ENCOUNTER RESOURCES LIMITED — AGM Information 2017

Oct 26, 2017

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NOTICE OF ANNUAL GENERAL MEETING

&

EXPLANATORY STATEMENT

To be held

At 10.00am (WST), Thursday, 30 November 2017

at

The Offices of AMEC, 6 Ord Street, West Perth WA 6005

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Level 7, 600 Murray Street West Perth WA 6005 PO Box 273 West Perth WA 6872 P 08 9486 9455 F 08 9486 8366

www.enrl.com.au

23[rd] October 2017

Dear Fellow Encounter Shareholder,

Please find enclosed the Notice of Annual General Meeting for the Shareholders’ Meeting to be held at 6 Ord Street, West Perth at 10.00am (WST) on Thursday, 30 November 2017.

The purpose of the meeting is to conduct the annual business of the Company, being consideration of the annual financial statements, the remuneration report and in addition seek shareholder approval in accordance with the Corporations Act 2001 and the Listing Rules of the ASX to a number of resolutions, which are set out in the attached Notice of Meeting paper.

Your Directors seek your support and look forward to your attendance at the meeting.

Yours sincerely

Paul Chapman Chairman

1

ENCOUNTER RESOURCES LIMITED ABN 47 109 815 796

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Annual General Meeting of Encounter Resources Limited will be convened at 10.00am WST on Thursday, 30 November 2017 at 6 Ord Street, West Perth, Western Australia.

AGENDA

1. Discussion of Financial Statements and Reports

• To discuss the Financial Report, the Directors’ Report and Auditor’s Report for the year ended 30 June 2017.

2. Adoption of the Remuneration Report

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

“That, for the purpose of Section 250R(2) of the Corporations Act and for all other purposes, approval is given for the adoption of the remuneration report as contained in the Company’s annual financial report for the financial year ended 30 June 2017.”

Voting Prohibition Statement

The Company will disregard any votes cast on Agenda Item 2 by or on behalf of a Restricted Voter. However, the Company need not disregard a vote if:

• (a) it is cast by a person as a proxy appointed by writing that specifies how the proxy is to vote on the proposed resolution; and

• (b) it is not cast on behalf of a Restricted Voter.

Further, a Restricted Voter who is appointed as a proxy will not vote on Agenda Item 2 unless:

• (a) the appointment specifies the way the proxy is to vote on that Resolution; or

• (b) the proxy is the Chair of the Meeting and the appointment expressly authorises the Chair to exercise the proxy even though the Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel. Shareholders should note that the Chair intends to vote any undirected proxies in favour of Agenda Item 2. Shareholders may also choose to direct the Chair to vote against Agenda Item 2, or to abstain from voting.

3. Re-election of Director – Mr Paul Chapman

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

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

4. Approval of Additional 10% Placement Capacity

To consider and, if thought fit, to approve the following resolution, with or without amendment, as a special resolution :

"That, for the purpose of Listing Rule 7.1A and all other purposes, the Company approves the allotment and issue of Equity Securities up to 10% of the issued capital of the Company (at the time of the issue) calculated in accordance with in Listing Rule 7.1A.2 and on the terms and conditions set out in the Explanatory Statement."

Voting Exclusion Statement

The Company will disregard any votes cast on Agenda Item 4 by any person who may participate in the proposed issue and any person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities if the Resolution is passed, and any person associated with those persons.

However, votes cast by a person as proxy for a person who is entitled to vote (in accordance with the directions on the proxy form) or 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) will be taken into account.

2

ENCOUNTER RESOURCES LIMITED ABN 47 109 815 796

NOTICE OF ANNUAL GENERAL MEETING

OTHER BUSINESS

To deal with any other business which may be brought forward in accordance with the Constitution and the Corporations Act.

Details of the definitions and abbreviations used in this Notice are set out in the Glossary to the Explanatory Statement.

GENERAL NOTES

1. With respect to Agenda Item 2, the vote on this item is advisory only and does not bind the Directors of the Company. However, the Board will take the outcome of the vote into consideration when reviewing the remuneration practices and policies of the Company.

2. Voting by Proxy : Sections 250BB and 250BC of the Corporations Act came into effect on 1 July 2011 and apply to voting by proxy on or after that date. Shareholders and their proxies should be aware of these changes to the Corporations Act, as they will apply to this Annual General Meeting. Broadly, the changes mean that:

• if proxy holders vote, they must cast all directed proxies as directed; and

• if a poll is demanded for a particular resolution, any directed proxies which are not voted (where the appointed proxy is not the chair of the meeting) will automatically default to the Chair, who must vote the proxies as directed.

Proxy vote if appointment specifies way to vote

Section 250BB(1) of the Corporations Act provides that an appointment of a proxy may specify the way the proxy is to vote on a particular resolution and, if it does :

the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way (i.e. as directed); and

• if the proxy has 2 or more appointments that specify different ways to vote on the resolution – the proxy must not vote on a show of hands; and

• if the proxy is the chair of the meeting at which the resolution is voted on – the proxy must vote on a poll, and must vote that way (i.e. as directed); and

• if the proxy is not the chair – the proxy need not vote on the poll, but if the proxy does so, the proxy must vote that way (i.e. as directed).

Transfer of non-chair proxy to chair in certain circumstances

Section 250BC of the Corporations Act provides that, if:

• an appointment of a proxy specifies the way the proxy is to vote on a particular resolution at a meeting of the Company's members; and

• the appointed proxy is not the chair of the meeting; and

• at the meeting, a poll is duly demanded on the resolution; and

• either of the following applies:

• the proxy is not recorded as attending the meeting;

• the proxy does not vote on the resolution,

the chair of the meeting is taken, before voting on the resolution closes, to have been appointed as the proxy for the purposes of voting on the resolution at the meeting.

3. The Explanatory Statement to Shareholders attached to this Notice of Annual General Meeting is hereby incorporated into and forms part of this Notice of General Meeting.

4. The Directors have determined in accordance with Regulation 7.11.37 of the Corporations Regulations that, for the purposes of voting at the meeting, shares will be taken to be held by the registered holders at 5.00pm (WST) on 28 November 2017.

BY ORDER OF THE BOARD

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Kevin R Hart COMPANY SECRETARY Dated this 23[rd] day of October 2017

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ENCOUNTER RESOURCES LIMITED ABN 47 109 815 796

EXPLANATORY STATEMENT

The purpose of the Explanatory Statement is to provide shareholders with information concerning all of the Agenda Items in the Notice of Annual General Meeting.

Certain abbreviations and other defined terms are used throughout this Explanatory Statement. Defined terms are generally identifiable by the use of an upper case first letter. Details of the definitions and abbreviations are set out in the Glossary to the Explanatory Statement.

1. Discussion of Financial Statements & Reports

The Company’s financial reports for the financial year ended 30 June 2017, together with the Directors’ reports and the auditor’s report are placed before the Annual General Meeting thereby giving shareholders the opportunity to discuss those documents and to ask questions. The auditor will be attending the Annual General Meeting and will be available to answer any questions relevant to:

• the conduct of the audit;

• the preparation and content of the independent audit report;

• the accounting policies adopted by the Company in relation to the preparation of accounts; and

• the independence of the auditor in relation to the conduct of the audit.

Shareholders should consider these documents and raise any matters of interest with the Directors when this item is being considered.

2. Adoption of Remuneration Report

Section 250R(2) of the Corporations Act requires the Company to present to its Shareholders the Remuneration Report, as disclosed in the Company’s Annual Report.

The Resolution is advisory only and does not bind the Directors or the Company. The Annual Report (together with the Remuneration Report) is available on the Company’s website (www.enrl.com.au).

Under the Corporations Act, if at least 25% of the votes cast on the resolution to Agenda Item 2 are voted against adoption of the Remuneration Report at the Annual General Meeting, and then again at the Company's next Annual General Meeting, the Company will be required to put to Shareholders a resolution proposing the calling of a general meeting to consider the appointment of directors of the Company ( Spill Resolution ).

If more than 50% of Shareholders vote in favour of the Spill Resolution, the Company must convene the general meeting ( Spill Meeting ) within 90 days of the Company's Annual General Meeting. All of the Directors who were in office when the Company's Directors' report was approved, other than the Managing Director of the Company, will cease to hold office immediately before the end of the Spill Meeting but may stand for re-election at the Spill Meeting. Following the Spill Meeting those persons whose election or re-election as Directors is approved will be the Directors of the Company.

The proportion of votes cast against the adoption of the 2016 Remuneration Report was less than 25% of the total votes cast. Accordingly the Spill Resolution is not relevant for this Annual General Meeting.

The Remuneration Report explains the Board policies in relation to the nature and level of remuneration paid to the Directors and sets out the Company’s remuneration arrangements for each of the Directors and senior management of the Company for the financial year ended 30 June 2017. The Remuneration Report is part of the Directors’ report contained in the annual financial report of the Company for the financial year ending 30 June 2017.

A reasonable opportunity will be provided for discussion of the remuneration report at the Annual General Meeting.

The Board considers that its current practices of setting executive and non-executive remuneration are within normal industry expectations, and provides an effective balance between the need to attract and retain the services of the highly skilled key management personnel that the Company requires. As such the directors recommend that shareholders vote in favour of the resolution to Agenda Item 2.

4

ENCOUNTER RESOURCES LIMITED ABN 47 109 815 796

EXPLANATORY STATEMENT

2. Adoption of Remuneration Report (Continued)

Voting

Note that a voting exclusion applies to Agenda Item 2 in the terms set out in the Notice of Meeting. In particular, the Directors and other Restricted Voters may not vote on this Resolution and may not cast a vote as proxy, unless the appointment gives a direction on how to vote or the proxy is given to the Chair and expressly authorises the Chair to exercise your proxy even if the Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel.

By appointing the Chair as proxy, and not providing voting directions, you are considered to have expressly authorised the Chair to exercise your proxy, even though the resolution may be connected directly or indirectly with the remuneration of a member of the Key Management Personnel. The Chair will use any such proxies to vote in favour of the Resolution.

Shareholders are urged to carefully read the proxy form and provide a direction to the proxy on how to vote on this Resolution.

3. Re-Election of Director – Mr Paul Chapman (B.comm, ACA, Grad.Dip.Tax, MAICD, AAusImm)

as an Ordinary Resolution

Experience

Mr Chapman is a chartered accountant with over twenty-five years’ experience in the resources sector gained in Australia and the United States. Mr Chapman has experience across a range of commodity businesses including gold, nickel, uranium, manganese, bauxite/alumina and oil/gas. Mr Chapman has held managing director and other senior management roles in public companies of various sizes.

During the last 3 years, Mr Chapman has been a director of Silver Lake Resources Limited (resigned 30 September 2015) and Avanco Resources Limited (appointed 1 May 2017).

Term of Office

Mr Chapman was appointed as Director of Company on 7 October 2005.

Independence

The Board of Encounter Resources Limited considers Mr Chapman to be an Independent Director.

Special Responsibilities

Mr Chapman is the Chairman of the Company and a member of the Company’s Audit Committee.

Directors’ Recommendation

The Board (excluding Mr Chapman) supports the proposed re-election and recommends that Shareholders vote in favour of the re-election of Mr Paul Chapman as a Director.

4. Approval of Additional 10% Placement Capacity

as a Special Resolution

Listing Rule 7.1A enables eligible entities to issue Equity Securities up to 10% of its issued share capital over a 12 month period after the Annual General Meeting at which a resolution for the purposes of Listing Rule 7.1A is passed by special resolution ( Additional 10% Placement Capacity ). The Additional 10% Placement Capacity is in addition to the Company's 15% placement capacity under Listing Rule 7.1.

An entity will be eligible to seek approval under Listing Rule 7.1A if: (a) the entity has a market capitalisation of $300 million or less; and (b) the entity that is not included in the S&P ASX 300 Index. The Company’s market capitalisation as at 20 October 2017 was $15.4m and therefore the Board considers that it is an eligible entity for the purposes of Listing Rule 7.1A.

5

ABN 47 109 815 796

ENCOUNTER RESOURCES LIMITED

EXPLANATORY STATEMENT

4. Approval of Additional 10% Placement Capacity (Continued)

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

(A x B) – E

Where,

A = Has the same meaning an is Listing Rule 7.1

B = 10%

E = The number of equity securities issued or agreed to be issued under Listing Rule 7.1A2 in the 12 months before the issue date or date of agreement to issue that are not issued with the approval of holders of ordinary securities under Listing Rule 7.1 or 7.4.

The Company is putting Agenda Item 4 to Shareholders to seek approval to issue additional Equity Securities under the Additional 10% Placement Capacity.

This Resolution does not mean that the Company will necessarily utilise the 10% Additional Placement Capacity. Rather, capital markets have recently been in a state of fluctuation and the Directors acknowledge that they may need to act quickly to raise funds when favourable markets emerge. The Company’s failure to raise capital, if and when needed, could delay or suspend the Company’s business strategy and could have a material adverse effect on the Company’s activities. Under these circumstances, the Additional 10% Placement Capacity will provide flexibility for the Company to issue additional securities, in the event that the Directors determine that the issue of the additional securities is in the interests of the Shareholders and the Company in achieving its objectives.

Listing Rule 7.1A

The effect of Agenda Item 4 will be to permit the Company to issue the Equity Securities under Listing Rule 7.1A during the Additional Placement Period (as defined below) without using the Company’s 15% placement capacity under Listing Rule 7.1.

Equity Securities issued under the Additional 10% Placement Capacity must be in the same class as an existing quoted class of Equity Securities of the Company. As at the date of this Notice the Company has quoted securities in the form of Shares on issue.

Based on the number of Shares on issue at the date of this Notice, the Company has 192,007,760 Shares on issue and therefore, subject to Shareholder approval being sought under Agenda Item 4, up to 19,200,776 Equity Securities will be permitted to be issued in accordance with Listing Rule 7.1A. Shareholders should note that the calculation of the number of Equity Securities permitted to be issued under the Additional 10% Placement Capacity is a moving calculation and will be based on the formula set out in Listing Rule 7.1A at the time of issue of the Equity Securities. The table on the page below demonstrates various examples as to the number of Equity Securities that may be issued under the Additional 10% Placement Capacity.

The resolution the subject of Agenda Item 4 is a special resolution, requiring 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) in order to be passed.

Specific information required by Listing Rule 7.3A

The following information in relation to the Shares to be issued is provided to Shareholders for the purposes of Listing Rule 7.3A:

• (a) The Equity Securities will be issued at an issue price of not less than 75% of the volume weighted average price for the Company's Equity Securities in the same class calculated over the 15 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 Trading Days of the date in paragraph (i) above, the date on which the Equity Securities are issued.

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ENCOUNTER RESOURCES LIMITED ABN 47 109 815 796

EXPLANATORY STATEMENT

4. Approval of Additional 10% Placement Capacity (Continued)

Specific information required by Listing Rule 7.3A (Continued)

• (b) If the resolution the subject of Agenda Item 4 is approved by Shareholders and the Company issues Equity Securities under the Additional 10% Placement Capacity, the existing Shareholders' economic and voting interests in the Company will be diluted. There is also 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 of the Equity Securities.

The table below shows the dilution of existing Shareholders of the issue of the maximum number of Equity Securities under the Additional 10% Placement Capacity using different variables for the number of ordinary securities for variable “A” (as defined in Listing Rule 7.1A) and the market price of Shares. It is noted that variable “A” is based on the number of ordinary securities the Company has on issue at the time of the proposed issue of Equity Securities.

The table shows:

• (i) examples of where variable “A” is at its current level, and where variable “A” has increased by 50% and by 100%;

• (ii) examples of where the issue price of ordinary securities is the current market price as at close of trade on 20 October 2017 (current market price), where the issue price is halved, and where it is doubled; and

• (iii) the dilutionary effect will always be 10% if the maximum number of Equity Securities that may be issued under the Additional 10% Placement Capacity are issued.

Variable ‘A’	Number of Shares issued and funds raised under the Additional 10% Placement Capacity and dilution effect		Dilution
		$0.04 Issue Price at half the current market price	$0.08 Issue Price at current market price	$0.16 Issue Price at double the current market price
Current Variable A 192,007,760 Shares	Shares issued	19,200,776	19,200,776	19,200,776
	Funds raised	$768,031	$1,536,062	$3,072,124
	Dilution	10%	10%	10%
50% increase in current Variable A 288,011,640 Shares	Shares issued	28,801,164	28,801,164	28,801,164
	Funds raised	$1,152,047	$2,304,093	$4,608,186
	Dilution	10%	10%	10%
100% increase in current variable A 384,015,520 Shares	Shares issued	38,401,552	38,401,552	38,401,552
	Funds raised	$1,536,062	$3,072,124	$6,144,248
	Dilution	10%	10%	10%

Note: this table assumes:

• (i) No Options are exercised before the date of the issue of the Equity Securities;

• (ii) The Company issues the maximum number of Equity Securities under the Additional 10% Placement Capacity and the Equity Securities issues consists only of Shares;

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ENCOUNTER RESOURCES LIMITED ABN 47 109 815 796

EXPLANATORY STATEMENT

4. Approval of Additional 10% Placement Capacity (Continued)

• (iii) The table does not show an example of dilution that may be caused to a particular Shareholder by reason of placements under the 10% Placement Facility, based on that Shareholders holding at the date of the Annual General Meeting;

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

• (c) Approval of the Additional 10% Placement Capacity will be valid from the date of the Annual General Meeting and will expire on the earlier of:

• (i) the date that is 12 months after the date of the Annual General Meeting; and

• (ii) 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),

• (Additional Placement Period).

• (d) The Company may seek to issue the Equity Securities for the following purposes:

• (i) cash consideration. If Equity Securities are issued for cash consideration, the Company intends to use the funds to advance its exploration programs and general working capital purposes; or

• (ii) non-cash consideration for the acquisition of new assets or any other consideration other than cash. If Equity Securities are issued for non-cash consideration, the Company will comply with the minimum issue price limitation under Listing Rule 7.1A.3 in relation to such issue and will release the valuation of the non-cash consideration to the market.

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

(e) The Company’s allocation policy for the issue of Equity Securities under the Additional 10% Placement Capacity will be dependent on the prevailing market conditions at the time of the proposed placement(s). Securities allotted pursuant to the allocation policy will be determined following consideration of a number of factors including, but not limited to, the following matters:

• (i) the ability of the Company to raise funds at the time of the proposed issue of Equity Securities;

• (ii) the dilutionary effect of the proposed of the issue of the Equity Securities on existing Shareholders at the time of proposed issued of Equity Securities;

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

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

At the date of this Notice, the Company has not formed an intention as to whether the securities will be offered to existing security holders, or to any class or group of existing security holders, or whether the securities will be offered exclusively to new investors that have not previously been security holders of the Company. The Company will give consideration before making any placement of securities under Listing Rule 7.1A whether the raising of any funds under such placement could be carried out in whole, or in part, by an entitlements offer to existing security holders.

The allottees under the Additional 10% Placement Capacity have not been determined as at the date of this Notice but will not include related parties (or their associates) of the Company.

• (f) The Company previously obtained approval from its Shareholders pursuant to Listing Rule 7.1A at its 2016 Annual General Meeting on 25 November 2016 and the Company has issued 15,564,404 securities pursuant to that Listing Rule 7.1A approval.

During the 12 month period prior to the date of this Notice, the Company otherwise issued a total of 33,307,500 new Shares and 2,775,000 new Options, being a total of 36,082,500 New Equity Securities.

The total amount of 36,082,500 New Equity Securities issued represents approximately 21.5% of the total diluted number of Equity Securities on issue in the Company on 25 November 2016, being 168,180,473.

8

ABN 47 109 815 796

ENCOUNTER RESOURCES LIMITED

EXPLANATORY STATEMENT

4. Approval of Additional 10% Placement Capacity (Continued)

Information relating to issues of Equity Securities by the Company in the 12 months prior to the date of this Notice is as follows:

is as follows:
Date of Appendix 3B	Number of Equity Securities	Class of Equity Securities and summary of terms	Names of recipients or basis on which recipients determined	Issue price of Equity Securities and discount to Market Price1 on the trading day prior to the issue	If issued for cash – the total consideration, what it was spent on and the intended use of any remaining funds If issued for non-cash consideration – a description of the consideration and the current value of the consideration
20 October 2016	250,000 ordinary fully paid shares	Note 2	Issued to vendors on the acquisition of the East Thomsons Dome Gold Prospect by the Company.	Issued at a price of 8.5 cents per share. Market price on the trading day prior to the issue was 10 cents per share.	Non-cash consideration amounting to $21,250 given in exchange for the acquisition of the East Thomsons Dome Gold Prospect. Current fair value of consideration given at 20 October 2017 is $20,000.
25 November 2016	2,000,000 unlisted options	Note 3,4	Issued to Directors of the Company pursuant to shareholder approval at the Company’s 2016 AGM.	Nil issue price. Market price on the trading day prior to the issue was 8.6 cents per share.	Options issued to directors of the Company for no cash consideration. At the date of this Notice of Meeting the options have nil fair value as the exercise price of the options exceeds the underlying market value of the Company’s shares.
14 December 2016	775,000 unlisted options	Note 3	Issued to certain employees of the Company pursuant to the terms of the Company’s Employee Share Option Plan.	Nil issue price. Market price on the trading day prior to the issue was 6.8 cents per share.	Options issued to employees of the Company for no cash consideration. At the date of this Notice of Meeting the options have nil fair value as the exercise price of the options exceeds the underlying market value of the Company’s shares.
26 May 2017	24,050,000 ordinary fully paid shares	Note 2	Issued to various sophisticated and professional investors pursuant to a share placement announced to ASX on 22 May 2017.	Issued at a price of 10 cents per share. Market price on the trading day prior to the issue was 10 cents per share.	Cash consideration $2,405,000 before costs of the issue. Funds from the placement of approximately $1.9 million have been used to the date of this notice to advance exploration programs at the Company’s Paterson Gold Prospects and for working capital purposes. The balance of the placement fundswill be used for the same purposes.

9

ENCOUNTER RESOURCES LIMITED

ABN 47 109 815 796

EXPLANATORY STATEMENT

4. Approval of Additional 10% Placement Capacity (Continued)

Date of Appendix 3B	Number of Equity Securities	Class of Equity Securities and summary of terms	Names of recipients or basis on which recipients determined	Issue price of Equity Securities and discount to Market Price1 on the trading day prior to the issue	If issued for cash – the total consideration, what it was spent on and the intended use of any remaining funds If issued for non-cash consideration – a description of the consideration and the current value of the consideration
2 June 2017	2,180,000 ordinary fully paid shares	Note 2	Issued to various sophisticated and professional investors pursuant to a share placement announced to ASX on 22 May 2017.	Issued at a price of 10 cents per share. Market price on the trading day prior to the issue was 10 cents per share.	Cash consideration $218,000 before costs of the issue. No placement funds have been expended to the date of this notice. The funds will be used, to advance exploration programs at the Company’s Paterson Gold Prospects and for working capital purposes.
15 June 2017	6,827,500 ordinary fully paid shares	Note 2	Issued to existing shareholders of the Company pursuant to a Share Purchase Plan closing 12 June 2017.	Issued at a price of 10 cents per share. Market price on the trading day prior to the issue was 12 cents per share.	Cash consideration $682,750 before costs of the offer. No SPP funds have been expended to the date of this notice. and the funds will be used, to advance exploration programs at the Company’s Paterson Gold Prospects and for working capital purposes.
12 July 2017	2,806,216 ordinary fully paid shares	Note 2	Issued to directors of the Company pursuant to a share placement announced to ASX on 22 May 2017 and shareholder approval on 11 July 2017.	Issued at a price of 10 cents per share. Market price on the trading day prior to the issue was 11.5 cents per share.	Cash consideration $280,622 before costs of the issue. No placement funds have been expended to the date of this notice. The funds will be used, to advance exploration programs at the Company’s Paterson Gold Prospects and for working capital purposes.
5 October 2017	250,000 ordinary fully paid shares	Note 2	Issued to vendors on the acquisition of exploration assets by the Company.	Issued at a price of 8.2 cents per share. Market price on the trading day prior to the issue was 8.2 cents per share.	Non-cash consideration amounting to $20,500 given in exchange for the acquisition of exploration assets. Current fair value of consideration given at 20 October 2017 is $20,000.

10

ENCOUNTER RESOURCES LIMITED ABN 47 109 815 796

EXPLANATORY STATEMENT

4. Approval of Additional 10% Placement Capacity (Continued)

Notes:

1. Market Price means the closing price of ordinary fully paid shares on ASX (excluding special crossings, overnight sales and exchange traded option exercises).

2. Ordinary fully paid shares (ENR), terms of which are set out in the Company’s constitution.

3. Unlisted options issued pursuant to the terms and conditions of the Encounter Resources Limited Employee Option Plan and/or pursuant to shareholder approval at the Company’s 2016 AGM and exercisable at 13 cents each on or before 24 November 2020.

4. Unlisted options issued pursuant to shareholder approval at the Company’s 2016 AGM and exercisable at 17.5 cents each on or before 24 November 2021.

5. (g) A voting exclusion statement is included in the Notice. At the date of the Notice, the Company has not determined its allocation policy for the issue of Equity Securities under the Additional 10% Placement Capacity. The Company has not approached, and has not yet determined to approach, any particular existing security holders or an identifiable class of existing security holders to participate in an offer under the Additional 10% Placement Capacity, and therefore no Shareholder will be excluded from voting on Agenda Item 4.

Directors Recommendation

The Board recommends Shareholders vote in favour of Agenda Item 4.

11

ENCOUNTER RESOURCES LIMITED

ABN 47 109 815 796

EXPLANATORY STATEMENT

Glossary

Annual General Meeting means the annual general meeting of the Company.

Accounting Standards has the meaning given to that term in the Corporations Act.

Additional 10% Placement Capacity has the meaning set out in Section 4 of the Explanatory Statement.

Additional Placement Period has the meaning set out in Section 4(c) of the Explanatory Statement.

Annual General Meeting or Meeting means the annual general meeting the subject of the Notice.

Annual Report means the annual report of the Company for the year ended 30 June 2017.

ASX means ASX Limited ABN 98 008 624 691 and, where the context permits, the Australian Securities Exchange operated by ASX Limited.

Board means the board of Directors.

Closely Related Party has the meaning given to that term in the Corporations Act.

Company means Encounter Resources Limited ACN 47 109 815 796.

Constitution means the constitution of the Company.

Corporations Act means the Corporations Act 2001 (Cth).

Director means a director of the Company.

Equity Securities has the meaning as in the Listing Rules.

Explanatory Statement means this Explanatory Statement accompanying the Notice.

Key Management Personnel has the meaning given to that term in the Accounting Standards and broadly includes those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, including any Director (whether executive or otherwise) of the Company.

Listing Rules means the listing rules of the ASX.

Market Value means the value of Shares as determined by the volume weighted average trading price of Shares sold on the ASX over the last 5 trading days immediately before the relevant date.

New Equity Securities means all securities issued in the 12 months prior to 23 October 2017.

Notice or Notice of Meeting means the notice of annual general meeting accompanying this Explanatory Statement.

Option means an option to acquire a Share.

Plan means the Encounter Resources Limited Employee Share Option Plan.

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 2017.

Restricted Voter means Key Management Personnel and their Closely Related Parties.

Resolution means a resolution the subject of this Notice.

Share means an ordinary fully paid share in the capital of the Company;

Shareholder means a holder of a Share.

Trading Day means a day determined by ASX to be a trading day in accordance with the Listing Rules.

WST means Australian Western Standard Time.

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