules and for all other purposes, approval is given for the Company to administer and issue securities under its Performance Rights Plan as an exception to Listing Rule 7.1 and on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice of Meeting."

In accordance with ASX Listing Rule 7.2, the Company will disregard any votes cast on Resolution 4 by any person who may participate in the proposed issue and any of their associates who might obtain a benefit, except a benefit solely in the capacity of a security holder, if Resolution 4 is passed. However the Company need not disregard a vote if it is cast by a person as a proxy appointed by writing that specifies how the proxy is to vote on Resolution 4; and it is not cast on behalf of a person excluded from voting or their associates.

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NOTICE OF MEETING EMMERSON RESOURCES LIMITED

RESOLUTION 5 - ISSUE OF RIGHTS TO MR ROBERT BILLS

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

"That for the purposes of ASX Listing Rule 10.14 and Chapter 2E of the Corporations Act and for all other purposes, the Company approve and authorise the grant and issue to Mr Robert Bills a total of 2,000,000 Performance Rights and the issue of fully paid ordinary shares in the capital of the Company pursuant to those Performance Rights under the Company’s Performance Rights Plan on the terms and conditions set out in Annexure A to the Explanatory Memorandum accompanying this Notice of Meeting."

In accordance with ASX Listing Rule 10.14 and section 224 of the Corporations Act, the Company will disregard any votes cast on Resolution 5 by or on behalf of Robert Bills or an associate of Robert Bills. However, a vote on Resolution 5 may be cast if it is cast by a person as a proxy appointed by writing that specifies how the proxy is to vote on Resolution 5; and it is not cast on behalf of Robert Bills or an associate of Robert Bills.

RESOLUTION 6 - APPROVAL OF 10% PLACEMENT FACILITY

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

"That, pursuant to and in accordance with Listing Rule 7.1A and for all other purposes, shareholders approve the issue of Equity Securities up to 10% of the issued capital of the Company (at the time of the issue) calculated in accordance with the formula prescribed in Listing Rule 7.1A.2 and on the terms and conditions in the Explanatory Memorandum."

The Company will disregard any votes cast on this Resolution by a person (and any associates of such a person) who may participate in the 10% Placement Facility and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of Shares, if this Resolution is passed. However, the Company will not disregard a vote if it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or it is cast by the Chairman 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.

OTHER BUSINESS

To transact any other business that may be legally brought before the meeting.

By order of the Board

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TREVOR VERRAN Company Secretary 25 October 2012

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EXPLANATORY MEMORANDUM EMMERSON RESOURCES LIMITED

INTRODUCTION

This Explanatory Memorandum has been prepared for the information of shareholders of Emmerson Resources Limited (" Company ") in connection with the business to be conducted at the Annual General Meeting to be held at Tennant Creek Battery Hill and Mining Centre, Peko Road, Tennant Creek, Northern Territory on Tuesday 27 November 2012 commencing at 4:00 pm (CST).

This Explanatory Memorandum should be read in conjunction with the accompanying Notice of Meeting.

This Explanatory Memorandum should be read in its entirety. If shareholders are in doubt as to how they should vote, they should seek advice from their accountant, solicitor or other professional adviser prior to voting.

ANNUAL ACCOUNTS

During this item there will be an opportunity for shareholders to ask questions and comment on the Financial Report, Directors' Report, Directors' Declaration and Audit Report for the year ended 30 June 2012. No resolution will be required to be passed on this matter.

RESOLUTION 1 - RE-ELECTION OF MR ANDREW MCILWAIN

The Company’s Constitution requires that at the Annual General Meeting, one-third of the Directors shall retire from office. In accordance with this requirement Mr McIlwain retires and being eligible, has offered himself for re-election as a Director.

Mr McIlwain was appointed as a Director of the Company on 26 April 2007 and is the independent NonExecutive Chairman of the Company. Details of Mr McIlwain background and experience are set out in the Annual Report.

The Board (excluding Mr McIlwain) recommends that shareholders vote in favour of Resolution 1. The Chairman of the meeting intends to vote undirected proxies in favour of Resolution 1.

RESOLUTION 2 - RE-ELECTION OF MR SIMON ANDREW

The Company’s Constitution requires that at the Annual General Meeting, one-third of the Directors shall retire from office. In accordance with this requirement Mr Andrew retires and being eligible, has offered himself for re-election as a Director.

Mr Andrew was appointed as a Director of the Company on 21 July 2006 and is a Non-Executive Director of the Company. Details of Mr Andrew background and experience are set out in the Annual Report.

The Board (excluding Mr Andrew) recommends that shareholders vote in favour of Resolution 2. The Chairman of the meeting intends to vote undirected proxies in favour of Resolution 2.

RESOLUTION 3 - ADOPTION OF REMUNERATION REPORT

Resolution 3 seeks shareholder approval for the adoption of the Remuneration Report for the year ended 30 June 2012.

During this item there will be an opportunity for shareholders to ask questions and comment about the Remuneration Report for the year ended 30 June 2012 which is included from page 21 to page 29 of the Directors Report of the Company’s 2012 Annual Report. The vote on the proposed resolution is advisory only and will not bind the Directors or the Company.

However recent changes to the Corporations Act give shareholders the opportunity to remove the Board if the Remuneration Report receives a 'no' vote of 25% or more at two consecutive annual general meetings (Two Strikes Rule).

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EXPLANATORY MEMORANDUM EMMERSON RESOURCES LIMITED

Under the Two Strikes Rule, where a resolution on the Remuneration Report receives a 'no' vote of 25% or more at two consecutive annual general meetings, the Company will be required to put to shareholders at the second annual general meeting a resolution on whether another meeting should be held (within 90 days) at which all Directors (other than the managing director) who were in office at the date of approval of the applicable Directors' Report must stand for re-election.

In summary, if the Remuneration Report receives a 'no' vote of 25% or more at this Meeting, shareholders should be aware that if there is a 'no' vote of 25% or more at the next annual general meeting the consequences are that it may result in the re-election of the Board.

The Chairman intends to exercise all undirected proxies in favour of Resolution 3. If the Chairman of the Meeting is appointed as your proxy and you have not specify the way the Chairman is to vote on Resolution 3, by signing and returning the Proxy Form, the shareholder is considered to have provided the Chairman with an express authorisation for the Chairman to vote the proxy in accordance with the Chairman's intention.

RESOLUTION 4 - APPROVAL OF PERFORMANCE RIGHTS PLAN

The Company has established a Performance Rights Plan (“Plan”) which was last approved at the annual general meeting held on 25 November 2009. Resolution 4 is a resolution which seeks shareholder approval in accordance with Exception 9 of Rule 7.2 of the ASX Listing Rules for the Company to issue securities under the Plan without prior shareholder approval and in reliance on the exception to Listing Rule 7.1.

Listing Rule 7.1 places certain restrictions on the extent to which a listed company may issue certain securities, including rights to shares. The effect is that shareholder approval is required before the company may issue securities representing more than 15% of the capital of the company within a 12 month period. However, certain issues are exempt from the restrictions of Listing Rule 7.1 and are effectively disregarded for the purposes of determining the number of securities which a company may issue within a 12 month period.

Exempt issues include an issue of securities to persons participating in an employee incentive scheme where shareholders have approved the issue of securities under the scheme as an exemption from Listing Rule 7.1. Shareholder approval must be given in a general meeting held not more than 3 years before the date of issue when the notice of meeting contains or is accompanied by certain prescribed information (set out below) (Exception 9 of Listing Rule 7.2).

In order to take advantage of the exemption from Listing Rule 7.1 and allow the Company flexibility to issue securities, shareholders are requested to approve the issue of securities under the Plan as an exemption from Listing Rule 7.1. This approval will be effective for a period of 3 years from the date of the Resolution. It should be noted that Resolution 4 does not approve the issue of any Performance Rights to any Director of the Company. Performance Rights cannot be granted to Directors or associates of the Company unless prior approval of shareholders is obtained in accordance with the Listing Rules.

The main purposes of the Plan is to provide the Company with a remuneration mechanism, through Share ownership, to motivate and reward the performance of employees (including Directors) in achieving specified vesting conditions within a specified period. The Board will ensure that the vesting conditions attached to the securities issued pursuant to the Plan are aligned with the successful growth of the Company’s business activities. Under the Company's current circumstances the Directors consider that the incentives to employees which are represented by the Performance Rights are a cost effective and efficient incentive for the Company as opposed to alternative forms of incentive such as cash bonuses or increased remuneration.

All currently issued rights vest 50% after 2 years, 25% after 3 years with the balance after 4 years.

The Directors do not consider that there are any opportunity costs to the Company or benefits foregone by the Company in granting the Performance Rights under the Plan.

Application will not be made for official quotation on the ASX of the Performance Rights.

In accordance with Exception 9 of Listing Rule 7.2, shareholders are provided with the following information.

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EXPLANATORY MEMORANDUM EMMERSON RESOURCES LIMITED

A summary of the significant terms of the Performance Rights Plan are as follows:

• (a) The Plan is open to any full time or part time employee or consultant of the Company (including its subsidiaries) who is declared by the Board to be eligible to receive grants of Performance Rights under the Plan.

• (b) A Performance Right is an entitlement to a Share subject to satisfaction of achievement criteria and the corresponding obligation of the Company to provide the Share.

• (c) A Performance Right granted under the Plan will not vest until the vesting conditions imposed by the Board are satisfied. If the vesting conditions are not satisfied, the Performance Rights will lapse and the holder will have no entitlement to any Shares.

• (d) The Board may, at its absolute discretion and only where a participant continues to satisfy any relevant conditions imposed by the Board, grant Performance Rights to participants with effect from the date determined by the Board, upon the terms set out in the Plan and upon such additional terms and vesting conditions as the Board determines.

• (e) Unless the Board determines otherwise, participants will not be liable to make payment for Performance Rights granted to them.

• (f) Performance Rights are transferable only with consent of the Board.

• (g) The exercise of any vested Performance Right will be effected in the form and manner determined by the Board, and, if an amount is payable on vesting of the Performance Right, will be accompanied by payment of that amount, unless the manner of payment of that amount is otherwise provided for by the Board.

• (h) The Company must issue to or procure the transfer to the participant the number of Shares in respect of which vested Performance Rights are exercised, within a reasonable time after a Performance Right is exercised.

• (i) All Shares allotted under the Plan rank equally with other Shares on issue at the time those Shares are provided and carry the same rights and entitlements as those conferred by other Shares.

• (j) Shares issued on exercise of Performance Rights are subject to restrictions on transfer, unless the participant requests that the Company waives those restrictions and that request is approved by the Company.

• (k) The Board may, in its absolute discretion, determine that all or a specified number of a holder’s Performance Rights automatically vest in the event of:

• (i) a takeover bid in respect of the Company under Chapter 6 of the Corporations Act is made; (ii) a Court orders a meeting to be held in relation to a proposed compromise or arrangement for the purposes of or in connection with a scheme for the reconstruction of the Company or its amalgamation with any other company or companies;

• (iii) any person becomes bound or entitled to acquire shares in the Company under:

  • (A) section 414 of the Corporations Act; or

  • (B) Chapter 6A of the Corporations Act;

• (iv) the Company passes a resolution for voluntary winding up; or

• (v) an order is made for the compulsory winding up of the Company, and such a determination shall be notified to the holder in writing. If no determination is made or if the Board determines that some or all of a holder’s Performance Rights do not vest, those Performance Rights shall automatically lapse.

• (l) If Shares are issued pro-rata to shareholders generally by way of bonus issue (other than an issue in lieu of dividends or by way of dividend reinvestment) involving capitalisation or reserves or distributable profits, the number of Performance Rights to which each holder is entitled, or any amount payable on vesting of the Performance Rights, or both as appropriate, will be adjusted in the manner determined by the Board to ensure that no advantage accrues to the holder as a result of the bonus issue and in any event in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the bonus issue.

• (m) In the event of any reorganisation (including consolidation, subdivision, reduction or return) of the issued capital of the Company, the number of Performance Rights to which each Participant is entitled, or any amount payable on vesting of the Performance Rights, or both as appropriate, will be adjusted in the manner determined by the Board to ensure that no advantage or disadvantage accrues to the holder as a result of such corporate actions and in any event in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reorganisation.

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EXPLANATORY MEMORANDUM EMMERSON RESOURCES LIMITED

• (n) Subject to paragraphs (l) and (m), there are no participating rights or entitlements inherent in the Performance Rights and holders will not be entitled to participate in new issues of capital offered to shareholders during the currency of the Performance Rights unless the vesting conditions have been satisfied and the relevant Shares have been issued prior to the records date for determining entitlements. However, the Company will give notice to the holders of any new issues of capital prior to the records date for determining entitlements.

• (o) The Board may at any time by resolution amend all or any of the provisions of the Plan, or the terms or conditions of any Performance Right granted under the Plan.

• (p) Without the consent of the participant, no amendment may be made to the terms of any granted Performance Right which reduces the rights of the participant in respect of that Performance Right, other than an amendment:

• (i) for the purpose of complying with or conforming to present or future State or Commonwealth legislation governing or regulating the maintenance or operation of the Plan or like plans;

• (ii) to correct any manifest error or mistake; or

• (iii) to take into consideration possible adverse tax implications in respect of the Plan arising from, amongst others, adverse rulings from the Commissioner of Taxation, changes to tax legislation (including an official announcement by the Commonwealth of Australia) and/or change in the interpretation of tax legislation by a court of competent jurisdiction.

• (q) The holder of Performance Rights does not have any entitlement to vote at a general meeting of shareholders.

Performance Rights issued under the Plan in accordance with Exception 9 of Listing Rule 7.2 since the date of the last approval:

Grant date 25/11/2009 25/11/2009 25/11/2009 01/09/2010 01/09/2010 01/09/2010 25/11/2011 25/11/2011 25/11/2011 Total	Number Vesting date Expiry date Exercise price 512,500 25/11/2011 25/11/2014 Nil 256,250 25/11/2012 25/11/2014 Nil 256,250 25/11/2013 25/11/2014 Nil 512,500 01/09/2012 01/09/2015 Nil 256,250 01/09/2013 01/09/2015 Nil 256,250 01/09/2014 01/09/2015 Nil 437,500 25/11/2013 25/11/2016 Nil 218,750 25/11/2014 25/11/2016 Nil 218,750 25/11/2015 25/11/2016 Nil 2,925,000

RESOLUTION 5 - ISSUE OF RIGHTS TO MR ROBERT BILLS

Resolution 5 seeks shareholder approval to grant and issue to Mr Robert Bills a total of 2,000,000 Performance Rights (Rights) and the issue of fully paid ordinary shares in the capital of the Company pursuant to those Rights under the Company’s Performance Rights Plan on the terms and conditions set out in Annexure A to the Explanatory Memorandum accompanying this Notice of Meeting.

These Rights will vest under the following terms:

• i) 25% (500,000 Rights) vest 1 year from date of grant;

• ii) A further 25% (500,000 Rights) vest 2 years from date of grant;

• iii) A further 25% (500,000 Rights) vest 3 years from date of grant; and

• iv) The remaining 25% (500,000 Rights) vest 4 years from date of grant.

No cash consideration will be payable by a Mr Bills to acquire Performance Rights under the Performance Rights Plan. Further, no cash consideration (exercise price) will be payable by Mr Bills for the acquisition of Shares upon exercise of a Performance Right.

Shareholder approval for the grant and issue of the Rights the subject of Resolution 5 is required by ASX Listing Rule 10.14 and Chapter 2E of the Corporations Act.

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EXPLANATORY MEMORANDUM EMMERSON RESOURCES LIMITED

Purpose of the Rights

The granting of Rights to Mr Bills is part of his overall remuneration package and incentives provided as Managing Director of Emmerson Resources Limited. Under the Company's current circumstances, the Directors consider that the incentive represented by the issue of the Rights are a cost effective and efficient reward and incentive for Mr Bills to maximise returns to shareholders, as opposed to alternative forms of incentives, such as the payment of further cash compensation.

The grant of the Rights is designed to incentivise Mr Bills and align the Board and management in the setting and achievement of the Company’s objectives, participating in the future growth and prosperity of the Company through share ownership.

The number of Rights to be issued has been determined based on a number of factors including:

• (a) Mr Bills role as the Managing Director and Chief Executive Officer of the Company, in particular the specialist assistance to management;

• (b) continuity of senior management. Mr Bills has acquired substantial and extensive knowledge regarding the development of the Company's projects. The retention of Mr Bills with the knowledge possessed by him will be critical to the successful development of the Company’s projects; and

• (c) alignment of interests. The Directors consider that it is in the interests of shareholders to align the interests of Directors and shareholders by encouraging Directors, subject to achieving appropriate milestones, to have an equity holding in the Company.

Related Party Transactions

Chapter 2E of the Corporations Act prohibits a public company from giving a financial benefit to a related party (such as a director) of the public company unless either:

• (a) the giving of the financial benefit falls within one of the nominated exceptions in Chapter 2E; or

• (b) shareholder approval is obtained prior to the giving of the financial benefit and the benefit is given within 15 months after obtaining such approval.

For the purposes of Chapter 2E, each of the Directors is considered to be a related party of the Company.

Resolution 5 provides for the grant of Rights to a Director of the Company which is a financial benefit for the purposes of Chapter 2E of the Corporations Act and, therefore, requires prior shareholder approval.

In accordance with Chapter 2E of the Corporations Act, the following information is provided to shareholders:

• (a) If Resolution 5 is passed by shareholders it will permit the giving of the following financial benefit to Mr Bills:

Vesting 1 year from date of grant 2 years from date of grant 3 years from date of grant 4 years from date of grant	Number of Rights Consideration Exercise price 500,000 nil nil 500,000 nil nil 500,000 nil nil 500,000 nil nil 2,000,000

• (b) The nature of the financial benefit proposed to be given is the grant of Rights in the Company for no consideration on the terms and conditions set out in Annexure A to this Explanatory Memorandum. The purpose of the issue is to give Mr Bills an incentive to provide dedicated and ongoing commitment to the Company. The Directors consider the issue of the Rights is appropriate having regard to the skills, ability and contribution of Mr Bills (both now and in the future) to the Company.

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EXPLANATORY MEMORANDUM EMMERSON RESOURCES LIMITED

• (c) In respect of Resolution 5, all Directors recommend that shareholders vote in favour of Resolution 5, save for Robert Bills who has an interest in the outcome of Resolution 5 and declines to make a recommendation in respect of it.

• (d) As at the date of this Notice, Mr Bills holds the following relevant interests in the securities in the Company representing 4.4% of the current issued capital of the Company on a fully diluted basis:

Ordinary Shares

Ordinary Shares Unlisted Options at an exercise price of $0.25 expiring 13/12/2012 Unlisted Options at an exercise price of $0.30 expiring 13/12/2012 Total securities	2,301,600 5,000,000 5,000,000
	12,301,600

• (e) If shareholders approve Resolution 5, Mr Bills will hold the following relevant interests in the securities in the Company representing 5.08% of the issued capital of the Company on a fully diluted basis:

Ordinary Shares Unlisted Options at an exercise price of $0.25 expiring 13/12/2012 Unlisted Options at an exercise price of $0.30 expiring 13/12/2012 Unlisted Rights at an exercise price of nil Total securities	2,301,600 5,000,000 5,000,000 2,000,000
	14,301,600

• (f) If shareholders approve Resolution 5, the capital structure of the Company would be as follows with relevant interests in securities held by the Mr Bills representing 5.11% of the issued capital of the Company on a fully diluted basis:

Ordinary shares currently on issue Options currently on issue: Exercise price of $0.50 expiring 24/11/2012 Exercise price of $0.25 expiring 13/12/2012 Exercise price of $0.30 expiring 13/12/2012 Exercise price of $0.25 expiring 11/03/2013 Rights currently on issue: Exercise price of nil vesting on 25/11/12 Exercise price of nil vesting on 25/11/13 Exercise price of nil vesting on 01/09/13 Exercise price of nil vesting on 01/09/14 Exercise price of nil vesting on 25/11/14 Exercise price of nil vesting on 25/11/15 Total securities currently on issue Proposed Rights under resolution 5: Exercise price of nil vesting 1 year from date of grant Exercise price of nil vesting 2 years from date of grant Exercise price of nil vesting 3 years from date of grant Exercise price of nil vesting 4 years from date of grant Total securities (fully diluted)	Total Held by Robert Bills % Held by Robert Bills 260,910,213 2,301,600 0.88% 7,000,000 - 0.00% 5,000,000 5,000,000 100.00% 5,000,000 5,000,000 100.00% 500,000 - 0.00% 150,000 - 0.00% 462,500 - 0.00% 162,500 - 0.00% 162,500 - 0.00% 156,250 - 0.00% 156,250 - 0.00%
	279,660,213 12,301,600 4.40% 500,000 500,000 100.00% 500,000 500,000 100.00% 500,000 500,000 100.00% 500,000 500,000 100.00%
	281,660,213 14,301,600 5.08%

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EXPLANATORY MEMORANDUM EMMERSON RESOURCES LIMITED

If all of the Rights granted to Mr Bills as proposed are exercised, the effect would be to dilute the shareholding of existing shareholders by 0.76% based on the number of shares on issue as at the date of the notice, assuming no other existing Options and Rights are exercised. If all other Options and Rights are also exercised, the effect would be to dilute the shareholding of other shareholders by 0.71%.

• (g) During the last 12 months before the date of lodgment of this Notice with ASIC, the highest trading price of the Company’s shares on the ASX was $0.305 on 16 and 17 November 2011 and the lowest trading price of the Shares was $0.10 on 10 October 2011. The volume weighted average price of the Company’s shares on the ASX over the 5 days before the date of lodgment of this Notice with ASIC was $0.121. On 9 October 2012, the last trading day before this Notice was lodged with ASIC, the Shares closed at a price of $0.12 per share.

• (h) Mr Bills current salary plus superannuation per annum is $436,000.

• (i) The Rights are not to be quoted on ASX and as such have no actual market value. The Rights are capable of being converted to Shares when vesting conditions are met and accordingly have a value at the date of grant. As no cash consideration (exercise price) will be payable by Mr Bills for the acquisition of Shares upon exercise of Performance Rights, the effect will be to give an immediate financial benefit to Mr Bills on exercising the Rights.

Under Australian Accounting Standards, the Company is required to recognise the value of Rights as an expense on a pro-rata basis over the vesting period in the income statement with a corresponding adjustment to equity.

The technical value of the Options using the Black and Scholes option pricing model is 12 cents per Right. This imputes a total value of $240,000 to the Rights. The value may go up or down after the date of valuation as it will depend on the future price of a Share. The material assumptions used in valuing the Rights were:

• a) share price of 12 cents per share on 9 October 2012;

• b) option exercise price of nil;

• c) risk free interest rate of 3.25%; and

• d) volatility factor of 85%.

The valuation of the Rights has been prepared in accordance with the Accounting Standards without regard to whether the vesting hurdles will be satisfied. In other words, the Rights have been valued without including any risk factor to the achievement of these vesting hurdles. If you are of the opinion that there is a probability that one or more of the vesting hurdles will not be satisfied/achieved then you need to include an appropriate risk weighting to the value attributed to the Options.

• (j) As no cash consideration (exercise price) will be payable by Mr Bills for the acquisition of Shares upon exercise of Performance Rights, there may be a perceived cost to the Company.

• (k) Neither the Directors nor the Company are aware of any other information that would be reasonably required by shareholders to make a decision in relation to the financial benefit contemplated by the proposed resolution.

Listing Rule 10.14

Listing Rule 10.14 requires shareholders to approve the issue of securities (including Rights) under an employee incentive scheme to a Director of the Company.

Separate approval pursuant to ASX Listing Rule 7.1 is not required to approve the proposed issue of Rights to Directors as approval is being obtained under Listing Rule 10.14. Shareholders should note that the issue of Rights to Directors will not be included in the 15% calculation for the purposes of ASX Listing Rule 7.1.

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EXPLANATORY MEMORANDUM EMMERSON RESOURCES LIMITED

For the purposes of Listing Rules 10.14, the following information is provided to shareholders:

• (a) the Rights will be granted to Mr Bills as noted above;

• (b) the maximum number of Rights to be granted pursuant to Resolution 5 is 2,000,000;

• (c) the Rights will be allotted and granted on one date which will be no later than one month after the date of this Meeting;

• (d) the Rights will be granted for no consideration;

• (e) All Directors of the Company (being Andrew McIlwain, Rob Bills, Timothy Kestell and Simon Andrew) are entitled to participate in the Performance Rights Plan;

• (f) No Directors have previously received any securities under the Performance Rights Plan and there has been no previous approvals sought under Listing Rule 10.14;

• (g) the Company will disregard any votes cast on Resolution 5 by or on behalf of Mr Bills or an associate of Mr Bills;

• (h) The Company will not provide any loan in relation to the acquisition of Rights under the Performance Rights Plan.

• (i) no funds will be raised by the grant of the Rights; and

• (j) the terms and conditions of the Rights are set out in Annexure A to this Explanatory Memorandum.

RESOLUTION 6 - APPROVAL OF 10% PLACEMENT FACILITY

General

Listing Rule 7.1A enables eligible entities to issue Equity Securities up to 10% of its issued share capital through placements over a 12 month period after the annual general meeting (10% Placement Facility). The 10% Placement Facility is in addition to the Company's 15% 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 10% Placement Facility.

The exact number of Equity Securities to be issued under the 10% Placement Facility will be determined in accordance with the formula prescribed in Listing Rule 7.1A.2 (as set out below).

The Directors of the Company believe that Resolution 6 is in the best interests of the Company and unanimously recommend that shareholders vote in favour of this Resolution.

Resolution 6 is a special resolution. Accordingly, at least 75% of votes cast by shareholders present and eligible to vote at the Meeting must be in favour of Resolution 6 for it to be passed.

Listing Rule 7.1A

(a) Shareholder approval

The ability to issue Equity Securities under the 10% Placement Facility is subject to shareholder approval by way of a special resolution at an annual general meeting.

(b) Equity Securities

Any Equity Securities issued under the 10% Placement Facility must be in the same class as an existing quoted class of Equity Securities of the Company. The Company currently has only one quoted class of Equity Securities on issue, being the Shares (ASX Code: ERM).

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EXPLANATORY MEMORANDUM EMMERSON RESOURCES LIMITED

(c) Formula for calculating 10% Placement Facility

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 12 month period after the date of the annual general meeting, a number of Equity Securities calculated in accordance with the following formula:

(A x D) – E

Where:

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

• plus the number of Shares issued in the previous 12 months under an exception in ASX Listing Rule 7.2;

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

• plus the number of Shares issued in the previous 12 months with approval of holders of Shares under ASX Listing Rule 7.1 and 7.4; and

• less the number of Shares cancelled in the previous 12 months.

D is 10%

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

(d) Listing Rule 7.1 and Listing Rule 7.1A

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

At the date of this Notice, the Company has on issue 260,910,213 Shares and therefore has a capacity to issue:

• 39,136,531 Equity Securities under Listing Rule 7.1; and

• subject to shareholder approval being sought under Resolution 6, 26,091,213 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 7.1A.2 (as set out above).

Specific information required by Listing Rule 7.3A

(a) Minimum Price

The minimum price at which the Equity Securities may be issued is 75% of the volume weighted average price of Equity Securities in that class, calculated over the 15 ASX trading days on which trades in that class were recorded 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 ASX trading days of the date in (a)(i) above, the date on which the Equity Securities are issued.

(b) Date of Issue

The Equity Securities may be issued under the 10% Placement Facility commencing on the date of the Meeting and expiring on the first to occur of the following:

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EXPLANATORY MEMORANDUM EMMERSON RESOURCES LIMITED

• i) 12 months after the date of this Meeting; and

• ii) the date of approval by shareholders of any transaction under ASX Listing Rules 11.1.2 (a significant change to the nature or scale of the Company’s activities) or 11.2 (disposal of the Company’s main undertaking),

or such longer period if allowed by ASX (10% Placement Facility Period).

(c) Risk of voting dilution

Any issue of Equity Securities under the 10% Placement Facility will dilute the interests of shareholders who do not receive any Shares under the issue.

If Resolution 6 is approved by shareholders and the Company issues the maximum number of Equity Securities available under the 10% Placement Facility, the economic and voting dilution of existing Shares would be as shown in the table below.

The table below shows the dilution of existing shareholders calculated in accordance with the formula outlined in ASX Listing Rule 7.1A(2), on the basis of the closing price of the Shares on ASX on 9 October 2012 and the current number of Equity Securities on issue as at the date of this Notice.

The table also shows the voting dilution impact where the number of Shares on issue (variable A in the formula) changes and the economic dilution where there are changes in the issue price of Shares issued under the 10% Placement Facility.

		Dilution	Dilution
	Issue Price (per Share)
		$0.06	$0.12	$0.24
Number of Shares on Issue
				100% increase in Issue Price
		50% decrease in Issue Price
			Issue Price
	Shares issued	26,091,021	26,091,021	26,091,021
260,910,213 (Current)
	Funds raised	$1,565,461	$3,130,923	$6,261,845
	Shares issued	39,136,531	39,136,531	39,136,531
391,365,319 (50% increase)
	Funds raised	$2,348,192	$4,696,384	$9,392,767
	Shares issued	52,182,042	52,182,042	52,182,042
521,820,426 (100% increase)
	Funds raised	$3,130,923	$6,261,845	$12,523,690

The table above uses the following assumptions:

• i) The issue price set out above is the closing price of the Shares on the ASX on 9 October 2012. ii) The Company issues the maximum possible number of Equity Securities under the 10% Placement Facility.

• iii) The Company has not issued any Equity Securities in the 12 months prior to the Meeting that were not issued under an exception in ASX Listing Rule 7.2 or with approval under ASX Listing Rule 7.1.

• iv) The calculations above do not show the dilution that any one particular shareholder will be subject to. All shareholders should consider the dilution caused to their own shareholding depending on their specific circumstances.

• v) This table does not set out any dilution pursuant to approvals under ASX Listing Rule 7.1.

• vi) shareholders should note that there is a risk that:

• the market price for the Company’s Shares may be significantly lower on the issue date than on the date of the Meeting; and

• the Shares may be issued at a price that is at a discount to the market price for those Shares on the date of issue.

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EXPLANATORY MEMORANDUM EMMERSON RESOURCES LIMITED

(d) Purpose of Issue under 10% Placement Facility

The Company may issue Equity Securities under the 10% Placement Facility for the following purposes:

• i) as cash consideration, in which case the Company intends to use funds raised to fund:

• the ongoing exploration and evaluation programmes;

• the evaluation and acquisition of new opportunities; and

• the corporate and administrative activities of the Company and to provide working capital and meet the costs of the issue; or

• ii) as non-cash consideration for the acquisition of new resources assets and investments, where the Company identifies such resource 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.

(e) Allocation under the 10% Placement Facility

The Company’s allocation policy is dependent on the prevailing market conditions at the time of any proposed issue pursuant to the 10% Placement Facility. 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:

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

• ii) the effect of the issue of the Equity Securities on the control of the Company; iii) the financial situation and solvency of the Company; and

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

The allottees under the 10% Placement Facility 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 10% Placement Facility will be the vendors of the new resources assets or investments.

(f) Previous Approval under ASX Listing Rule 7.1A

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

Voting Exclusion

A voting exclusion statement is included in this Notice. As at the date of this Notice, the Company has not invited any existing shareholder to participate in an issue of Equity Securities under ASX Listing Rule 7.1A. Therefore, no existing shareholders will be excluded from voting on Resolution 6.

DATED this 25 October 2012

BY ORDER OF THE BOARD

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EXPLANATORY MEMORANDUM EMMERSON RESOURCES LIMITED

GLOSSARY OF TERMS

In this Explanatory Memorandum and accompanying Notice of Meeting the following words and expressions have the following meanings:

“ Annual General Meeting ” or “ Meeting ” means the meeting convened by this Notice.

" ASIC ” means Australian Securities & Investments Commission;

• " ASX " means ASX Limited;

" Board " means the board of Directors of the Company.

• “ Closely Related Party ” of a member of the Key Management Personnel means:

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

• (b) a child of the member’s spouse;

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

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

• (e) a company the member controls; or

• (f) a person prescribed by the Corporations Regulations 2001 (Cth).

" Company " or " Emmerson ” means Emmerson Resources Limited (ABN 53 117 086 745);

“ Constitution ” means the constitution of the Company.

" Corporations Act 2001 " means Australian Corporations Act 2001 (Cth);

" Directors " mean the directors of Emmerson Resources Limited from time to time.

“ Equity Securities ” includes a Share, a Right to a Share or Option, an Option, a convertible security and any security that ASX decides to classify as an Equity Security.

" Explanatory Memorandum " means the information attached to the Notice of Meeting which provides information to shareholders about the resolutions contained in the Notice of Meeting;

“ Key Management Personnel ” has the same meaning as in the accounting standards issued by the Australian Accounting Standards Board and means those persons having authority and responsibility for planning, directing and controlling the activities of the Company, or if the Company is part of a consolidated entity, of the consolidated entity, directly or indirectly, including any director (whether executive or otherwise) of the Company, or if the Company is part of a consolidated entity, of an entity within the consolidated group.

" Listing Rules " means the Listing Rules of ASX.

" Notice of Meeting " or “ Notice ” means this notice of meeting including the Explanatory Memorandum and the Proxy Form;

" Options " means options to acquire Shares;

“ Ordinary Securities ” has the meaning set out in the Listing Rules.

" Performance Rights " means rights to acquire Shares pursuant to the Company’s Performance Rights Plan;

“ Proxy Form ” means the proxy form accompanying this Notice.

“ Remuneration Report ” means the remuneration report set out in the Director’s report section of the Company’s annual financial report for the year ended 30 June 2012.

" Resolution " means a resolution referred to in the Notice.

" Rights " means rights to acquire Shares;

" Shares ” means ordinary fully paid shares in the Company;

“WST” means Australian Western Standard Time;

"$" means Australian dollars.

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EXPLANATORY MEMORANDUM EMMERSON RESOURCES LIMITED

ANNEXURE A

TERMS OF RIGHTS

• (a) Each Right entitles the holder, when exercised, to one (1) share in the capital of the Company;

• (b) The Rights are only exercisable after they vest, the vesting conditions for the Rights are as follows:

• i) 25% (500,000 Rights) vest 1 year from date of grant; ii) A further 25% (500,000 Rights) vest 2 years from date of grant; iii) A further 25% (500,000 Rights) vest 3 years from date of grant; and iv) The remaining 25% (500,000 Rights) vest 4 years from date of grant.

• (c) All unvested Rights are immediately forfeited upon cessation of employment with the Company or Group Company.

• (d) If for any reason you cease to be an employee of the Company or a Group Company or otherwise cease to satisfy any other relevant condition imposed by the Board after a Right has vested but before the Right has been exercised, you may exercise those vested Rights within the 60 day period following cessation of employment or ceasing to satisfy any other relevant conditions (as appropriate) or such other period (longer or shorter) as the Board determines, after which they lapse.

• (e) the exercise price of each Right is $ 0.00 and the expiry date for each Right is five years from the Issue date;

• (f) Rights may be exercised by completing a notice of exercise form and delivering it for the number of Shares in respect of which the Rights are exercised to the registered office of the Company.

• (g) Vested Rights not exercised in accordance with paragraphs (d) or (f) prior to the expiry date (paragraph (e)) will automatically lapse;

• (h) All Shares issued upon exercise of the Rights will be issued not more than ten (10) business days after the date of the notice of exercise;

• (i) All Shares issued upon exercise of the Rights will rank pari passu with the Company’s existing fully paid ordinary Shares;

• (j) The Rights do not confer on the holder the right to a change in exercise price or a change in the number of underlying securities over which the Right can be exercised;

• (k) The Rights will not be quoted on the ASX unless the Company (in its discretion and subject to the ASX Listing Rules) seeks to do so. However, the Company will make application to the ASX for the quotation of the Shares issued on the exercise of the Rights and issue a holding statement within three (3) Business Days after the issue of those Shares;

• (l) There are no participating rights or entitlement inherent in the Rights and holders will not be entitled to participate in new issues of capital offered to shareholders during the currency of the Rights. However, the Company will ensure that for the purpose of determining entitlements to any such issues, the record date will be at least six (6) Business Days after the issue is announced. This will give eligible Right holders the opportunity to exercise their vested Rights prior to the date for determining entitlements to participate in any such issue; and

• (m) If at any time the issued capital of the Company is reconstructed (including a consolidation, subdivision, reduction or return of capital), all rights of a Right holder are to be changed in a manner consistent with the Corporation Act and the Listing Rules at the time of the reconstruction.

The Rights are otherwise exercisable in accordance with the terms of the Company’s Performance Right Plan.

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emmerson
resources
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Emmerson Resources Limited ABN 53 117 086 745

Lodge your vote:



Online:

www.investorvote.com.au

 By Mail:

Computershare Investor Services Pty Limited GPO Box 242 Melbourne Victoria 3001 Australia

T 000001 000 ERM MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

Alternatively you can fax your form to (within Australia) 1300 728 843 (outside Australia) +61 3 9415 4000

For Intermediary Online subscribers only (custodians) www.intermediaryonline.com

For all enquiries call:

(within Australia) 1300 850 505 (outside Australia) +61 3 9415 4000

Proxy Form



Vote online or view the annual report, 24 hours a day, 7 days a week:

www.investorvote.com.au

Your secure access information is: Cast your proxy vote Control Number: 999999 Access the annual report SRN/HIN: I9999999999 PIN: 99999  PLEASE NOTE: For security reasons it is important that you keep your Review and update your securityholding SRN/HIN confidential.

 For your vote to be effective it must be received by 4:00pm (CST) Sunday 25 November 2012

How to Vote on Items of Business

All your securities will be voted in accordance with your directions.

Appointment of Proxy

Voting 100% of your holding: Direct your proxy how to vote by marking one of the boxes opposite each item of business. If you do not mark a box your proxy may vote as they choose. If you mark more than one box on an item your vote will be invalid on that item.

Voting a portion of your holding: Indicate a portion of your voting rights by inserting the percentage or number of securities you wish to vote in the For, Against or Abstain box or boxes. The sum of the votes cast must not exceed your voting entitlement or 100%.

Appointing a second proxy: You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you appoint two proxies you must specify the percentage of votes or number of securities for each proxy, otherwise each proxy may exercise half of the votes. When appointing a second proxy write both names and the percentage of votes or number of securities for each in Step 1 overleaf.

A proxy need not be a securityholder of the Company.

Signing Instructions for Postal Forms

Individual: Where the holding is in one name, the securityholder must sign.

Joint Holding: Where the holding is in more than one name, all of the securityholders should sign.

Power of Attorney: If you have not already lodged the Power of Attorney with the registry, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: Where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please sign in the appropriate place to indicate the office held. Delete titles as applicable.

Attending the Meeting

Bring this form to assist registration. If a representative of a corporate securityholder or proxy is to attend the meeting you will need to provide the appropriate “Certificate of Appointment of Corporate Representative” prior to admission. A form of the certificate may be obtained from Computershare or online at www.investorcentre.com under the information tab, "Downloadable Forms".

Comments & Questions: If you have any comments or questions for the company, please write them on a separate sheet of paper and return with this form.

GO ONLINE TO VOTE,  or turn over to complete the form

916CR_0_Sample_Proxy/000001/000001/i

MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

Proxy Form

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I9999999999
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Change of address. If incorrect, mark this box and make the correction in the space to the left. Securityholders sponsored by a I9999999999 broker (reference number commences with ’ X ’) should advise your broker of any changes. I 9999999999 I ND

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Please mark

to indicate your directions

Appoint a Proxy to Vote on Your Behalf

XX

I/We being a member/s of Emmerson Resources Limited hereby appoint the Chairman OR of the Meeting

 PLEASE NOTE: Leave this box blank if OR you have selected the Chairman of the Meeting. Do not insert your own name(s).

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the Meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, and to the extent permitted by law, as the proxy sees fit) at the Annual General Meeting of Emmerson Resources Limited to be held at Tennant Creek Battery Hill and Mining Centre, Peko Road, Tennant Creek, NT on Tuesday, 27 November 2012 at 4:00pm (CST) and at any adjournment or postponement of that Meeting.

Chairman authorised to exercise undirected proxies on remuneration related resolutions : Where I/we have appointed the Chairman of the Meeting as my/our proxy (or the Chairman becomes my/our proxy by default), I/we expressly authorise the Chairman to exercise my/our proxy on Resolutions 3, 4 and 5 (except where I/we have indicated a different voting intention below) even though Resolution 3, 4 and 5 connected directly or indirectly with the remuneration of a member of key management personnel, which includes the Chairman.

Important Note: If the Chairman of the Meeting is (or becomes) your proxy you can direct the Chairman to vote for or against or abstain from voting on Resolutions 3, 4 and 5 by marking the appropriate box in step 2 below.

STEP	2	Items	of	Business		PLEASE NOTE:If you mark theAbstainbox for an item, you are directing your proxy not to vote on your behalf on a show of hands or a poll and your votes will not be counted in computing the required majority. For Against Abstain

			For	Again	st Abstain
Resolution	1	Re-election of Mr Andrew McIlwain
Resolution	2	Re-election of Mr Simon Andrew
Resolution	3	Adoption of Remuneration Report
Resolution	4	Approval of Performance Rights Plan
Resolution	5	Issue of Rights to Mr Robert Bills
Resolution	6	Approval of 10% Placement Facility

The Chairman of the Meeting intends to vote all available proxies in favour of each item of business.

SIGN

Signature of Securityholder(s) This section must be completed.

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Individual or Securityholder 1 Securityholder 2 Securityholder 3
Sole Director and Sole Company Secretary Director Director/Company Secretary
Contact
Contact Daytime / /
Name Telephone Date
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