ENCOUNTER RESOURCES LIMITED — Capital/Financing Update 2018

May 29, 2018

Level 7, 600 Murray Street West Perth WA 6005 PO Box 273 West Perth WA 6872

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P 08 9486 9455 F 08 9486 8366 www.enrl.com.au

30 May 2018

Company Announcements Office Australian Securities Exchange 4th Floor, 20 Bridge Street Sydney NSW 2000

Appendix 3B –Share Placement

Please find attached an Appendix 3B in respect of the issue of 42,367,332 ordinary fully paid shares to unrelated professional and sophisticated investors pursuant to the share placement (Placement) announced to ASX on 24 May 2018.

The first tranche of the Placement was completed pursuant to the Company’s security issue capacities under Listing Rule 7.1 and 7.1A. A total of 23,191,556 Shares was issued pursuant to Listing Rule 7.1 and 19,175,776 Shares issued pursuant to Listing Rule 7.1A.

The balance of the shares to be issued pursuant to the Placement requires shareholder approval for the directors of the Company to subscribe for 4,000,000 shares on the same terms. A notice of meeting in respect of this proposed issue was mailed to shareholders on 28 May 2018.

Attached is a notice given under Section 708A(5) of the Corporations Act in respect of the shares issue.

7.1A DISCLOSURE

The Company provides the following Listing Rule 7.1A disclosure in respect of the issue of 19,175,766 ordinary fully paid shares at 6 cents per Share raising $1,150,547, in accordance with Listing Rule 3.10.5A.

• (a) Details of the dilution to the existing holders of ordinary securities caused by the issue.

Number of shares held by existing 192,007,760 shareholders before the Placement Number of Shares on issue after the 211,183,536 Placement % dilutionary effect of Placement on existing 9.9% shareholders before the Placement*

*not including Shares issued pursuant to the Placement under Listing Rule 7.1

• (b) Where the equity securities are issued for cash consideration, a statement of the reasons why the eligible entity issued the equity securities as a placement under rule 7.1A and not as (or in addition to) a pro rata issue or other type of issue in which existing ordinary security holders would have been eligible to participate.

The Placement has been completed with significant support from respected resource investment funds and at a 15% discount to the prevailing market price of the Company’s shares at announcement of the raising. The Company was not able to complete a share purchase plan (SPP) at the time as the Company had completed a prior SPP within the last 12 months and it is only permitted to complete one SPP in a 12 month period. The Company did not consider that a pro rata entitlement issue would raise the $2.75 million achieved by the Placement in the timeframe.

• (c) Details of any underwriting arrangements, including any fees payable to the underwriter.

No underwriting arrangements or underwriting fees payable were incurred in connection with the Placement.

• (d) Any other fees or costs incurred in connection with the issue.

Commission fees totalling $79,874 are payable to third parties in relation to the Placement.

Encounter Resources Limited

Kevin Hart Company Secretary

Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

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

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

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

Name of entity

Encounter Resources Limited

ABN 47 109 815 796

We (the entity) give ASX the following information.

Part 1 - All issues

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

1 +Class of +securities issued or to Ordinary Fully Paid Shares be issued 2 Number of[+] securities issued or 42,367,332 to be issued (if known) or maximum number which may be issued 3 Principal terms of the +securities (eg, if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)

• See chapter 19 for defined terms.

Appendix 3B Page 1

01/08/2012

Appendix 3B New issue announcement

4 Do the+securities rank equally in all respects from the date of allotment with an existing+class of quoted+securities? If the additional securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 6a Is the entity an+eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h_in relation to the+securities_ the subject of this Appendix 3B, and comply with section 6i 6b The date the security holder resolution under rule 7.1A was passed 6c Number of+securities issued without security holder approval under rule 7.1 6d Number of+securities issued with security holder approval under rule 7.1A	Yes
	6 cents per share
	Shares issued pursuant to a share placement announced to ASX on 24 May 2018.
	Yes
	30 November 2017
	23,191,556
	19,175,776

• See chapter 19 for defined terms.

Appendix 3B Page 2

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Appendix 3B New issue announcement

6e Number of[+] securities issued Nil with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of securities issued Nil under an exception in rule 7.2 6g If securities issued under rule Yes. 7.1A, was issue price at least Issue date – 30 May 2018. 75% of 15 day VWAP as Issue price – 6 cents per share. calculated under rule 7.1A.3? 75% of 15 day VWAP – 5.2 cents. Include the issue date and both Source of VWAP – Orient Capital. values. Include the source of the VWAP calculation. 6h If securities were issued under N/a rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining Yes issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 Dates of entering +securities 30 May 2018 into uncertificated holdings or despatch of certificates Number +Class 8 Number and +class of all 234,375,092 Ordinary fully paid +securities quoted on ASX shares (ENR) ( including the securities in section 2 if applicable)

• See chapter 19 for defined terms.

Appendix 3B Page 3

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Appendix 3B New issue announcement

9 Number and +class of all +securities not quoted on ASX (including the securities in section 2 if applicable)	Number	+Class
	495,000 1,250,000 750,000 500,000 5,441,429 400,000 2,025,000 750,000 825,000	Exercisable at $0.22 each expiring 31 May 2018 Exercisable at $0.23 each expiring 27 November 2018 Exercisable at $0.31 each expiring 27 November 2019 Exercisable at $0.16 each expiring 31 January 2019 Exercisable at $0.21 each expiring 30 September 2018 Exercisable at $0.14 each expiring 28 February 2020 Exercisable at $0.13 each expiring 24 November 2020 Exercisable at $0.175 each expiring 24 November 2021 Exercisable at $0.105 each expiring 1 November 2021

10 Dividend policy (in the case of a N/a trust, distribution policy) on the increased capital (interests)

Part 2 - Bonus issue or pro rata issue

11 Is security holder approval N/a required? 12 Is the issue renounceable or nonN/a renounceable?

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

13 Ratio in which the+securities will be offered 14 +Class of+securities to which the offer relates 15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has+security holders who will not be sent new issue documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of acceptances or renunciations 20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of+security holders 25 If the issue is contingent on +security holders’ approval, the date of the meeting	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a

• See chapter 19 for defined terms.

Appendix 3B Page 5

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Appendix 3B New issue announcement

26 Date entitlement and acceptance form and prospectus or Product Disclosure Statement will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do+security holders sell their entitlements_in full_through a broker? 31 How do+security holders sell part of their entitlements through a broker and accept for the balance? 32 How do +security holders dispose of their entitlements (except by sale through a broker)? 33 +Despatch date	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a

Part 3 - Quotation of securities

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

34 Type of securities ( tick one )

• (a)  Securities described in Part 1

(b)[All other securities ]

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

• See chapter 19 for defined terms.

Appendix 3B Page 6

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Appendix 3B New issue announcement

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

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

36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

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

Entities that have ticked box 34(b)

38 Number of securities for which +quotation is sought

39 Class of +securities for which quotation is sought

40 Do the[+] securities rank equally in all respects from the date of allotment with an existing[+] class of quoted[+] securities?

If the additional securities do not rank equally, please state:

• the date from which they do

• the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment

• • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

• See chapter 19 for defined terms.

Appendix 3B Page 7

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Appendix 3B New issue announcement

41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another security, clearly identify that other security)

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

Quotation agreement

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

• 2 We warrant the following to ASX.

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

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

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

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

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

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

• See chapter 19 for defined terms.

Appendix 3B Page 8

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Appendix 3B New issue announcement

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

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

Sign here:

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Date: 30 May 2018

Company secretary

Print name: Kevin Hart

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• See chapter 19 for defined terms.

Appendix 3B Page 9

01/08/2012

Appendix 3B New issue announcement

Appendix 3B – Annexure 1

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

Introduced 01/08/12

Part 1

Rule 7.1 – Issues exceeding 15% of capital

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

Part 1	Part 1
Rule 7.1 – Issues exceeding 15% of capital
Step 1: Calculate “A”, the base figure from which the placement capacity is calculated
Insertnumber of fully paid ordinary securities on issue 12 months before date of issue or agreement to issue	155,894,044
Addthe following: • Number of fully paid ordinary securities issued in that 12 month period under an exception in rule 7.2 • Number of fully paid ordinary securities issued in that 12 month period with shareholder approval • Number of partly paid ordinary securities that became fully paid in that 12 month period Note: • Include only ordinary securities here – other classes of equity securities cannot be added • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items	6,827,500 shares issued pursuant to a share purchase plan (issued 15 June 2017). 24,050,000 shares issued at 10 cents each pursuant to a share placement (issued 26 May 2017) 2,180,000 shares issued at 10 cents each pursuant to a share placement (issued 1 June 2017) 2,806,216 shares issued at 10 cents each pursuant to a share placement (issued 12 July 2017)
Subtractthe number of fully paid ordinary securities cancelled during that 12 month period	Nil
“A”	191,757,760

• See chapter 19 for defined terms.

Appendix 3B Page 10

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Appendix 3B New issue announcement

Step 2: Calculate 15% of “A”
“B”	0.15 [Note: this value cannot be changed]
Multiply“A” by 0.15	28,763,664
Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used
Insertnumber of equity securities issued or agreed to be issued in that 12 month period not counting_those issued: • Under an exception in rule 7.2 • Under rule 7.1A • With security holder approval under rule 7.1 or rule 7.4 _Note: • This applies to equity securities, unless specifically excluded – not just ordinary securities • Include here (if applicable ) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items	250,000 shares issued to acquire exploration assets (issued 5 October 2017) 23,191,556 placement shares (issued 30 May 2018 – this Appendix 3B)
“C”	23,441,556
Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1
“A” x 0.15 Note: number must be same as shown in Step 2	28,763,664
Subtract“C” Note: number must be same as shown in Step 3	23,441,556
Total[“A” x 0.15] – “C”	5,322,108 [Note: this is the remaining placement capacity under rule 7.1]

• See chapter 19 for defined terms.

Appendix 3B Page 11

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Appendix 3B New issue announcement

Part 2

Rule 7.1A – Additional placement capacity for eligible entities

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

“A” 191,757,760 Note: number must be same as shown in Step 1 of Part 1 Step 2: Calculate 10% of “A” “D” 0.10 Note: this value cannot be changed Multiply “A” by 0.10 19,175,776

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

Insert number of equity securities issued or 19,175,776 placement shares (issued 30 agreed to be issued in that 12 month period May 2018 – this Appendix 3B) under rule 7.1A

Notes:

• This applies to equity securities – not just ordinary securities

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

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

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

• “E” 19,175,776

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

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

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A	Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A
“A” x 0.10 Note: number must be same as shown in Step 2	19,175,776
Subtract“E” Note: number must be same as shown in Step 3	19,175,776
Total[“A” x 0.10] – “E”	Nil Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

Appendix 3B Page 13

01/08/2012

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30 May 2018

The Manager Company Announcements Office Australian Securities Exchange 20 Bridge Street SYDNEY NSW 2000

Dear Sir or Madam

ENCOUNTER RESOURCES LIMITED SECONDARY TRADING NOTICE – NOTIFICATION PURSUANT TO PARAGRAPH 708A(5)(e) OF THE CORPORATIONS ACT 2001

This notice is given by Encounter Resources Limited (ACN 109 815 796) (“Encounter”) under section 708A(5)(e) of the Corporations Act 2001 (Cth) (“the Act”).

As contemplated by Encounter’s Placement announcement on Thursday, 24 May 2018 Encounter advises that it has today issued 42,367,332 new shares at $0.06 per share to professional and sophisticated investors (“Placement Shares”).

Encounter gives notice under section 708A(5)(e) of the Act that:

• (a) The Placement Shares were issued without disclosure to investors under Part 6D.2 of the Act;

• (b) as a disclosing entity, Encounter is subject to regular reporting and disclosure obligations;

• (c) as at the date of this notice, Encounter has complied with the provisions of Chapter 2M as they apply to Encounter and section 674 of the Act; and

• (d) as at the date of this notice, there is no information that is ‘excluded information’ within the meaning of section 708A(7) and 708A(8) of the Act which is required to be disclosed by Encounter under section 708A(6)(e) of the Act.

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Kevin Hart Company Secretary