FOCUS MINERALS LTD — AGM Information 2008

Oct 21, 2008

FOCUS MINERALS LTD ACN 005 470 799 Notice of Annual General Meeting

TIME: 3.00pm (WDST)

DATE: 25 November 2008

PLACE: Hannan's Club 44 Brookman St (Cnr Maritana & Brockman Sts) Kalgoorlie WA 6433

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting.

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on (+61 8) 9215 7888.

Contents

Notice of Annual General Meeting (setting out the proposed resolutions)	4
Explanatory Statement (explaining the proposed resolutions)	7
Glossary	14
Schedule 1 – Terms and Conditions of Options	15
Schedule 2 – Terms and Conditions of Director Options	16
Schedule 3 – Valuation of Director Options	17
Proxy Form	19

Time and Place of Meeting and How to Vote

VENUE

The Annual General Meeting of the Shareholders to which this Notice of Meeting relates will be held at 3.00 pm (WDST) on 25 November 2008 at:

Hannan's Club 44 Brookman St (Cnr Maritana & Brockman Sts) Kalgoorlie WA 6433

YOUR VOTE IS IMPORTANT

The business of the Annual General Meeting affects your shareholding and your vote is important.

VOTING IN PERSON

To vote in person, attend the Annual General Meeting on the date and at the place set out above.

VOTING BY PROXY

To vote by proxy, please complete and sign the enclosed Proxy Form and return by:

• (a) post to Focus Minerals Ltd, PO Box Z5422, St Georges Terrace, Perth WA 6831; or
• (b) facsimile to the Company on facsimile number (+61 8) 9215 7889,

so that it is received not later than 3.00pm (WDST) on 23 November 2008.

Proxy Forms received later than this time will be invalid.

Notice of Annual General Meeting

Notice is given that the Annual General Meeting of Shareholders will be held at 3.00pm (WDST) on 25 November 2008 at Hannan's Club, 44 Brookman St (Cnr Maritana & Brockman Sts), Kalgoorlie, Western Australia.

The Explanatory Statement to this Notice of Meeting provides additional information on matters to be considered at the Annual General Meeting. The Explanatory Statement and the Proxy Form are part of this Notice of Meeting.

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Annual General Meeting are those who are registered Shareholders of the Company at 3.00pm (WDST) on 23 November 2008.

Terms and abbreviations used in this Notice of Meeting and Explanatory Statement are defined in the Glossary.

AGENDA

Ordinary Business

Financial Statements and Reports

To receive and consider the annual financial report of the Company for the financial year ended 30 June 2008 together with the declaration of the directors, the directors' report, the remuneration report and the auditor's report.

1. RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT

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

"That, for the purpose of Section 250R(2) of the Corporations Act and for all other purposes, approval is given for the adoption of the remuneration report as contained in the Company's annual financial report for the financial year ended 30 June 2008."

2. RESOLUTION 2 – RE-ELECTION OF DIRECTOR – CHRIS HENDRICKS

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

"That, for the purpose of clause 13.4 of the Constitution and for all other purposes, Chris Hendricks, a Director who was appointed on 11 January 2008, retires, and being eligible, is re-elected as a Director."

3. RESOLUTION 3 – RE-ELECTION OF DIRECTOR – DONALD TAIG

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

"That, for the purpose of clause 13.2 of the Constitution and for all other purposes, Donald Taig, a Director who retires by rotation, and being eligible, is re-elected as a Director."

4. RESOLUTION 4 – RATIFICATION OF PRIOR ISSUE – OPTIONS

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

"That, for the purpose of ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify the allotment and issue of 40,000,000 Options on the terms and conditions set out in the Explanatory Statement."

Voting Exclusion: The Company will disregard any votes cast on this Resolution by a person who participated in the issue and any of their associates. 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 the directions on the Proxy Form or 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.

Notice of Annual General Meeting

5. RESOLUTION 5 – ADOPTION OF EMPLOYEE INCENTIVE OPTION SCHEME

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

"That, for the purposes of Listing Rule 7.2 (Exception 9) of the ASX Listing Rules and for all other purposes, approval is given for the Company to adopt an incentive option scheme (Scheme), a summary of which is set out in the Explanatory Statement accompanying this Notice of Meeting."

Short Explanation: The Scheme is designed to be an incentive to key people who assist in the successful development and operation of the Company. Approval is sought pursuant to ASX Listing Rule 7.2 (Exception 9) so that Options issued pursuant to the Scheme are not included in the Company's 15% capacity for the purposes of ASX Listing Rule 7.1. Please refer to the Explanatory Statement for further details.

Voting Exclusion: The Company will disregard any votes cast on this Resolution by the Directors of the Company and any of their associates (except one who is ineligible to participate in any employee incentive scheme in relation to the Company).

6. RESOLUTION 6 – DIRECTORS' REMUNERATION

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

"That, for the purposes of clause 13.7 of the Constitution, ASX Listing Rule 10.17 and for all other purposes, Shareholders approve the maximum total aggregate fixed sum per annum to be paid to Directors be set at \$200,000 to be paid in accordance with the terms and conditions set out in the Explanatory Statement."

Voting Exclusion: The Company will disregard any votes cast on this Resolution by a Director and any of their associates. 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 the directions on the Proxy Form or 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 – ISSUE OF DIRECTOR OPTIONS TO DONALD TAIG

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

"That, for the purposes of Section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, approval is given for the Directors to allot and issue 10,000,000 Director Options to Donald Taig (or his nominee) on the terms and conditions set out in the Explanatory Statement."

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Donald Taig (or his nominee) or any of his associates. 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 the directions on the Proxy Form or 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 – ISSUE OF DIRECTOR OPTIONS TO PHILLIP LOCKYER

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

"That, for the purposes of Section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, approval is given for the Directors to allot and issue 6,000,000 Director Options to Phillip Lockyer (or his nominee) on the terms and conditions set out in the Explanatory Statement."

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Phillip Lockyer (or his nominee) or any of his associates. 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 the directions on the Proxy Form or 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 – ISSUE OF DIRECTOR OPTIONS TO CHRISTOPHER HENDRICKS

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

"That, for the purposes of Section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, approval is given for the Directors to allot and issue 6,000,000 Director Options to Christopher Hendricks (or his nominee) on the terms and conditions set out in the Explanatory Statement."

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Phillip Lockyer (or his nominee) or any of his associates. 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 the directions on the Proxy Form or 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.

Notice of Annual General Meeting

10. RESOLUTION 10 – ISSUE OF DIRECTOR OPTIONS TO PETER WILLIAMS

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

"That, for the purposes of Section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, approval is given for the Directors to allot and issue 35,450,000 Director Options to Peter Williams (or his nominee) on the terms and conditions set out in the Explanatory Statement."

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Phillip Lockyer (or his nominee) or any of his associates. 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 the directions on the Proxy Form or 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.

Dated: 21 October 2008 By order of the Board

Jon Grygorcewicz

Focus Minerals Ltd Company Secretary

Explanatory Statement

This Explanatory Statement has been prepared for the information of the Shareholders in connection with the business to be conducted at the Annual General Meeting to be held at 3.00pm (WDST) on 25 November 2008 at Hannan's Club, 44 Brookman St (Cnr Maritana & Brockman Sts), Kalgoorlie, Western Australia.

This purpose of this Explanatory Statement is to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions in the Notice of Meeting.

1. FINANCIAL STATEMENTS AND REPORTS

In accordance with the Constitution, the business of the Annual General Meeting will include receipt and consideration of the annual financial report of the Company for the financial year ended 30 June 2008 together with the declaration of the directors, the directors' report, the remuneration report and the auditor's report.

In accordance with amendments to the Corporations Act the Company is no longer required to provide a hard copy of the Company's annual financial report to Shareholders unless a Shareholder has specifically elected to receive a printed copy. These amendments may result in reducing the Company's printing costs.

Whilst the Company will not provide a hard copy of the Company's annual financial report unless specifically requested to do so, Shareholders may view the Company annual financial report on its website at www.focusminerals.com.au.

2. RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT

The Corporations Act requires that at a listed company's annual general meeting, a resolution that the remuneration report be adopted must be put to the shareholders. However, such a resolution is advisory only and does not bind the Directors or the Company.

The remuneration report sets out the Company's remuneration arrangements for the Directors and senior management of the Company. The remuneration report is part of the Directors' report contained in the annual financial report of the Company for the financial year ending 30 June 2008.

A reasonable opportunity will be provided for discussion of the remuneration report at the Annual General Meeting.

3. RESOLUTION 2 – RE-ELECTION OF DIRECTOR – CHRIS HENDRICKS

Clause 13.4 of the Constitution allows the Directors to appoint at any time a person to be a Director as an addition to the existing Directors, but only where the total number of Directors does not at any time exceed the maximum number specified by the Constitution.

Any Director so appointed holds office only until the next following annual general meeting and is then eligible for re-election.

Chris Hendricks will retire in accordance with clause 13.4 of the Constitution and being eligible seeks re-election.

4. RESOLUTION 3 – RE-ELECTION OF DIRECTOR – DONALD TAIG

Clause 13.2 of the Constitution requires that if the Company has three or more Directors, one third (or the number nearest one-third) of those Directors must retire at each annual general meeting, provided always that no Director (except a Managing Director) shall hold office for a period in excess of 3 years, or until the third annual general meeting following his or her appointment, whichever is the longer, without submitting himself or herself for re-election.

The Company currently has four Directors and accordingly one must retire.

A Director who retires by rotation under clause 13.2 of the Constitution is eligible for re-election.

Donald Taig retires by rotation and seeks re-election.

5. RESOLUTION 4 – RATIFICATION OF PRIOR ISSUE – OPTIONS

5.1 General

In accordance with the terms of a facility agreement between the Company and Investec Bank (Australia) Limited (Investec) dated 30 April 2008 (Facility Agreement), as announced on 2 May 2008 the Company has issued 40,000,000 Options as consideration for services provided by Investec.

Investec is not a related party of the Company.

Resolution 4 seeks Shareholder ratification pursuant to ASX Listing Rule 7.4 for the issue of those Options (Option Ratification).

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue during any 12 month period any equity securities, or other securities with rights to conversion to equity (such as an option), if the number of those securities exceeds 15% of the number of securities in the same class on issue at the commencement of that 12 month period.

ASX Listing Rule 7.4 sets out an exception to ASX Listing Rule 7.1. It provides that where a company in general meeting ratifies the previous issue of securities made pursuant to ASX Listing Rule 7.1 (and provided that the previous issue did not breach ASX Listing Rule 7.1) those securities will be deemed to have been made with shareholder approval for the purpose of ASX Listing Rule 7.1.

By ratifying this issue, the Company will retain the flexibility to issue equity securities in the future up to the 15% annual placement capacity set out in ASX Listing Rule 7.1 without the requirement to obtain prior Shareholder approval.

5.2 Technical information required by ASX Listing Rule 7.4

Pursuant to and in accordance with ASX Listing Rule 7.5, the following information is provided in relation to the Option Ratification:

• (a) 40,000,000 Options were allotted;
• (b) the Options were issued for nil cash consideration;
• (c) the Options were issued on the terms and conditions set out in Schedule 1;
• (d) the Options were allotted and issued to Investec Bank (Australia) Limited; and
• (e) no funds were raised from this issue as the Options were issued in consideration for services provided by Investec in accordance with terms of the Facility Agreement.

6. RESOLUTION 5 - ADOPTION OF EMPLOYEE INCENTIVE OPTION SCHEME

6.1 Background

ASX Listing Rule 7.1 requires a listed company to obtain shareholder approval prior to the issue of shares, or securities convertible into shares, representing more than 15% of the issued capital of that company in any rolling 12 month period.

An exception to ASX Listing Rule 7.1 is set out in ASX Listing Rule 7.2 (Exception 9), which provides that issues under an employee incentive scheme are exempt for a period of 3 years from the date on which shareholders approve the issue of securities under the plan.

Resolution 5 seeks Shareholder approval for the adoption of the "Focus Minerals Ltd Employee Incentive Option Scheme" (Scheme) to allow the issue of Options under the Scheme as an exception to ASX Listing Rule 7.1 in accordance with ASX Listing Rule 7.2 (Exception 9).

Shareholders should note that no Options have previously been issued under this Scheme and the objective of the Scheme is to attract, motivate and retain key employees and consultants.

Explanatory Statement

6.2 Terms of Scheme

It is considered by the Directors that the adoption of the Scheme and the future grant of options under the Scheme will provide selected employees and consultants with the opportunity to participate in the future growth of the Company.

A summary of the terms and conditions of the Scheme is set out below:

The detailed terms and conditions of the Scheme may be obtained free of charge by contacting the Company. A summary of the terms and conditions of the Scheme is set out below.

General

The Board may from time to time, in its absolute discretion, offer to grant Options to eligible participants under the Scheme.

Each Option will be issued for no consideration and will carry the right in favour of the Optionholder to subscribe for one (1) Share in the capital of the Company.

The Board may determine the exercise price of the Options in its absolute discretion. Subject to the ASX Listing Rules, the exercise price may be nil but to the extent the ASX Listing Rules specify or require a minimum price, the exercise price in respect of an offer made following the day on which Shares are first quoted on the Official List must not be less than any minimum price specified in the ASX Listing Rules.

Eligible Participants

Full time employees, part time employees and consultants of the Company or an associated body corporate (the Group) are eligible to participate in the Scheme.

Lapse of Options

Unless the Board in its absolute discretion determines otherwise, Options shall lapse immediately if:

• (a) the eligible participant ceases to be an employee of, or to render services to, a member of the Group for any reason whatsoever and the conditions of exercise of the Options (Exercise Conditions) have not been met;
• (b) the Exercise Conditions of the Options are unable to be met;
• (c) the date which is 2 years after the date of the grant of the Options, or such other expiry date as the Board determines in its discretion at the time of grant of the Option (Lapsing Date) has passed; or
• (d) the expiry of 60 days after the eligible participant ceases to be an employee of, or to render services to, a member of the Group for any reason whatsoever prior to the Lapsing Date where the Exercise Conditions have been met,

whichever is earlier.

Participation in Future Issues

There are no participating rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least 7 business days after the issue is announced. This will give Optionholders the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue.

If the Company makes a pro rata issue of securities (except a bonus issue) to the holders of Shares (other than an issue in lieu or in satisfaction of dividends or by way of dividend reinvestment) the exercise price of the Options shall be reduced in accordance with the formula in the ASX Listing Rules.

In the event of a bonus issue of Shares being made pro-rata to Shareholders (other than an issue in lieu of dividends), the number of Shares issued on exercise of each Option will include the number of bonus Shares that would have been issued if the Option had been exercised prior to the record date for the bonus issue. No adjustment will be made to the exercise price per Share of the Option.

Reorganisation

The terms upon which Options will be granted will not prevent them being reorganised as required by the ASX Listing Rules on the reorganisation of the capital of the Company.

6.2 Terms of Scheme cont.

Trigger Events

Upon the occurrence of certain trigger events (for example the receipt by the Company of a bidder's statement in respect of the Company) (Trigger Event), the Directors may determine:

• (a) in respect of Options that have vested as at the date of the Trigger Event (Vested Options), the Directors in their sole discretion may determine:
• (i) that the Vested Options may be exercised at any time from the date of such determination, and in any number until the date determined by the Directors acting bona fide so as to permit the holder to participate in any change of control arising from a Trigger Event, provided that the Directors will forthwith advise in writing each holder of such determination. Thereafter, the Vested Options shall lapse to the extent they have not been exercised; or
• (ii) to use their reasonable endeavours to procure that an offer is made to holders of Vested Options on like terms (having regard to the nature and value of the Vested Options) to the terms proposed under the Trigger Event in which case the Directors shall determine an appropriate period during which the holder may elect to accept the offer and, if the holder has not so elected at the end of that period, the Vested Options shall immediately become exercisable and if not exercised within 10 days, shall lapse; and
• (b) in respect of Options that have not vested as at the date of the Trigger Event (Unvested Options), the Directors must use their reasonable endeavours to procure that an offer is made to holders of the Unvested Options on like terms (having regard to the nature and value of the Unvested Options) to the terms proposed under the Trigger Event in which case the Directors shall determine an appropriate period during which the holder may elect to accept the offer and, if the holder has not so elected at the end of that period, the Unvested Options shall immediately lapse and all rights in respect of those Unvested Options will thereupon be lost.

6.3 ASX Listing Rules

ASX Listing Rule 7.1 sets a 15% limit on the number of ordinary securities which the Company can issue in any 12 month period without shareholder approval. ASX Listing Rule 7.2 (Exception 9) provides that an issue of securities made under an employee incentive scheme (such as the Scheme) is not counted for the purposes of ASX Listing Rule 7.1, provided that certain conditions have been met.

One such condition is that shareholders have, within the last 3 years, approved the issue of securities under the Scheme as an exception to ASX Listing Rule 7.1. Such shareholder approval is sought by Resolution 5.

Other conditions include:

• (a) the requirement that the notice of meeting to shareholders includes a summary of the Scheme; and
• (b) the requirement to state the number of securities issued under the Scheme since the date of last approval.

A summary of the Scheme is provided above and a full copy of the terms of the Scheme can be obtained by contacting the Company.

7. RESOLUTION 6 – DIRECTORS' REMUNERATION

Clause 13.7 of the Constitution requires that the total aggregate fixed sum per annum to be paid to the Directors from time to time will not exceed the sum determined by the Shareholders in general meeting and the total aggregate fixed sum will be divided between the Directors as the Directors shall determine and, in default of agreement between them, then in equal shares.

Resolution 6 seeks Shareholder approval to increase the total aggregate fixed sum per annum to be paid to the Directors by \$50,000 to \$200,000. The Company has not sought an increase to the total aggregate fixed sum per annum to be paid to the Directors since the incorporation of the Company in 2000.

The total aggregate fixed sum per annum has been determined after reviewing similar companies listed on ASX and the Directors believe that this level of remuneration is in line with corporate remuneration of similar companies.

8. RESOLUTIONS 7, 8, 9 AND 10 – ISSUE OF DIRECTOR OPTIONS

8.1 General

The Company has agreed, subject to obtaining Shareholder approval, to allot and issue a total of 57,450,000 Options (Director Options) to Messrs Taig, Lockyer, Hendricks and Williams (Related Parties) on the terms and conditions set out below.

For a public company, or an entity that the public company controls, to give a financial benefit to a related party of the public company, the public company or entity must:

• (c) obtain the approval of the public company's members in the manner set out in Sections 217 to 227 of the Corporations Act; and
• (d) give the benefit within 15 months following such approval,

unless the giving of the financial benefit falls within an exception set out in Sections 210 to 216 of the Corporations Act.

In addition, ASX Listing Rule 10.11 also requires shareholder approval to be obtained where an entity issues, or agrees to issue, securities to a related party, or a person whose relationship with the entity or a related party is, in ASX's opinion, such that approval should be obtained unless an exception in ASX Listing Rule 10.12 applies.

The grant of the Director Options to the Related Parties requires the Company to obtain Shareholder approval because the grant of Director Options constitutes giving a financial benefit and as Directors, Messrs Taig, Lockyer, Hendricks and Williams are related parties of the Company.

It is the view of the Directors that the exceptions set out in Sections 210 to 216 of the Corporations Act and ASX Listing Rule 10.12 do not apply in the current circumstances. Accordingly, Shareholder approval is sought for the grant of Director Options to the Related Parties.

8.2 Shareholder Approval (Chapter 2E of The Corporations Act and Listing Rule 10.11)

Pursuant to and in accordance with the requirements of Sections 217 to 227 of the Corporations Act and ASX Listing Rule 10.13, the following information is provided in relation to the proposed grant of Director Options:

• (a) the related parties are Messrs Taig, Lockyer, Hendricks and Williams and they are related parties by virtue of being Directors;
• (b) the maximum number of Director Options (being the nature of the financial benefit being provided) to be granted to the Related Parties is:
• (i) 10,000,000 Director Options to Donald Taig;
• (ii) 6,000,000 Director Options to Phillip Lockyer;
• (iii) 6,000,000 Director Options to Christopher Hendricks; and
• (iv) 35,450,000 Director Options to Peter Williams;
• (c) the Director Options shall vest as follows:
• (i) 10,000,000 Director Options to Donald Taig exercisable on or before that date which is 3 years after the date they are issued at an exercise price of \$0.035 each shall vest immediately upon grant;
• (ii) 6,000,000 Director Options to Phillip Lockyer exercisable on or before that date which is 3 years after the date they are issued at an exercise price of \$0.035 each shall vest immediately upon grant;
• (iii) 6,000,000 Director Options to Christopher Hendricks exercisable on or before that date which is 3 years after the date they are issued at an exercise price of \$0.035 each shall vest immediately upon grant;
• (iv) 35,450,000 Director Options to Peter Williams shall vest in the following tranches:
• (A) 11,816,667 Director Options exercisable on or before that date which is 3 years after the date they are issued at an exercise price of \$0.033 each shall vest immediately upon grant (Tranche 1 Options);
• (B) 11,816,667 Director Options exercisable on or before 30 June 2011 at an exercise price of \$0.035 each to vest on 30 June 2009 (Tranche 2 Options); and
• (C) 11,816,666 Director Options exercisable on or before 30 June 2011 at an exercise price of \$0.04 each to vest on 30 June 2010 (Tranche 3 Options);

8.2 Shareholder Approval (Chapter 2E of The Corporations Act and Listing Rule 10.11) cont.

• (d) the Director Options will be granted to the Related Parties no later than 1 month after the date of the Annual General Meeting (or such later date as permitted by any ASX waiver or modification of the ASX Listing Rules) and it is anticipated the Director Options will be issued on one date;
• (e) the Director Options will be granted for nil cash consideration, accordingly no funds will be raised;
• (f ) the terms and conditions of the Director Options are set out in Schedule 2;
• (g) the value of the Director Options and the pricing methodology is set out in Schedule 3;
• (h) the relevant interests of the Related Parties in securities of the Company are set out below;

Related Party	Shares	Options
Donald Taig	9,955,366	Nil
Phillip Lockyer	344,523	Nil
Christopher Hendricks	190,909	Nil
Peter Williams	1,187,023	6,950,0001

1 3,475,000 Options exerciseable at \$0.05 each on or before 30 November 2010 and 3,475,000 Options exerciseable at \$0.06 each on or before 30 November 2010.

(i) the remuneration and emoluments from the Company to the Related Parties for both the current financial year and previous financial year are set out below:

Related Party	Current Financial Year	Previous
Financial Year
Donald Taig	\$153,950	\$56,200
Phillip Lockyer	\$30,000	\$30,000
Christopher Hendricks	\$15,000	N/A
Peter Williams	\$224,770	\$202,540

(j) if the Director Options granted to the Related Parties are exercised, a total of 57,450,000 Shares would be allotted and issued. This will increase the number of Shares on issue from 1,386,143,210 to 1,422,393,210 (assuming that no other Options are exercised and no other Shares issued) with the effect that the shareholding of existing Shareholders would be diluted as follows:

Shareholder	Issued Shares as at the date of this Notice of Meeting	% of Total Share Capital	Director Options to be issued	Issued Shares upon exercise of all Director Options	% of Total Share Capital upon exercise of Director Options
Donald Taig	9,955,366	0.08%	10,000,000	19,955,366	1.53%
Phillip Lockyer	344,523	0.03%	6,000,000	6,344,523	0.49%
Christopher Hendricks	190,909	0.02%	6,000,000	6,190,909	0.47%
Peter Williams	1,187,023	0.10%	35,450,000	36,637,023	2.81%
Non-associated Shareholders	1,234,465,389	99.06%	Nil	1,234,465,389	95.59%
TOTAL	1,246,143,210	100%	57,450,000	1,303,593,210	100%

The market price for Shares during the term of the Director Options would normally determine whether or not the Director Options are exercised. If, at any time any of the Director Options are exercised and the Shares are trading on ASX at a price that is higher than the exercise price of the Director Options, there may be a perceived cost to the Company.

Explanatory Statement

(k) the trading history of the Shares on ASX in the 12 months before the date of this Notice of Annual General Meeting is set out below:

	Price	Date
Highest	11.5 cents	19 November 2007
Lowest	2.0 cents	10 October 2008
Last	2.6 cents	20 October 2008

• (l) the primary purpose of the grant of Director Options to the Related Parties is to provide cost effective consideration to the Related Parties for their ongoing commitment and contribution to the Company in their respective roles as Directors. The Board does not consider that there are any significant opportunity costs to the Company or benefits foregone by the Company in issuing the Director Options upon the terms proposed;
• (m) the Board acknowledges the grant of Director Options to Donald Taig, Phillip Lockyer and Christopher Hendricks is contrary to Recommendation 8.2 of the ASX Corporate Governance Principles and Recommendations. However, the Board considers the grant of Director Options to Donald Taig, Phillip Lockyer and Christopher Hendricks reasonable in the circumstances, given the necessity to attract the highest calibre of professionals to the Company, whilst maintaining the Company's cash reserves;
• (n) Donald Taig declines to make a recommendation to Shareholders in relation to Resolution 7 due to his material personal interest in the outcome of the Resolution. The other Directors, who do not have a material interest in the outcome of Resolution 7, recommend that Shareholders vote in favour of Resolution 7. The Board (other than Donald Taig) is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass the Resolution;
• (o) Phillip Lockyer declines to make a recommendation to Shareholders in relation to Resolution 8 due to his material personal interest in the outcome of the Resolution. The other Directors, who do not have a material interest in the outcome of Resolution 8, recommend that Shareholders vote in favour of Resolution 8. The Board (other than Phillip Lockyer) is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass the Resolution;
• (p) Christopher Hendricks declines to make a recommendation to Shareholders in relation to Resolution 9 due to his material personal interest in the outcome of the Resolution. The other Directors, who do not have a material interest in the outcome of Resolution 9, recommend that Shareholders vote in favour of Resolution 9. The Board (other than Christopher Hendricks) is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass the Resolution; and
• (q) Peter Williams declines to make a recommendation to Shareholders in relation to Resolution 10 due to his material personal interest in the outcome of the Resolution. The other Directors, who do not have a material interest in the outcome of Resolution 10, recommend that Shareholders vote in favour of Resolution 10. The Board (other than Peter Williams) is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass the Resolution.

Approval pursuant to ASX Listing Rule 7.1 is not required in order to issue the Director Options to the Related Parties as approval is being obtained under ASX Listing Rule 10.11. Accordingly, the issue of Director Options to the Related Parties will not be included in the 15% calculation of the Company's annual placement capacity pursuant to ASX Listing Rule 7.1.

9. ENQUIRIES

Shareholders are required to contact Jon Grygorcewicz on (+ 61 8) 9215 7888 if they have any queries in respect of the matters set out in these documents.

Glossary

\$ means Australian dollars.

Annual General Meeting means the meeting convened by the Notice of Meeting.

ASIC means the Australian Securities and Investments Commission.

ASX means ASX Limited.

ASX Listing Rules means the Listing Rules of ASX.

Board means the current board of directors of the Company.

Business Day means Monday to Friday inclusive, except New Year's Day, Good Friday, Easter Monday, Christmas Day, Boxing Day, and any other day that ASX declares is not a business day.

Company means Focus Minerals Ltd (ACN 005 470 799).

Constitution means the Company's constitution.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

Director Option means an Option granted pursuant to Resolutions 7, 8, 9 and 10 with the terms and conditions set out in Schedule 2.

Explanatory Statement means the explanatory statement accompanying the Notice of Meeting.

Notice of Meeting or Notice of Annual General Meeting means this notice of annual general meeting including the Explanatory Statement.

Option means an option to acquire a Share with the terms and conditions set out in Schedule 1.

Optionholder means a holder of an Option or Director Option as the context requires.

Resolutions means the resolutions set out in the Notice of Meeting, or any one of them, as the context requires.

Scheme means the Focus Minerals Ltd Employee Incentive Option Scheme.

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

Shareholder means a holder of a Share.

WDST means Western Daylight Saving Time as observed in Perth, Western Australia.

Schedule 1- Terms and Conditions of Options

The Options entitle the holder to subscribe for Shares on the following terms and conditions:

• (a) Each Option gives the Optionholder the right to subscribe for one Share. To obtain the right given by each Option, the Optionholder must exercise the Options in accordance with the terms and conditions of the Options.
• (b) The Options will expire at 5:00 pm (WDST) on 30 April 2011 (Expiry Date). Any Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.
• (c) The amount payable upon exercise of each Option will be 6.875 cents (Exercise Price).
• (d) The Options held by each Optionholder may be exercised in whole or in part, and if exercised in part, multiples of 10,000,000 must be exercised on each occasion.
• (e) An Optionholder may exercise their Options by lodging with the Company, before the Expiry Date:
• (i) a written notice of exercise of Options specifying the number of Options being exercised; and
• (ii) a cheque or electronic funds transfer for the Exercise Price for the number of Options being exercised;

(Exercise Notice).

• (f ) An Exercise Notice is only effective when the Company has received the full amount of the Exercise Price in cleared funds.
• (g) Within 10 Business Days of receipt of the Exercise Notice accompanied by the Exercise Price, the Company will allot the number of Shares required under these terms and conditions in respect of the number of Options specified in the Exercise Notice.
• (h) The Options are not transferable.
• (i) All Shares allotted upon the exercise of Options will upon allotment rank pari passu in all respects with other Shares.
• (j) The Company will not apply for quotation of the Options on ASX. However, The Company will apply for quotation of all Shares allotted pursuant to the exercise of Options on ASX within 10 Business Days after the date of allotment of those Shares.
• (k) If at any time the issued capital of the Company is reconstructed, all rights of an Optionholder are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reconstruction.
• (l) There are no participating rights or entitlements inherent in the Options and Optionholders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least 6 Business Days after the issue is announced. This will give Optionholders the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue.
• (m) An Option does not confer the right to a change in exercise price or a change in the number of underlying securities over which the Option can be exercised.

Schedule 2 - Terms and Conditions of Director Options

The Director Options entitle the holder to subscribe for Shares on the following terms and conditions:

• (a) Each Director Option gives the Optionholder the right to subscribe for one Share. To obtain the right given by each Director Option, the Optionholder must exercise the Director Options in accordance with the terms and conditions of the Director Options.
• (b) The Options will expire at 5:00 pm (WDST) on the respective expiry dates as detailed in section 8.2(c) (Expiry Date). Any Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.
• (c) The amount payable upon exercise of each Option will be as detailed in section 8.2(c) (Exercise Price).
• (d) The Options shall vest as set out in section 8.2(c).
• (e) The Director Options held by each Optionholder may be exercised in whole or in part, and if exercised in part, multiples of 1,000 must be exercised on each occasion.
• (f ) An Optionholder may exercise their Director Options by lodging with the Company, before the Expiry Date:
• (i) a written notice of exercise of Director Options specifying the number of Director Options being exercised; and
• (ii) a cheque or electronic funds transfer for the Exercise Price for the number of Director Options being exercised;

(Exercise Notice).

• (g) An Exercise Notice is only effective when the Company has received the full amount of the Exercise Price in cleared funds.
• (h) Within 10 Business Days of receipt of the Exercise Notice accompanied by the Exercise Price, the Company will allot the number of Shares required under these terms and conditions in respect of the number of Director Options specified in the Exercise Notice.
• (i) The Director Options are not transferable.
• (j) All Shares allotted upon the exercise of Director Options will upon allotment rank pari passu in all respects with other Shares.
• (k) The Company will not apply for quotation of the Director Options on ASX. However, The Company will apply for quotation of all Shares allotted pursuant to the exercise of Director Options on ASX within 10 Business Days after the date of allotment of those Shares.
• (l) If at any time the issued capital of the Company is reconstructed, all rights of an Optionholder are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reconstruction.
• (m) There are no participating rights or entitlements inherent in the Director Options and Optionholders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Director Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least 6 Business Days after the issue is announced. This will give Optionholders the opportunity to exercise their Director Options prior to the date for determining entitlements to participate in any such issue.
• (n) A Director Option does not confer the right to a change in exercise price or a change in the number of underlying securities over which the Director Option can be exercised.

Schedule 3 - Valuation of Director Options

The Director Options to be issued to the Related Parties pursuant to Resolutions 7, 8, 9 and 10 have been valued by internal management.

Using the theoretical Black & Scholes option model and based on the assumptions set out below, the Director Options were ascribed a value range, as follows:

Director Options to be issued pursuant to Resolutions 7, 8 and 9

Assumptions:
Valuation date	16 October 2008
Market price of Shares	2.5 cents
Exercise price	3.5 cents
Expiry date	3 years from the date of issue
Risk free interest rate	4.66%
Volatility	80%
Indicative value per Director Option	1.14 cents
Total Value of Director Options
- Donald Taig	\$114,362
- Phillip Lockyer	\$68,617
- Christopher Hendricks	\$68,617
Director Options to be issued pursuant to Resolution 10
Assumptions:
Valuation date	16 October 2008
Market price of Shares	2.5 cents
Exercise price	Tranche 1 Options: 3.3 cents Tranche 2 Options: 3.5 cents Tranche 3 Options: 4 cents
Expiry date	Tranche 1 Options: 3 years from the date of issue Tranche 2 Options: 30 June 2011 Tranche 3 Options: 30 June 2011
Risk free interest rate	4.66%
Volatility	80%
Indicative value per Director Option
- Tranche 1 Options	1.108 cents
- Tranche 2 Options	1.060 cents
- Tranche 3 Options	1.012 cents
Total Value of Director Options – Peter Williams
- Tranche 1 Options	\$130,885
- Tranche 2 Options	\$125,204
- Tranche 3 Options	\$119,635
Total Value of Tranche 1 Options, Tranche 2 Options and Tranche 3 Options	\$375,724

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Proxy Form

APPOINTMENT OF PROXY FOCUS MINERALS LTD ACN 005 470 799

ANNUAL GENERAL MEETING

I/We
of
	being a member of Focus Minerals Ltd entitled to attend and vote at the Annual General Meeting, hereby
Appoint
	Name of proxy
OR	the Chair of the Annual General Meeting as your proxy
adjournment thereof.	or failing the person so named or, if no person is named, the Chair of the Annual General Meeting, or the Chair's nominee, to vote in accordance with the following directions, or, if no directions have been given, as the proxy sees fit, at the Annual General Meeting to be held at 3.00pm (WDST), on 25 November 2008 at Hannan's Club, 44 Brookman St (Cnr Maritana & Brockman Sts), Kalgoorlie WA 6433, and at any
	If no directions are given, the Chair will vote in favour of all the Resolutions.
	If the Chair of the Annual General 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 Resolutions 4 to 10 please place a mark in this box.
	By marking this box, you acknowledge that the Chair of the Annual General Meeting may exercise your proxy even if he has an interest in the outcome of Resolutions 4 to 10 and that votes cast by the Chair of the Annual General Meeting for Resolutions 4 to 10 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 Resolutions 4 to 10 and your votes will not be counted in calculating the required majority if a poll is called on Resolutions 4 to 10.
OR
	Voting on Business of the Annual General Meeting
		FOR	AGAINST	ABSTAIN
	Resolution 1 – Adoption of remuneration report			
	Resolution 2 – Re-election of Director – Chris Hendricks			
	Resolution 3 – Re-election of Director – Donald Taig			
	Resolution 4 – Ratification of Prior Issue – Options			
	Resolution 5 – Adoption of Employee Incentive Option Scheme			
	Resolution 6 – Directors' Remuneration			
	Resolution 7 – Issue of Director Options to Donald Taig			
	Resolution 8 – Issue of Director Options to Phillip Lockyer			
	Resolution 9 – Issue of Director Options to Christopher Hendricks			
	Resolution 10 – Issue of Director Options to Peter Williams			
	Please note: If you mark the abstain box for a particular Resolution, you are directing your proxy not to vote on that Resolution on a show of hands or on a poll and your votes will not to be counted in computing the required majority on a poll.
	Signature of Member(s):		Date: ____

Individual or Member 1	Member 2	Member 3
Sole Director/Company Secretary	Director	Director/Company Secretary
		Contact Name: _____ Contact Ph (daytime): _________

FOCUS MINERALS LTD ACN 005 470 799

• 1. (Appointing a Proxy): A member entitled to attend and vote at an Annual General Meeting is entitled to appoint not more than two proxies to attend and vote on a poll on their behalf. The appointment of a second proxy must be done on a separate copy of the Proxy Form. Where more than one proxy is appointed, such proxy must be allocated a proportion of the member's voting rights. If a member appoints two proxies and the appointment does not specify this proportion, each proxy may exercise half the votes. A duly appointed proxy need not be a member of the Company.
• 1. (Direction to Vote): A member may direct a proxy how to vote by marking one of the boxes opposite each item of business. Where a box is not marked the proxy may vote as they choose. Where more than one box is marked on an item the vote will be invalid on that item.

3. (Signing Instructions):

• • (Individual): Where the holding is in one name, the member must sign.
• • (Joint Holding): Where the holding is in more than one name, all of the members must sign.
• • (Power of Attorney): If you have not already provided the Power of Attorney with the registry, please attach a certified photocopy of the Power of Attorney to this form when you return it.
• • (Companies): Where the company has a sole director who is also the sole company secretary, that person must sign. Where the company (pursuant to Section 204A of the Corporations Act) does not have a company secretary, a sole director can also sign alone. Otherwise, a director jointly with either another director or a company secretary must sign. Please sign in the appropriate place to indicate the office held.
• 1. (Attending the Meeting): Completion of a Proxy Form will not prevent individual members from attending the Annual General Meeting in person if they wish. Where a member completes and lodges a valid Proxy Form and attends the Annual General Meeting in person, then the proxy's authority to speak and vote for that member is suspended while the member is present at the Annual General Meeting.
• 1. (Return of Proxy Form): To vote by proxy, please complete and sign the enclosed Proxy Form and return by:
• (a) post to Focus Minerals Ltd, PO Box Z5422, St Georges Terrace, Perth WA 6831; or
• (b) facsimile to the Company on facsimile number +61 8 9215 7889,

so that it is received not later than 3.00pm (WDST) on 23 November 2008.

Proxy forms received later than this time will be invalid.