FENIX RESOURCES LTD — Share Issue/Capital Change 2019

Feb 18, 2019

19 February 2019

Appendix 3B

Fenix Resources Limited ( Company ) encloses an Appendix 3B in relation to the issue of Employee Performance Rights pursuant to the Fenix Performance Rights plan approved by shareholders on 10 September 2018 and as disclosed in its Prospectus dated 4 September 2018.

The Directors have granted a total of 19.75 million Performance Rights to management and employees of the Company that include performance milestone hurdles focused on the development of the Iron Ridge Project, WA.

The Company has developed a highly skilled management team that possesses the necessary abilities to both technically and financially advance the project. A significant focus has been upon strengthening the Company’s internal capital management capabilities, this has been achieved via the addition of a former member of the Board of Directors of AXA Switzerland, Mr Willi Rudin, who served as Chief Underwriting Officer for more than 30 years. AXA is a global Investment Manager and Insurer, is the World’s 25[th] largest company by revenue (99 billion euros per annum), operates in 62 countries with 160,000 employees and 100 million customers.

The performance hurdles encompass the following;

• Delineating a material resource upgrade at the Iron Ridge Project of:

• An initial upgrade of the existing JORC-code compliant resource to a total of not less than 6Mt @65% Fe at a cut-off grade of 50% Fe with at least 60% of the total resource categorised in at least the Indicated category in accordance with the JORC Code (2012); and

• A further upgrade of the JORC-code compliant resource to a total of not less than 8Mt @65% Fe at a cut-off grade of 50% Fe with at least 60% of the total resource categorised in at least the Indicated category in accordance with the JORC Code (2012).

• Execution of a binding offtake agreement with a third party for the purchase from the Company of a minimum combined total of 6 million tonnes of iron ore.

• Execution of binding agreements for trucking and port access for transportation of iron ore from the Iron Ridge Project.

• Securing necessary funding to commence production at the Iron Ridge Project, including via equity or debt (or a combination of both) or other funding mechanism such as joint venture or forward payments on an offtake agreement.

• Completion of a feasibility study that derives a Net Present Value (NPV) (utilising a discount rate of 10%) of the Iron Ridge Project of not less than A$50,000,000.

• Obtaining all environmental and mining licence approvals necessary to commence mining at the Iron Ridge Project.

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Achieving any of the milestones above will convert 25% of the Performance Rights held by the eligible participant into ordinary shares. Once a milestone has been achieved it cannot be achieved again. Therefore, once four milestones have been achieved, 100% of the Performance Rights will convert into ordinary shares. The time period for achieving any of the milestones is three years from the date of issue of the Plan Shares.

In the event of the sale, transfer or disposal by the Company of the Iron Ridge Project for consideration of not less than A$30 million, all Performance Rights will automatically vest, subject to the ASX Listing Rules.

In addition, it proposed to issue Executive Director Mr Robert Brierley 6 million performance rights subject to shareholder approval.

On Behalf of Fenix Resources Limited:

Matthew Foy Company Secretary FENIX RESOURCES LTD

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Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

FENIX RESOURCES LIMITED

ABN

68 125 323 622

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of+securities issued or to be issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued 3 Principal terms of the+securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)	Employee Performance Rights
	19,750,000
	Employee Performance Rights convertible into ordinary shares subject to performance milestones with a three-year term to expiry.

4 Do the+securities rank equally in all respects from the+issue date with an existing+class of quoted +securities? If the additional+securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 6a Is the entity an+eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h in relation to the+securities the subject of this Appendix 3B, and comply with section 6i 6b The date the security holder resolution under rule 7.1A was passed 6c Number of+securities issued without security holder approval under rule 7.1 6d Number of+securities issued with security holder approval under rule 7.1A 6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting)	Ordinary shares issued upon conversion of the performance rights will rank equally with the existing fully paid ordinary shares on issue.
	N/A
	Issue of Employee Performance rights to employees pursuant to the Performance Rights Plan approved by shareholders on 10 September 2018.
	No
	N/A
	N/A
	N/A
	N/A

• See chapter 19 for defined terms.

Appendix 3B Page 2

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6f Number of+securities issued under an exception in rule 7.2 6g If+securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation. 6h If+securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B. 8 Number and +class of all +securities quoted on ASX (including the +securities in section 2 if applicable)	19,750,000
	N/A
	N/A
	Refer Annexure
	19 February 2019
	Number	+Class
	172,898,133	Ordinary shares

9 Number and +class of all +securities not quoted on ASX (including the +securities in section 2 if applicable)	Number	+Class
	8,654,586 12,875,000 18,470,414 3,917,752 11,082,248 9,135,502 20,864,498 11,319,379 26,180,621 9,135,504 20,864,496 19,750,000 59,000,000	Ordinary shares held in escrow for two years from the date of reinstatement of the Company. Ordinary shares held in escrow until 31/5/2019 Ordinary shares held in escrow until 21/11/2019 Class A Performance Shares held in escrow for two years from the date of reinstatement of the Company Class A Performance Shares held in escrow until 21/11/2019 Class B Performance Shares held in escrow for two years from the date of reinstatement of the Company Class B Performance Shares held in escrow until 21/11/2019 Class C Performance Shares held in escrow two years from the date of reinstatement of the Company Class C Performance Shares held in escrow until 21/11/2019 Class D Performance Shares held in escrow for two years from the date of reinstatement of the Company Class D Performance Shares held in escrow until 21/11/2019 Employee Performance Rights subject to performance milestones with a three-year term to expiry Unlisted options exercisable at 8¢ expiring 21 November 2021 held in escrow for two years from the date of reinstatement of the Company

• See chapter 19 for defined terms.

Appendix 3B Page 4

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10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	N/A

Part 2 - Pro rata issue

11	Is security holder approval
	required?
12	Is the issue renounceable or non-
	renounceable?
13	Ratio in which the+securities will
	be offered
14	+Class of+securities to which the
	offer relates
15	+Record date to determine
	entitlements
16	Will holdings on different
	registers (or subregisters) be
	aggregated for calculating
	entitlements?
17	Policy for deciding entitlements in
	relation to fractions
18	Names of countries in which the
	entity has security holders who
	will not be sent new offer
	documents
	Note: Security holders must be told how their
	entitlements are to be dealt with.
	Cross reference: rule 7.7.
19	Closing date for receipt of
	acceptances or renunciations
20	Names of any underwriters
21	Amount of any underwriting fee
	or commission
22	Names of any brokers to the issue
23	Fee or commission payable to the
	broker to the issue

24	Amount of any handling fee
	payable to brokers who lodge
	acceptances or renunciations on
	behalf of security holders
25	If the issue is contingent on
	security holders’ approval, the
	date of the meeting
26	Date entitlement and acceptance
	form and offer documents will be
	sent to persons entitled
27	If the entity has issued options,
	and the terms entitle option
	holders to participate on exercise,
	the date on which notices will be
	sent to option holders
28	Date rights trading will begin (if
	applicable)
29	Date rights trading will end (if
	applicable)
30	How do security holders sell their
	entitlements_in full_through a
	broker?
31	How do security holders sell_part_
	of their entitlements through a
	broker and accept for the balance?
32	How do security holders dispose
	of their entitlements (except by
	sale through a broker)?
33	+Issue date

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

34 Type of[+] securities ( tick one )

(a) +Securities described in Part 1

• (b)[All other ][+][securities ]

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

• See chapter 19 for defined terms.

Appendix 3B Page 6

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Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

• 35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders

36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories

1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

37 A copy of any trust deed for the additional[+] securities

Entities that have ticked box 34(b)

38	Number of+securities for which
	+quotation is sought
39	+Class of+securities for which
	quotation is sought
40	Do the+securities rank equally in
	all respects from the+issue date
	with an existing+class of quoted
	+securities?
	If the additional+securities do not
	rank equally, please state:
	• the date from which they do
	• the extent to which they
	participate for the next
	dividend, (in the case of a trust,
	distribution) or interest
	payment
	• the extent to which they do not
	rank equally, other than in
	relation to the next dividend,
	distribution or interest
	payment

41 Reason for request for quotation now

Example: In the case of restricted securities, end of restriction period

(if issued upon conversion of another[+] security, clearly identify that other[+] security)

Number +Class

42 Number and +class of all +securities quoted on ASX ( including the[+] securities in clause 38)

• See chapter 19 for defined terms.

Appendix 3B Page 8

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Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted +quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: ............................................................Date: 19 February 2019 Company secretary Print name: Matthew Foy

== == == == ==

• See chapter 19 for defined terms.

04/03/2013

Appendix 3B Page 9

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1

Rule 7.1 – Issues exceeding 15% of capital

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Step 1: Calculate “A”, the base figure from which the placement
capacity is calculated
Insert number of fully paid [+] ordinary
securities on issue 12 months before the
+ issue date or date of agreement to issue 45,398,133
Add the following:
• Number of fully paid [+] ordinary -
securities issued in that 12 month
period under an exception in rule 7.2
• Number of fully paid [+] ordinary 167,500,000
securities issued in that 12 month
period with shareholder approval
• Number of partly paid [+] ordinary
securities that became fully paid in that
12 month period
Note:
• Include only ordinary securities here –
other classes of equity securities
cannot be added
• Include here (if applicable) the
securities the subject of the Appendix
3B to which this form is annexed
• It may be useful to set out issues of
securities on different dates as
separate line items
Subtract the number of fully paid Nil
+ ordinary securities cancelled during that
12 month period
212,898,133
“A”
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• See chapter 19 for defined terms.

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Step 2: Calculate 15% of “A”
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“B” 0.15
[Note: this value cannot be changed]
Multiply “A” by 0.15 31,934,719
Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that
has already been used
Insert number of [+] equity securities issued -
or agreed to be issued in that 12 month
period not counting those issued:
• Under an exception in rule 7.2
• Under rule 7.1A
• With security holder approval under rule
7.1 or rule 7.4
Note:
• This applies to equity securities, unless
specifically excluded – not just ordinary
securities
• Include here (if applicable) the securities
the subject of the Appendix 3B to which
this form is annexed
• It may be useful to set out issues of
securities on different dates as separate
line items
“C” -
Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement
capacity under rule 7.1
“A” x 0.15
31,934,719
Note: number must be same as shown in
Step 2
Subtract “C” -
Note: number must be same as shown in
Step 3
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“A” x 0.15 31,934,719 Note: number must be same as shown in Step 2 Subtract “C” - Note: number must be same as shown in Step 3 Total [“A” x 0.15] – “C” 31,934,719 [Note: this is the remaining placement capacity under rule 7.1]

• See chapter 19 for defined terms.

04/03/2013

Appendix 3B Page 11