ESTRELLA RESOURCES LIMITED — AGM Information 2012

Sep 26, 2012

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ACN 151 155 207

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NOTICE OF 2[nd] ANNUAL GENERAL MEETING

EXPLANATORY MEMORANDUM

PROXY FORM

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Date of Meeting

Thursday 22[nd] November, 2012

Time of Meeting 11.00 a.m. (AEST)

Place of Meeting

Estrella Resources Limited Level 17, 15 Castlereagh Street SYDNEY NSW 2000

NOTICE OF 2012 ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the second Annual General Meeting of the members of Estrella Resources Limited (“ the Company ”) will be held at the offices of Estrella Resources Limited at Level 17, 15 Castlereagh Street, Sydney on Thursday 22[nd] November, 2012 commencing at 11.00 a.m. (AEST).

BUSINESS:

ITEM 1: TO RECEIVE THE CONSOLIDATED FINANCIAL REPORT

To receive and consider the Consolidated Financial Report of the Company, together with the reports of the Directors and Auditor, for the financial year ended 30 June 2012.

Note: There is no requirement for Shareholders to approve these reports.

ITEM 2: ORDINARY RESOLUTIONS:

Resolution 1: Adoption of Remuneration Report

“That the Shareholders adopt the Remuneration Report for the financial year ended 30 June 2012.”

Note: The vote on this Resolution is advisory only and does not bind the Directors or the Company.

Voting Exclusion Statement:

In accordance with section 250R (4) of the Act, no member of the key management personnel of the Company or a closely related party of such a member may vote on Resolution 1.

However, in accordance with the Act, a person described above may vote on Resolution 1 if:

• It is cast by such person as proxy for a person who is permitted to vote, in accordance with the direction specified on the proxy form how to vote; or

• It is cast by the Chairman as proxy for a person who is permitted to vote, in accordance with an express direction specified on the proxy form to vote as the proxy decides.

Chairman appointed as proxy:

If the Chairman is appointed as a proxy for a person who is permitted to vote on this Resolution 1, the Chairman will vote any proxies which do not indicate on their proxy form the way the Chairman must vote, in favour of Resolution 1.

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Resolution 2: To re-elect a Director and Chairman – Mr Gavin Solomon

“That, for the purposes of clause 15.3 of the Company’s Constitution and for all other purposes, Gavin Solomon retires as a Director of the Company by rotation pursuant to the Company’s Constitution and, being eligible, is re-elected as a Director and Chairman of the Company.”

Resolution 3: To re-elect a Director – Mr Julian Bavin

“That, for the purposes of clause 15.1 (c) of the Company’s Constitution and for all other purposes, Julian Bavin, being a Director appointed to fill a casual vacancy since the last Annual General Meeting, retires as a Director of the Company and, being eligible, is reelected as a Director of the Company.”

Resolution 4: To re-elect a Director – Mr Simon Kidston

“That, for the purposes of clause 15.3 of the Company’s Constitution and for all other purposes, Simon Kidston retires as a Director of the Company by rotation pursuant to the Company’s Constitution and, being eligible, is re-elected as a Director of the Company.”

ITEM 3: SPECIAL BUSINESS:

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

Resolution 5: Approval for Additional Placement Capacity

“That, pursuant to and in accordance with ASX Listing 7.1A, and for all other purposes, Shareholders approve the issue of Equity Securities up to 10% of the issued ordinary capital of the Company (at the time of issue) calculated in accordance with the formula prescribed in Listing Rule 7.1A.2 and on the terms and conditions in the Explanatory Memorandum.”

Voting Exclusion Statement:

The Company will disregard any votes cast on this Resolution by a person (and any associates of such a person) who may participate in the 10% Placement Facility and a person who might obtain a benefit, except solely in the capacity of a holder of Shares, if this Resolution is passed.

However, the Company will not disregard a vote if:

• 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

• It is cast by the Chairman 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.

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ITEM 4: OTHER BUSINESS

To transact any other business brought forward in accordance with the Company’s Constitution.

Further information in relation to these resolutions is set out in the Explanatory Memorandum below.

PROXIES

To be effective, the proxy form and the power of attorney or other authority (if any) under which each is signed (or a copy of that power or authority certified in a manner acceptable to the Directors of the Company) must be received at least 48 hours prior to the meeting (i.e. not later than 11.00 a.m. on Tuesday 20[th] November 2012), or to any adjourned meeting, at the Company’s Share Registrars being:

Boardroom Pty Limited Hand Delivery: By Mail: By Facsimile: Level 7, 207 Kent Street GPO Box 3993 (02) 9290 9655 Sydney NSW 2000 Sydney NSW 2001

A member entitled to attend and vote is entitled to appoint not more than two persons as his/her proxy to attend and vote instead of the member. A proxy need not be a member of the Company. If more than one proxy is appointed, each proxy must be appointed to represent a specified proportion of the member’s voting rights. Unless under Power of Attorney (which should have been noted by the Company) a proxy form by a corporation should be executed under its common seal or in accordance with the Corporations Act.

Dated at Sydney this 26th day of September 2012

BY ORDER OF THE BOARD

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Justin B Clyne Company Secretary

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EXPLANATORY MEMORANDUM

These explanatory notes set out information in connection with the business to be considered at the Estrella Resources Limited Annual General Meeting.

ORDINARY BUSINESS

The following items of ordinary business will be considered at the meeting.

ITEM 1: TO RECEIVE THE CONSOLIDATED FINANCIAL REPORT

This item of business relates to the receipt and adoption of the Company’s Financial Report for the period ended 30 June 2012 and to the receipt of the Directors’ and Auditor’s Reports. These documents will be tabled by the Chairman of the meeting and do not require a formal resolution.

Resolution 1: Adoption of Remuneration Report

The Corporations Act (“ the Act ”) requires that a resolution be put to the members to adopt the Remuneration Report as disclosed in the Director’s Report. The vote on this resolution is advisory only and non-binding. The resolution gives the members the opportunity to ask questions or make comments concerning the remuneration report during the meeting.

The Remuneration Report is set out on pages 26 to 32 of the Company’s Annual Report for the year ending 30 June 2012 which was lodged with the ASX on or about the date of this Notice. The Remuneration Report sets out the Company’s remuneration policy and reports on the remuneration arrangements in place for the Directors and key executives of the Company.

Section 250R (2) of the Act stipulates that the Company must propose a resolution to the Shareholders that the Remuneration Report be adopted. The outcome of the Resolution is advisory only and does not bind the Directors or the Company. The Directors will consider the outcome of the vote and comments made by Shareholders on the Remuneration Report at the meeting at which the Directors review the Company’s remuneration policies.

At the Meeting, the Chairman must allow a reasonable opportunity for the Shareholders at the Meeting, as a whole, to ask questions about or make comments on the management of the Company or the Remuneration Report.

Under recent amendments to the Act:

• the Company is required to disregard any votes cast on this Resolution by any member of the “Key Management Personnel” (“ KMP ”) of the Company and their closely related parties, except as directed by any proxies; and

• a ‘two-strike’ process in relation to the advisory and non-binding vote on the remuneration report has been introduced. Under the two-strike process if, at two consecutive AGMs, at least

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25% of votes cast on a resolution that the remuneration report be adopted are against the adoption of the report, at the second of these AGMs, there must be put to the vote a resolution that another meeting be held within 90 days at which all Directors (except the Managing Director) who were Directors when the 25% ‘no’ vote was passed must stand for re-election.

KMP are people having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, and include Directors. “Closely related parties” include certain family members and dependents of KMP and companies they control.

2011 AGM result

At the Company’s first AGM in 2011, the Company was unlisted and did not put a resolution to shareholders in relation to the adoption of the Remuneration Report as there was no requirement to under the Corporations Act. If the Company receives a ‘strike’ at this Meeting, being at least 25% of votes cast against the resolution to adopt the Remuneration Report, this would be the ‘first strike’ for the purposes of section 250U of the Act.

Chairman as proxy

It is very important that the Shareholders appointing the Chairman as their proxy clearly indicate on the attached proxy form the way the Chairman must vote their proxy on Resolution 1. Otherwise, if the Chairman is appointed as a proxy for a person who is permitted to vote on this Resolution 1 and the Shareholder does not indicate on their proxy form the way the Chairman must vote, the Chairman will vote that proxy in favour of Resolution 1. Please see the proxy form attached to the Notice for further information.

Recommendation

Noting that each Director of the Company has a personal interest in their own remuneration the subject of this Resolution, the Board does not consider it appropriate to make a recommendation to Shareholders in relation to voting on this Resolution.

Resolution 2: Re-election of a Director and Chairman – Mr Gavin Solomon

Gavin Solomon was originally appointed a Director and Chairman of the Company upon its incorporation on 27 May 2011. Under the Company’s Constitution and the ASX Listing Rules, Mr Solomon retires by rotation and being eligible, wishes to stand for re-election. Gavin has over 30 years' experience in equity and capital markets in Australia and overseas. Gavin is a Sydney based lawyer by background and has been a Director of a number of ASX listed companies as well as many unlisted public and private companies. Gavin is a non-executive director and co-founder of Endocoal Ltd (EOC: ASX). Gavin has also held executive and non-executive positions with a range of companies in commercial fields such as mineral exploration, media, property and telecommunications both within Australia and overseas. Gavin holds a bachelor of Commerce/Law from the University of New South Wales, is a Notary Public and is a member of the Australian Institute of Company Directors. Gavin brings a wealth of expertise to Estrella Resources with his wide ranging business experience

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and knowledge. Gavin is also a non-executive Director of the Bradman Foundation (including the International Cricket Hall of Fame).

Recommendation

The Directors unanimously recommend that shareholders vote in favour of Mr Solomon’s re-election as a Director and Chairman of the Company.

Resolution 3: Re-election of a Director – Mr Julian Bavin

Julian Bavin was appointed as a Director of the Company with effect from 6 March 2012, to fill a casual vacancy on the Board. Pursuant to clause 15.1 (c) of the Company’s Constitution Mr Bavin must not hold office (without re-election) past the next Annual General Meeting, being the first since his appointment. Accordingly, Mr Bavin, being eligible, offers himself for re-election. Julian is an independent director who was educated at the University of Leicester, the Royal School of Mines and London Business School. He has 30 years of technical, operational and commercial experience in mineral exploration gained from work in a wide range of commodities, jurisdictions and cultures most of which was spent with the Rio Tinto Group in South America, Australia, Indonesia and Europe. From 2001 to 2009 he was responsible for the Rio Tinto exploration in South America and the teams which identified the potential in a range of projects now in various stages of feasibility including the PRC potash and Altar copper/gold projects in Argentina, the Mina Justa, Constancia and La Granja copper projects in Peru, and the Amargosa bauxite project in Brazil. Mr Bavin is also a Director of Exeter Resource Corporation and a Director and CEO of Pan Global Resources. Mr Bavin holds a Bachelor of Science and a Master’s of Science and is a member of MIMM.

Recommendation

The Directors unanimously recommend that shareholders vote in favour of Mr Bavin’s re-election as a Director of the Company.

Resolution 4: Re-election of a Director – Mr Simon Kidston

Simon Kidston was originally appointed a Director of the Company upon its incorporation on 27 May 2011. Under the Company’s Constitution and the ASX Listing Rules, Mr Kidston retires by rotation and being eligible, wishes to stand for re-election. Simon has 20 years investment banking experience in Australia, UK and Asia. Simon has an equity capital markets background and has considerable experience assisting company’s raise capital. Simon is a Non-executive director and cofounder of Carabella Resources Limited (CLR: ASX). Simon holds a Bachelor of Commerce degree from Griffith University and has a Graduate Diploma in Applied Finance and Investment from the Securities Institute of Australia. He is also a member of the Australian Institute of Company Directors.

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Recommendation

The Directors unanimously recommend that shareholders vote in favour of Mr Kidston’s re-election as a Director of the Company.

SPECIAL BUSINESS

Resolution 5: Approval for Additional Placement Capacity

5.1 General

Listing Rule 7.1A enables eligible entities to issue Equity Securities up to 10% of their issued share capital through placements over a 12 month period after the annual general meeting ( 10% Placement Facility ). The 10% Placement Facility is in addition to the Company's 15% placement capacity under Listing Rule 7.1.

An eligible entity for the purposes of Listing Rule 7.1A is an entity that is not included in the S&P/ASX 300 Index and has a market capitalisation of $300 million or less. The Company is an eligible entity. The Company is now seeking shareholder approval by way of a special resolution to have the ability to issue Equity Securities under the 10% Placement Facility.

The exact number of Equity Securities to be issued under the 10% Placement Facility will be determined in accordance with the formula prescribed in Listing Rule 7.1A.2 (refer to Section 5.2(c) below).

The Company may use the 10% Placement Facility to acquire new resource assets or investments, for further exploration work on its current tenements and/or for working capital.

5.2 Description of Listing Rule 7.1A

(a) Shareholder approval

The ability to issue Equity Securities under the 10% Placement Facility is subject to shareholder approval by way of a special resolution at an annual general meeting.

(b) Equity Securities

Any Equity Securities issued under the 10% Placement Facility must be in the same class as an existing quoted class of Equity Securities of the Company. The Company, as at the date of the Notice, has only one class of quoted Equity Securities, Ordinary Shares.

(c) Formula for calculating 10% Placement Facility

Listing Rule 7.1A.2 provides that eligible entities which have obtained shareholder approval at an annual general meeting may issue or agree to issue, during the 12 month period after the date of the annual general meeting, a number of Equity Securities calculated in accordance with the following formula:

(A x D) – E

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• A is the number of shares on issue 12 months before the date of issue or agreement. In the event that this is less than 12 months then A is the date of first quotation of the Company’s shares being 9 May 2012. Pursuant to Listing Rule 7.1B.4 this number is 87,101,000:

• (A) plus the number of fully paid shares issued in the 12 months under an exception in Listing Rule 7.2;

• (B) plus the number of partly paid shares that became fully paid in the 12 months;

• (C) plus the number of fully paid shares issued in the 12 months with approval of holders of shares under Listing Rule 7.1 and 7.4. This does not include an issue of fully paid shares under the entity's 15% placement capacity without shareholder approval;

• (D) less the number of fully paid shares cancelled in the 12 months.

[Note that A is has the same meaning in Listing Rule 7.1 when calculating an entity's 15% placement capacity.]

• D is 10%

• E is the number of Equity Securities issued or agreed to be issued under Listing Rule 7.1A.2 in the 12 months before the date of the issue or agreement to issue (or since the date of quotation if less than 12 months) that are not issued with the approval of shareholders under Listing Rule 7.1 or 7.4.

(d) Listing Rule 7.1 and Listing Rule 7.1A

The ability of an entity to issue Equity Securities under Listing Rule 7.1A is in addition to the entity's 15% placement capacity under Listing Rule 7.1.

At the date of this Notice, the Company has on issue 87,101,000 Shares and therefore has a capacity to issue:

(i) 13,065,150 Equity Securities under Listing Rule 7.1; and

(ii) subject to Shareholder approval being sought under Resolution 5, a further 8,710,100 Equity Securities under Listing Rule 7.1A.

The actual number of Equity Securities that the Company will have capacity to issue under Listing Rule 7.1A will be calculated at the date of issue of the Equity Securities in accordance with the formula prescribed in Listing Rule 7.1A.2 (refer to Section 5.2(c) above).

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(e) Minimum Issue Price

The issue price of Equity Securities issued under Listing Rule 7.1A must be not less than 75% of the Volume Weighted Average Price (VWAP) of Equity Securities in the same class calculated over the 15 Trading Days immediately before:

(i) the date on which the price at which the Equity Securities are to be issued is agreed; or

(ii) if the Equity Securities are not issued within 5 Trading Days of the date in paragraph (i) above, the date on which the Equity Securities are issued.

(f) 10% Placement Period

Shareholder approval of the 10% Placement Facility under Listing Rule 7.1A is valid from the date of the annual general meeting at which the approval is obtained and expires on the earlier to occur of:

(i) the date that is 12 months after the date of the annual general meeting at which the approval is obtained; or

(ii) the date of the approval by shareholders of a transaction under Listing Rules 11.1.2 (a significant change to the nature or scale of activities) or 11.2 (disposal of main undertaking),

or such longer period if allowed by ASX ( 10% Placement Period ).

10.3 Listing Rule 7.1A

The effect of Resolution 5 will be to allow the Directors to issue the Equity Securities under Listing Rule 7.1A during the 10% Placement Period without using the Company’s 15% placement capacity under Listing Rule 7.1.

Resolution 5 is a special resolution and therefore requires approval of 75% of the votes cast by Shareholders present and eligible to vote (in person, by proxy, by attorney or, in the case of a corporate Shareholder, by a corporate representative).

10.4 Specific information required by Listing Rule 7.3A

Pursuant to and in accordance with Listing Rule 7.3A, information is provided in relation to the approval of the 10% Placement Facility as follows:

(a) The Equity Securities will be issued at an issue price of not less than 75% of the VWAP for the Company's Equity Securities over the 15 Trading Days immediately before:

(i) the date on which the price at which the Equity Securities are to be issued is agreed; or

(ii) if the Equity Securities are not issued within 5 Trading Days of the date in paragraph (i) above, the date on which the Equity Securities are issued.

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(b) If Resolution 5 is approved by Shareholders and the Company issues Equity Securities under the 10% Placement Facility, the existing Shareholders' voting power in the Company will be diluted as shown in the below table (in the case of Options, only if the Options are exercised). There is a risk that:

(i) the market price for the Company's Equity Securities may be significantly lower on the date of the issue of the Equity Securities than on the date of the Meeting; and

(ii) the Equity Securities may be issued at a price that is at a discount to the market price for the Company's Equity Securities on the issue date or the Equity Securities are issued as part of consideration for the acquisition of a new asset,

which may have an effect on the amount of funds raised by the issue of the Equity Securities.

The below table shows the dilution of existing Shareholders on the basis of the current market price of Shares and the current number of ordinary securities for variable "A" calculated in accordance with the formula in Listing Rule 7.1A(2) as at the date of this Notice. The table also shows:

(i) two examples where variable “A” has increased, by 50% and 100%. Variable “A” is based on the number of ordinary securities the Company has on issue. The number of ordinary securities on issue may increase as a result of issues of ordinary securities that do not require Shareholder approval (for example, a pro rata entitlements issue or scrip issued under a takeover offer) or future specific placements under Listing Rule 7.1 that are approved at a future Shareholders’ meeting; and

(ii) two examples of where the issue price of ordinary securities has decreased by 50% and increased by 100% as against the current market price.

Variable ‘A’ in Listing Rule 7.1A.2		Dilution	Dilution	Dilution
		$0.055 50% decrease in Issue Price	$0.11 Issue Price	$0.22 100% increase in Issue Price
Current Variable ‘A’ 87,101,000 Shares	10% voting dilution	8,710,100 Shares	8,710,100 Shares	8,710,100 Shares
	Funds raised	$479,055	$958,111	$1,916,222
50% increase in current Variable ‘A’ 130,651,500	10% voting dilution	13,065,150 Shares	13,065,150 Shares	13,065,150 Shares
	Funds raised	$718,583	$1,437,166	$2,874,333
100% increase in current Variable ‘A’ 174,202,000	10% voting dilution	17,420,200 Shares	17,420,200 Shares	17,420,200 Shares
	Funds raised	$958,111	$1,916,222	$3,832,444

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The table has been prepared on the following assumptions:

(i) The Company issues the maximum number of Equity Securities available under the 10% Placement Facility.

(ii) No Options are exercised into Shares before the date of the issue of the Equity Securities;

(iii) The 10% voting dilution reflects the aggregate percentage dilution against the issued share capital at the time of issue. This is why the voting dilution is shown in each example as 10%.

(iv) The table does not show an example of dilution that may be caused to a particular Shareholder by reason of placements under the 10% Placement Facility, based on that Shareholder’s holding at the date of the Meeting.

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

(vi) The issue of Equity Securities under the 10% Placement Facility consists only of Shares.

(vii) The issue price is $0.11, being the closing price of the Shares on ASX on 25 September 2012.

(c) The Company will only issue and allot the Equity Securities during the 10% Placement Period. The approval under Resolution 5 for the issue of the Equity Securities will cease to be valid in the event that Shareholders approve a transaction under Listing Rule 11.1.2 (a significant change to the nature or scale of activities or Listing Rule 11.2 (disposal of main undertaking).

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

(i) non-cash consideration for the acquisition of new resources assets and investments. In such circumstances the Company will provide a valuation of the non-cash consideration as required by Listing Rule 7.1A.3; or

(ii) cash consideration. In such circumstances, the Company intends to use the funds raised towards an acquisition of new assets or investments (including expense associated with such acquisition), continued exploration and feasibility study expenditure on the Company’s current assets and/or general working capital.

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

The Company’s allocation policy is dependent on the prevailing market conditions at the time of any proposed issue pursuant to the 10% Placement Facility. The identity of the

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allottees of Equity Securities will be determined on a case-by-case basis having regard to the factors including but not limited to the following:

(i) the methods of raising funds that are available to the Company, including but not limited to, rights issue or other issue in which existing security holders can participate;

(ii) the effect of the issue of the Equity Securities on the control of the Company;

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

(iv) advice from corporate, financial and broking advisers (if applicable).

The allottees under the 10% Placement Facility have not been determined as at the date of this Notice but may include existing substantial Shareholders and/or new Shareholders who are not related parties or associates of a related party of the Company.

Further, if the Company is successful in acquiring new resources assets or investments, it is likely that the allottees under the 10% Placement Facility will be the vendors of the new resources assets or investments.

The Company has not previously obtained Shareholder approval under Listing Rule 7.1A.

A voting exclusion statement is included in the Notice. At the date of the Notice, the Company has not approached any particular existing Shareholder or security holder or an identifiable class of existing security holder to participate in the issue of the Equity Securities. No existing Shareholder's votes will therefore be excluded under the voting exclusion in the Notice.

Recommendation

The Directors of the Company believe that Resolution 5 is in the best interests of the Company and unanimously recommend that Shareholders vote in favour of this Resolution.

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