PRIME MINERALS LTD

ABN 61 120 658 497

Notice of Annual General Meeting

Explanatory Statement

and

Proxy Form

9:30 am (WST) on Friday 25 November 2011 Celtic Club, 48 Ord Street, West Perth, Western Australia

PRIME MINERALS LTD ABN 61 120 658 497

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Annual General Meeting of members of PRIME MINERALS LTD (PIM or the Company) will be held on Friday 25 November 2011 commencing at 9.30 am (Australian Western Standard Time) at the Celtic Club, 48 Ord Street, West Perth, Western Australia.

The Explanatory Statement that accompanies and forms part of this Notice of Annual General Meeting describes in more detail the matters to be considered. Terms used in this Notice of Annual General Meeting have the meaning given to them in the "Definitions" section contained in the Explanatory Statement.

AGENDA

BUSINESS OF THE MEETING

А. Accounts and reports

To receive and consider the Financial Statements and the reports of the Directors and the Auditors for the year ended 30 June 2011.

B. Resolution 1 - Adoption of the Remuneration Report

To consider and, if thought fit, pass with or without amendment, the following as a non-binding resolution:

"That for the purposes of section 250R(2) of the Corporations Act and for all other purposes, the Remuneration Report as contained in the Company's Annual Report for the financial year ended 30 June 201,1 be adopted."

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

Voting prohibition statement

A vote on this resolution must not be cast (in any capacity) by or on behalf of any of the following persons:

a member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report; or
a Closely related Party of such a member,
(collectively referred to as a Prohibited Voter).

However, a Prohibited Voter may cast a vote on the resolution if:

the person does so as a proxy appointed in writing that specifies how the proxy is to vote on the proposed resolution; and
the vote is not cast on behalf of a Prohibited Voter.

If you appoint the Chairman of the Meeting as your proxy, the Company encourages you to direct the Chairman how to vote on this advisory Resolution. The Chairman, as one of the Key Management Personnel of the Company, is not permitted to cast any votes in respect of this advisory Resolution that arise from undirected proxies held.

C. Resolution 2 - Re-election of a Director

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

" That Michael Ernest Scivolo, who retires by rotation in accordance with the Company's Constitution, be re-elected a Director of the Company"

D. Resolution 3 - Approval for a proposed Share issue

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

"That in accordance with the requirements of Listing Rule 7.1 of the Listing Rules of the Australian Stock Exchange Limited and for all other purposes, the Company approves and authorises the Directors to allot and issue up to 20,000,000 ordinary fully paid Shares . The Shares are to be issued at a minimum issue price equal to not less than 80% of the average market price of ordinary Shares in the capital of the Company trading on the ASX over the last 5 days on which sales were recorded before the day on which the issue was made, or if there is a prospectus, Product Disclosure Statement, or offer information statement relating to the issue, over the last five days on which sales in the securities were recorded, before the date of the prospectus, Product Disclosure Statement, or offer information statement is signed."

VOTING EXCLUSION

The Company will disregard any votes cast on Resolution 3 by a person who may participate in the proposed issue and any associate of those persons or any person who might obtain a benefit. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with directions on the proxy form or if 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;

Voting Entitlements

For the purposes of determining voting entitlements at the General Meeting, Shares will be taken to be held by persons who are registered as holding Shares at 9.30am on 23 November 2011. Accordingly, transactions registered after that time will be disregarded in determining entitlements to attend and vote at the general meeting.

Proxy and Voting Entitlement Instructions are included on the Proxy Form accompanying this Notice of General Meeting.

By order of the Board David N. Zukerman Company Secretary

20 October 2011

EXPLANATORY STATEMENT

INTRODUCTION

This Explanatory Statement has been prepared for the information of members of PRIME MINERALS LTD in connection with the business to be conducted at the Annual General Meeting of members to be held at the Celtic Club, 48 Ord Street, West Perth, Western Australia, on 25 November 2011 at 9.30 am (Australian Western Standard Time).

This Explanatory Statement forms part of and should be read in conjunction with the accompanying Notice of Annual General Meeting.

Shareholders should note that all the Directors approved the proposal to put the resolutions to shareholders as outlined in the Notice of General Meeting and to prepare this Explanatory Statement

A. FINANCIAL REPORTS

The Corporations Act requires the Company to lay before the Annual General Meeting its annual financial report and reports of the Directors and Auditor for the last financial year. The annual financial report of the Company for the year ended 30 June 2011 is available on its website at www.primeminerals.com.au

Shareholders are not required to vote on these reports. However, shareholders will be given a reasonable opportunity at the Meeting to comment on, or to ask questions about, the management of the Company. Shareholders will also be given a reasonable opportunity to ask the Auditor questions relevant to the Auditor's report, the conduct of the audit, accounting policies adopted by the Company and the independence of the Auditor.

Written questions to the Company's Auditor about the content of the Auditor's report or the conduct of the audit may be submitted no later than 18 November 2011 to:

Prime Minerals Ltd PO Box 1618 West Perth WA 6872.

Facsimile: +618 9481 7835 Email: [email protected]

Copies of the questions, if any, to the Company's Auditor will be available at the meeting.

RESOLUTION 1 - ADOPTION OF REMUNERATION REPORT

Under Section 250R(2) of the Corporations Act, the Company must put to its shareholders at each annual general meeting a resolution adopting the report on remuneration of the Company's Directors, and senior executives.

The Remuneration Report of the Company for the financial year ended 30 June 2011 is included in the Directors' Report in the Company's 2011 Annual Report. It is also available on the Company's website at www.primeminerals.com.au

The Remuneration Report includes:

An explanation of the Company's policy in relation to the nature and amount of remuneration paid to Directors and senior executives of the Company:

A discussion of the link between this policy and the Company's performance; $\bullet$
Details of any element of the remuneration of Directors and executives of the Company which is dependent upon the satisfaction of a performance condition; and
Details of the total remuneration of each Director (including a breakdown of components of that $\bullet$ remuneration) and the senior executives of the Company who receive the highest remuneration.

The vote on this resolution is advisory only and does not bind the Company

C. RESOLUTION 2 - RE-ELECTION OF A DIRECTOR

Pursuant the Company's Constitution, Michael Ernest Scivolo, being a Director of the Company, retires by way of rotation and, being eligible, offers himself for re-election as a Director of the Company.

Michael Scivolo is a Certified Practising Accountant with 35 years experience in accounting and taxation. He is a partner of Perth accounting firm Alessandrino Scivolo. He is currently a Director of Sabre Resources Ltd, Victory West Moly Limited, Blaze International Limited and Power Resources Limited.

D. RESOLUTION 3 - APPROVAL FOR A PROPOSED SHARE ISSUE

Subject to shareholder approval, pursuant to Listing Rule 7.1, the Company proposes to issue up to 20,000,000 Shares.

Listing Rule 7.1 broadly provides, subject to certain exceptions, that shareholder approval is required for any issue of securities where the securities proposed to be issued represent more than 15% of the Company's shares then on issue.

For the purposes of Listing Rule 7.3, the following information is provided to shareholders:

a) the maximum number of Shares which may be issued pursuant to this resolution is 20,000,000;

b) the Shares will be issued and allotted on one date which will be no later than 3 months after the date of this meeting or such later date as approved by ASX by waiver to the Listing Rules;

c) the Shares will be issued at a minimum issue price which is at least 80% of the average market price of Shares trading on ASX over the last 5 days on which sales were recorded before the day on which the issue was made (or if there is a prospectus or offer information statement relating to the issue, over the last 5 days on which sales in the Shares were recorded before the date of the prospectus or offer information statement).

d) the allottees will be at the direction of the Directors but will not be related parties of the Company;

e) the terms of the Shares will be the same as the existing ordinary fully paid Shares in the Company,

f) the purpose of the issue is for additional working capital and acquisition of assets;

The Board of Directors unanimously recommends Shareholders vote in favour of the resolution.

DEFINITIONS

ASX means ASX Limited (formerly Australian Stock Exchange Limited and now operating under the name, Australian Securities Exchange).
Board means the board of Directors.

$\bar{\mathbf{z}}$

Company means Prime Minerals Ltd ABN 61 120 658 497

Corporations Act means Corporations Act 2001 (Cth)

Director means a director of the Company.
Listing Rules means the official listing rules of ASX.
Notice means the Notice of Annual General Meeting accompanying this Explanatory Statement
means a fully paid ordinary share in the capital of the Company and Shares has a Share corresponding meaning.

PRIME MINERALS LTD ABN 61 120 658 497

1st Floor, 8 Parliament Place West Perth WA 6872 Facsimile: (08) 9481 7835

I/We (full name)

Of (address)

being a member(s) of PRIME MINERALS LTD, hereby appoint as my/our proxy

Of (address)

or, failing him/her the Chairperson of the Meeting to attend and vote for me/us at the Annual General Meeting of the Company to be held at 9.30 am (WST) on 25 November 2011 and at any adjournment thereof in respect of % of my/our shares or, failing any number being specified, ALL of my/our shares in the Company.

If the Chair of the meeting is appointed as your proxy, or may be appointed by default and you do not wish to direct your proxy how to vote as your proxy in respect of a resolution please place a mark in the box.

By marking this box, you acknowledge that the Chair of the meeting may exercise your proxy even if he has an interest in the outcome of the resolutions and that votes cast by the Chair of the meeting for those resolutions other than as proxy holder will be disregarded because of that interest.

If you do not mark this box, and you have not directed your proxy how to vote, the Chair will not cast your votes on the resolution and your votes will not be counted in calculating the required majority if a poll is called on the resolution.

Should you so desire to direct the proxy how to vote, then please tick the appropriate box below:

RESOLUTIONS

	FOR	AGAINST	ABSTAIN
1. Adoption of Remuneration Report	П
2. Re-election of a Director	п
3. Approval for a proposed Share issue	ΙI

If the member is an individual or joint holder:

Usual Signature		Usual Signature
Dated this	day of	2011 If the member is a Company:
Signed in accordance with the Constitution of the company in the presence of:
Director/Sole Director	Director/Secretary	Sole Director and Sole Secretary
Dated this	day of	2011.