EQUATORIAL RESOURCES LIMITED — Proxy Solicitation & Information Statement 2010

Mar 29, 2010

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EQUATORIAL COAL LIMITED

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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 30 April 2010 at 9.30am (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.

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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 (“ Company ”) will be held at the Plaza Level, BGC Centre, 28 The Esplanade, Perth, Western Australia on 30 April 2010 at 9.30am (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 28 April 2010 at 5pm (WST).

Terms and abbreviations used in this Notice and the Explanatory Memorandum are defined in Section 4 of the Explanatory Memorandum.

AGENDA

1. Resolution 1 – Approve Share Consolidation

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

"That, pursuant to and in accordance with section 254H of the Corporations Act 2001, clause 4.1 of the Constitution and for all other purposes, Shareholders approve and authorise the Directors to consolidate the issued capital of the Company on the basis that every ten (10) Shares be consolidated into one (1) Share and that Options on issue be adjusted in accordance with the Listing Rules on the terms and conditions in the attached Explanatory Memorandum accompanying this Notice."

Dated 30 March 2010

BY ORDER OF THE BOARD

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MARK PEARCE Company Secretary

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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 30 April 2010 at 9.30am (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 Resolution in the Notice.

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

Section 2: Action to be taken by Shareholders

Section 3: Resolution 1 – Approve Share Consolidation

Section 4: Definitions

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 Resolution.

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.

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3. Resolution 1 – Approve Share Consolidation

Resolution 1 seeks Shareholder approval for the Company to undertake a consolidation of the number of Shares on issue on the basis that every ten (10) Shares held be consolidated into one (1) Share. Similarly, the number of Options on issue will be consolidated on the basis of one (1) Option for every ten (10) Options held and the exercise price of such Options will increase according to the consolidation ratio.

The result of the consolidation is that each Security holding will be reduced by ten times its current level. Each Shareholder’s proportional interest in the Company’s share capital will remain unchanged as a result of the consolidation. Any fractional entitlements of Securityholders as a consequence of the consolidation will be rounded up.

The change in capital structure of the Company following the consolidation, which is subject to adjustments for rounding, is as follows:

Class of Security	Number on Issue (Pre- Consolidation)	Number on Issue (Post- Consolidation)
Shares on issue	431,128,341	43,112,835
Total Shares	431,128,341	43,112,835
Unlisted Options1	7,250,000	725,000

• 1 As at the date of this Notice, there are 7,250,000 Unlisted Options on issue. These Unlisted Options are exercisable at the following exercise prices:

Number on Issue (Pre- Consolidation)	Number on Issue (Post- Consolidation)	Issue Price in dollars (Pre Consolidation)	Issue Price in dollars (Post Consolidation	Expiry
1,000,000	100,000	0.2335	2.335	4 Aug2011
750,000	75,000	0.1835	1.835	31 Dec2010
1,000,000	100,000	0.2835	2.835	31 Dec2012
2,000,000	200,000	0.20	2.00	30 July2013
1,500,000	150,000	0.30	3.00	30 July2013
1,000,000	100,000	0.40	4.00	30 July2013
7,250,000	725,000

The consolidation will take effect from the second Business Day after Shareholder approval is received pursuant to the Notice of Meeting (“ Effective Date ”).

As from the day that is four Business Days after the Effective Date, the Company may not register transfers on a pre-consolidation basis. In the case of certificated holdings, this is the last day for the Company to accept transfers accompanied by certificates issued before the consolidation.

The Company will send a notice to all Securityholders not earlier than the fifth Business Day after the Effective Date and not later than the ninth Business Day after the Effective Date advising of the number of Securities held by each Shareholder both before and after the capital consolidation.

Uncertificated security holding statements or certificates (as applicable) for the Securities will be sent to Securityholders not earlier than the fifth Business Day after

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(but not including) the Effective Date and not later than the ninth Business Day after (but not including) the Effective Date.

The Company will, from the date that is five Business Days after the Effective Date, reject transfers accompanied by a certificate or holding statement that was issued before the consolidation.

Where a Securityholder has sold his or her Securities in the Company prior to the consolidation of ordinary shares or consolidation of options and the Company receives a valid transfer executed by the Shareholder together with a certificate (if applicable) for those Shares or options, the Company will send an uncertificated security holding statement or certificate (as applicable) for the new securities (in respect to the Shares or Options) to the transferee named in the transfer.

Based upon the above, an indicative timetable assuming Shareholder approval is obtained will be as follows:

Date	Event
30 April 2010	Following shareholder approval Company announces shareholder approval to capital consolidation. Last day for trading pre-capital consolidation securities.
4 May 2010	Effective Date. Trading of post capital consolidation securities on a deferred settlement basis commences.
10 May 2010	Last day to register transfers on a pre-capital consolidation basis.
11 May 2010	First day to register transfers on a post-capital consolidation basis.
17 May 2010	Latest date for Company to send notice to each security holder of pre and post capital consolidation holdings.

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4. In this Explanatory Memorandum and Notice

ASIC means Australian Securities and Investments Commission.

ASX means ASX Limited.

Board means the board of Directors.

Constitution means the Constitution of the Company.

Corporations Act means the Corporations Act 2001 (Cth).

Director means a director of the Company.

Equatorial and Company means Equatorial Coal Limited ACN 009 188 694.

Explanatory Memorandum means the explanatory memorandum attached to the Notice.

Listing Rules means the listing rules of ASX.

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

Notice means this notice of meeting.

Option means an option to acquire a Share.

Proxy Form means the proxy form attached to the Notice.

Resolution means a resolution contained in this Notice.

Schedule means a schedule to this Notice.

Security means a Shares or Option.

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

Shareholder means a shareholder of the Company.

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.

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EQUATORIAL COAL LIMITED ACN 0 0 9 1 8 8 6 9 4

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 30 April 2010 at 9.30am (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

The chairman of the Meeting intends to vote undirected proxies in favour of the Resolution.

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

For Against Abstain

Resolution 1 Approve Share Consolidation

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 Director Director/Company Secretary 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).