GREEN360 TECHNOLOGIES LIMITED — AGM Information 2012

Nov 13, 2012

LITHEX RESOURCES LIMITED

ACN 140 316 463

NOTICE OF ANNUAL GENERAL MEETING

TIME : 11.00am WST DATE : 14 December 2012 PLACE : 75 King Street, Perth WA

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) 9200 5885.

CONTENTS PAGE

Business of the Meeting (setting out the proposed resolutions)	3
Explanatory Statement (explaining the proposed resolutions)	7
Glossary	28
Schedule 1 – Terms and Conditions of Options	30
Schedule 2 – Terms and Conditions of Options	31

IMPORTANT INFO RMATION

TIME AND PLACE OF MEETING

Notice is given that the meeting of the Shareholders to which this Notice of Meeting relates will be held at 11.00 am (WST) on 14 December 2012 at:

75 King Street Perth WA

YOUR VOTE IS IMPORTANT

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

VOTING ELIGIBILITY

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered Shareholders at 4:00pm (WST) on 12 December 2012.

VOTING IN PERSON

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

VOTING BY PROXY

To vote by proxy, please complete and sign the enclosed Proxy Form and return by the time and in accordance with the instructions set out on the Proxy Form.

In accordance with section 249L of the Corporations Act, members are advised that:

• each member has a right to appoint a proxy;

• the proxy need not be a member of the Company; and

• a member who is entitled to cast 2 or more votes may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If the member appoints 2 proxies and the appointment does not specify the proportion or number of the member’s votes, then in accordance with section 249X(3) of the Corporations Act, each proxy may exercise one-half of the votes.

New sections 250BB and 250BC of the Corporations Act came into effect on 1 August 2011 and apply to voting by proxy on or after that date. Shareholders and their proxies should be aware of these changes to the Corporations Act, as they will apply to this Meeting. Broadly, the changes mean that:

• if proxy holders vote, they must cast all directed proxies as directed; and

• any directed proxies which are not voted will automatically default to the Chair, who must vote the proxies as directed.

Further details on these changes is set out below.

Proxy vote if appointment specifies way to vote

Section 250BB(1) of the Corporations Act provides that an appointment of a proxy may specify the way the proxy is to vote on a particular resolution and, if it does :

• the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way (i.e. as directed); and

• if the proxy has 2 or more appointments that specify different ways to vote on the resolution – the proxy must not vote on a show of hands; and

• if the proxy is the chair of the meeting at which the resolution is voted on – the proxy must vote on a poll, and must vote that way (i.e. as directed); and

• if the proxy is not the chair – the proxy need not vote on the poll, but if the proxy does so, the proxy must vote that way (i.e. as directed).

Transfer of non-chair proxy to chair in certain circumstances

Section 250BC of the Corporations Act provides that, if:

• an appointment of a proxy specifies the way the proxy is to vote on a particular resolution at a meeting of the Company's members; and

• the appointed proxy is not the chair of the meeting; and

• at the meeting, a poll is duly demanded on the resolution; and

• either of the following applies:

• the proxy is not recorded as attending the meeting;

• the proxy does not vote on the resolution,

the chair of the meeting is taken, before voting on the resolution closes, to have been appointed as the proxy for the purposes of voting on the resolution at the meeting.

BUSINESS OF THE MEET ING

AGENDA

FINANCIAL STATEMENTS AND REPORTS

To receive and consider the annual financial report of the Company for the financial year ended 30 June 2012 together with the declaration of the directors, the director’s 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 2012.”

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

Voting Prohibition Statement:

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

• (a) a member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report; or

• (b) a Closely Related Party of such a member.

However, a person (the voter ) described above may cast a vote on this Resolution as a proxy if the vote is not cast on behalf of a person described above and either:

• (a) the voter is appointed as a proxy by writing that specifies the way the proxy is to vote on this Resolution; or

• (b) the voter is the Chair and the appointment of the Chair as proxy:

• (i) does not specify the way the proxy is to vote on this Resolution; and

• (ii) expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel.

2. RESOLUTION 2 – RE-ELECTION OF DIRECTOR – MR STEVEN CRABBE

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 6.3(c) of the Constitution and for all other purposes, Mr Steven Crabbe, a Director, retires by rotation, and being eligible, is re-elected as a Director.”

3. RESOLUTION 3 – ISSUE OF SHARES AND OPTIONS TO STRATEGIC RESOURCE MANAGEMENT PTY LTD

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 7.1, ASX Listing Rule 11.1.2 and for all other purposes, approval is given for the Company to allot and issue up to 12,000,000 Shares and 20,000,000 Options to Strategic Resource Management Pty Ltd (or its 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 any person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed and any associates of those persons. 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.

4. RESOLUTION 4 – ISSUE OF SHARES TO MR ROBERT MANDANICI

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 1,000,000 Shares to Robert Mandanici (or his nominee) on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion Statement : The Company will disregard any votes cast on this Resolution by Mr Robert Mandanici (or his nominee) 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.

Voting Prohibition Statement:

A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

(a) the proxy is either:

• (i) a member of the Key Management Personnel; or

• (ii) a Closely Related Party of such a member; and

• (b) the appointment does not specify the way the proxy is to vote on this Resolution.

However, the above prohibition does not apply if:

• (c) the proxy is the Chair of the Meeting; and

• (d) the appointment expressly authorises the Chair to exercise the proxy even if the Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

5. RESOLUTION 5 – ISSUE OF SHARES TO MR STEVEN CRABBE

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 1,000,000 Shares to Steven Crabbe (or his

nominee) on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion Statement : The Company will disregard any votes cast on this Resolution by Mr Steven Crabbe (or his nominee) 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.

Voting Prohibition Statement:

A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

• (a) the proxy is either:

• (i) a member of the Key Management Personnel; or

• (ii) a Closely Related Party of such a member; and

• (b) the appointment does not specify the way the proxy is to vote on this Resolution.

However, the above prohibition does not apply if:

• (c) the proxy is the Chair of the Meeting; and

• (d) the appointment expressly authorises the Chair to exercise the proxy even if the Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

6. RESOLUTION 6 –APPROVAL OF 10% PLACEMENT CAPACITY– SHARES

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

• “That, for the purpose of Listing Rule 7.1A and for all other purposes, approval is given for the issue of Equity Securities totalling up to 10% of the issued capital of the Company at the time of issue, calculated in accordance with the formula prescribed in Listing Rule 7.1A.2 and on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by any person who may participate in the issue of Equity Securities under this Resolution and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed and any associates of those persons. However, the Company will 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 – RATIFICATION OF PRIOR ISSUE OF SHARES AND OPTIONS

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

• “That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify the allotment and issue of 6,987,000 Shares and 3,493,500 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 associates of those persons. 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: 14 NOVEMBER 2012

BY ORDER OF THE BOARD

NEAL SHOOBERT COMPANY SECRETARY

EXPLANATORY STATEMEN T

This Explanatory Statement has been prepared to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions which are the subject of the business of the Meeting.

1. FINANCIAL STATEMENTS AND REPORTS – AGENDA ITEM

In accordance with the Constitution, the business of the Meeting will include receipt and consideration of the annual financial report of the Company for the financial year ended 30 June 2012 together with the declaration of the directors, the directors’ report, the Remuneration Report and the auditor’s report.

The Company will not provide a hard copy of the Company’s annual financial report to Shareholders unless specifically requested to do so. The Company’s annual financial report is available on its website at www.lithex.com.au.

2. RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT

2.1 General

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 company or the directors of 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 a financial year.

The chair of the meeting must allow a reasonable opportunity for its shareholders to ask questions about or make comments on the remuneration report at the annual general meeting.

2.2 Voting consequences

Under changes to the Corporations Act which came into effect on 1 July 2011, a company is required to put to its shareholders a resolution proposing the calling of another meeting of shareholders to consider the appointment of directors of the company ( Spill Resolution ) if, at consecutive annual general meetings, at least 25% of the votes cast on a remuneration report resolution are voted against adoption of the remuneration report and at the first of those annual general meetings a Spill Resolution was not put to vote. If required, the Spill Resolution must be put to vote at the second of those annual general meetings.

If more than 50% of votes cast are in favour of the Spill Resolution, the company must convene a shareholder meeting ( Spill Meeting ) within 90 days of the second annual general meeting.

All of the directors of the company who were in office when the directors' report (as included in the company’s annual financial report for the most recent financial year) was approved, other than the managing director of the company, will cease to hold office immediately before the end of the Spill Meeting but may stand for re-election at the Spill Meeting.

Following the Spill Meeting those persons whose election or re-election as directors of the company is approved will be the directors of the company.

2.3 Previous voting results

At the Company’s previous annual general meeting the votes cast against the remuneration report considered at that annual general meeting were less than 25%. Accordingly, the Spill Resolution is not relevant for this Annual General Meeting.

2.4 Proxy voting restrictions

Shareholders appointing a proxy for this Resolution should note the following:

If you appoint a member of the Key Management Personnel (other than the Chair) whose remuneration details are included in the Remuneration Report, or a Closely Related Party of such a member as your proxy

You must direct your proxy how to vote on this Resolution . Undirected proxies granted to these persons will not be voted and will not be counted in calculating the required majority if a poll is called on this Resolution.

If you appoint the Chair as your proxy (where he/she is also a member of the Key Management Personnel whose remuneration details are included in the Remuneration Report, or a Closely Related Party of such a member).

You do not need to direct your proxy how to vote on this Resolution. However, if you do not direct the Chair how to vote, you must mark the acknowledgement on the Proxy Form to expressly authorise the Chair to exercise his/her discretion in exercising your proxy even though this Resolution is connected directly or indirectly with the remuneration of Key Management Personnel .

If you appoint any other person as your proxy

You do not need to direct your proxy how to vote on this Resolution, and you do not need to mark any further acknowledgement on the Proxy Form.

3. RESOLUTION 2 – RE-ELECTION OF DIRECTOR – MR STEVEN CRABBE

Clause 6.3 of the Constitution requires that at the Company's annual general meeting in every year, one-third of the Directors for the time being, or, if their number is not a multiple of 3, then the number nearest one-third (rounded upwards in case of doubt), shall retire from office, 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 Directors to retire at an annual general meeting are those who have been longest in office since their last election, but, as between persons who became Directors on the same day, those to retire shall (unless they otherwise agree among themselves) be determined by drawing lots.

A Director who retires by rotation under clause 6.3(c) of the Constitution is eligible for re-election.

The Company currently has 3 Directors and accordingly 1 must retire.

Steven Crabbe, the Director longest in office since his last election, retires by rotation and seeks re-election.

4. RESOLUTION 3 – ISSUE OF SHARES AND OPTIONS TO STRATEGIC RESOURCE MANAGEMENT PTY LTD

4.1 Background

The Company was incorporated on 30 October 2009 and was admitted to the official list of the ASX on 17 May 2011 (ASX code: LTX). The Company is a Perthbased exploration company with principal activities of mineral exploration and identification of potential mining assets for acquisition and development.

The Company currently holds a 100% interest in four (4) granted exploration licences, a 90% interest in six (6) granted exploration licences, a 100% interest in four (4) applications for exploration licences and a 90% interest in one (1) application for an exploration licence. All of the tenements in which the Company has an interest are situated in northern Western Australia. Since listing on ASX, approximately $2,800,000 has been spent on the Company’s current projects (comprising of $1,500,000 on exploration and $1,300,000 on administration).

On 4 October 2012, the Company announced that it had executed a Heads of Agreement with Strategic Resource Management Pty Ltd ( Strategic ) to acquire all of the shares in Far North Minerals Pty Ltd ( Far North ) which holds a suite of graphite tenements ( Tenements ) in four Australian states: Western Australia, South Australia, Queensland and New South Wales (the Acquisition ).

The Company, Strategic and Far North have since executed a formal Share Sale and Purchase Agreement ( Share Sale Agreement ), the material terms of which are summarised below.

4.2 Summary of Share Sale Agreement

On 8 November 2012, the Company entered into a Share Sale Agreement with Far North and Strategic being the sole shareholder of Far North , to acquire 100% of the shares in Far North. The material terms and conditions of the Share Sale Agreement are as follows:

• (a) ( Consideration ): in consideration for the acquisition of Far North, the Company will: (i) pay Strategic $150,000 cash;

• (ii) issue and allot to Strategic (and/or its nominee) 12,000,000 Shares at a deemed issue price of $0.06 per Share;

• (iii) issue and allot to Strategic (and/or its nominee) 10,000,000 Options exercisable at $0.08 per Option on or before 31 December 2015; and

• (iv) issue and allot to Strategic (and/or its nominee) 10,000,000 Options exercisable at $0.16 per Option on or before 31 December 2016;

• (b) ( Conditions Precedent ): the Share Sale Agreement remains conditional upon: (i) the Company obtaining all Shareholder approvals required under the Corporations Act and ASX Listing Rules for the Acquisition; and

• (ii) the Company completing the Rights Issue.

If the conditions are not satisfied by 31 December 2012 (or such later date as agreed by the parties), the Company or Strategic may terminate the Share Sale Agreement;

• (c) ( Reimbursement ) The Company will reimburse Strategic for exploration costs of up to $50,000 incurred up to the completion date.

• (d) ( Escrow ): Strategic agrees that the Shares and Options issued as part of the consideration for the Acquisition will be the subject of escrow restrictions for a period the longer of:

• (i) that imposed by ASX under the ASX Listing Rules;

• (ii) or imposed by the Company, being a period of up to three months, and voluntarily assumed by Strategic.

Strategic agrees to execute (or arrange for its nominee to execute) such form of restriction agreement in respect of the Shares and Options as may be required by ASX or by the Company acting reasonably (as the case may be).

• (e) ( Appointment and Resignation of Directors ): At completion, the Company must cause the Board to appoint a nominee of Strategic (subject to the nominee delivering to the Board a duly executed consent to act) as a non-executive director of the Company. No later than three (3) months after Completion, one existing director of the Company will resign from the Board.

• (f) ( Warranties ): Strategic has provided warranties to the Company in respect of Far North and the Tenements that are customary for an agreement of this nature.

4.3 Far North Minerals Pty Ltd

Far North is an Australian proprietary company limited by shares, which was incorporated on 18 July 2011. Far North does not have any current activities other than having an interest in the eleven (11) graphite tenements as listed below and in the following table:

• (a) Far North has a 100% interest in four (4) Western Australian exploration licences as follows:

• (i) E70/4212; (ii) E74/517; (iii) E74/518; and (iv) E74/523;

• (b) Far North has a 100% interest in one (1) exploration permit for minerals in Queensland, EPM 19362;

• (c) Far North has a 100% interest in five (5) New South Wales exploration licences as follows:

• (i) EL7913; (ii) EL7914; (iii) EL7915;

(iv) EL7916; and

(v) EL7917; and

(d) Far North has a 100% interest in one (1) exploration licence application in South Australia, EL249/11.

New South Wales

New South Wales
Tenement Project Application Date Status Unit Unit	Area (Km2)
EL7913 Becks Point 9/09/2011 Granted SB 12 EL7914 Winterbourne 9/09/2011 Granted SB 13 EL7915 Plumbago 9/09/2011 Granted SB 27 EL7916 Big Dipper 9/09/2011 Granted SB 4 EL7917 Pappens 9/09/2011 Granted SB 20	36 39 81 12 60

Western Australia

Tenement Project Unit Area	Area (Km2)
E 70/4212 Furniss East 9/08/2011 Granted SB 12 E 74/517 Munglinup 9/08/2011 Granted SB 23 E 74/518 Munglinup 9/08/2011 Granted SB 2 E 74/523 Munglinup 2/02/2012 Granted SB 33	36 69 6 99
Queensland
Tenement Project Unit Unit	Area (Km2)
EPM19362 Emu Plain 9/09/2011 Granted SB 8	24
South Australia

Tenement Project Unit Unit	Area (Km2)
ELA249_11 Eyre Point 10/19/2011 Application SB 24	71

4.4 The Tenements

The graphite tenement package is comprised of eleven (11) tenements with a total area of 533 km[2] located in four Australian states. Three tenements make up the Munglinup Project in Western Australia, one comprises the Eyre Point Project in South Australia, five cover various historical showings located in New South Wales, one covers the Furniss East Project in Western Australia, and one covers the Emu Plain Project located in Queensland.

The Tenements are located in the main known graphite provinces in Australia, including the Munglinup Region of Western Australia and the Eyre Peninsula of South Australia.

No recent or systematic exploration program has been carried out for the exploration of graphite on any of the acquired Tenements. The Tenements are considered prospective for occurrences of graphite.

(a) Munglinup Tenements

The Company considers the flagship property to be the Munglinup Tenement. The Munglinup Tenement consists of three separate tenements covering an area of 174 km[2] located in the far south of Western Australia between the regional towns of Esperance and Ravensthorpe. The tenement is located along strike and contiguous with the eastern and southern sides of the Munglinup deposit, which is held by Graphite Australia Pty Ltd.

The Munglinup deposit is anticipated to be Western Australia’s first commercial graphite mine. The Munglinup Deposit and the historical estimate related thereto are separate from the Company’s Munglinup Tenement area, but the Company believes that there is potential for similar style mineralisation to occur within the Munglinup Tenement.

During a recent field programme by an independent consulting geologist, an area of sub-cropping graphitic gneiss was located near the north end E74/518 and graphitic gneiss float was located 700 metres south of the area of sub-cropping graphitic gneiss. The area of subcropping graphitic gneiss corresponds with the strong north-south trending EM anomaly.

Initial rock chip samples submitted to a commercial laboratory from outcropping graphite returned between 8.6% and 23.1% Total Graphitic Carbon.

Airborne electromagnetic data shows a significant anomaly to be coincident with the stratigraphy that hosts the Munglinup deposit. The EM data will be used to prioritise areas for drilling.

The Munglinup Tenement will be the Company’s first priority for drilling after further mapping and sampling, geophysical acquisition and EM ground surveys. The Munglinup Tenement is also considered to have untested potential for nickel deposits, with several nickel occurrences noted in the vicinity.

						Total Graphitic Carbon % by Method GRAV4D Detection Limit 0.05%
					%C by Method MET6A Detection Limit 0.02%
Samples No.	Easting	Northing	GPS_RL	Description
46501	300949	6270050	94	Calcrete from dam wall, to compare with graphite zone calcrete	7	<0.05
46502	301787	6269851	71	Calcrete – silcrete from graphitic zone	11	<0.05
46503	301817	6269777	67	Graphitic gneiss float, on track.	25.4	23.1
46505	301779	6269787	67	Graphitic gneiss float	16.8	14.4
46506	301784	6297797	67	Graphitic gneiss float	19	8.8
46507	301878	6269171	69	Graphitic gneiss float	10.8	8.6

• All coordinates GDA94 zone 51

• Samples 46501 and 46502 were collected for Mg analysis of carbonate in calcrete and magnesite

(b) Eyre Point Tenement

The Eyre Point Tenement area is located 15 kilometres to the north of the Uley Graphite Mine and covers three prospective areas within 71 km[2] .

The Uley Graphite Mine is a historical open-cut graphite mine at Uley on the Eyre Peninsula, South Australia and has recently been purchased by Mega Graphite Inc. Uley is recognised as an area of world class flake graphite mineralisation. The Uley graphite deposit is part of the Mikkira Graphite Province, one of the largest coarse flake graphite deposits in the world, containing disseminated, high-grade flake graphite.

The Eyre Point Tenement is located on the eastern Eyre Peninsula, where numerous graphite occurrences have been recorded over a 200 kilometre long zone extending from south of Port Lincoln to Kimba.

(c)

New South Wales Tenements

There are 14 recorded occurrences of graphite in New South Wales, all of which are in the area covered by the five Tenements that will be acquired pursuant to the Acquisition, covering a combined area of 228 km[2] . They occur in two main areas in the New England Orogen, Undercliff Falls, north of Tenterfield, and Walcha, south of Armidale.

The Plumbago occurrence is located in the Undercliff Falls area and hosts the Plumbago deposit where a total of 3,000 tonnes has been mined in the past according to historical records from the New South Wales mines department. In the Undercliff Falls area there are nine separate graphite localities which include the George Creek, Falls Creek, Nicklaus, Half Moon, Circular Quay Gully, Hutt Spur occurrences.

The Winterbourne occurrence contains the formerly operating Winterbourne graphite mine and is developed in a north-trending micropegmatite dyke that intrudes granitic stocks of the Cheyenne Complex, Hillgrove Supersuite. The dyke is 2 metres to 30 metres wide and is exposed over a distance of about 250 metres. It contains abundant segregations of fine-grained graphitic material.

(d) Queensland Tenement

The Emu Plain Tenement is located 10 kilometres to the south east the abandoned Jacks Creek Graphite Mine. The tenement hosts the same stratigraphical sequence, however no records of historic production, size of the resource, or grade are available.

4.5 Competent Person’s Statement

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr Andrew Spinks, who is a Member of The Australasian Institute of Mining and Metallurgy included in a list promulgates by the ASX from time to time. Andrew Spinks is a consultant to Far North Minerals Pty Ltd and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Andrew Spinks consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

4.6 Pro forma balance sheet

A pro forma balance sheet of the Company following completion of the Acquisition contemplated by Resolution 3 is set out below.

		30-Jun-12	30-Sep-12
				Pro-Forma
	Notes	Audited	Unaudited
ASSETS
CURRENT ASSETS
Cash and cash equivalents	(a)(b)(c)(d)	1,626,148	1,287,680	2,724,893 16,254
Trade and other receivables		15,423	16,254
TOTAL CURRENT ASSETS		1,641,571	1,303,934	2,741,147
NON-CURRENT ASSETS
Financial assets		18,570	18,570	18,570 3,164,117 47,658
Exploration and evaluation	(d)	2,270,818	2,294,117
Property,plant and equipment		47,658	47,658
TOTAL NON-CURRENT ASSETS		2,337,046	2,360,345	3,230,345
TOTAL ASSETS		3,978,616	3,664,279	5,971,492
LIABILITIES
CURRENT LIABILITIES
Trade and otherpayables		127,058	51,076	51,076
Other Creditors		41,372	12,601	12,601
TOTAL CURRENT LIABILITIES		168,430	63,677	63,677
TOTAL LIABILITIES		168,430	63,677	63,677
NET ASSETS		3,810,186	3,600,602	5,907,815
EQUITY	(a)(b)(c)(d) (e)
Issued capital		6,075,323	6,075,323	8,482,536
Share basedpayments reserve		85,015	85,015
				85,015
Accumulated losses		-2,350,151	-2,559,736	-2,659,736

Actual and Proposed Transactions to Arrive at Pro-Forma Unaudited Balance Sheet.

Actual and Proposed transactions adjusting the 30 June 2012 audited Balance Sheet in the pro-forma Balance Sheet are as follows:

• a) The payment of normal operating costs associated with administration and exploration on current tenements of approximately $338K for the quarter ended 30 September 2012:

• b) The issue of 6,987,000 shares at $0.05c plus one free-attaching option for every two shares held, under the 15% placement capacity raising a total of $349,350:

• c) The issue one (1) new Share for every two (2) Shares, together with one (1) free attaching option for every two (2) Shares issued, resulting in 26,783,505 new Shares and 13,391,753 free-attaching options will be issued, raising approximately $1,339,175 less costs:

• d) The acquisition of Far North Minerals Pty Ltd by way $150,000 cash and of an issue of 12,000,000 shares at deemed price of $0.06c with 10,000,000 options with a exercise price at $0.08c and 10,000,000 options at with an exercise price $0.16c:

• e) The issue of Shares to Messrs Mandanici and Crabbe as outlined in Resolutions 4 and 5.

4.7 Pro forma capital structure

The effect of the Acquisition on the capital structure of the Company following completion of the Acquisition will be as follows:

completion of the Acquisition will be as follows:
	Shares	Options
Current issued capital	80,350,5151	32,015,2532
Shares to be issued to Strategic(or its nominee)	12,000,000	Nil
Shares to be issued to Directors(or its nominee)	2,000,000
Options to be issued to Strategic (or its nominee)	Nil	20,000,0003
Options to be issued to CPS(or its nominee)		10,000,0004
Total issued capital	94,350,515	62,015,253

Notes :

1. This assumes the issue of 22,474,159 Shares scheduled to be issued after the date of this Notice, in accordance with the Company’s Underwriting Agreement with CPS Securities for the Rights Issue.

2. 1,000,000 options exercisable at $0.20 on or before 31 March 2015; 3,500,000 options exercisable at $0.20 on or before 9 May 2015; 7,130,000 options exercisable at $0.20 on or before 30 June 2015; 1,000,000 options exercisable at $0.30 on or before 30 June 2015; 1,600,000 options exercisable at $0.20 on or before 30 June 2015; 250,000 options exercisable at $0.25 on or before 12 June 2015; 250,000 options exercisable at $0.25 on or before 12 December 2015, 400,000 options exercisable at $0.15 on or before 29 May 2015 and 5,648,173 options exercisable at $0.08 on or before 31 December 2015.

3. 10,000,000 options exercisable at $0.08 per Option on or before 31 December 2015 and 10,000,000 options exercisable at $0.16 per Option on or before 31 December 2016.

4. 10,000,000 options exercisable at $0.08 per Option on or before 31 December 2015

4.8

Advantages of the Transaction

The Directors are of the view that the following non-exhaustive list of advantages may be relevant to a Shareholder’s decision on how to vote on Resolution:

• (a) the graphite exploration activities from the Tenements represent a significant opportunity for the Company;

• (b) the Acquisition provides an opportunity for the Company to diversify into graphite exploration;

• (c) should the Company be successful with its exploration there is an opportunity to build substantial value for investors; and

4.9 Disadvantages of the Transaction

The Directors are of the view that the following non-exhaustive list of disadvantages may be relevant to a Shareholder’s decision on how to vote on Resolution 3:

• (a) the Acquisition will result in the issue of additional Shares and Options to the Strategic which will have a dilutionary effect on the holdings of existing Shareholders;

• (b) the Company will be changing the nature and scale of its activities, which may not be consistent with the objectives of all Shareholders;

• (c) there is no guarantee that any exploration conducted on the Tenements by the Company will result in an economic outcome; and

4.10 Plans for the Company if the Resolution is not passed

If the Resolution is not passed and the Acquisition is not completed, the Company will continue to develop its existing projects and look for other potential mineral assets for acquisition, exploration and development. Directors’ recommendation

The Directors of the Company unanimously recommend the Acquisition and that Shareholders vote in favour of Resolution 3. It is the view of the Directors that the Acquisition will add value to the Company and complement the suite of projects the Company currently holds. Shareholder approvals

Resolution 3 seeks Shareholder approval for:

• (a) the allotment and issue to Strategic of:

• (i) 12,000,000 Shares;

• (ii) 10,000,000 Options exercisable at $0.08 per Option on or before 31 December 2015; and

• (iii) 10,000,000 Options exercisable at $0.16 per Option on or before 31 December 2016; and

• (b) approval for the Company to change the nature and scale of its business by completing the Acquisition.

Strategic has agreed that it will not exercise the Options issued to the extent that the exercise will cause Strategic’s voting power in the Company to increase above 20%.

4.11 ASX Listing Rule 7.1

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue more equity securities during any 12 month period than that amount which represents 15% of the number of fully paid ordinary securities on issue at the commencement of that 12 month period.

The effect of Resolution 3 will be to allow the Company to issue the Shares and Options pursuant during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity.

4.12 ASX Listing Rule 11.1

ASX Listing Rule 11.1 provides that where an entity proposes to make a significant change, either directly or indirectly, to the nature or scale of its activities, it must provide full details to ASX before it makes the change.

Listing Rule 11.1.2 gives ASX the authority to require the company to get the approval of its shareholders before making the change to the nature or scale of its activities.

The Company is seeking Shareholder approval for the Company to change the nature and scale of its activities under ASX Listing Rule 11.1.2.

4.13 Technical information required by ASX Listing Rule 7.1

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to the Placement:

• (a) the maximum number of Shares to be issued is 12,000,000 Shares and the maximum number of Options to be issued is 20,000,000 Options;

• (b) the Shares and Options will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that allotment will occur on the same date;

• (c) although the Shares are being issued for nil cash consideration (in consideration for the Acquisition) the deemed issue price will be $0.06 per Share;

• (d) the issue price of the Options will be nil as they are also being issued as part of the consideration for the Acquisition;

• (e) the Shares and Options will be allotted and issued to Strategic Resource Management Pty Ltd (or its nominee), which is not a related party of the Company;

• (f) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;

• (g) 10,000,000 Options will be issued on the terms and conditions set out in Schedule 1 and 10,000,000 Options will be issued on the terms and conditions set out in Schedule 2; and

• (h) no funds will be raised from the issue the subject of Resolution 3 as the Shares and Options are being issued in consideration for the Acquisition.

5. RESOLUTIONS 4 AND 5 – ISSUE OF SHARES TO RELATED PARTIES

5.1 General

In the Company’s 2011 IPO Prospectus, the Company disclosed that pursuant to the terms and conditions of the executive services agreements entered into with each of Messrs Robert Mandanici, Steven Crabbe and Malcolm Carson, each would be entitled to an issue of Shares to them following the completion of one year’s satisfactory service to the Company and a further issue of Shares at the end of two year’s satisfactory service to the Company. Shareholder approval for the issue of the first tranche of Shares to Messrs Robert Mandanici, Steven Crabbe and Malcolm Carson was obtained at a general meeting of Shareholders on 31 July 2012.

The purpose of Resolutions 4 and 5 is to seek the approval of Shareholders to enable the Company to bring forward the issue of the second tranche of Shares referred to in the 2011 IPO Prospectus to Messrs Mandanici and Crabbe ( Related Parties ).

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:

• (a) obtain the approval of the public company’s members in the manner set out in Sections 217 to 227 of the Corporations Act; and

• (b) 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.

The grant of the Shares pursuant to Resolutions 4 and 5 constitutes giving a financial benefit and Messrs Mandanici and Crabbe are related parties of the Company by virtue of being Directors of the Company.

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 Directors have considered the exceptions contained in Sections 210 to 216 of the Corporations Act and have determined to seek the approval of Shareholders under Section 208 of the Corporations Act.

5.2 Shareholder Approval (Chapter 2E of the Corporations Act and Listing Rule 10.11)

Pursuant to and in accordance with the requirements of Section 219 of the Corporations Act and ASX Listing Rule 10.13, the following information is provided in relation to the proposed grant of Shares pursuant to Resolutions 1 to 3:

• (a) the related parties are Messrs Robert Mandanici and Steven Crabbe and they are related parties by virtue of being Directors of the Company;

• (b) the maximum number of Shares (being the nature of the financial benefit being provided) to be granted to the Related Parties is:

• (i) 1,000,000 Shares to Robert Mandanici; and

• (ii) 1,000,000 Shares to Steven Crabbe;

• (c) the Shares will be allotted to the Related Parties no later than 1 month after the date of the Meeting (or such later date as permitted by any ASX waiver or modification of the ASX Listing Rules) and it is anticipated the Shares will be issued on one date;

• (d) the Shares will be granted for nil cash consideration as they are being issued pursuant to the terms and conditions of the executive service agreements entered into between the Company and the Directors prior to the undertaking of the Company’s IPO in Match 2011, accordingly no funds will be raised;

• (e) the Shares will rank pari passu with the existing Shares on issue in the Company;

• (f) the value of the Shares to be issued can be determined using the current price of the Company’s Shares trading on ASX on any given day. As the price of the Company’s Shares may fluctuate between the date of this Notice of Meeting and the date of the Meeting, it is not possible to provide an exact value of the Shares. However, the table below outlines the relative values of the Shares using different pricing mechanisms:

mechanisms:
Related Party	Mandanici	Crabbe
Closing Share price as at date of Notice of Meeting	$0.045	$0.045
5 day VWAP immediately prior to date of Notice of Meeting	$0.047	$0.047
30 day VWAP immediately prior to date of Notice of Meeting	$0.046	$0.046

• (g) the relevant interests of the Related Parties in securities of the Company are set out below:

are set out below:
Related Party	Shares	Options
Robert Mandanici	3,460,164	108,7501
Steven Crabbe	2,970,000	500,0002

• 1 Options exercisable at $0.08 each on or before 31 December 2015.

• 2 Options exercisable at $0.20 each on or before 30 June 2015.

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

	Related Party	Current Financial Year (cash)	Current Financial Year (non- cash)1	Previous Financial Year (cash)	Previous Financial Year (non-cash)

Robert Mandanici	180,000	50,000	204,096	0
Steven Crabbe	54,502	50,000	55,862	0

1. This refers to Shares issued to the Directors for which Shareholder approval was obtained on 31 July 2012.

(i) the effect of the issue of the Shares to the Related Parties will be to increase the number of Shares on issue from 92,350,515 to 94,350,515 (assuming that no existing Options are exercised and no Shares, other than those contemplated by this Notice of Meeting are issued) with the effect that the shareholding of existing Shareholders will be diluted by an aggregate of 2.12%, comprising 1.06% by Mr Mandanici and 1.06% by Mr Crabbe.

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

	Price	Date
Highest	$0.18	9 November 2011
Lowest	$0.033	21August 2012
Last	$0.045c	8 November 2012

(k) the primary purpose of the issue of the Shares to each of the Related Parties is to comply with the contractual requirements of the executive service agreements entered into by the Company with each of the Related Parties prior to the undertaking of the IPO in 2011. The purpose of Resolutions 4 and 5 is to seek the approval of Shareholders to enable the Company to bring forward the issue of the second tranche of Shares referred to in the 2011 IPO Prospectus to Messrs Mandanici and Crabbe (Related Parties) . The issue of the second tranche is being brought forward to remove any overhanging legacy issues following the completion of the acquisition of Far North. A summary of the terms and conditions of each of those executive service agreements is contained in the 2011 IPO Prospectus, which is available on the Company’s announcements platform at www.asx.com.au;

• (l) Mr Mandanici declines to make a recommendation to Shareholders in relation to Resolution 4 due to his material personal interest in the outcome of the Resolution on the basis that he is to be granted Shares in the Company should Resolution 4 be passed. However, in respect of Resolution 5, Mr Mandanici recommends that Shareholders vote in favour of that Resolution for the following reasons:

• (i) the issue of the Shares to Mr Crabbe is a contractual obligation of the Company under the terms of their respective executive service agreements with the Company;

• (ii) Mr Crabbe has not undertaken any action in his role as Director of the Company in the previous 12 months that would disqualify him from receiving these Shares in accordance with their contractual terms;

• (m) Mr Crabbe declines to make a recommendation to Shareholders in relation to Resolution 5 due to his material personal interest in the outcome of the Resolution on the basis that Mr Crabbe is to be granted Shares in the Company should Resolution 5 be passed. However, in respect of Resolution 4, Mr Crabbe recommends that Shareholders vote in favour of that Resolution for the following reasons:

• (i) the issue of the Shares to Mr Mandanici is a contractual obligation of the Company under the terms of their respective executive service agreements with the Company;

• (ii) Mr Mandanici has not undertaken any action in his role as Director of the Company in the previous 12 months that would disqualify him from receiving these Shares in accordance with their contractual terms;

• (n) Malcolm Carson recommends that Shareholders vote in favour of Resolutions 4 and 5 for the reasons set out in paragraphs (l) and (m) above;

• (o) the Board 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 Resolutions 4 and 5.

Approval pursuant to ASX Listing Rule 7.1 is not required in order to issue the Shares to the Related Parties as approval is being obtained under ASX Listing Rule 10.11. Accordingly, the issue of the Shares 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.

6. RESOLUTION 6 – APPROVAL OF 10% PLACEMENT CAPACITY– SHARES

6.1 General

ASX Listing Rule 7.1A provides that an Eligible Entity may seek Shareholder approval at its annual general meeting to allow it to issue Equity Securities up to 10% of its issued capital ( 10% Placement Capacity ).

The Company is an Eligible Entity.

If Shareholders approve Resolution 6, the number of Equity Securities the Eligible Entity may issue under the 10% Placement Capacity will be determined in accordance with the formula prescribed in ASX Listing Rule 7.1A.2 (as set out in section 6.2 below).

The effect of Resolution 6 will be to allow the Company to issue Equity Securities up to 10% of the Company’s fully paid ordinary securities on issue under the 10% Placement Capacity during the period up to 12 months after the Meeting, without subsequent Shareholder approval and without using the Company’s 15% annual placement capacity granted under Listing Rule 7.1.

Resolution 6 is a special resolution. Accordingly, at least 75% of votes cast by Shareholders present and eligible to vote at the Meeting must be in favour of Resolution 6 for it to be passed.

6.2 ASX Listing Rule 7.1A

ASX Listing Rule 7.1A came into effect on 1 August 2012 and enables an Eligible Entity to seek shareholder approval at its annual general meeting to issue Equity Securities in addition to those under the Eligible Entity’s 15% annual placement capacity.

An Eligible Entity is one that, as at the date of the relevant annual general meeting:

(a) is not included in the S&P/ASX 300 Index; and

(b)

has a maximum market capitalisation (excluding restricted securities and securities quoted on a deferred settlement basis) of $300,000,000.

The Company is an Eligible Entity as it is not included in the S&P/ASX 300 Index and has a current market capitalisation of $5,907,815 (this includes the22,474,159 Shares to be issued after the date of this Notice in accordance with the Company’s Underwriting Agreement with CPS Securities for the Rights Issue).

Any Equity Securities issued must be in the same class as an existing class of quoted Equity Securities. The Company currently has two classes of Equity Securities on issue, being the Shares (ASX Code: LTX) and listed Options (ASX Code: LTXOA).

The exact number of Equity Securities that the Company may issue under an approval under Listing Rule 7.1A will be calculated according to the following formula as set out in Listing Rule 7.1A.2:

(A x D) – E

Where:

• A is the number of Shares on issue 12 months before the date of issue or agreement:

• (i) plus the number of Shares issued in the previous 12 months under an exception in ASX Listing Rule 7.2;

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

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

• (iv) less the number of Shares cancelled in the previous 12 months.

D

• is 10%.

• E is the number of Equity Securities issued or agreed to be issued under ASX Listing Rule 7.1A.2 in the 12 months before the date of issue or agreement to issue that are not issued with the approval of holders of Ordinary Securities under ASX Listing Rule 7.1 or 7.4.

6.3 Technical information required by ASX Listing Rule 7.1A

Pursuant to and in accordance with ASX Listing Rule 7.3A, the information below is provided in relation to this Resolution 6:

(a) Minimum Price

The minimum price at which the Equity Securities may be issued is 75% of the volume weighted average price of Equity Securities in that class, calculated over the 15 ASX trading days on which trades in that class were recorded immediately before:

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

(ii)

• if the Equity Securities are not issued within 5 ASX trading days of the date in section 6.3(a)(i), the date on which the Equity Securities are issued.

(b) Date of Issue

The Equity Securities may be issued under the 10% Placement Capacity commencing on the date of the Meeting and expiring on the first to occur of the following:

• (i) 12 months after the date of this Meeting; and

• (ii) the date of approval by Shareholders of any transaction under ASX Listing Rules 11.1.2 (a significant change to the nature or scale of the Company’s activities) or 11.2 (disposal of the Company’s main undertaking) (after which date, an approval under Listing Rule 7.1A ceases to be valid);

( 10% Placement Capacity Period ).

(c) Risk of voting dilution

Any issue of Equity Securities under the 10% Placement Capacity will dilute the interests of Shareholders who do not receive any Shares under the issue.

If Resolution 6 is approved by Shareholders and the Company issues the maximum number of Equity Securities available under the 10% Placement Capacity, the economic and voting dilution of existing Shares would be as shown in the table below.

The table below shows the dilution of existing Shareholders calculated in accordance with the formula outlined in ASX Listing Rule 7.1A.2, on the basis of the current market price of Shares and the current number of Equity Securities on issue as at the date of this Notice.

The table also shows the voting dilution impact where the number of Shares on issue (Variable A in the formula) changes and the economic dilution where there are changes in the issue price of Shares issued under the 10% Placement Capacity.

Number of Shares on Issue (Variable ‘A’ in ASX Listing Rule 7.1A2)
		Dilution
	Issue Price (per Share)	$0.023 50% decrease in Issue Price	$0.046 Issue Price	$0.92 100% increase in Issue Price
	Shares issued - 10% voting dilution	9,435,051 Shares	9,435,051 Shares	9,435,051 Shares
94,350,515 (Current Variable A)
	Funds raised	$217,006	$434,012	$849,155
	Shares issued - 10% voting dilution	14,152,577 Shares	14,152,577 Shares	14,152,577 Shares
141,525,773 (50% increase in Variable A)
	Funds raised	$325,509	$651,019	$1,302,037

Number of Shares on Issue (Variable ‘A’ in ASX Listing Rule 7.1A2)
		Dilution
	Issue Price (per Share)	$0.023 50% decrease in Issue Price	$0.046 Issue Price	$0.92 100% increase in Issue Price
	Shares issued - 10% voting dilution	18,870,103 Shares	18,870,103 Shares	18,870,103 Shares
188,701,020 (100% increase in Variable A)
	Funds raised	$434,012	$868,025	$1,736,040

*The number of Shares on issue (Variable A in the formula) could increase as a result of the issue of Shares that do not require Shareholder approval (such as under a prorata rights issue or scrip issued under a takeover offer) or that are issued with Shareholder approval under Listing Rule 7.1.

The table above uses the following assumptions:

1. There will be 94,350,515 Shares on issue comprising:

2. (a) 57,876,356 existing Shares as at the date of this Notice of Meeting; and

3. (b) 14,000,000 Shares which will be issued if Resolutions 3, 4 and 5 are passed at this Meeting.

4. (c) 22,474,159 Shares will be issued after the date of this Notice in accordance with the Company’s Underwriting Agreement with CPS Securities for the Rights Issue.

5. The issue price set out above is the closing price of the Shares on the ASX on 7 November 2012.

6. The Company issues the maximum possible number of Equity Securities under the 10% Placement Capacity.

7. The Company has not issued any Equity Securities in the 12 months prior to the Meeting that were not issued under an exception in ASX Listing Rule 7.2 or with approval under ASX Listing Rule 7.1.

8. The issue of Equity Securities under the 10% Placement Capacity consists only of Shares. It is assumed that no Options are exercised into Shares before the date of issue of the Equity Securities.

9. The calculations above do not show the dilution that any one particular Shareholder will be subject to. All Shareholders should consider the dilution caused to their own shareholding depending on their specific circumstances.

10. This table does not set out any dilution pursuant to approvals under ASX Listing Rule 7.1.

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

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

Shareholders should note that there is a risk that:

• (i) the market price for the Company’s Shares may be significantly lower on the issue date than on the date of the Meeting; and

• (ii) the Shares may be issued at a price that is at a discount to the market price for those Shares on the date of issue.

(d) Purpose of Issue under 10% Placement Capacity

The Company may issue Equity Securities under the 10% Placement Capacity for the following purposes:

• (i) as cash consideration in which case the Company intends to use funds raised to meet the ongoing costs associated with the exploration on its existing tin projects and the new graphite projects that the Company is in the process of acquiring (as discussed in Section 4.1 above), or to investigate additional acquisitions of projects to complement those projects; or

• (ii) as non-cash consideration for the acquisition of new projects or otherwise as consideration for services rendered by non-related third parties to the Company, where it is considered appropriate by the board to do so. In such circumstances the Company will provide a valuation of the non-cash consideration as required by listing Rule 7.1A.3. The Company will comply with the disclosure obligations under Listing Rules 7.1A(4) and 3.10.5A upon issue of any Equity Securities.

(e) Allocation policy under the 10% Placement Capacity

The Company’s allocation policy for the issue of Equity Securities under the 10% Placement Capacity will be dependent on the prevailing market conditions at the time of the proposed placement(s).

The allottees of the Equity Securities to be issued under the 10% Placement Capacity have not yet been determined. However, the allottees of Equity Securities could consist of current Shareholders or new investors (or both), none of whom will be related parties of the Company.

The Company will determine the allottees at the time of the issue under the 10% Placement Capacity, having regard to the following factors:

• (i) the purpose of the issue;

• (ii) alternative methods for raising funds available to the Company at that time, including, but not limited to, an entitlement issue or other offer where existing Shareholders may participate;

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

• (iv) the circumstances of the Company, including, but not limited to, the financial position and solvency of the Company;

• (v) prevailing market conditions; and

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

Further, if the Company is successful in acquiring new projects, or chooses to use the 10% Placement Capacity as consideration for services rendered by non-related third parties to the Company, it is likely that the allottees under the 10% Placement Capacity will be vendors of the new assets or the non-related third parties, as the case may be.

(f) Previous Approval under ASX Listing Rule 7.1A

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

(g) Compliance with ASX Listing Rules 7.1A.4 and 3.10.5A

When the Company issues Equity Securities pursuant to the 10% Placement Capacity, it will give to ASX:

• (i) a list of the allottees of the Equity Securities and the number of Equity Securities allotted to each (not for release to the market), in accordance with Listing Rule 7.1A.4; and

(ii) the information required by Listing Rule 3.10.5A for release to the market.

6.4 Voting Exclusion

A voting exclusion statement is included in this Notice. As at the date of this Notice, the Company has not invited any existing Shareholder to participate in an issue of Equity Securities under ASX Listing Rule 7.1A. Therefore, no existing Shareholders will be excluded from voting on Resolution 6.

7. RESOLUTION 7 – RATIFICATION OF PRIOR ISSUE – SHARES AND OPTIONS

7.1 General

On 12 October 2012, the Company announced the completion of a placement 6,987,000 Shares at an issue price of $0.05 per Share together with one (1) free attaching Option for every two (2) Shares subscribed for raising $349,350 ( Placement ).

The Company issued the Shares and Options the subject of the Placement without prior Shareholder approval out of its 15% annual placement capacity.

Resolution 7 seeks Shareholder ratification pursuant to ASX Listing Rule 7.4 for the issue of those Shares and Options ( Ratification ).

A summary of ASX Listing Rule 7.1 is set out in section 4.13 above.

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.

7.2 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 Ratification:

• (a) 6,987,000 Shares and 3,493,500 Options were allotted;

• (b) the issue price per Share was $0.05 and the issue price of the Options was nil as they were issued free attaching with the Shares on a 1:2 basis;

• (c) the Shares issued were all fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;

• (d) the Options will be issued on the terms and conditions set out in Schedule 1;

• (e) the Shares and Options were allotted and issued to client of Cunningham Peterson Sharbanee Securities Pty Ltd trading as CPS Securities. None of these subscribers are related parties of the Company; and

• (f) the funds raised from this issue will be used towards to fund exploration on the tenements to be acquired pursuant to the acquisition of Far North, to fund the Company’s ongoing exploration requirements for its current projects and for additional working capital.

GLOSSARY

• $ means Australian dollars.

10% Placement Capacity has the meaning given in section 6.1 of this Notice.

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

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.

Chair means the chair of the Meeting.

Closely Related Party of a member of the Key Management Personnel means:

• (a) a spouse or child of the member;

• (b) a child of the member’s spouse;

• (c) a dependent of the member or the member’s spouse;

• (d) anyone else who is one of the member’s family and may be expected to influence the member, or be influenced by the member, in the member’s dealing with the entity;

• (e) a company the member controls; or

• (f) a person prescribed by the Corporations Regulations 2001 (Cth).

Company means Lithex Resources Limited (ACN 140 316 463).

Constitution means the Company’s constitution.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

Eligible Entity means an entity that, at the date of the relevant general meeting:

• (a) is not included in the S&P/ASX 300 Index; and

• (b) has a maximum market capitalisation (excluding restricted securities and securities quoted on a deferred settlement basis) of $300,000,000.

Explanatory Statement means the explanatory statement accompanying the Notice.

Key Management Personnel has the same meaning as in the accounting standards issued by the Australian Accounting Standards Board and means those persons having authority and responsibility for planning, directing and controlling the activities of the Company, or if the Company is part of a consolidated entity, of the consolidated entity, directly or indirectly, including any director (whether executive or otherwise) of the Company, or if the Company is part of a consolidated entity, of an entity within the consolidated group.

Notice or Notice of Meeting means this notice of meeting including the Explanatory Statement and the Proxy Form.

Option means an option to acquire a Share.

Optionholder means a holder of an Option.

Ordinary Securities has the meaning set out in the ASX Listing Rules.

Proxy Form means the proxy form accompanying the Notice.

Remuneration Report means the remuneration report set out in the Director’s report section of the Company’s annual financial report for the year ended 30 June 2012.

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

Rights Issue means the pro rata non-renounceable entitlement offer to eligible Shareholders on the basis of one (1) new Share for every two (2) Shares held by Shareholders on the record date at an issue price of $0.05 per Share together with one (1) free attaching Option for every two (2) new Shares issued to raise approximately $1,339,175, as announced to ASX on 5 October 2012.

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

Shareholder means a holder of a Share.

Variable A means “A” as set out in the calculation in section 6.2 of this Notice.

WST means Western Standard Time as observed in Perth, Western Australia.

SCHEDULE 1 – TERMS AND CONDITIONS OF OPTIONS

• (a) The Options will expire at 5:00 pm (WST) on 31 December 2015 ( Expiry Date ). Any Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

• (b) Each option gives the Optionholder the right to subscribe for one ordinary share at $0.08 per 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.

• (c) The Options shall vest on allotment ( Vesting Date ).

• (d) All or part of the Options may be exercised at any time prior to the Expiry Date.

• (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 (Exercise Notice); and

• (ii) a cheque or electronic funds transfer for the exercise price for the number of Options being exercised.

• (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) All ordinary shares allotted upon the exercise of Options will upon allotment rank pari passu in all respects with other ordinary shares.

• (i) The Company will apply for quotation of the Options on ASX.

• (j) The Company will apply for quotation by ASX of all ordinary shares allotted pursuant to the exercise of Options within 10 Business Days after the date of allotment of those Shares.

• (k) In the event of any reorganisation including consolidation, sub-division, reduction or return) of the issued capital of the Company before the expiry of any Options, the number of Options to which an Optionholder is entitled or the exercise price of the Options or both will be reconstructed (as appropriate) in accordance with the ASX Listing Rules.

• (l) 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.

• (m) 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 the proposed issue notice of the new issue will be given to Optionholders at least seven (7) business days before the record date. This will give Optionholders the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue.

SCHEDULE 2 – TERMS AND CONDITIONS OF OPTIONS

• (a) The Options will expire at 5:00 pm (WST) on 31 December 2016 ( Expiry Date ). Any Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

• (b) Each option gives the Optionholder the right to subscribe for one ordinary share at $0.16 per 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.

• (c) The Options shall vest on allotment ( Vesting Date ).

• (d) All or part of the Options may be exercised at any time prior to the Expiry Date.

• (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 (Exercise Notice); and

• (ii) a cheque or electronic funds transfer for the exercise price for the number of Options being exercised.

• (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) All ordinary shares allotted upon the exercise of Options will upon allotment rank pari passu in all respects with other ordinary shares.

• (i) The Company will not apply for quotation of the Options on ASX.

• (j) The Company will apply for quotation by ASX of all ordinary shares allotted pursuant to the exercise of Options within 10 Business Days after the date of allotment of those Shares.

• (k) In the event of any reorganisation including consolidation, sub-division, reduction or return) of the issued capital of the Company before the expiry of any Options, the number of Options to which an Optionholder is entitled or the exercise price of the Options or both will be reconstructed (as appropriate) in accordance with the ASX Listing Rules.

• (l) 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.

• (m) 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 the proposed issue notice of the new issue will be given to Optionholders at least seven (7) business days before the record date. This will give Optionholders the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue.

THIS DOCUMENT IS IMPORTANT. IF YOU ARE IN DOUBT AS TO HOW TO DEAL WITH IT, PLEASE CONTACT YOUR STOCK BROKER OR LICENSED PROFESSIONAL ADVISOR.

PROXY FORM

LITHEX RESOURCES LIMITED

REGISTERED OFFICE:

ABN: 97 140 316 463

75 KING STREET PERTH WA 6000

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SHARE REGISTRY: Security Transfer Registrars Pty Ltd All Correspondence to: PO BOX 535, APPLECROSS WA 6953 AUSTRALIA 770 Canning Highway, APPLECROSS WA 6153 AUSTRALIA T: +61 8 9315 2333 F: +61 8 9315 2233 E: registrar@securitytransfer.com.au W: www.securitytransfer.com.au

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Code: LTX Holder Number:

SECTION A: Appointment of Proxy

I/We, the above named, being registered holders of the Company and entitled to attend and vote hereby appoint:

OR

The meeting Chairperson The name of the person you are appointing (mark with an "X") (if this person is someone other than the Chairperson of the meeting).

or failing the person named, or if no person is named, the Chairperson of the Meeting, as my/our Proxy to act generally at the meeting on my/our behalf and 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 of the Company to be held at 11.00am (WST) on Friday, 14 December 2012 at 75 King Street, Perth WA and at any adjournment of that meeting.

SECTION B: Voting Directions to your Proxy

Please mark "X" in the box to indicate your voting directions to your Proxy.

Resolution

For Against Abstain*

1. ADOPTION OF REMUNERATION REPORT

2. RE-ELECTION OF DIRECTOR – MR STEVEN CRABBE

3. ISSUE OF SHARES AND OPTIONS TO STRATEGIC RESOURCE MANAGEMENT PTY LTD

4. ISSUE OF SHARES TO MR ROBERT MANDANICI

5. ISSUE OF SHARES TO MR STEVEN CRABBE

6. APPROVAL OF 10% PLACEMENT CAPACITY– SHARES

7. RATIFICATION OF PRIOR ISSUE OF SHARES AND OPTIONS

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If no directions are given my proxy may vote as the proxy thinks fit or may abstain.

• If you mark the Abstain box for a particular item, you are directing your Proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

SECTION C: Please Sign Below

This section must be signed in accordance with the instructions overleaf to enable your directions to be implemented.

his section must be signed in accordance with the instructions overleaf to enable your directions to be implemented.	his section must be signed in accordance with the instructions overleaf to enable your directions to be implemented.	his section must be signed in accordance with the instructions overleaf to enable your directions to be implemented.
Individual or Security Holder Sole Director and Sole Company Secretary Security Holder 2 Director Security Holder 3 Director / Company Secretary TELEPHONE NUMBER ( ) NAME My/Our contact details in case of enquiries are:
	1 Reference Number: LTX 1 1806531611

NOTES

1. Name and Address

This is the name and address on the Share Register of LITHEX RESOURCES LIMITED. If this information is incorrect, please make corrections on this form. Shareholders sponsored by a broker should advise their broker of any changes. Please note that you cannot change ownership of your shares using this form.

2. Appointment of a Proxy

If you wish to appoint the Chairperson of the Meeting as your Proxy please mark "X" in the box in Section A. Please also refer to Section B of this proxy form and ensure you mark the box in that section if you wish to appoint the Chairperson as your Proxy.

If the person you wish to appoint as your Proxy is someone other than the Chairperson of the Meeting please write the name of that person in Section A. If you leave this section blank, or your named Proxy does not attend the meeting, the Chairperson of the Meeting will be your Proxy. A Proxy need not be a Shareholder of LITHEX RESOURCES LIMITED.

3. Directing your Proxy how to vote

To direct the Proxy how to vote place an "X" in the appropriate box against each item in Section B. Where more than one Proxy is to be appointed and the proxies are to vote differently, then two separate forms must be used to indicate voting intentions.

4. Appointment of a Second Proxy

You are entitled to appoint up to two (2) persons as proxies to attend the meeting and vote on a poll. If you wish to appoint a second Proxy, an additional Proxy form may be obtained by telephoning the Company's share registry +61 8 9315 2333 or you may photocopy this form.

To appoint a second Proxy you must:

• (a) On each of the Proxy forms, state the percentage of your voting rights or number of securities applicable to that form. If the appointments do not specify the percentage or number of votes that each Proxy may exercise, each Proxy may exercise half of your votes; and

• (b) Return both forms in the same envelope.

5. Signing Instructions Individual: where the holding is in one name, the Shareholder must sign.

Joint Holding: where the holding is in more than one name, all of the Shareholders must sign.

Power of Attorney: to sign under Power of Attorney you must have already lodged this document with the Company's share registry. If you have not previously lodged this document for notation, 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, this form must be signed by that person. If the Company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director may sign alone. Otherwise this form must be signed by a Director jointly with either another Director or Company Secretary. Please indicate the office held in the appropriate place.

If a representative of the corporation is to attend the meeting the appropriate "Certificate of Appointment of Corporate Representative" should be lodged with the Company before the meeting or at the registration desk on the day of the meeting. A form of the certificate may be obtained from the Company's share registry.

6. Lodgement of Proxy

Proxy forms (and any Power of Attorney under which it is signed) must be received by Security Transfer Registrars Pty Ltd no later than 11.00am (WST) on Wednesday, 12 December 2012, being 48 hours before the time for holding the meeting. Any Proxy form received after that time will not be valid for the scheduled meeting.

Security Transfer Registrars Pty Ltd PO BOX 535 Applecross, Western Australia 6953

Street Address: Alexandrea House, Suite 1 770 Canning Highway Applecross, Western Australia 6153

Telephone +61 8 9315 2333 Facsimile +61 8 9315 2233 Email registrar@securitytransfer.com.au

PRIVACY STATEMENT

Personal information is collected on this form by Security Transfer Registrars Pty Ltd as the registrar for securities issuers for the purpose of maintaining registers of securityholders, facilitating distribution payments and other corporate actions and communications. Your personal details may be disclosed to related bodies corporate, to external service providers such as mail and print providers, or as otherwise required or permitted by law. If you would like details of your personal information held by Security Transfer Registrars Pty Ltd or you would like to correct information that is inaccurate please contact them on the address on this form.

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