ENEGEX LIMITED — AGM Information 2016

Oct 23, 2016

ENEGEX LIMITED

(ABN 28 160 818 986)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Members of Enegex Limited (Company) will be held at The Institute of Chartered Accountants in Australia on Level 3 of 600 Bourke Street, Melbourne, Victoria on Thursday, 24 November 2016 at 10:30am (ADST).

ORDINARY BUSINESS

1. Annual Financial Report

To receive and consider the Consolidated Financial Statements of the Company for the year ended 30 June 2016 and the reports of the Directors and Auditor thereon

2. Resolution 1: Adoption of the Remuneration Report for the year ended 30 June 2016

To consider and if thought fit, to pass the following as a non-binding and advisory Resolution in accordance with section 250R of the Corporations Act:

“To adopt the Remuneration Report as included in the Directors’ Report for the year ended 30 June 2016.”

3. Resolution 2: To consider the re-election of Mr E.G. Albers as a Director of the Company

To consider and if thought fit, to pass the following as an Ordinary Resolution:

“That Mr Ernest Geoffrey Albers, who retires as a Director pursuant to the Constitution and, being eligible, offers himself for re-election and is hereby elected as a Director of the Company.”

SPECIAL BUSINESS

4. Resolution 3: Approval of a 10% Placement Capacity under Listing Rule 7.1A

To consider and if thought fit, to pass the following Resolution as a Special Resolution:

“That for the purposes of Listing Rule 7.1A and for all other purposes, the issue of up to 10% of the Company’s share capital, calculated in accordance with Listing Rule 7.1A and on the terms and conditions set out in the Explanatory Memorandum, is approved.”

5. Resolution 4: Adoption of a new Constitution for the Company

To consider and if thought fit, to pass the following as a Special Resolution:

“That, in lieu of the present Constitution of the Company, there be adopted as the Constitution of the Company, a Constitution in the form of the proposed Constitution marked with the letter "A", a copy of which Constitution shall be tabled at the meeting and signed by the Chairman of the Company for the purposes of identification."

OTHER BUSINESS

To transact any other business which may be properly brought before the Meeting in accordance with the Company’s Constitution and the Corporations Act

By order of the Board ENEGEX LIMITED

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Robert Wright Company Secretary 19 October 2016

EXPLANATORY NOTES TO THE BUSINESS OF THE MEETING

Item 1: Annual Financial Report of the Company

The Consolidated Financial Statements and related reports for the last financial year are contained in the Company’s 2016 Annual Report and will be laid before the Meeting. While no Resolution is required, Members are encouraged to ask questions of the Directors and the Auditor and make comments on the Consolidated Financial Statements and reports.

The Auditor responsible for preparing the Auditor's Report for the year ended 30 June 2016, (or his representative) will attend the Meeting. The Chairman will also allow a reasonable opportunity for Members to ask the Auditor questions about the:

• a) conduct of the audit;

• b) preparation and content of the Auditor's Report;

• c) accounting policies adopted by the Company in relation to the preparation of the Consolidated Financial Statements; and

• d) independence of the Auditor in relation to the conduct of the audit.

To assist the Directors and the Auditor in responding to questions, please submit your questions by mail to Enegex Limited, Level 21, 500 Collins Street, Melbourne 3000 or by fax to +61 (0) 3 8610 4799 or by email to admin@enegex.com.au so they are received by no later than 5:00pm (ADST) on Thursday, 17 November 2016, being five (5) business days prior to the Meeting.

As required under section 250PA of the Corporations Act, at the Meeting the Company will distribute a list setting out the questions directed to the Auditor that have been received in writing from Members, being questions the Auditor considers relevant to the content of the Auditor's Report or the conduct of the audit of the Consolidated Financial Statements for the year ended 30 June 2016. The Chairman will allow reasonable opportunity for the Auditor to respond to the questions set out in this list.

Item 2: Resolution 1 - Remuneration Report

The Remuneration Report, which is included in the Directors’ Report section of the Company’s 2016 Annual Report, will be laid before the Meeting. While the Resolution to adopt it is not binding on the Company or the Directors, Members are encouraged to ask questions and make comments on the Remuneration Report. You should also note that the following voting restrictions apply in relation to voting on the Remuneration Report.

Voting exclusion statement

A vote may not be cast (in any capacity) on Resolution 1 by or on behalf of any of the following persons:

• a) a member of the Key Management Personnel , details of whose remuneration are included in the Remuneration Report; or

• b) a Closely Related Party of a member of the Key Management Personnel .

However, a person described in (a) or (b) may cast a vote on Resolution 1 if:

• c) the person does so as a proxy appointed in writing that specifies how the proxy is to vote on the proposed Resolution; and

• d) the vote is not cast on behalf of a person described in (a) or (b).

The Directors unanimously recommend eligible Members vote in favour of adopting the Remuneration Report.

Item 3: Resolution 2 - Election of Mr E.G. Albers as a Director

Resolution 2. The Company’s Constitution requires that at every Annual General Meeting one third of the Directors (other than the Managing Director) shall, by rotation, retire from office and provides that such Director or Directors are eligible for re-election. Mr Albers retires by rotation and is seeking re-election at the Meeting. The Directors, other than Mr Albers, unanimously recommend all Members vote in favour of the reelection of Mr Albers.

Item 4: Resolution 3 - Approval of 10% Placement Capacity under Listing Rule 7.1A

Under Resolution 3, the Company is seeking Members’ approval of a Special Resolution to renew the Company’s capacity to issue the maximum number of additional equity securities permitted under ASX Listing Rule 7.1A. This Listing Rule ( LR ) permits the placement of new equity securities (calculated in accordance with LR 7.1A.2) of up to 10% of the number of fully paid ordinary shares ( Shares ) in the Company on issue 12

months before the issue date or the date of agreement to issue the additional equity securities ( 10% Placement ). As Resolution 3 is a Special Resolution, it requires approval of 75% of the votes cast by Members present and eligible to vote at the Meeting. The 10% Placement may comprise any equity securities as defined by ASX Listing Rules.

Eligibility criteria

Under LR 7.1A an eligible entity may, subject to shareholder approval by way of Special Resolution, make such a 10% Placement in addition to the 15% new issue capacity available to ASX-listed entities under LR 7.1. An eligible entity for the purposes of LR 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 not included in the S&P/ASX 300 Index and has a market capitalisation of significantly less than $300 million, so is an eligible entity.

Placement capacity under Listing Rule7.1A

As at the date of this Notice, the Company had 80,499,737 ordinary shares on issue. Therefore, in addition to any equity securities it can issue under LR 7.1, if Resolution 3is approved, the Company will have capacity to issue up to 80,049,974 equity securities under LR 7.1A, being up to 10% of the 80,499,737 fully paid ordinary shares presently on issue. However, the number of equity securities that may be issued under LR 7.1A may increase beyond 80,499,737, as the actual number of fully paid shares on issue may increase by the date of any issue that may be made should Resolution 3 be approved.

Minimum issue price

In accordance with LR 7.1A, equity securities issued under the 10% Placement can only be issued at a price that is equivalent to not less than 75% of the volume weighted average price ( VWAP ) of the Company’s equity securities of the same class calculated over the 15 trading days on which trades in its Shares were recorded immediately before:

• the date on which the issue price of the equity securities is agreed; or

• the issue date (if the equity securities are not issued within five trading days of the date on which the issue price is agreed).

Placement period

Shareholder approval of the 10% Placement under LR 7.1A is valid from the date of the Meeting until the earlier to occur of:

• 12 months after the date of the Meeting; and

• the date of approval by Members of a transaction under LR 11.1.2 (a significant change to the nature or scale of activities) or LR 11.2 (disposal of main undertaking), or such longer period if allowed by ASX. (The approval of Members to the 10% Placement under LR 7.1A will cease to be valid in the event that Members approve a transaction under LR 11.1.2 or 11.2.)

• Shareholder approval under LR 7.1A does not lapse if the Company’s market capitalisation subsequently exceeds $300 million or it is included in the S&P/ASX 300 Index at some time during the placement period; provided the Company meets the criteria under LR 7.1A on the date of the Meeting.

Dilution to existing shareholdings

If Resolution 3 is approved by Members and the Company issues equity securities under the 10% Placement, there is a potential risk of economic and voting dilution to existing Shareholders as a result.

Further, as the market price of the equity securities may be significantly lower on the issue date of the 10% Placement than on the date of approval at the Meeting, and because equity securities may be issued at a price that is at a discount to the market price on the issue date, there is a risk that the 10% Placement may raise less funding than it would based on current market prices.

The economic dilution will reflect that existing Shareholders who do not participate in the 10% Placement will have their underlying economic interests in the Company’s assets diluted pro rata to the dilution in their shareholdings.

Additionally, as the issue price of any equity securities issued under the10% Placement capacity may be at a discount to the equivalent VWAP of the Company’s Shares traded over the 15 trading days prior to their issue price being set or the equity securities being issued, a further economic effect of such a placement may be a reduction in the market price or value of their then existing equity holding in the capital of the Company. Whether such a reduction in market price or value occurs, and if so for how long it continues, will depend on

factors not presently known, including the purpose for which the 10% Placement may be made. The converse outcomes may also occur.

It is not possible to set out further economic effects which may arise from the 10% Placement, as they are unknown in advance of such a placement being made.

Details of all issues of equity securities by Enegex during the 12 months preceding the date of the meeting as required by Listing Rule 7.3A6

Date of	Number	Class/Type of	Summary of	Names of persons	Price at	Discount to
Issue:	Issued:	equity	terms:	who received	which equity	market	Total cash	Amount of cash	Use of cash	Intended use for
		security:		securities or basis	securities	price (if	consideration	consideration	consideration:	remaining
				on which those	were issued:	any):	received:	spent:		amount of cash
				persons was						(if any):
				determined:
29/6/16	26,833,246	Fully paid	Ordinary fully	Rights issue – not	.012	None	$321,998	$70,000	Working capital	Working capital
		ordinary shares	paid shares	applicable					and evaluation	and evaluation
			ranking equally						expenditure	expenditure
			with all other
			ordinary shares
			on issue

Table showing various hypothetical scenarios as required by Listing Rule 7.3A.2

As required by LR 7.3A.2, the table below shows a number of hypothetical scenarios for the 10% Placement where Variable “A” in the formula in LR 7.1A.2 (representing the Company’s share capital) has increased by either 50% or 100% and the share price has decreased by 50% or increased by 100% from the approximate share price as at the date of this Notice.

		DILUTION
Variable “A” in LR 7.1A.2 is presently 80,499,737 fully paid shares		10% Placement Issue Price $0.0045	10% Placement Issue Price $0.009	10% Placement Issue Price $0.018
Current Capital comprises 1,020,380,247 shares Current Capital comprises		(being a 50% decrease in Issue Price below current share price)	(being the current Share Price)	(being a 100% increase in Issue Price above current share price
80,499,737 shares	Number of Shares	8,049,974	8,049,974	8,049,974
No increase in capital.
Variable A remains
80,499,737 shares	Funds raised (excluding capital	$36,224.88	$72,450	$144,899.53
	raising costs)1
50% increase in capital to
120,749,606 shares by	Number of Shares2	12,074,961	12,074,961	12,074,961
issue of 40,249,869 shares.
Variable A increases to
120,749,606 shares	Funds raised1	$54,337	$108,675	$217,349

1 Rounded to nearest whole dollar

2 No of Shares rounded to nearest whole Share

The table has been prepared on the following hypothetical assumptions but the Company does not represent the assumptions will necessarily occur:

• the Company issues the maximum number of Shares available under the 10% Placement.

• any increase in Variable A (being the Company’s issued share capital at the time of issue under the 10% Placement) is due solely to an issue of Shares which is an exception in LR 7.2; for example a prorata rights issue. However, a 15% placement under LR 7.1 does not increase Variable “A” for the purposes of calculating the placement capacity under LR 7.1A.

• the table shows only the effect of issues of shares under LR 7.1A, not under the 15% placement capacity available to ASX listed entities under LR 7.1.

• the table does not show the dilution that may be caused to any particular Shareholder by reason of placements of Shares under LR 7.1A, based on that Shareholder’s holding at the date of the Meeting. For instance, Shareholders will have different outcomes depending on whether or not they participate in a pro-rata issue which has the effect of increasing Variable “A”; and

• the current price for shares is assumed to be $0.009, being the price on 14 October 2016 immediately prior to lodgement of this Notice with ASX.

Purpose of the 10% Placement

The Company may seek to issue equity securities under the 10% Placement:

• at a cash issue price, in which case the Company would use the funds for existing projects, to fund new venture opportunities, as working capital generally or for other corporate purposes; or

• for a non-cash consideration, such as for the acquisition of new assets or investments, subject to any applicable ASX requirements.

In either case, the cash issue price or the value of the non-cash consideration must comply with the minimum issue price noted above.

The most probable purpose of a 10% Placement will be to fund ongoing working capital generally or, if the Company should make any acquisition(s), fund or partially fund such acquisition(s).

If equity securities under the 10% Placement are issued for a non-cash consideration then the Company will provide, and release to the market, a valuation of the non-cash consideration that demonstrates the issue price of the equity securities under the 10% Placement complies with the requirements of LR 7.1A. Such a valuation may be provided by an independent expert or by the Directors, provided in the latter case the Directors have appropriate expertise to value the relevant non-cash consideration and the report contains a similar level of analysis and is of a similar standard to an independent expert’s report.

Allocation policy

The allottees of any equity securities to be issued under the 10% Placement capacity have not yet been determined. However, the allottees of equity securities could consist of current shareholders or new investors (or both), none of whom will be related parties of the Company.

No priority of application will be accorded to existing shareholders and, unless the 10% Placement was made with disclosure, the allottees will be excluded offerees under section 708(8), 708(10) or 708(11) of the Corporations Act.

Subject to the above provisos, the Company will determine the allottees and the manner of their selection at the time of the issue of the 10% Placement, having regard for the following factors:

• the purpose of the issue of equity securities;

• alternative methods for raising funds available to the Company at that time including, but not limited to, an entitlement issue or other offer where existing Shareholders may participate;

• the effect of the issue of equity securities on the control of the Company;

• the circumstances of the Company including, but not limited to, the financial position and solvency of the Company;

• prevailing market conditions; and

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

Recommendation

As at the date of the Notice containing these Explanatory Notes, the Company has no plans to raise additional capital utilising the 10% Placement authority provided by Resolution 3. However, many eligible resource companies are, as a matter of corporate prudence, seeking to obtain this form of available shareholder approval to enable capital raisings to be made, if appropriate, during the 12 months following the Meeting. Accordingly, Members’ approval of Resolution 3 is considered prudential.

The Directors believe Resolution 3 will provide the Company with the flexibility to raise capital quickly if advantageous terms are available or if required for funding the Company and where doing so is in the best interests of the Company.

The Directors unanimously recommend that all Members vote in favour of Resolution 3.

Item 5: Resolution 4 - Adoption of a new Constitution for the Company

Under Resolution 4, the Company is seeking Members’ approval of a Special Resolution to adopt a new Constitution for the Company to enable direct voting.

While the Company’s share registry provides facilities for online completion and lodgment of proxies, its Constitution does not provide for direct voting. Section 250J of the Corporations Act governing how votes are cast is a replaceable rule and the proposed Constitution permits direct voting by all shareholders without the need for any lodgment of a proxy provided the shareholders authenticates its right to vote by provision of required details (SRN, correct address, shareholding).

Additionally the proposed amendments provide that a shareholder lodging a valid direct vote so that:

• shareholders lodging a direct vote will be deemed to be present at the meeting for all purposes (including for constituting a quorum);

• where a Resolution is put to a meeting to be voted on, on a show of hands, they will be deemed to have voted on a show of hands according to the manner in which they have voted on when direct voting;

• where a poll is carried out in respect of any Resolution on any notice of meeting, the direct voting form completed at the time of voting will be deemed to constitute the poll slip required to be completed on any poll being taken insofar as the subject of the poll is a Resolution voted upon.

The Directors unanimously recommend all Members vote in favour of Resolution 4.

VOTING GENERALLY

• The Company has determined that, in accordance with regulation 7.11.37 of the Corporations Regulations 2001 (Cwth), the holders of shares of the Company who are on the Company’s share register as at 10:30am (ADST) on 22 November 2016 will be taken for the purposes of the Meeting to be held by the persons who held them at that time. Accordingly, those persons will be entitled to attend and vote at the Meeting.

• A Member entitled to attend and vote at the Meeting is entitled to appoint not more than two proxies to attend and vote on their behalf. Where more than one proxy is appointed, such proxy must be allocated a proportion of the Member's voting rights.

• A proxy duly appointed need not be a Member.

• A proxy form accompanies this Notice and to be effective, the form and any document necessary to show the validity of the form must be lodged with the Company not less than 48 hours before the time appointed for the Meeting. Any proxy lodged after that time will be treated as invalid.

• Directors and Officers of corporate shareholders should note that unless the corporate shareholder either:

• (a) completes and lodges with the Company a valid form of appointment of proxy in accordance with the instructions on the enclosed proxy form; or

• (b) completes and either lodges with the Company prior to the Meeting a form of appointment of personal representative in accordance with the provisions of Section 250D of the Corporations Act or causes such personal representative to attend the Meeting with such form of appointment; or

(c) has appointed an attorney,

and such proxy, personal representative or attorney attends the Meeting, then such corporate shareholder will be unable to exercise any votes at the Meeting.

• Proxy and corporate appointment of representative forms may be returned to the Company in the manner detailed at point 6 on the reverse of the proxy form.

• Corporate shareholders should comply with the execution requirements set out above and on the reverse of the proxy form and otherwise comply with the provisions of Section 127 of the Corporations Act, as detailed at point 7 on the reverse of the proxy form.

• Completion of a proxy form will not prevent individual Members from attending the Meeting in person if they wish. Where a Member completes and lodges a valid proxy form and attends the Meeting in person then the proxy's authority to speak and vote for that Member is suspended while the Member is present at the Meeting.

• Where a proxy form or form of appointment of personal representative is lodged and is executed under power of attorney the power of attorney must be lodged in like manner as a proxy.

PROXY FORM ENEGEX LIMITED

(ABN 28 160 818 986)

The Company Secretary Enegex Limited Level 21, 500 Collins Street Melbourne, Victoria 3000

I/We (name of Member) .............................................................................................................................................. of (address) .................................................................................................................................................................

being a Member/Members of Enegex Limited ( Company ) HEREBY APPOINT

(name) …………………………………………………………………………………………………….. or, failing that person, then the Chairman of the Meeting as my/our proxy to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held at The Institute of Chartered Accountants in Australia on Level 3 of 600 Bourke Street, Melbourne, Victoria on Thursday, 24 November 2016 commencing at 10:30 am (ADST) and at any adjournment thereof.

INSTRUCTIONS AS TO VOTING ON RESOLUTIONS

To indicate your instructions mark ý

If no directions are given my/our proxy may vote as he/she thinks fit or may abstain. Otherwise my/our proxy is to vote as follows:

te as follows:
	FOR	AGAINST	ABSTAIN
Ordinary Resolutions
Resolution 1: - Adoption of the Remuneration Report	o	o	o
Resolution 2: - Re-election of Director: Mr E G Albers	o	o	o
Special Resolutions
Resolution 3: -Approval of 10% placement Capacity	o	o	o
Resolution 4: Adoption of a new Constitution for the Company	o	o	o

Chair’s voting intention in relation to undirected proxies

Subject to the operation of the express voting exclusions contained in the Explanatory Notes to the Notice of Meeting, the Chair's intention is to vote an undirected proxy in favour of each resolution to be put to the Meeting, even if he has an interest in the outcome of the resolution/s. You should be aware that votes so cast by the Chair of the Meeting as your proxyholder will not be disregarded because of that interest.

If no direction is given above or if more than one box is marked in relation to a resolution, I/we authorise my/our proxy to vote or abstain as my/our proxy thinks fit in respect of that resolution at the Meeting and any adjournment thereof.

If you are appointing more than one proxy, you must complete the following statement

My total voting right is ___ shares . This Proxy is appointed to represent _ % of my voting right or if 2 proxies are appointed Proxy 1 represents % and Proxy 2 represents ____% of my total votes. If no direction is given above or if more than one box is marked in relation to a resolution, I/we authorise my/our proxy to vote or abstain as my/our proxy thinks fit in respect of that resolution at the Meeting and any adjournment thereof.

Signature(s)

Date Individual or Joint Shareholder 1 Director/Company Secretary

Joint Shareholder 2 Joint Shareholder 3 Director Sole Director & Sole Company Secretary

INSTRUCTIONS FOR APPOINTMENT OF PROXY

1. A Member entitled to attend and vote at a General Meeting of the Company is entitled to appoint not more than two proxies to attend and vote on their behalf. Where more than one proxy is appointed, such proxy must be allocated a proportion of the Member's voting rights.

2. A duly appointed proxy need not be a Member.

3. This proxy form and any document necessary to show the validity of the form must be lodged with the Company not less than 48 hours before the time appointed for the meeting. Any proxy lodged after that time will be treated as invalid.

4. In the case of joint holders of shares in the Company, all holders must sign.

5. Directors and Officers of corporate shareholders should note that unless the corporate shareholder either:

6. (i) completes and lodges with the Company a valid form of appointment of proxy; or

7. (ii) completes and either lodges with the Company prior to the meeting a form of appointment of or certificate of appointment of personal representative in accordance with the provisions of Section 250D of the Corporations Act ( Act ) or causes such personal representative to attend the meeting with such form of appointment or certificate; or

8. (iii) has appointed an attorney,

and such proxy, personal representative or attorney attends the relevant meeting, then such corporate shareholder will be unable to exercise any votes at the relevant meeting.

1. Proxy and corporate representative appointment forms may be returned to the Company by delivery (by hand, mail, courier or facsimile) to the Company Secretary, Enegex Limited at its Registered Office:

   • (a) Level 21 (b) 500 Collins Street

   • (c) Melbourne

   • (d) Victoria 3000

   • (e) Facsimile: +61 (0)3 8610 4799

2. Corporate shareholders should comply with the provisions of Section 127 or Section 204A of the Act as applicable. Section 127 of the Act provides that a company may execute a document without using its common seal if the document is signed by:

3. two directors of the company; or

4. a director and a company secretary of the company; or

5. for a proprietary company that has a sole director who is also the sole company secretary - that director. In this case the signatory must state this next to their signature.

Section 204A of the Act permits a proprietary company that does not have a company secretary to validly execute an instrument appointing a proxy if it is executed by the sole company director of that company and the person signing the proxy states that next to their signature.

For the Company to rely on the assumptions set out in sections 129(5) and (6) of the Act, a document must appear to have been executed in accordance with section 127(1) or (2) or section 204A of the Act. This effectively means the status of the person(s) signing the document or witnessing the affixing of the seal must be set out and conform to the requirements of Section 127(1) or (2) or section 204A as applicable. In all cases the person or persons signing the instrument of proxy will be deemed to have warranted and represented to the Company that the proxy is executed in accordance with sections 129(5) and (6) of the Act or section 204A of the Act as relevant.

1. Completion of a proxy form will not prevent individual Members from attending a meeting in person if they wish. Where a Member completes and lodges a valid proxy form and attends a meeting in person then the proxy's authority to speak and vote for that Member is suspended while the Member is present at that meeting.

2. Where a proxy form or form of appointment of or certificate of appointment of personal representative is lodged and is executed under power of attorney the power of attorney must be lodged in like manner as a proxy.