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NOTICE OF GENERAL MEETING

A General Meeting of the Company will be held at the Plaza Level, BGC Centre, 28 The Esplanade, Perth, Western Australia on 18 August 2010 at 10am (WST).

This Notice of General Meeting 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.

Should you wish to discuss any matter please do not hesitate to contact the Company by telephone on (08) 9322 6322.

EQUATORIAL COAL LIMITED

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NOTICE OF GENERAL MEETING

Notice is hereby given that a general meeting of Shareholders of Equatorial Coal Limited (“ Equatorial ” or “ Company ”) will be held at the Plaza Level, BGC Centre, 28 The Esplanade, Perth, Western Australia on 18 August 2010 at 10am (WST) (“ Meeting ”).

The Explanatory Memorandum to this Notice provides additional information on matters to be considered at the Meeting. The Explanatory Memorandum and the Proxy Form form part of this Notice.

The Directors have determined pursuant to regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered as Shareholders on 16 August 2010 at 5pm (WST).

Terms and abbreviations used in this Notice and the Explanatory Memorandum are defined in Section 15 of the Explanatory Memorandum.

AGENDA

1. Resolution 1 – Change of Company Name

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

“That, with effect from the date that ASIC alters the details of the Company’s registration in accordance with section 157 of the Corporations Act, the name of the Company be changed to “ Equatorial Resources Limited ”.

2. Resolution 2 – Authority to Issue Vendor Shares

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

“That, pursuant to and in accordance with Listing Rule 7.1 and for all other purposes, Shareholders approve the issue of 5,700,000 Shares (“ Vendor Shares ”) to the Vendors and/or their nominees in accordance with the terms and conditions in the Explanatory Memorandum accompanying this Notice.”

Voting Exclusion

The Company will disregard any votes cast on this resolution by a person (or any associate of such a person) who may participate in the issue of the Vendor Shares and a person (or any associate of such a person) who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the resolution is passed.

However, the Company will not disregard a vote if:

(a) 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
(b) it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

3. Resolution 3 – Authority to Issue Placement Shares

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

"That, pursuant to and in accordance with Listing Rule 7.1 and for all other purposes, Shareholders approve and authorise the Directors to allot and issue up to 8,000,000 Shares each at an issue price of $0.25 (“ Placement Shares ”) on the terms and conditions in the Explanatory Memorandum accompanying this Notice.”

Voting Exclusion

The Company will disregard any votes cast on this resolution by a person (or any associate of such a person) who may participate in the issue of the Placement Shares and a person (or any associate of such a person) who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the resolution is passed.

However, the Company will not disregard a vote if:

(a) 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
(b) it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

4. Resolution 4 – Authority to Issue Shares to Mr John Welborn

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

"That, pursuant to and in accordance with Listing Rule 10.11 and for all other purposes, Shareholders authorise and approve the Directors to allot and issue up to 2,000,000 Shares each at an issue price of $0.25 to Mr John Welborn and/or his nominees (“ Welborn Shares ”) on the terms and conditions in the Explanatory Memorandum accompanying this Notice.”

Voting Exclusion

The Company will disregard any votes cast on this resolution by Mr John Welborn or his associates.

However, the Company will not disregard a vote if:

(a) 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
(b) it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

5. Resolution 5 – Ratification of Prior Share Issue

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

“That, pursuant to and in accordance with Listing Rule 7.4 and for all other purposes, Shareholders approve and ratify the prior issue by the Directors of 6,400,000 Shares each at an issue price of $0.25 ( “Prior Placement Shares” ) on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice.”

Voting Exclusion

The Company will disregard any votes cast on this resolution by a person who participated in the issue of the Prior Placement Shares, or any associate of such a person.

However, the Company will not disregard a vote if:

(a) 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
(b) it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

6. Resolution 6 – Authority to Grant Incentive Options to Mr Peter Woodman

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

"That, pursuant to and in accordance with Listing Rule 10.11 and for all other purposes, Shareholders approve the grant of the following:

(a) 500,000 Incentive Options exercisable at $0.25 each on or before 30 June 2012; and

(b) 500,000 Incentive Options exercisable at $0.40 each on or before 30 June 2013,

(collectively referred to as “ Woodman Incentive Options ”) to Mr Peter Woodman or his nominees and on the terms and conditions in the Explanatory Memorandum."

Voting Exclusion

The Company will disregard any votes cast on this resolution by a person (or any associate of such a person) who is to receive the Woodman Incentive Options and a person (or any associate of such a person) who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the resolution is passed.

However, the Company will not disregard a vote if:

(a) 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
(b) it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

7. Resolution 7 – Authority to Grant Incentive Options to Mr Mark Pearce

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

"That, pursuant to and in accordance with Listing Rule 10.11 and for all other purposes, Shareholders approve the grant of the following:

(a) 300,000 Incentive Options exercisable at $0.25 each on or before 30 June 2012; and
(b) 500,000 Incentive Options exercisable at $0.40 each on or before 30 June 2013,

(collectively referred to as “ Pearce Incentive Options ”) to Mr Mark Pearce or his nominees and on the terms and conditions in the Explanatory Memorandum."

Voting Exclusion

The Company will disregard any votes cast on this resolution by a person (or any associate of such a person) who is to receive the Pearce Incentive Options and a person (or any associate of such a person) who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the resolution is passed.

However, the Company will not disregard a vote if:

(a) 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
(b) it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

8. Resolution 8 – Authority to Grant Incentive Options to Mr John Welborn

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

"That, pursuant to and in accordance with Listing Rule 10.11 and for all other purposes, Shareholders approve the grant of the following:

(a) 1,000,000 Incentive Options exercisable at $0.25 each on or before 30 June 2012 vesting after 6 months of service;
(b) 1,500,000 Incentive Options exercisable at $0.40 each on or before 30 June 2013 vesting after 12 months of service; and
(c) 2,000,000 Incentive Options exercisable at $0.60 each on or before 31 December 2013 vesting after 18 months of service,

(collectively referred to as “ Welborn Incentive Options ”) to Mr John Welborn or his nominees and on the terms and conditions in the Explanatory Memorandum."

Voting Exclusion

The Company will disregard any votes cast on this resolution by a person (or any associate of such a person) who is to receive the Welborn Incentive Options and a person (or any associate of such a person) who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the resolution is passed.

However, the Company will not disregard a vote if:

(a) 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
(b) it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

9. Resolution 9 – Authority to Grant Incentive Options to Employees and Consultants

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

"That, pursuant to and in accordance with Listing Rule 7.1 and for all other purposes, Shareholders approve the grant of the following:

(a) 1,000,000 Incentive Options exercisable at $0.25 each on or before 30 June 2012;
(b) 1,500,000 Incentive Options exercisable at $0.40 each on or before 30 June 2013; and
(c) 2,000,000 Incentive Options exercisable at $0.60 each on or before 31 December 2013,

(collectively referred to as “ Employee Incentive Options ”) to key employees and consultants of the Company and/or their nominees and on the terms and conditions in the Explanatory Memorandum."

Voting Exclusion

The Company will disregard any votes cast on this resolution by a person (or any associate of such a person) who may participate in the issue of the Employee Incentive Options and a person (or any associate of such a person) who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the resolution is passed.

However, the Company will not disregard a vote if:

(a) 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
(b) it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

10. Resolution 10 - Re-election of Director – Mr Peter Woodman

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

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

11. Resolution 11 - Re-election of Director – Mr John Welborn

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

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

Dated 14 July 2010

BY ORDER OF THE BOARD

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GREG SWAN

Company Secretary

EQUATORIAL COAL LIMITED

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EXPLANATORY MEMORANDUM

1. Introduction

This Explanatory Memorandum has been prepared for the information of Shareholders of the Company in connection with the business to be conducted at the Meeting to be held at the Plaza Level, BGC Centre, 28 The Esplanade, Perth, Western Australia on 18 August 2010 at 10am (WST).

This Explanatory Memorandum should be read in conjunction with and forms part of the accompanying Notice. The purpose of this Explanatory Memorandum is to provide information to Shareholders in deciding whether or not to pass the Resolutions in the Notice.

This Explanatory Memorandum includes the following information to assist Shareholders in deciding how to vote on the Resolutions:

Section 2: Action to be taken by Shareholders Section 3: Summary of Transaction Section 4: Resolution 1 – Change of Company Name Section 5: Resolution 2 – Authority to Issue Vendor Shares Section 6: Resolution 3 – Authority to Issue Placement Shares Section 7: Resolution 4 – Authority to Issue Placement Shares to Mr John Welborn
Section 8: Resolution 5 – Ratification of Prior Share Issue Section 9: Resolution 6 – Authority to Grant Incentive Options to Mr Peter Woodman
Section 10: Resolution 7 – Authority to Grant Incentive Options to Mr Mark Pearce
Section 11: Resolution 8 – Authority to Grant Incentive Options to Mr John Welborn
Section 12: Resolution 9 – Authority to Grant Incentive Options to Employees and Consultants
Section 13: Resolution 10 – Re-election of Director – Mr Peter Woodman Section 14: Resolution 11 – Re-election of Director – Mr John Welborn Section 15: Definitions

Schedule 1: Summary of ROC Mining Laws and Title Information Schedule 2: Specific Risks in Relation to the Transaction Schedule 3: Terms and Conditions of Incentive Options

A Proxy Form is located at the end of the Explanatory Memorandum.

2. Action to be taken by Shareholders

Shareholders should read this Explanatory Memorandum carefully before deciding how to vote on the Resolutions.

A Proxy Form is attached to the Notice. This is to be used by Shareholders if they wish to appoint a representative (a 'proxy') to vote in their place. All Shareholders are invited and encouraged to attend the Meeting or, if they are unable to attend in person, sign and return the Proxy Form to the Company in accordance with the instructions provided. Lodgement of a Proxy Form will not preclude a Shareholder from attending and voting at the Meeting in person.

3. Summary of Transaction

The Company announced on 8 June 2010 that it had acquired a 100% interest in Congo Mining Limited SARL (“ CML ”) which holds the rights to two potentially largescale iron ore projects (“ Projects ”) located in the Republic of Congo (“ Transaction ”).

This Meeting has been called by the Board of Equatorial to seek the necessary approvals required as a result of that announcement.

3.1 Overview of CML

CML is a private company incorporated in the Republic of Congo (“ ROC ”) which holds the rights to the Mayoko-Moussondji Iron Project (“ MMIP ”) and Badondo Iron Project (“ BIP ”) located in the ROC.

Further information regarding CML’s exploration assets is included in Sections 3.2, 3.3 and 3.4 and Schedule 1.

3.2 Overview of Projects

CML holds exploration licences for the MMIP and BIP located in the ROC. A summary of the MMIP and BIP title information and overview of exploration licences in the ROC is included in Schedule 1.

Highlights of the Projects are as follows:

The MMIP is located in South West ROC and immediately to the west of DMC Mining Limited’s (“ DMC ”) (ASX: DMM) Mayoko-Lekoumou iron ore project. DMC is currently the subject of two competing takeover offers.
The MMIP contains approximately 9kms of elevated ridges prospective for hematite and magnetite rich itabirite hosted iron ore mineralisation based on

surface exploration work undertaken by the French Government Resource Bureau (“ BRGM ”) in September 2007.

The Mayoko to Pointe Noire rail line crosses through the MMIP and runs to the established deep water port of Pointe Noire.
The BIP is located in North West ROC and close to Sundance Resources Limited’s (“ Sundance ”) (ASX: SDL) Nabeba iron ore project and Core Mining Ltd’s (“ Core Mining ”) Avima iron ore project. Severstal, Russia’s largest steel producer, recently acquired 16.5% of Core Mining for US$15 million.
The BIP is also prospective for hematite and magnetite rich itabirite hosted iron ore mineralisation with exploration previously undertaken by BRGM having already identified an approximately 7km long ridge, outcropping up to over 400m high above the plain that is known to host iron mineralisation.
Both Projects are located in a potential next generation iron ore province that hosts numerous large projects such as:
DMC’s Mayoko-Lekoumou iron ore project (0.5km east of MMIP);
Xstrata plc’s Zanaga iron ore project (120km south east of MMIP);
Sundance’s Mbalam iron ore project (100km north east of BIP);
Sundance’s Nabeba iron ore project (80km north east of BIP);
CMEC’s Belinga iron ore project (50km south of BIP) and
Core Mining’s Avima iron ore project (50km north of BIP);
The ROC is a stable and secure country with foreign investment actively encouraged.

3.3 Mayoko-Moussondji Iron Project

The MMIP is located in the Department of Niari, in the South West of the ROC close to the town of Mayoko (refer Figure 1). It is located on a north south road axis that passes through the town of Mossendjo, approximately 75km to the south of Mayoko.

The MMIP contains two iron ore exploration targets:

The Makengui Prospect is located approximately 10kms west of Mayoko and consists of a succession of ridges which are aligned in the ENE-SSW direction parallel to the major regional geology trends. The ridges correspond to outcrops of itabirite (similar geologically to the term Banded Iron Formation used in Australia) and are estimated to be 5km in strike length.
The Mavendi Prospect is located approximately 15kms to the north west of Mayoko and consists of two main ridges. The first ridge, situated to the north east, is a ridge in the shape of a semi-circle approximately 1km in diameter. The second ridge, is situated to the south, is linear and represents a small plateau oriented NE-SW and is approximately 4km long.

The geology at Mayoko consists of biotite gneiss bordered to the north and the south by amphibolites which host the iron deposit at Makengui. This structure is recognised over approximately 20km length by 5km width. It is hosted in Archean granitic terrain locally termed the Chaillu Massif. The regional orientation is NNESSW and the dips of the formations oscillate between 45[o] and the vertical.

3.4 Badondo Iron Project

The BIP is located in the North West region of the ROC, in the Department of Shanga, approximately 10kms from the border with Gabon. The BIP contains Mt. Badondo and is 50km to the south of Mt. Avima, 80km to the south west of Mt. Nabeba and approximately 50km to the north of the iron rich district of Belinga, in Gabon.

Mt. Badondo consists of itabirites that outcrop in a discontinuous manner along a ridge line of more than 7km long, oriented north-south. The width of the ridge is of the range of 10m to 20m, the east flank is steep and the west flank displays a gentler slope. Its altitude varies between 500m, the altitude of the wetland plains at the base of Mont Badondo and more than 920m in its north part.

Mt. Badondo and the other iron rich ridges of the Haut Ivindo terrain are relics of ancient metamorphic rocks hosted in the granitic massif of Haut Ivindo, the northern equivalent of the granitic Chaillu Massif (refer Figure 1), located in the south west of ROC (which hosts the MMIP Project). These metamorphic rocks are composed of hematitic quartzite, amphibole and biotite, amphibolites, mica-schists and biotite gneiss with biotite or biotite-amphibole. The ridge is represented by a continuous outcrop of ferruginous quartzite and is bordered with gneiss and crystalline schists.

The BIP was part of a regional geological reconnaissance mission undertaken by BRGM between 1964 and 1966, which included a limited surface sampling program at BIP. The results of the surface sampling program were grouped together in the table completed by Wissink (1966) as follows:

No.	Type	Fe %	SiO2 %	Al2O3 %	S %	P %
65/9	Altered Itabirite	48.10	30.30	-	-	-
65/33	Altered Itabirite	46.15	31.60	-	-	-
65/34	Rich Itabirite	52.40	24.25	-	-	-
65/35	Rich Itabirite	57.00	17.45	-	-	-
65/37	Itabirite	48.70	28.65	-	-	-
65/42	Jacutinga*	60.75	12.45	0.25	<0.01	0.015

Table 1: Chemical analysis of samples from BIP by Wissink (1966)

*Jacutinga – Brazilian term: highly sheared, metamorphosed, hydrothermally altered ironformation

More recently, BRGM geologists visited the BIP in September 2007 and confirmed a ridge line of more than 7km long of outcropping iron ore mineralisation and also identified the possibility of second layer of iron ore, oriented parallel to the main ridge.

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Figure 1: Location of MMIP and BIP

3.5 Commercial Terms

The Company has entered into acquisition agreements with the Vendors to acquire 100% of CML for consideration as follows:

(i) US$3,200,000 cash;
(ii) 5,700,000 Shares (being the Vendor Shares), subject to shareholder approval; and
(iii) 2,000,000 Shares to be issued not later than 45 days after Equatorial makes an announcement to the ASX of the discovery of a 100Mt Mineral Resource (“ 100Mt Resource Milestone ”).

Resolution 2 seeks Shareholder approval for the issue of the Vendor Shares (refer Section 5 for further details).

On satisfaction of the 100Mt Resource Milestone the Company will seek Shareholder approval for the issue of the 2,000,000 Shares to be issued on satisfaction of such milestone.

The Vendors have agreed that 3,200,000 of the Vendor Shares issued to the Vendors will be subject to a 12 month trading lock from the date of issue of the Vendor Shares.

There are normal commercial warranties associated with the Transaction.

3.6 Capital Raising

As announced on 8 June 2010, the Company will, subject to shareholder approval, make a placement of 8,000,000 Shares at an issue price of $0.25 (being the Placement Shares) to raise $2,000,000 before costs to fund initial working capital on the Projects. Resolution 3 seeks Shareholder approval for the issue of the Placement Shares (refer Section 6 for further details).

As announced on 2 June 2010, the Company completed a placement of 6,400,000 Shares each at an issue price of $0.25 (being the Prior Placement Shares) to raise $1,600,000 before costs to fund the acquisition of CML and to provide working capital. Resolution 4 seeks Shareholder ratification of the issue of Prior Placement Shares (refer Section 8 for further details).

3.7 Risk Factors

The Company has undertaken a due diligence process (including title, legal, technical and other risks) with respect to the acquisition of CML, however it should be noted that the usual risks associated with start up companies undertaking exploration and development activities of large scale projects in the iron ore sector will remain at completion of the acquisition.

Further information regarding the risks associated with the acquisition and ongoing operation of CML are outlined in Schedule 2.

3.8 Geological Information

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr Peter Woodman, who is a member of the Australian Institute of Mining and Metallurgy. Mr Woodman is a Director of Equatorial Coal Limited. Mr Woodman has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Woodman consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

4. Resolution 1 – Change of Company Name

The Directors of the Company have determined to change the Company’s name to “ Equatorial Resources Limited ” and Resolution 1 seeks Shareholder approval for that change in accordance with section 157 of the Corporations Act.

Resolution 1 is a special resolution and requires approval of 75% of the votes cast by Shareholders.

If the proposed change of name is available that change of name takes effect from when ASIC alters the details of the Company’s registration.

5. Resolution 2 – Authority to Issue Vendor Shares

Resolution 2 seeks Shareholder approval pursuant to Listing Rule 7.1 for the issue of the Vendor Shares, which forms part of the total consideration for the acquisition of a 100% interest in CML.

Further details of the issue of Vendor Shares are outlined above in Section 3 – Summary of Transaction.

Listing Rule 7.1 – Shareholder approval of the Vendor Shares

Listing Rule 7.1 requires Shareholder approval for the issue of the Vendor Shares. Listing Rule 7.1 provides that, subject to certain exceptions, Shareholder approval is required for any issue of securities by a listed company, where the securities proposed to be issued represent more than 15% of the Company’s securities then on issue.

Given the Shares issued under Resolution 2 will exceed the balance of the 15% threshold and none of the exceptions contained in Listing Rule 7.2 apply, Shareholder approval is required in accordance with Listing Rule 7.3.

Resolution 2 is an ordinary resolution.

Specific Information Required by ASX Listing Rule 7.3

For the purposes of Shareholder approval of the issue of the Vendor Shares and the requirements of Listing Rule 7.3, information is provided as follows:

(a) the maximum number of Shares the Company can issue under Resolution 2 is 5,700,000 Shares;
(b) the Company will issue and allot the Shares no later than 3 months after the date of the Meeting (or such longer period of time as ASX may in its discretion allow);
(c) the Shares will be issued to the Vendors (or their nominees) in part consideration for the acquisition of CML and as such, no funds will be raised;
(d) the Vendors have agreed that 3,200,000 of the Vendor Shares issued to the Vendors will be subject to a 12 month trading lock from the date of issue of the Vendor Shares;
(e) the securities to be issued pursuant to Resolution 2 are fully paid ordinary shares and will rank equally in all respects with the Company’s existing Shares on issue;
(f) the issue of the Shares will occur progressively; and
(g) a voting exclusion statement is included in the Notice.

6. Resolution 3 – Authority to Issue Placement Shares

Resolution 3 seeks Shareholder approval pursuant to Listing Rule 7.1 for the issue of the Placement Shares to raise $2,000,000 before costs.

Further details of the issue of Placement Shares are outlined above in Section 3 – Summary of Transaction.

Listing Rule 7.1 – Shareholder approval of the issue of Placement Shares

Listing Rule 7.1 requires Shareholder approval for the proposed issue of Placement Shares. Listing Rule 7.1 provides, subject to certain exceptions, that Shareholder approval is required for any issue of securities by a listed company, where the securities proposed to be issued represent more than 15% of the Company’s securities then on issue.

Given the issue of the Placement Shares under Resolution 3 will exceed this 15% threshold and none of the exceptions in Listing Rule 7.2 apply, Shareholder approval is required in accordance with Listing Rule 7.3.

Resolution 3 is an ordinary resolution.

Specific Information Required by Listing Rule 7.3

For the purposes of Shareholder approval of the issue of Placement Shares and the requirements of Listing Rule 7.3, information is provided as follows:

(a) the maximum number of Shares the Company can issue under Resolution 3 is 8,000,000 Shares;
(b) the Company will issue and allot the Shares no later than 3 months after the date of the Meeting (or such longer period of time as ASX may in its discretion allow);
(c) the Shares will be allotted at an issue price of $0.25 each;
(d) the Shares will be issued to sophisticated and professional investors and other exempt investors who are not related parties of the Company;
(e) the Shares to be issued are ordinary shares and rank equally with the Company's existing listed shares;
(f) the issue of the Shares will occur progressively;
(g) a voting exclusion statement is included in the Notice; and
(h) Shareholder approval has been sought to raise $2,000,000 from the issue of Placement Shares. The expected application of funds will be as follows:

Description	Amount $
Exploration and development on Projects	1,529,000
Working capital	471,000
Total	2,000,000

The allocation of funds between exploration and development expenditure and general working capital is based on budgeted expenditures for exploration and work programs that are currently anticipated to occur. This allocation may vary depending on results from these exploration and work programs and/or any additional business development opportunities identified.

7. Resolution 4 – Authority to Issue Shares to Mr John Welborn

Resolution 4 seeks Shareholder approval pursuant to Listing Rule 10.11 and for Mr John Welborn and/or his nominees to subscribe for the Welborn Shares.

The terms and conditions upon which Mr Welborn will subscribe for the Welborn Shares will be the same price as the Placement Shares.

The proposed issue of the Welborn Shares was announced on 8 July 2010. Mr Welborn will commence his role as Managing Director on or about 6 August 2010.

Shareholder approval is required under ASX Listing Rule 10.11 because Mr Welborn a related party of the Company.

Furthermore, Shareholder approval of the issue of the Welborn Shares means that this issue will not reduce the Company's 15% placement capacity under ASX Listing Rule 7.1.

Resolution 4 is an ordinary resolution.

Specific Information Required by ASX Listing Rule 10.13

For the purposes of ASX Listing Rule 10.13, information regarding the issue of the Welborn Shares is provided as follows:

(a) the securities will be issued to Mr John Welborn and/or his nominees;
(b) the maximum number of securities the Company can issue to Mr John Welborn and/or his associates under Resolution 4 is 2,000,000 Shares;
(c) the Welborn Shares will each be allotted at an issue price of $0.25 and will raise $500,000 if fully subscribed by Mr Welborn and/or his nominees;
(d) the Shares to be issued are ordinary shares and rank equally with the Company's existing listed shares;
(e) the Company will issue and allot the Welborn Shares to Mr Welborn and/or his associates no later than one month after the Meeting (or such longer period of time as ASX may in its discretion allow);
(f) a voting exclusion statement is included in the Notice; and
(g) the funds raised from the issue of the Welborn Shares will be used for general working capital of the Company.

8. Resolution 5 – Ratification of Prior Share Issue

Resolution 5 seeks Shareholder ratification pursuant to Listing Rule 7.4 of the issue of the Prior Placement Shares to raise $1,600,000 before costs.

Further details of the issue of the Prior Placement Shares are outlined above in Section 3 – Summary of Transaction.

The Prior Placement Shares were issued within the 15% annual limit permitted under Listing Rule 7.1, without the need for Shareholder approval. The effect of Shareholders passing Resolution 5 by ratifying the issue of the Shares will be to restore the Company’s ability to issue further capital to the maximum 15% limit during the next 12 months.

Resolution 5 is an ordinary resolution.

Specific Information Required by ASX Listing Rule 7.5

For the purposes of Shareholder approval of the issue of Prior Placement Shares and the requirements of Listing Rule 7.5, information is provided as follows:

(a) the number of Shares issued by the Company was 6,400,000 Shares;
(b) the Shares were each issued at $0.25 to raise a total of $1,600,000 before costs;

(c) the Shares issued were fully paid ordinary shares in the capital of the Company and rank equally in all respects with the Company’s existing Shares on issue;
(d) the Prior Placement Shares were issued to a small group of sophisticated and professional investors who are not related parties of the Company;
(e) proceeds from the issue of the Prior Placement Shares were used to fund the acquisition of CML and the Projects and to provide working capital; and
(f) a voting exclusion statement is included in the Notice.

9. Resolution 6 – Authority to Grant Incentive Options to Mr Peter Woodman

Resolution 6 seeks Shareholder approval pursuant to Listing Rule 10.11 for the grant of the Woodman Incentive Options to Mr Peter Woodman (or his nominees) as the incentive component of his remuneration as Director of the Company.

The proposed grant of Incentive Options was announced on 8 June 2010. The closing price of Equatorial Shares on the ASX on the last trading day prior to the date of this announcement was $0.34.

The Company is small listed company, which is focussed on the exploration and development of the Projects. The Company has limited funds, most of which are allocated to specific exploration and development activities. The Board has chosen to grant Incentive Options to Mr Woodman as a key component of his remuneration in order to retain his services and to provide incentive linked to the performance of the Company.

There are no performance criteria on the Incentive Options as given the speculative nature of the Company's activities and the small management team responsible for its running, it is considered the performance of Mr Woodman and the performance and value of the Company are closely related. As such, the Incentive Options granted will generally only be of benefit if Mr Woodman performs to the level whereby the value of the Company increases sufficiently to warrant exercising the Incentive Options.

Listing Rule 10.11 requires Shareholder approval for the proposed grant of the Woodman Incentive Options. Listing Rule 10.11 provides, subject to certain exceptions, that Shareholder approval is required for any issue of securities by a listed company to a related party. As Mr Woodman is a related party of the Company and none of the exceptions contained in Listing Rule 10.12 apply, Shareholder approval is required in accordance with Listing Rule 10.11.

Shareholder approval is sought under Listing Rule 10.11 and as such approval under Listing Rule 7.1 is not required.

Resolution 6 is an ordinary resolution.

Specific information required by ASX Listing Rule 10.13

For the purposes of Shareholder approval of the grant of the Incentive Options and the requirements of Listing Rule 10.13, information is provided as follows:

(a) The maximum number of securities the Company can grant under Resolution 6 is:
(i) 500,000 Incentive Options exercisable at $0.25 each on or before 30 June 2012; and
(ii) 500,000 Incentive Options exercisable at $0.40 each on or before 30 June 2013;
(b) the Company will issue the Woodman Incentive Options no later than 1 month after the date of the Meeting (or such longer period of time as ASX may in its discretion allow);
(c) the Woodman Incentive Options will be granted for no consideration;
(d) the Woodman Incentive Options will be granted to Mr Woodman (or his nominees) in two classes:

Incentive	Number	Exercise	End Date
Option Class		Price
Class A	500,000	$0.25	30 June 2012
Class B	500,000	$0.40	30 June 2013

Refer to Schedule 3 for further terms and conditions of the Incentive Options. There are no vesting dates for the Woodman Incentive Options;

(e) upon exercise of the Woodman Incentive Options, the Shares will be issued on a one for one basis on the same terms as the Company's existing Shares;
(f)
a voting exclusion statement is included in the Notice; and
(g) no funds will be raised from the granting of the Woodman Incentive Options as they are being granted as an incentive component of his remuneration package.

10. Resolution 7 – Authority to Grant Incentive Options to Mr Mark Pearce

Resolution 7 seeks Shareholder approval pursuant to Listing Rule 10.11 for the grant of the Pearce Incentive Options to Mr Mark Pearce (or his nominees) as the incentive component of his remuneration as Director of the Company.

The proposed grant of Incentive Options was announced on 8 June 2010. The closing price of Equatorial Shares on the ASX on the last trading day prior to the date of this announcement was $0.34.

to grant Incentive Options to Mr Pearce as a key component of his remuneration in order to retain his services and to provide incentive linked to the performance of the Company.

There are no performance criteria on the Incentive Options as given the speculative nature of the Company's activities and the small management team responsible for its running, it is considered the performance of Mr Pearce and the performance and value of the Company are closely related. As such, the Incentive Options granted will generally only be of benefit if Mr Pearce performs to the level whereby the value of the Company increases sufficiently to warrant exercising the Incentive Options.

Listing Rule 10.11 requires Shareholder approval for the proposed grant of the Pearce Incentive Options. Listing Rule 10.11 provides, subject to certain exceptions, that Shareholder approval is required for any issue of securities by a listed company to a related party. As Mr Pearce is a related party of the Company and none of the exceptions contained in Listing Rule 10.12 apply, Shareholder approval is required in accordance with Listing Rule 10.11.

Shareholder approval is sought under Listing Rule 10.11 and as such approval under Listing Rule 7.1 is not required.

Resolution 7 is an ordinary resolution.

Specific information required by ASX Listing Rule 10.13

For the purposes of Shareholder approval of the grant of the Incentive Options and the requirements of Listing Rule 10.13, information is provided as follows:

(a) the maximum number of securities the Company can grant under Resolution 7 is:
(i) 300,000 Incentive Options exercisable at $0.25 each on or before 30 June 2012; and
(ii) 500,000 Incentive Options exercisable at $0.40 each on or before 30 June 2013;
(b) the Company will issue the Pearce Incentive Options no later than 1 month after the date of the Meeting (or such longer period of time as ASX may in its discretion allow);
(c) the Pearce Incentive Options will be granted for no consideration;
(d) the Pearce Incentive Options will be granted to Mr Pearce in two classes:

Incentive	Number	Exercise	End Date
Option Class		Price
Class A	300,000	$0.25	30 June 2012
Class B	500,000	$0.40	30 June 2013

Refer to Schedule 3 for further terms and conditions of the Incentive Options. There are no vesting dates for the Pearce Incentive Options;

(e) upon exercise of the Pearce Incentive Options, the Shares will be issued on a one for one basis on the same terms as the Company's existing Shares;
(f) a voting exclusion statement is included in the Notice; and
(g) no funds will be raised from the granting of the Pearce Incentive Options as they are being granted as an incentive component of his remuneration package.

11. Resolution 8 – Authority to Grant Incentive Options to Mr John Welborn

Resolution 8 seeks Shareholder approval pursuant to Listing Rule 10.11 for the grant of the Welborn Incentive Options to Mr John Welborn (or his nominees) as the incentive component of his remuneration as Director of the Company.

The proposed grant of Incentive Options was announced on 8 July 2010. Mr Welborn will commence his role as Managing Director on or about 6 August 2010.

The closing price of Equatorial Shares on the ASX on the last trading day prior to the date of this announcement was $0.37.

The Company is small listed company, which is focussed on the exploration and development of the Projects. The Company has limited funds, most of which are allocated to specific exploration and development activities. The Board has chosen to grant Incentive Options to Mr Welborn as a key component of his remuneration in order to retain his services and to provide incentive linked to the performance of the Company.

There are no performance criteria on the Incentive Options as given the speculative nature of the Company's activities and the small management team responsible for its running, it is considered the performance of Mr Welborn and the performance and value of the Company are closely related. As such, the Incentive Options granted will generally only be of benefit if Mr Welborn performs to the level whereby the value of the Company increases sufficiently to warrant exercising the Incentive Options.

Listing Rule 10.11 requires Shareholder approval for the proposed grant of the Welborn Incentive Options. Listing Rule 10.11 provides, subject to certain exceptions, that Shareholder approval is required for any issue of securities by a listed company to a related party. As Mr Welborn is a related party of the Company and none of the exceptions contained in Listing Rule 10.12 apply, Shareholder approval is required in accordance with Listing Rule 10.11.

Shareholder approval is sought under Listing Rule 10.11 and as such approval under Listing Rule 7.1 is not required.

Resolution 8 is an ordinary resolution.

Specific information required by ASX Listing Rule 10.13

For the purposes of Shareholder approval of the grant of the Incentive Options and the requirements of Listing Rule 10.13, information is provided as follows:

(h) the maximum number of securities the Company can grant under Resolution 8 is:
(iii) 1,000,000 Incentive Options exercisable at $0.25 each on or before 30 June 2012 vesting after 6 months of service; and
(iv) 1,500,000 Incentive Options exercisable at $0.40 each on or before 30 June 2013 vesting after 12 months of service;
(v) 2,000,000 Incentive Options exercisable at $0.60 each on or before 31 December 2013 vesting after 18 months of service;
(i) the Company will issue the Welborn Incentive Options no later than 1 month after the date of the Meeting (or such longer period of time as ASX may in its discretion allow);
(j) the Welborn Incentive Options will be granted for no consideration;
(k) the Welborn Incentive Options will be granted to Mr Welborn in three classes:

Incentive	Number	Exercise	End Date
Option Class		Price
Class A*	1,000,000	$0.25	30 June 2012
Class B**	1,500,000	$0.40	30 June 2013
Class C***	2,000,000	$0.60	31 December 2013

Vesting after 6 months of service
** Vesting after 12 months of service
*** Vesting after 18 months of service

The Welborn Incentive Options will immediately vest if a change in control event occurs in respect of the Shares of the Company.

Refer to Schedule 3 for further terms and conditions of the Incentive Options;

(l) upon exercise of the Welborn Incentive Options, the Shares will be issued on a one for one basis on the same terms as the Company's existing Shares;
(m) a voting exclusion statement is included in the Notice; and
(n) no funds will be raised from the granting of the Welborn Incentive Options as they are being granted as an incentive component of his remuneration package.

12. Resolution 9 – Authority to Grant Incentive Options to Employees and Consultants

Resolution 9 seeks Shareholder approval pursuant to Listing Rule 7.1 for the issue of the Employee Incentive Options, to be granted at the discretion of the Directors to key employees and consultants of the Company.

Listing Rule 7.1 – Shareholder approval of the Employee Incentive Options

Listing Rule 7.1 requires Shareholder approval for the issue of the Employee Incentive Options. Listing Rule 7.1 provides that, subject to certain exceptions, Shareholder approval is required for any issue of securities by a listed company, where the securities proposed to be issued represent more than 15% of the Company’s securities then on issue.

Given the Incentive Options issued under Resolution 9 will exceed the balance of the 15% threshold and none of the exceptions contained in Listing Rule 7.2 apply, Shareholder approval is required in accordance with Listing Rule 7.3.

Resolution 9 is an ordinary resolution.

Specific Information Required by ASX Listing Rule 7.3

For the purposes of Shareholder approval of the issue of the Employee Incentive Options and the requirements of Listing Rule 7.3, information is provided as follows:

(a) the maximum number of securities the Company can grant under Resolution 9 is:
(i) 1,000,000 Incentive Options exercisable at $0.25 each on or before 30 June 2012;
(ii) 1,500,000 Incentive Options exercisable at $0.40 each on or before 30 June 2013; and
(iii) 2,000,000 Incentive Options exercisable at $0.60 each on or before 31 December 2013;
(b) the Company will issue the Employee Incentive Options no later than 3 months after the date of the Meeting (or such longer period of time as ASX may in its discretion allow);
(c) the Employee Incentive Options will be granted to key employees, consultants and advisors of the Company who are not related parties of the Company or their associates, at the discretion of Directors;
(d) the Employee Incentive Options will be granted in three classes:

Incentive	Number	Exercise	End Date
Option Class		Price
Class A	1,000,000	$0.25	30 June 2012
Class B	1,500,000	$0.40	30 June 2013
Class C	2,000,000	$0.60	31 December 2013

Refer to Schedule 3 for further terms and conditions of the Incentive Options;

(e) the Board may apply time-based vesting conditions to the Incentive Options. The time-based vesting conditions will be up to a maximum period of 2 years from their date of grant;
(f) upon exercise of the Employee Incentive Options, the Shares will be issued on a one for one basis on the same terms as the Company's existing Shares;
(g)
the grant of the Employee Incentive Options will occur progressively;
(h) the Employee Incentive Options will be granted for nil consideration and therefore no funds will be raised; and
(i) a voting exclusion statement is included in the Notice.

13. Resolution 10 – Re-Election of Director – Mr Peter Woodman

Resolution 10 deals with the re-election of Mr Peter Woodman to the Board of the Company.

Clause 14.14 of the Constitution gives the Directors authority to appoint other Directors.

Mr Woodman was appointed a Director of the Company on 8 April 2010.

Clause 14.15 of the Constitution states any Director appointed in accordance with Clause 14.14 must retire at the next general meeting and is eligible for re-election.

Accordingly, Mr Woodman resigns as a Director at this Meeting and being eligible seeks approval to be re-elected as a Director.

Details of Mr Woodman's experience and qualifications are as follows:

Mr Woodman is a geologist with over 20 years experience in exploration, development and operations in the resources sector. He is a graduate of the Australian National University.

The Board supports the re-election of Mr Woodman.

14. Resolution 11 – Re-Election of Director – Mr John Welborn

Resolution 11 deals with the re-election of Mr John Welborn to the Board of the Company.

Clause 14.14 of the Constitution gives the Directors authority to appoint other Directors.

Mr Welborn will commence his role as Managing Director on or about 6 August 2010.

Clause 14.15 of the Constitution states any Director appointed in accordance with Clause 14.14 must retire at the next general meeting and is eligible for re-election.

Accordingly, Mr Welborn resigns as a Director at this Meeting and being eligible seeks approval to be re-elected as a Director.

Details of Mr Welborn's experience and qualifications are as follows:

Mr Welborn has extensive experience in the resources sector as a senior executive and in corporate management, finance and investment banking. Most recently Mr Welborn was the Managing Director of a resources company focused on bulk commodities. Previously Mr Welborn was the Head of Specialised Lending in Western Australia for Investec Bank (Australia) Ltd. Mr Welborn also has more than 15 years experience in national and international professional services and management consulting firms.

Mr Welborn is a Chartered Accountant and has a Bachelor of Commerce degree from the University of Western Australia and memberships of the Institute of Chartered Accountants in Australia, the Financial Services Institute of Australasia, and the Australian Institute of Company Directors. Mr Welborn is also a Director of Rugby WA Ltd and a Commissioner of Tourism in Western Australia

The Board supports the re-election of Mr Welborn.

15. Definitions

In this Explanatory Memorandum and Notice:

ASIC means Australian Securities and Investments Commission.

ASX means ASX Limited ACN 009 624 691 and, where the context permits, the Australian Securities Exchange operated by ASX Limited.

BIP means the claims comprising the Badondo Iron Project, located in the ROC, as set out in Schedule 1.

Board means the board of Directors.

CML means Congo Mining Limited SARL.

Constitution means the Constitution of the Company.

Corporations Act means the Corporations Act 2001 (Cth).

Director means a director of the Company.

Employee Incentive Options has the meaning given in Resolution 9.

Equatorial and Company means Equatorial Coal Limited ACN 009 624 691.

Explanatory Memorandum means the explanatory memorandum attached to the Notice.

Incentive Option means an option which entitles the holder to subscribe for one Share on the terms and conditions in the Explanatory Memorandum and Schedule 3.

Listing Rules means the listing rules of ASX.

Meeting has the meaning given in the introductory paragraph of the Notice.

Mineral Resource means an inferred, indicated or measured mineral resource (or combination thereof) reported in accordance with the JORC Code.

MMIP means the claims comprising the Mayoko-Moussondji Iron Project, located in the ROC, as set out in Schedule 1.

Mt means million tonnes.

Notice means this notice of meeting.

Pearce Incentive Options has the meaning given in Resolution 7.

Placement Shares has the meaning given in Resolution 3.

Prior Placement Shares has the meaning given in Resolution 5.

Projects mean CML’s MMIP and BIP, located in the ROC.

Proxy Form means the proxy form attached to the Notice.

Resolution means a resolution contained in this Notice.

ROC means Republic of Congo.

Schedule means a schedule to this Notice.

Share or Shares means a fully paid ordinary share in the capital of the Company.

Shareholder means a shareholder of the Company.

Transaction has the meaning given in Section 3 of the Explanatory Memorandum.

Vendor Shares has the meaning given in Resolution 2.

Vendors mean the owners of CML and those parties which assisted with the Transaction, all of whom are not related parties of the Company.

Welborn Incentive Options has the meaning given in Resolution 8.

Welborn Shares has the meaning given in Resolution 4.

Woodman Incentive Options has the meaning given in Resolution 6.

WST means Western Standard Time, being the time in Perth, Western Australia.

In this Notice, words importing the singular include the plural and vice versa.

Schedule 1 – Summary of ROC Mining Laws and Title Information

1. Summary of ROC Mining Laws

A new Mining Code was passed by Parliament through the Law No 4-2005 dated April 11, 2005 (Mining Code). The Mining Code promotes mineral development by the private sector with the principal role of the ROC to promote and regulate the development of the mining industry.

(a) Exploration Licences

An exploration licence confers on the holder an exclusive right to undertake prospecting and research of substances in the permitted area. The right is limited to the substances and to the area for which a Decree has been issued. The licence is an indivisible real estate right.

The exploration licence is valid for three (3) years from the date of the gazetting of the decree that awards the licence. The licence can be renewed twice for biannual periods. At the time of each renewal, the area of the licence is reduced with a maximum of 50% of the previous surface area.

An exploration licence includes expenditure commitments.

In case of successful results, the exploration licence allows its holder the priority to apply for a mining licence for the discovered substances and for the same area.

Failure to start research operations within nine (9) months from the date of the award of the exploration means that the licence may be withdrawn upon decision of the Minister in charge of Mines.

(b) Mining licence

A holder of an exploration licence who has proved the existence of workable deposit and who has submitted an economic and technical program for the exploitation may make an application for a mining licence.

The mining licence confers the holder the exclusive right to undertake exploitation works in the limits of its perimeter and in depth limitless, for the mineral substances for which it has been awarded.

The duration of the mining licence cannot exceed twenty five (25) years. The licence can be renewed for new periods of fifteen (15) years when the recoverable reserves substantiate the extension of the licence duration.

The holder of the mining licence shall start the development works within twelve (12) months. Upon proposal of the Minister in charge of Mines, the Council of Ministers can withdraw the licence if the holder does not fulfil this obligation.

(c) Mine Frame Agreement

The holder of an exploration licence or a mining licence must enter into a Mining Frame Agreement with the ROC which defines the rights and obligations of the parties with regards to the investments to be made including minimum works programs.

In the case of a holder of a mining licence the holder is required to register a local company to do business in Congo and reserve 10% of the share capital for the Congolese State.

2. Exploration licences of CML

In accordance with Articles 25 and 27 of the Mining Code, CML has been awarded through Presidential Decree No 2009-72 dated March 17, 2009 and Presidential Decree No 2009-73 dated March 17, 2009:

a) an exploration licence valid for iron ore named “Badondo” in the Sangha department and covering a surface area of 998 square kilometres (“Badondo Exploration Licence”); and
b) an exploration licence valid for iron ore named “Mayoko-Moussondji” in the Niari department and covering a surface area of 1,000 square kilometres (“MayokoMoussondji Exploration Licence”).

The Badondo and Mayoko Moussondji Exploration Licences have been awarded for an initial period of three (3) years and can be renewed twice for two (2) extension periods of two (2) years in accordance with Article 32 of the Mining Code and in the conditions defined under Articles 26 and 28 of the Decree No 2007-274 dated May 21, 2007 fixing the conditions of prospecting, research and exploitation of mineral substances.

In accordance with article 7 of the awarding decrees of the Badondo and MayokoMoussondji Explorations Licences, CML, as the licence holder, shall pay a surface royalty. Under the Law No 50-84 dated September 7, 1984, fixing the applicable rates and fees for mining titles, the licence holder shall pay:

XAF 250 per square kilometre / year during the first exploration period;
XAF 500 per square kilometre / year during the second exploration period;
XAF 1,000 per square kilometre / year during the third exploration period.

A new law on rates and fees applicable for mining titles has just been passed before the Congolese Parliament. The new rates defined in the draft of bill of law are the following ones:

XAF 1,500 per square kilometre / year during the first exploration period;
XAF 2,000 per square kilometre / year during the second exploration period;
XAF 2,500 per square kilometre / year during the third exploration period.

The law is not yet promulgated and gazetted.

(Note: The XAF has a fixed exchange rate to the Euro, being EUR 1 = 655.957 XAF. At 13 July 2010, AUD 1 = 447 XAF)

3. Exploration Agreement

Following the awarding of the Badondo and Mayoko Moussondji Exploration Licences, CML has validly concluded with the Government of the Republic of Congo an Exploration Agreement defining the conditions under which CML will conduct mineral exploration works on the area of the Badondo and Mayoko Moussondji Exploration Licences, in accordance with Article 98 of the Mining Code and Article 37 of the Decree No 2007-274 dated May 21, 2007 fixing the conditions of prospecting, research and exploitation of mineral substances.

4. Minimum work program and budget

The minimum work program and budget applicable to the Badondo and Mayoko-Moussondji Exploration Licences are defined, in the exhibit of the Presidential Decrees awarding those Exploration Licences (referred in article 4 of the awarding decrees). In accordance with article 24 of the Decree No 2007-274 dated May 21, 2007, the licence holder (CML) shall perform the work program and budget defined in the awarding decree.

Under Article 24 of the Decree No 2007-274 dated May 21, 2007 fixing the conditions of prospecting, research and exploitation of mineral substances, the holder of an exploration licence shall realize during the validity period of the licence the minimum work program and relevant budget defined in the awarding decree. According to Article 26 of the same Decree, the renewal of the exploration licence is automatic when the holder has fulfilled (i) the minimum work program defined in the awarding decree (ii) its legal and regulatory obligations under its exploration licence. Under Article 29 of the Decree No 2007-274 dated May 21, 2007, the Government can refuse to renew a exploration licence when the conditions defined in above Article 24 (fulfilment of minimum work program and budget) are not met.

not met.
Minimum Work Programs	Year				1				Year 2						Year 3
	2	4	6	8	10	12	14	16	18	20	22	24	26	28	30	32	34	36
Opening of access roads
Construction of the site base
Geophysical studies
Geological study
Drilling and wells
Estimation of reserves
Environmental impact study
Feasibility study
Final report

Budgets											Mayoko Moussondji					Badondo
Opening of access roads and					heliport					XAF 600,000,000				XAF 1,200,000,000
Construction and equipment of the site							base			XAF 400,000,000				XAF 650,000,000
Geophysical studies										XAF 400,000,000				XAF 400,000,000
Geological study										XAF 100,000,000				XAF 100,000,000
Drilling and wells										XAF 250,000,000				XAF 250,000,000
Estimation of reserves										XAF 200,000,000				XAF 200,000,000
Environmental impact study										XAF 100,000,000				XAF 100,000,000
Feasibility study										XAF 25,000,000				XAF 25,000,000
Personnel and other expenses									XAF 1,000,000,000					XAF 1,000,000,000
TOTAL									XAF 3,075,000,000					XAF 3,925,000,000

(Note: The XAF has a fixed exchange rate to the Euro, being EUR 1 = 655.957 XAF. At 13 July 2010, AUD 1 = 447 XAF)

In accordance with article 92 of the Mining Code, article 32 of the Decree No 2007-274 dated May 21, 2007 and article 8 of the awarding decrees of the Badondo and MayokoMoussondji Exploration Licences, the exploration licence can be temporarily suspended and/or withdrawn if the exploration works have not begun within nine (9) months from the date of granting of the exploration licence (being March 17, 2009 for the Badondo and Mayoko Moussondji Exploration Licences). The withdrawal of an exploration licence is decided through a Presidential decree passed in Council of Ministers upon a specific report from the Minister of Mines.

The Company notes that the Vendors did not start exploration works on the Badondo and Mayoko Moussondji Exploration Licences within the prescribed nine (9) months. However, the Ministry of Mines is aware of this situation and has approved the Transaction on the basis that exploration works will commence in a timely manner. The Company has now formally commenced exploration activities.

5. Legal access to the land for the licence holder

As per Article 28 of the Mining Code, an exploration licence confers to its holder, with the limits of its area and to an indefinite depth, the exclusive right to prospect for and explore the mineral substances for which it has been granted.

As per Article 84 of the Decree No 2007-274 dated May 21, 2007, any exploration activity, such as drilling, geophysical acquisition, etc, is subject to a prior declaration to the Ministry of Mines and Geology (notification only).

According to Article 102 of the Mining Code, and subject to the provisions of Article 113, the right to conduct prospecting, exploration or mining of mineral or fossil substances, is including the authorization to conduct drilling, to open wells or tunnels, to install machines, workshops or warehouses in walled enclosures, courtyards and gardens.

On the lands where customary real estate rights are being exercised, occupancy can only take place after these rights have been registered or following a systematic assessment study conducted by the administration.

Under Article 105, occupancy authorizations can also be granted by prefecture orders to the holder of a mining exploration licence, in order (i) to conduct exploration works within the surface area covered by the licence (ii) for the establishment of facilities intended to store and remove the mineral substances extracted and for all facilities intended to the exploration activities. The occupancy orders delivered by the Prefecture can only be issued after the owners and, if applicable the surface land operators, have presented their observations.

Those occupancy authorizations have specifically to be delivered only when the lands on which activities have to be conducted are owned by third parties through a land title.

The Ministry of Mines and Geology shall be informed in writing prior to the beginning of the exploration activities and shall give an advice when the activities to be conducted imply a formal authorization to be granted by another Ministry, such as the Ministry of Environment following an environment impact assessment study.

6. Environmental issues

As per the Law No 003-91 dated April 23, 1991 on the protection of environment and the Decree No 2009-415 dated November 20, 2009, on environmental impact assessment studies, the realization of mining works shall be preceded by an environmental impact assessment study (“ EIA ”), in order to obtain a formal authorization from the Ministry of Environment to realize such project. This study shall be realized by a licenced agency or a licenced institution.

According to Article 25 of the Decree No 2009-415 dated November 20, 2009, the EIA shall be submitted to the Ministry of Environment in ten (10) copies. The authorization shall be delivered within three (3) months following its filing in accordance with Article 40 of the Decree No 2009-415 dated November 20, 2009.

The EIA is dealing in principle with the consequences of the project on the environment, on the local populations and communities, on fauna and flora.

Schedule 2 – Specific Risks in Relation to the Transaction

The various risk factors that currently apply to Equatorial in respect to the activities of Equatorial and investing in Equatorial securities will also apply to the proposed acquisition of CML. A number of additional risk factors have also been identified, and are included herein. Any additional risk factor that may affect CML or its assets will also apply to Equatorial.

Shareholders should note that this list of risk factors is not exhaustive. Some of the risks may be mitigated by the use of appropriate safeguards and systems, whilst others are outside the control of the Company and cannot be mitigated.

Should any of the risks eventuate, then it may have a material adverse impact on the financial performance of the Project, Equatorial and the value of Equatorial’s securities.

A reference to the Projects includes all stages of the Projects, including the exploration,

extraction, and production of iron ore.

(a) Foreign Operations Risks

The Projects are located in the ROC and, as such, the operations of Equatorial will be exposed to various levels of political, economic and other risks and uncertainties. These risks and uncertainties include, but are not limited to, terrorism; hostage taking; military repression; extreme fluctuations in currency exchange rates; high rates of inflation; labour unrest; the risks of war or civil unrest; expropriation and nationalization; renegotiation or nullification of existing concessions, licences, permits and contracts; illegal mining; changes in taxation policies; restrictions on foreign exchange and repatriation; and changing political conditions, currency controls and governmental regulations that favour or require the awarding of contracts to local contractors or require foreign contractors to employ citizens of, or purchase supplies from, a particular jurisdiction.

Changes, if any, in mining or investment policies or shifts in political attitude in the ROC may adversely affect the operations or profitability of Equatorial. Operations may be affected in varying degrees by government regulations with respect to, but not limited to, restrictions on production, price controls, export controls, currency remittance, income taxes, expropriation of property, foreign investment, maintenance of claims, environmental legislation, land use, land claims of local people, water use and mine safety.

Failure to comply strictly with applicable laws, regulations and local practices relating to mineral rights applications and tenure, could result in loss, reduction or expropriation of entitlements, or the imposition of additional local or foreign parties as joint venture partners with carried or other interests.

The occurrence of these various factors and uncertainties cannot be accurately predicted and could have an adverse effect on the operations or profitability of the Company.

(b) Environmental Risks and Regulations

All phases of CML’s operations are subject to environmental regulation in the various jurisdictions in which it operates. These regulations mandate, among other things, the maintenance of air and water quality standards and land reclamation. They also set the limitations on the generation, transportation, storage and disposal of solid and

hazardous waste. Environmental legislation is evolving in a manner which will require stricter standards and enforcement, increased fines and penalties for noncompliance, more stringent environmental assessments of proposed projects, and a heightened degree of responsibility for companies and their officers, directors and employees. There is no assurance that future changes in environmental regulation, if any, will not adversely affect Equatorial’s operations. Environmental hazards may exist on the properties on which Equatorial holds interests which are unknown to Equatorial at present and which have been caused by previous or existing owners or operators of the properties.

CML will require additional approvals to progress from the exploration phase to the development and mining phases of operations. Failure to obtain approvals for mining or the imposition of restrictive conditions on mining activities making the Projects uneconomic may have a material adverse effect on the business operations of the Company.

Other Government approvals and permits are currently and may in the future be required in connection with the operations of Equatorial. To the extent such approvals are required and not obtained, Equatorial may be curtailed or prohibited from continuing its mining operations or from proceeding with planned exploration or development of mineral properties.

Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions thereunder, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment, or remedial actions. Parties engaged in mining operations or in the exploration or development of mineral properties may be required to compensate those suffering loss or damage by reason of the mining activities and may have civil or criminal fines or penalties imposed for violations of applicable laws or regulations.

Amendments to current laws, regulations and permits governing operations and activities of mining and exploration companies, or more stringent implementation thereof, could have a material adverse impact on Equatorial and cause increases in exploration expenses, capital expenditures or production costs, or reduction in levels of production at producing properties, or require abandonment or delays in development of new mining properties.

(c) Government Regulation

Any material adverse changes in government policies or legislation of the ROC that affect mining, processing, development and mineral exploration activities, income tax laws, royalty regulations, government subsidies and environmental issues may affect the viability and profitability of the Company’s current and future projects.

The mining, processing, development and mineral exploration activities of the Projects are subject to various laws governing prospecting, development, production, taxes, labour standards and occupational health, mine safety, toxic substances, land use, water use, indigenous land claims, and other matters. Furthermore, no assurance can be given that new rules and regulations will not be enacted or that existing rules and regulations will not be applied in a manner which could limit or curtail production or development. Amendments to current laws and regulations governing operations and activities of mining or more stringent implementation thereof could have a substantial adverse impact on the current and any future project and hence the Company.

(d) Licences and Permits

The Company’s mining exploration activities are dependent upon the grant, or as the case may be, the maintenance of appropriate licences, concessions, leases, claims, permits and regulatory consents which may be withdrawn or made subject to limitations. The maintaining of licences, obtaining renewals, or getting licences granted, often depends on the Company being successful in obtaining required statutory approvals for its proposed activities and that the licences, concessions, leases, claims, permits or consents it holds will be renewed as and when required. There is no assurance that such renewals will be given as a matter of course and there is no assurance that new conditions will not be imposed in connection therewith.

(e)

Title to Properties

There can be no assurances that the interest in the Company’s properties is free from defects. The Company has investigated its rights as set forth in this Notice and believes that these rights are in good standing. There is no assurance, however, that such rights and title interests will not be revoked or significantly altered to the detriment of the Company. There can be no assurances that the Company’s rights and title interests will not be challenged or impugned by third parties.

(f)

Insurance and Uninsured Risks

The business of CML is subject to a number of risks and hazards generally, including adverse environmental conditions, industrial accidents, labour disputes, unusual or unexpected geological conditions, ground or slope failures, cave-ins, changes in the regulatory environment and natural phenomena such as inclement weather conditions, floods and earthquakes. Such occurrences could result in damage to mineral properties or production facilities, personal injury or death, environmental damage to properties of CML or others, delays in mining, monetary losses and possible legal liability.

Although Equatorial maintains insurance to protect against certain risks in such amounts as it considers to be reasonable, its insurance will not cover all the potential risks associated with its operations and insurance coverage may not continue to be available or may not be adequate to cover any resulting liability. It is not always possible to obtain insurance against all such risks and Equatorial may decide not to insure against certain risks because of high premiums or other reasons. Moreover, insurance against risks such as environmental pollution or other hazards as a result of exploration and production is not generally available to Equatorial or to other companies in the mining industry on acceptable terms. Losses from these events may cause Equatorial to incur significant costs that could have a material adverse effect upon its financial performance and results of operations.

(g)

Limited Operating History

CML has a limited operating history on which the Company can base an evaluation of the prospects of CML and its assets.

The success of CML in the short to medium term is dependent upon a number of factors, including the successful:

identification of iron ore resources sufficient to supply the Projects over their life;

completion of a positive feasibility study which demonstrates that mining of iron ore can be economically undertaken on the Projects;
design, construction and commissioning of the infrastructure required for the Projects; and
raising of the funding required to develop and operate the Projects.

The prospects of the Projects must be considered in light of the considerable risks, expenses and difficulties frequently encountered by companies in the early stage of exploration and development activities, particularly in the iron ore sector.

Furthermore, as the Projects have not yet commenced operations, there can be no guarantee that the business will operate in line with assumed cost structures. Should the level of costs required to operate the business be higher than anticipated then it may have a materially adverse affect on the future performance and prospects of CML and the Company.

There can be no assurance that the Projects will be profitable in the future. Should production commence, the operating expenses and capital expenditures of the Projects are likely to increase in future years as targeted iron ore is more difficult to extract.

The amounts and timing of expenditures will depend on the progress of ongoing exploration and development, the results of consultants’ analyses and recommendations, the rate at which operating losses are incurred, the execution of any joint venture agreements with strategic partners, and other factors, many of which are beyond the Company’s control.

The Company expects to incur losses on the Projects unless and until such time as the Projects enter into commercial production and generate sufficient revenues to fund their continuing operations. The development of the Projects will require the commitment of substantial resources. There can be no assurance that the Company will generate any revenues or achieve profitability.

(h) No Mineral Resources or Reserves

There are no identified mineral resources and no known commercial quantities of mineral reserves at the Projects. Notwithstanding historical exploration activities on the Projects, there can be no assurances that the Company will identify mineral resources or establish economic quantities of mineral reserves at the Projects.

(i)

Reliance on Key Personnel

The Project is reliant on a number of key personnel, including a number of personnel and consultants for the operation and if applicable, expansion of CML's mining assets. The loss of one or more of its key personnel could have adverse impacts on the Projects and the ongoing development and expansion of CML’s mining assets.

The continued availability of consultants and advisers is to some extent dependent on maintaining the professional relationships that CML’s personnel have developed over time and which may be lost if key personnel cease to be involved with the Project before replacement arrangements can be made. If the involvement of industry specialists, managers or other personnel cease for reasons of contract

termination; ill health; death or disability, the continued development of CML’s mining assets may be adversely affected.

(j)

Future Capital Needs and Additional Funding

The future capital requirements of the Projects will depend on many factors including the results of future exploration and work programs. Furthermore, if other projects are identified by CML and acquired by CML or Equatorial, they may require a substantial amount of additional funding for infrastructure, payments to vendors and working capital before the Company may be able to generate positive cash flows from its operations.

Should the Company undertake to raise additional funding there can be no assurance that additional funding will be available on acceptable terms, or at all. Any inability to obtain additional finance, if required, would have a material adverse effect on the Project’s business and its financial condition and performance.

(k) Exploration and Development Risks

The exploration for, and development of, mineral deposits involves a high degree of risk. Few properties which are explored are ultimately developed into producing mines. Resource exploration and development is a speculative business, characterized by a number of significant risks, including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits, but also from finding mineral deposits that, although present, are insufficient in quantity and quality to return a profit from production. The marketability of minerals acquired or discovered by the Company may be affected by numerous factors that are beyond the control of the Company and that cannot be accurately predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment, and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals, and environmental protection, the combination of which factors may result in the Company not receiving an adequate return on investment capital.

All of the properties in which the Company has an interest, including the Projects, are without any mineral reserves. Whether a mineral deposit will be commercially viable depends on a number of factors, which include, without limitation, the particular attributes of the deposit, such as size, grade and proximity to infrastructure, metal prices, which fluctuate widely, and government regulations, including, without limitation, regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection. The combination of these factors may result in Equatorial expending significant resources (financial and otherwise) on a property without receiving a return. There is no certainty that expenditures made by Equatorial towards the search and evaluation of mineral deposits will result in discoveries of an economically viable mineral deposit.

The Company has relied on and may continue to rely on consultants and others for mineral exploration and exploitation expertise. The Company believes that those consultants and others are competent and that they have carried out their work in accordance with internationally recognized industry standards. However, if the work conducted by those consultants or others is ultimately found to be incorrect or inadequate in any material respect, the Company may experience delays or increased costs in developing its properties.

There can be no assurance that the Company’s mineral exploration activities will be successful. If such commercial viability is never attained, the Company may seek to transfer its property interests or otherwise realize value or may even be required to abandon its business and fail as a “going concern”.

(l)

Resource and Reserve Estimates

Ore Reserve and Mineral Resource estimates are expressions of judgment based on drilling results, past experience with mining properties, knowledge, experience, industry practice and many other factors. Estimates which are valid when made may change substantially when new information becomes available. Ore estimation is an interpretive process based on available data and interpretations and thus estimations may prove to be inaccurate.

The actual quality and characteristics of ore deposits cannot be known until mining takes place, and will almost always differ from the assumptions used to develop resources. Further, Ore Reserves are valued based on future costs and future prices and consequently, the actual Ore Reserves and Mineral Resources may differ from those estimated, which may result in either a positive or negative effect on operations.

Should the Projects encounter mineralisation or formations different from those predicted by past drilling, sampling and similar examinations, resource estimates may have to be adjusted and mining plans may have to be altered in a way which could adversely affect the Projects’ operations.

(m)

Results of Studies

Subject to the results of exploration and testing programs to be undertaken, the Company may progressively undertake a number of studies in respect to the Projects. These studies may include scoping, pre-feasibility and bankable feasibility studies.

These studies will be completed within certain parameters designed to determine the economic feasibility of the Projects within certain limits. There can be no guarantee that any of the studies will confirm the economic viability of the Projects or the results of other studies undertaken by the Company (e.g. the results of a feasibility study may materially differ to the results of a scoping study).

Further even if a study determines the economics of the Projects, there can be no guarantee that the Project will be successfully brought into production as assumed or within the estimated parameters in the feasibility study once production commences including but not limited to operation costs, mineral recoveries and commodity prices. In addition the ability of the Company to complete a study may be dependent on the Company’s ability to raise further funds to complete the study if required.

(n)

Payment Obligations

Under the exploration permits and certain other contractual agreements to which the Company is or may in the future become party, the Projects are or may become subject to payment and other obligations. Failure to meet these payments and obligations may render the Projects’ claims liable to be cancelled. Further, if any contractual obligations are not complied with when due, in addition to any other remedies which may be available to other parties, this could result in dilution or forfeiture of interests held by CML.

(o) Commodity Price Risks

The price of iron ore fluctuates widely and is affected by numerous factors beyond the control of Equatorial, such as industrial and retail supply and demand, exchange rates, inflation rates, changes in global economies, confidence in the global monetary system, forward sales of metals by producers and speculators as well as other global or regional political, social or economic events. The supply of iron ore consists of a combination of new mine production and existing stocks held by governments, producers, speculators and consumers.

Future production, if any, from the Projects (or any other iron ore projects) will be dependent upon the price of iron ore being adequate to make the project economic. Future price declines in the market value of iron ore could cause continued development of, and eventually commercial production from, the project to be rendered uneconomic. Depending on the price of iron ore, Equatorial could be forced to discontinue production or development and may lose its interest in, or may be forced to sell, the project. There is no assurance that, even if commercial quantities of iron ore are produced, a profitable market will exist for them.

In addition to adversely affecting future reserve estimates, if any, of any project, declining commodity prices can impact operations by requiring a reassessment of the feasibility of the project. Such a reassessment may be the result of a management decision or may be required under financing arrangements related to the project. Even if the project is ultimately determined to be economically viable, the need to conduct such a reassessment may cause substantial delays or may interrupt operations until the reassessment can be completed.

(p) Previous Exploration

Historical and current activities on the Projects’ claims could in the future give rise to costs for environmental rehabilitation, damage, control and losses. The Company has received no indication or instruction that rehabilitation of these areas is required. The enforcement of any environmental regulation could lead to increased costs for the Projects which in turn could adversely affect the Company’s financial performance and available cash reserves.

(q) Foreign Exchange Risks

CML’s operating and capital expenditures are likely to be incurred in currencies other than Australian dollars (likely to be Euros, CFA Francs, or US Dollars) and any future revenues from the sale of iron ore are also likely to be in currencies other than Australian dollars. Any fluctuations in the exchange rates between these currencies and the Australian dollar could have a material adverse effect on the Company’s business, financial position and operating results.

(r) Competition

Equatorial and CML will compete with other companies, some of which have greater financial and other resources, and as a result, may be in a better position to compete for future business opportunities. Many of the Company’s competitors not only explore for and produce minerals, but also carry out downstream operations on these and other products on a worldwide basis.

There can be no assurance that the Company or CML can compete effectively with these companies and will be able to attract or maintain the appropriate staffing levels to ensure that the project and business plan can be completed in a timely and cost effective manner.

Schedule 3 – Terms and Conditions of Incentive Options

1. Entitlement

Each Incentive Option (together the " Incentive Options" ) entitles the holder to subscribe for and be issued one fully paid ordinary share ( “Share” ) in Equatorial Coal Limited ( “Company” ) upon exercise of each Incentive Option.

2. Exercise Price and Expiry Date

The Exercise Price and Expiry Date of each Incentive Option is referred to in the below table.

Incentive Option Class	Exercise Price	Expiry Date
Class A	$0.25	30 June 2012
Class B	$0.40	30 June 2013
Class C	$0.60	31 December 2013

3. Exercise Period and Vesting Date

(a) Each Incentive Option is exercisable at any time after the later of the date of grant of the Incentive Option and the vesting date (if applicable) and before the Expiry Date.
(b) If there is a vesting date, the Incentive Options immediately vest if a Change in Control Event occurs in respect of the Shares of the Company.
(c) For the purposes of clause 3(b) a " Change in Control Event " means:
(i) the occurrence of:
- (A) the offeror under a takeover offer in respect of all Shares announcing that it has achieved acceptances in respect of 50.1% or more of the Shares; and
- (B) that takeover bid has become unconditional (except any condition in relation to the cancellation or exercise of the Incentive Options); or
(ii) the announcement by the Company that:
- (A) shareholders of the Company have at a Court convened meeting of shareholders voted in favour, by the necessary majority, of a proposed scheme of arrangement under which all Shares are to be either:
  - (1) cancelled; or
  - (2) transferred to a third party; and

(B) the Court, by order, approves the proposed scheme of arrangement.

4. Notice of Exercise

The Incentive Options may be exercised by notice in writing to the Company and payment of the Exercise Price for each Incentive Option being exercised. Any notice of exercise of an Incentive Option received by the Company will be deemed to be a notice of the exercise of that Incentive Option as at the date of receipt.

5. Shares issued on exercise

Shares issued on exercise of the Incentive Options rank equally with the then shares of the Company.

6. Quotation of Shares on exercise

Application will be made by the Company to ASX for official quotation of the Shares issued upon the exercise of the Incentive Options.

7. Timing of issue of Shares

Within 15 Business Days after the later of the following:

(a) receipt of a Notice of Exercise given in accordance with these terms and conditions and payment of the Exercise Price for each Option being exercised by the Company if the Company is not in possession of excluded information (as defined in section 708A(7) of the Corporations Act); and
(b) the date the Company ceases to be in possession of excluded information in respect to the Company (if any) following the receipt of the Notice of Exercise and payment of the Exercise Price for each Option being exercised by the Company,

the Company will:

(c) allot and issue the Shares pursuant to the exercise of the Options;
(d) give ASX a notice that complies with section 708A(5)(e) of the Corporations Act or lodge a prospectus with ASIC that qualifies the Shares for resale under section 708A(11) of the Corporations Act; and
(e) apply for official quotation on ASX of Shares issued pursuant to the exercise of the Options.

8. Participation in new issues

There are no participation rights or entitlements inherent in the Incentive Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Incentive Options.

However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least ten business days after the issue is announced. This will give the holders of Incentive Options the opportunity to exercise their Incentive Options prior to the date for determining entitlements to participate in any such issue.

9. Adjustment for bonus issues of Shares

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

(a) the number of Shares which must be issued on the exercise of an Incentive Option will be increased by the number of Shares which the Incentive Optionholder would have received if the Incentive Optionholder had exercised the Incentive Option before the record date for the bonus issue; and
(b) no change will be made to the Exercise Price.

10. Adjustment for rights issue

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

==> picture [206 x 29] intentionally omitted <==

O = the old Exercise Price of the Incentive Option.

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

P = average market price (as defined in the ASX Listing Rules) per Share weighted by reference to volume of the underlying Shares during the 5 trading days ending on the day before the ex rights date or ex entitlements date.

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

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

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

11. Adjustments for reorganisation

If there is any reconstruction of the issued share capital of the Company, the rights of the Incentive Optionholders will, be varied to the extent necessary to comply with the ASX Listing Rules which apply to the reconstruction at the time of the reconstruction.

12. Quotation of Incentive Options

No application for quotation of the Incentive Options will be made by the Company.

13. Incentive Options Transferable

The Incentive Options are transferable provided that the transfer of Incentive Options complies with section 707(3) of the Corporations Act.

14. Lodgement Instructions

Cheques shall be in Australian currency made payable to the Company and crossed "Not Negotiable". The application for Shares on exercise of the Incentive Options with the appropriate remittance should be lodged at the Company's Registry.

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EQUATORIAL COAL LIMITED ABN 50 009 188 694

PROXY FORM

The Company Secretary Equatorial Coal Limited

By delivery: Level 9, 28 The Esplanade PERTH WA 6000

By post: PO Box Z5083 PERTH WA 6831

By facsimile: +61 8 9322 6558

I/We[1] ________________

of _____________

being a Shareholder/Shareholders of the Company and entitled to __________

votes in the Company, hereby appoint[2 ] _____________

or failing such appointment the chairman of the general meeting as my/our proxy to vote for me/us on my/our behalf at the general meeting of the Company to be held at the Plaza Level, BGC Centre, 28 The Esplanade, Perth on 18 August 2010 at 10am (WST) and at any adjournment thereof in the manner indicated below or, in the absence of indication, as he thinks fit. If 2 proxies are appointed, the proportion or number of votes that this proxy is authorised to exercise is * [ ]% of the Shareholder's votes*/ [ ] of the Shareholder's votes. (An additional Proxy Form will be supplied by the Company, on request).

Instructions as to Voting on Resolutions

Important:

The chairman of the meeting intends to vote undirected proxies in favour of all of the Resolutions.

The proxy is to vote for or against the Resolutions referred to in the Notice as follows:


Resolution	1	Change of Company Name
Resolution	2	Authority to Issue Vendor Shares
Resolution	3	Authority to Issue Placement Shares
Resolution	4	Authority to Issue Shares to Mr John Welborn
Resolution	5	Ratification of Prior Share Issue
Resolution	6	Authority to Grant Incentive Options to Mr Peter Woodman
Resolution	7	Authority to Grant Incentive Options to Mr Mark Pearce
Resolution	8	Authority to Grant Incentive Options to John Welborn
Resolution	9	Authority to Grant Incentive Options to Employees and Consultants
Resolution	10	Re-election of a Director – Mr Peter Woodman
Resolution	11	Re-election of a Director – Mr John Welborn

Authorised signature/s This section must be signed in accordance with the instructions overleaf to enable your voting instructions to be implemented.

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

1Insert name and address of Shareholder

2 Insert name and address of proxy

*Omit if not applicable

Proxy Notes:

A Shareholder entitled to attend and vote at the general meeting may appoint a natural person as the Shareholder's proxy to attend and vote for the Shareholder at that general meeting. If the Shareholder is entitled to cast 2 or more votes at the general meeting the Shareholder may appoint not more than 2 proxies. Where the Shareholder appoints more than one proxy the Shareholder may specify the proportion or number of votes each proxy is appointed to exercise. If such proportion or number of votes is not specified each proxy may exercise half of the Shareholder's votes. A proxy may, but need not be, a Shareholder of the Company.

If a Shareholder appoints a body corporate as the Shareholder's proxy to attend and vote for the Shareholder at that general meeting, the representative of the body corporate to attend the general meeting must produce the Certificate of Appointment of Representative prior to admission. A form of the certificate may be obtained from the Company's share registry.

You must sign this form as follows in the spaces provided:

Joint Holding: where the holding is in more than one name all of the holders must sign. Power of Attorney: if signed under a Power of Attorney, you must have already lodged it with the registry, or alternatively, attach a certified photocopy of the Power of Attorney to this Proxy Form when you return it.

Companies: a Director can sign jointly with another Director or a Company Secretary. A sole Director who is also a sole Company Secretary can also sign. Please indicate the office held by signing in the appropriate space.

If a representative of the corporation is to attend the general meeting the appropriate 'Certificate of Appointment of Representative' should be produced prior to admission. A form of the certificate may be obtained from the Company's Share Registry.

Proxy Forms (and the power of attorney or other authority, if any, under which the Proxy Form is signed) or a copy or facsimile which appears on its face to be an authentic copy of the Proxy Form (and the power of attorney or other authority) must be deposited at or received by facsimile transmission at the Perth office of the Company (Level 9, 28 The Esplanade, Perth, WA, 6000, or by post to PO Box Z5083, Perth, WA, 6831 or Facsimile (08) 9322 6558 if faxed from within Australia or +618 9322 6558 if faxed from outside Australia) not less than 48 hours prior to the time of commencement of the Meeting (WST).

AI assistant

EQUATORIAL RESOURCES LIMITED — Proxy Solicitation & Information Statement 2010

64870_rns_2010-07-13_8921fc58-a537-417e-9e44-b59ef5514f1e.pdf

A B N 5 0 0 0 9 1 8 8 6 9 4

NOTICE OF GENERAL MEETING

EQUATORIAL COAL LIMITED

A B N 5 0 0 0 9 1 8 8 6 9 4

NOTICE OF GENERAL MEETING

AGENDA

1. Resolution 1 – Change of Company Name

2. Resolution 2 – Authority to Issue Vendor Shares

Voting Exclusion

3. Resolution 3 – Authority to Issue Placement Shares

Voting Exclusion

4. Resolution 4 – Authority to Issue Shares to Mr John Welborn

Voting Exclusion

5. Resolution 5 – Ratification of Prior Share Issue

Voting Exclusion

6. Resolution 6 – Authority to Grant Incentive Options to Mr Peter Woodman

Voting Exclusion

7. Resolution 7 – Authority to Grant Incentive Options to Mr Mark Pearce

Voting Exclusion

8. Resolution 8 – Authority to Grant Incentive Options to Mr John Welborn

Voting Exclusion

9. Resolution 9 – Authority to Grant Incentive Options to Employees and Consultants

Voting Exclusion

10. Resolution 10 - Re-election of Director – Mr Peter Woodman

11. Resolution 11 - Re-election of Director – Mr John Welborn

BY ORDER OF THE BOARD

GREG SWAN

EQUATORIAL COAL LIMITED

A B N 5 0 0 0 9 1 8 8 6 9 4

EXPLANATORY MEMORANDUM

1. Introduction

2. Action to be taken by Shareholders

3. Summary of Transaction

3.1 Overview of CML

3.2 Overview of Projects

3.3 Mayoko-Moussondji Iron Project

3.4 Badondo Iron Project

3.5 Commercial Terms

3.6

Capital Raising

3.7

Risk Factors

3.8 Geological Information

4. Resolution 1 – Change of Company Name

5. Resolution 2 – Authority to Issue Vendor Shares

Listing Rule 7.1 – Shareholder approval of the Vendor Shares

Specific Information Required by ASX Listing Rule 7.3

6. Resolution 3 – Authority to Issue Placement Shares

Listing Rule 7.1 – Shareholder approval of the issue of Placement Shares

Specific Information Required by Listing Rule 7.3

7. Resolution 4 – Authority to Issue Shares to Mr John Welborn

Specific Information Required by ASX Listing Rule 10.13

8. Resolution 5 – Ratification of Prior Share Issue

Specific Information Required by ASX Listing Rule 7.5

9. Resolution 6 – Authority to Grant Incentive Options to Mr Peter Woodman

Specific information required by ASX Listing Rule 10.13

10. Resolution 7 – Authority to Grant Incentive Options to Mr Mark Pearce

Specific information required by ASX Listing Rule 10.13

11. Resolution 8 – Authority to Grant Incentive Options to Mr John Welborn

Specific information required by ASX Listing Rule 10.13

12. Resolution 9 – Authority to Grant Incentive Options to Employees and Consultants

Listing Rule 7.1 – Shareholder approval of the Employee Incentive Options

Specific Information Required by ASX Listing Rule 7.3

13. Resolution 10 – Re-Election of Director – Mr Peter Woodman

14. Resolution 11 – Re-Election of Director – Mr John Welborn

15. Definitions

Schedule 1 – Summary of ROC Mining Laws and Title Information

1. Summary of ROC Mining Laws

(a) Exploration Licences

(b) Mining licence

(c) Mine Frame Agreement

2. Exploration licences of CML

3. Exploration Agreement

4. Minimum work program and budget

5. Legal access to the land for the licence holder

6. Environmental issues

(a) Foreign Operations Risks

EQUATORIAL RESOURCES LIMITED Proxy Solicitation & Information Statement 2010