GOLD MOUNTAIN LIMITED — Share Issue/Capital Change 2016

Nov 27, 2016

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ASX RELEASE

Suite 2501 Level 25 St Martins Tower 31 Market Street Sydney NSW 2000 Australia (PO Box Q638 QVB Market Street NSW 1230 Australia) Tel: +61 (02) 9283 3880

28 November 2016

Issue of Share Options under the Employee Share Option Plan

Gold Mountain Limited (“ GMN ” or “ Company ”) announced on 29 August 2016 of a grant of 18,900,000 share options (“ Options ”) to employees and consultants, and directors of the Company pursuant to the Company’s Employee Share Option Plan (“ ESOP ”).

At the extraordinary general meeting on 11 October 2016 (“ 2016 EGM ”), shareholders approved the issue of shares and options under the ESOP to employees including consultants and directors for a period of 3 years from date of the 2016 EGM.

The Company’s ESOP, first established in 2011, is for a number of purposes and continues to believe that ESOP is integral to the Company’s financial performance for a number of reasons, including:

• a) retaining and incentivising its key personnel;

• b) attracting and retaining valued employees essential for the continued growth and development of the Company;

• c) establishing a sense of ownership in the Company for the employees;

• d) promoting and fostering loyalty and support amongst the employees for the benefit of both the employees and the Company;

• e) enhancing the relationship between the Company and its employees for the long term mutual benefit of the parties; and

• f) enabling the Company to attract high calibre individuals who can bring expertise to the Company.

The granted Options under the ESOP are subject to the following vesting conditions.

1. The Company’s underlying share price must exceed $0.50 based on volume weighted average price (VWAP) over a 5 day consecutive period;

2. The exercise period of the Option shall not commence until a date that is at least 12 months after the date of grant of the Options (29 August 2016);

3. Subject to these vesting conditions, the Options have an exercise price of $0.30 and shall expire 36 months after the date of issue; and

4. The holder must be an actual consultant to or employee of the Company at the time of exercise of the relevant Options.

The Company advises that in accordance with ESOP and the approval of shareholders at the 2016 EGM, 18,400,000 Options have been issued today to the eligible employees (including consultants and directors).

A completed Appendix 3B in respect of the issue of options under the ESOP is attached.

Appendix 3B New issue announcement

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

Gold Mountain Limited

ABN

79 115 815 942

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)	Unlisted Options
	18,400,000
	Unlisted options issued under the Employee Share Option Plan (ESOP). Options are exercisable at $0.30 until expiry date 28/11/2019 and subject to vending condition that the Company’s share price must exceed $0.50 based on VWAP over a 5 day consecutive period.

• See chapter 19 for defined terms.

Appendix 3B Page 1

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Appendix 3B New issue announcement

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	Options will not be quoted. Shares to be issued upon exercise of the Options will rank equally with all other fully paid ordinary shares on issue.
	Nil issue price
	Issue of unlisted options under ESOP
	Yes
	18 November 2016
	Nil
	N/A

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 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)	Nil	Nil
	18,400,000 unlisted options
	N/A
	N/A
	Rule 7.1 51,132,572 Rule 7.1A 35,326,476
	29 November 2016
	Number	+Class
	379,950,222	Ordinary Shares

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

9 Number and +class of all +securities not quoted on ASX (including the +securities in section 2 if applicable)	Number	+Class
	500,000 46,217,858 18,400,000	Options at exercise price $0.07 expiring 31 December 2016 Options at exercise price $0.055 expiring 18/1/2018 Options at exercise price $0.30 expiring 28/11/2019

10 Dividend policy (in the case of a trust, distribution policy) on the No change increased capital (interests)

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.

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

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?

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

• 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

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

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

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.

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Appendix 3B New issue announcement

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.

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Sign here:

Date: 28 November 2016

( ~~Director/~~ Company Secretary)

Print name: Eric Kam.

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• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

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

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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

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Insert number of fully paid [+] ordinary 205,012,842
securities on issue 12 months before the
+ issue date or date of agreement to issue
Add the following:
• Number of fully paid [+] ordinary
securities issued in that 12 month
50,000,000 shares (22/3/16)
period under an exception in rule 7.2
60,000,000 shares (16/8/16)
• Number of fully paid [+] ordinary
securities issued in that 12 month
period with shareholder approval
38,251,926 shares (EGM 11/10/16)
• 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
“A” 353,264,768
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• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Step 2: Calculate 15% of “A”

Step 2: Calculate 15% of “A”	Step 2: Calculate 15% of “A”
“B”	0.15 [Note: this value cannot be changed]
Multiply“A” by 0.15	52,989,715
Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used
Insertnumber 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	1,238,095 shares (18/10/16) 619,048 options (18/10/16)
“C”	1,857,143
Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1
“A” x 0.15 Note: number must be same as shown in Step 2	52,989,715
Subtract“C” Note: number must be same as shown in Step 3	1,857,143
Total[“A” x 0.15] – “C”	51,132,572 [Note: this is the remaining placement capacity under rule 7.1]

placement capacity under rule 7.1
“A” x 0.15	52,989,715
Note: number must be same as shown in
Step 2
Subtract“C”	1,857,143
Note: number must be same as shown in
Step 3
Total[“A” x 0.15] – “C”	51,132,572
	[Note: this is the remaining placement
	capacity under rule 7.1]

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Part 2

Rule 7.1A – Additional placement capacity for eligible entities

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

“A” 353,264,768 Note: number must be same as shown in Step 1 of Part 1

Step 2: Calculate 10% of “A”

“D” 0.10 Note: this value cannot be changed Multiply “A” by 0.10 35,326,476

Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used

• Insert number of[+] equity securities issued or agreed to be issued in that 12 month period under rule 7.1A - Notes: • This applies to equity securities – not just ordinary securities

• • Include here – if applicable – the securities the subject of the Appendix 3B to which this form is annexed

• • Do not include equity securities issued under rule 7.1 (they must be dealt with in Part 1), or for which specific security holder approval has been obtained

• • It may be useful to set out issues of securities on different dates as separate line items

• “E” -

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A
“A” x 0.10 Note: number must be same as shown in Step 2	35,326,476
Subtract“E” Note: number must be same as shown in Step 3	-
Total[“A” x 0.10] – “E”	35,326,476 Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

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