HAMMER METALS LIMITED — AGM Information 2012

Oct 25, 2012

MIDAS RESOURCES LIMITED ABN 87 095 092 158

NOTICE OF ANNUAL GENERAL MEETING

The Park Business Centre 45 Ventnor Ave, West Perth, Western Australia at 2:00 pm (WST) on Monday, 26 November 2012

MIDAS RESOURCES LIMITED

ABN 87 095 092 158

NOTICE OF ANNUAL GENERAL MEETING

Notice is given that the Annual General Meeting of Shareholders of Midas Resources Limited (“Company”) will be held at The Park Business Centre, 45 Ventnor Ave, West Perth, Western Australia, at 2:00 pm (WST) on Monday, 26 November 2012.

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

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Annual General Meeting are those who are registered Shareholders of the Company at the close of business on 24 November 2012.

AGENDA

GENERAL BUSINESS

1. ADOPTION OF THE ANNUAL FINANCIAL REPORT

To receive the Annual Financial Report, including Financial Statements, Directors’ declarations and accompanying reports of the Directors and auditors for the financial year ended 30 June 2012.

2. RESOLUTION 1- ADOPTION OF THE 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 purposes of Section 250R(2) of the Corporations Act and for all other purposes, approval is given to the adoption of the Remuneration Report as contained in the Company’s financial report for the year ended 30 June 2012.”

Short Explanation : The vote on this resolution is advisory only and does not bind the Directors or the Company. However the Board will take the outcome of the vote into consideration when reviewing the remuneration practices and policies of the Company.

Voting Exclusion: The Company will disregard any votes cast on this resolution by any member of the Key Management Personnel of the Company whose remuneration is included in the remuneration report, or a closely related party of such member. However, the Company will not disregard any votes cast on by this resolution by such person if:

• (a) the person is acting as proxy and the proxy form specifies how the proxy is to vote on the resolution, and the vote is not cast on behalf of a person who is otherwise excluded from voting on this resolution as described above; or

• (b) the person is the Chairman of the Meeting voting an undirected proxy and their appointment expressly authorises the Chairman to exercise the proxy even though this resolution is connected with the remuneration of the Key Management Personnel of the Company.

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Notice of Annual General Meeting – November 2012

If you are a member of the Key Management Personnel of the Company or a closely related party of such person (or are acting on behalf of any such person) and purport to cast a vote (other than as a proxy as permitted in the manner set out above), that vote will be disregarded by the Company (as indicated above) and you may be liable for an offence for breach of voting restrictions that apply to you under the Corporations Act.

3. RESOLUTION 2 – RE-ELECTION OF DIRECTOR – MR JOHN HOPKINS

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

“That for all purposes, Mr. John Hopkins, a director of the Company, retires by rotation in accordance with Listing Rule 14.4 and Rule 7.3 of the Constitution and, being eligible, is re-elected as a Director of the Company.”

SPECIAL BUSINESS

4. RESOLUTION 3 – APPROVAL OF THE ISSUE OF SHARES UP TO 10% OF THE ISSUED CAPITAL

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 all other purposes, the Shareholders approve the allotment and issue by the Company of Equity Securities up to 10% of the issued capital of the Company (at the time of the 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 Memorandum."

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 the Additional 10% Placement Facility and any 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 person associated with those persons. However, the Company will not disregard any votes cast on this resolution by such person if:

• (a) the person is acting as proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or

• (b) the person is the Chairman of the Meeting acting 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.

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Notice of Annual General Meeting – November 2012

5. RESOLUTION 4 – APPROVAL OF THE ALLOTMENT AND ISSUE OF SHARES TO RELATED PARTY, VELSBERRY 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 Listing Rule 10.11 and Chapter 2E of the Corporations Act and all other purposes, the Company approves the allotment and issue of up to 21,075,327 Equity Securities at an issue price of $0.01 to Velsberry Pty Ltd, an entity in which Director Mr Terry Streeter has an interest, in satisfaction of the loan amount (including any interest) owing by the Company to Velsberry Pty Ltd on the terms and conditions set out in the Explanatory Memorandum."

Voting exclusion: The Company will disregard any votes cast on this resolution by Director Mr Terry Streeter and Velsberry Pty Ltd and any of their associates. However, the Company will not disregard any votes cast on this resolution by such person if:

• (a) the person is acting as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• (b) the person is the Chairman of the Meeting acting 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 .

6. RESOLUTION 5 – APPROVAL OF THE ALLOTMENT AND ISSUE OF SHARES TO RELATED PARTY, NEEDMORE INVESTMENTS 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 Listing Rule 10.11 and Chapter 2E of the Corporations Act and all other purposes, the Company approves the allotment and issue of up to 10,537,664 Equity Securities at an issue price of $0.01 to Needmore Investments Pty Ltd, an entity in which Director Mr Geoff Balfe has an interest, in satisfaction of the loan amount (including any interest) owing by the Company to Needmore Investments Pty Ltd on the terms and conditions set out in the Explanatory Memorandum."

Voting exclusion: The Company will disregard any votes cast on this resolution by Director Mr Geoff Balfe and Needmore Investments Pty Ltd and any of their associates. However, the Company will not disregard any votes cast on this resolution by such person if:

• (a) the person is acting as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• (b) the person is the Chairman of the Meeting acting 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 this 25[th ] day of October 2012

BY ORDER OF THE BOARD

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MIDAS RESOURCES LIMITED MARK PITTS COMPANY SECRETARY

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Notice of Annual General Meeting – November 2012

EXPLANATORY STATEMENT

This Explanatory Statement has been prepared for the information of the Shareholders of the Company in connection with the business to be conducted at the Annual General Meeting to be held at The Park Business Centre, 45 Ventnor Ave, West Perth, Western Australia, at 2:00 pm (WST) on Monday, 26 November 2012.

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

1. FINANCIAL STATEMENTS AND DIRECTORS’ REPORTS

In accordance with the Company’s Constitution, the business of the meeting will include receipt and consideration of the Company’s Financial Report and reports of Directors and Auditors for the year ended 30 June 2012.

2. RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT

Pursuant to Section 250R(2) of the Corporations Act the Company submits to Shareholders that the Remuneration Report as set out in the Company’s Annual Report for the year ended 30 June 2012 be considered and adopted. The Chairman of the Meeting will allow a reasonable opportunity for Shareholders as a whole to ask about, or make comments on, the Remuneration Report.

The Remuneration Report is for consideration and adoption by way of non-binding resolution. The vote on this resolution is advisory only and does not bind the Directors of the Company. However, the Corporations Act provides that if the Company’s Remuneration Report resolution receives a “no” vote of 25% or more of votes cast at the Annual General Meeting, the Company’s subsequent Remuneration Report must explain the Board’s proposed action in response or, if the Board does not propose any action, the Board’s reasons for not making any changes. The Board will take into account the outcome of the vote when considering the remuneration policy, even if it receives less than a 25% “no” vote.

In addition, the Corporations Act sets out a “two strikes” re-election process. Under the “two strikes” re-election process, if 25% or more of votes that are cast are voted against the adoption of the Remuneration Report at two consecutive AGM’s (that is, ‘two strikes’), Shareholders will be required to vote at the second of those AGM’s on a resolution (‘spill resolution’) that another meeting be held within 90 days (‘spill meeting’) at which all of the Company’s directors (excluding the Managing Director) must offer themselves for re-election.

The proportion of “no” votes cast against the adoption of the 2011 Remuneration Report was less than 25% of the total votes cast at the annual general meeting held on 30 November 2011. The Board considers that its current practices of setting executive and non executive remuneration are well within normal industry expectations, and provide an effective balance between the need to attract and retain the services of the highly skilled key management personnel that the Company requires. As such the directors recommend that Shareholders vote in favour of the Company’s remuneration report at Resolution 1.

The Remuneration Report is set out in the Midas Resources Limited Annual Report 2012 and is also available on the Company’s web site (www.midasresources.com.au).

Board recommendation

The Board unanimously recommends that Shareholders vote in favour of Resolution 1.

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Notice of Annual General Meeting – November 2012

3. RESOLUTION 2 – RE-ELECTION OF DIRECTOR – MR JOHN HOPKINS

Listing Rule 14.4 prevents a Director from holding office (without re-election) past the third annual general meeting following the Director’s appointment or 3 years, whichever is longer. Rule 7.3 of the Constitution requires that one third of the Company’s Directors must retire at each annual general meeting. A Director who retires under rule 7.3 of the Constitution is eligible for re-election.

In accordance with Listing Rule 14.4 and Rule 7.3 of the Constitution, Mr John Hopkins retires by rotation and offers himself for re-election.

Information about Mr John Hopkins is available in the Annual Report of the Company and on the Company’s web site at www.midasresources.com.au.

Board recommendation

The Board, other than Mr John Hopkins, who has a material personal interest in Resolution 2, recommends that Shareholders approve Resolution 2.

4. RESOLUTION 3 – APPROVAL TO ISSUE UP TO 10% PLACEMENT CAPACITY

Listing Rule 7.1A enables eligible entities to issue Equity Securities up to 10% of its issued share capital over a 12 month period after the Annual General Meeting at which a resolution for the purposes of Listing Rule 7.1A is passed by special resolution (‘Additional 10% Placement Capacity’). The Additional 10% Placement Capacity is in addition to the Company's 15% placement capacity under Listing Rule 7.1.

An entity will be eligible to seek approval under Listing Rule 7.1A if:

• (a) the entity has a market capitalisation of $300 million or less; and

• (b) the entity is not included in the S&PASX 300 Index.

As at the date of this Notice of Meeting, the Company is an eligible entity for the purposes of Listing Rule 7.1A.

The Company is putting Resolution 3 to Shareholders to seek approval to issue additional Equity Securities under the Additional 10% Placement Capacity over a 12 month period after the Annual General Meeting.

The exact number of Equity Securities to be issued under the Additional 10% Placement Capacity will be determined at the relevant time in accordance with the formula set out in Listing Rule 7.1A.2.

The Company continues to focus on exploration and expansion of its projects that will offer it the Company the opportunity to diversify its asset base and build Shareholder value that will be reflected in the Company’s share price. The additional capacity to issue new capital will provide the Board and management extra flexibility in financing and provide additional funds for exploration and development of its assets.

Listing Rule 7.1A

The effect of Resolution 3 will be to permit the Company to issue the Equity Securities under Listing Rule 7.1A during the Additional Placement Period (as defined below) without using the Company’s 15% placement capacity under Listing Rule 7.1.

4. RESOLUTION 3 – APPROVAL TO ISSUE UP TO 10% PLACEMENT CAPACITY (CONTINUED)

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Notice of Annual General Meeting – November 2012

Equity Securities issued under the Additional 10% Placement Capacity must be in the same class as an existing quoted class of Equity Securities of the Company. As at the date of this Notice the Company has 498,392,329 Shares on issue.

On the basis that the number of Shares on issue remains 498,392,329 and subject to Shareholder approval being granted under Resolution 3, 49,839,232 Equity Securities will be permitted to be issued in accordance with Listing Rule 7.1A.

Shareholders should note that this calculation of the number of Equity Securities permitted to be issued under the Additional 10% Placement Capacity is illustrative only as the calculation will be based on the formula set out in Listing Rule 7.1A, applied at the time of any issue of Equity Securities under the Additional 10% Placement Capacity. The table on the page below demonstrates various examples as to the number of Equity Securities that may be issued under the Additional 10% Placement Capacity.

This resolution is a special resolution, requiring approval of 75% of the votes cast by Shareholders present and eligible to vote (in person, by proxy, by attorney or, in the case of a corporate Shareholder, by a corporate representative) in order to be passed.

Specific information required by Listing Rule 7.3A

The following information in relation to the Shares to be issued is provided to Shareholders for the purposes of Listing Rule 7.3A:

• (a) The Equity Securities will be issued at an issue price of not less than 75% of the volume weighted average price for the Company's Equity Securities over the 15 Trading Days 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 Trading Days of the date in paragraph (i) above, the date on which the Equity Securities are issued.

• (b) If this resolution is approved by Shareholders and the Company issues Equity Securities under the Additional 10% Placement Capacity, the existing Shareholders' economic and voting interests in the Company will be diluted. There is also a risk that:

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

• (ii) the Equity Securities may be issued at a price that is at a discount to the market price for the Company's Equity Securities on the issue date or the Equity Securities.

The precise number of Equity Securities that the Company will have capacity to issue under Listing Rule 7.1A will be calculated at the date of issue of the Equity Securities in accordance with the following formula:

(A x D) – E

• A is the number of fully paid ordinary shares on issue 12 months before the date of issue or agreement:

• i. plus the number of fully paid ordinary shares issued in the 12 months under an exception in Listing Rule 7.2;

• ii. plus the number of partly paid ordinary shares that became fully paid in the 12 months;

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Notice of Annual General Meeting – November 2012

4. RESOLUTION 3 – APPROVAL TO ISSUE UP TO 10% PLACEMENT CAPACITY (CONTINUED)

• iii. plus the number of fully paid ordinary shares issued in the 12 months with approval of holders of Shares under Listing Rule 7.1 and 7.4;

• iv. less the number of fully paid ordinary shares cancelled in the 12 months.

Note that A has the same meaning in Listing Rule 7.1 when calculating an entity's 15% placement capacity.

• D is 10%

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

The table below shows the dilution of existing Shareholders of the issue of the maximum number of Equity Securities under the Additional 10% Placement Capacity using different variables for the number of ordinary securities for variable “A” (as defined in Listing Rule 7.1A) and the market price of Shares. It is noted that variable “A” is based on the number of ordinary securities the Company has on issue at the time of the proposed issue of Equity Securities.

The table below also shows:

• (i) examples of where variable “A” is at its current level, and where variable “A” has increased by 15% and by 100%;

• (ii) examples of where the issue price of ordinary securities is the current market price as at close of trade on 15 October 2012 (current market price), where the issue price is halved from that initial level and where it is doubled from that initial level; and

• (iii) that the dilutionary effect will always be 10% if the maximum number of Equity Securities that may be issued under the Additional 10% Placement Capacity are issued.

	Number of Shares issued and funds raised under the Additional 10% Placement Capacity and dilution effect		Dilution
		$0.0055 Issue Price at half the current market price	$0.011 Issue Price at current market price	$0.022 Issue Price at double the current market price
Variable ‘A’
Current Variable A 498,392,329 Shares	Shares issued	49,839,232	49,839,232	49,839,232
	Funds raised	$274,116	$548,232	$1,096,463
	Dilution	10%	10%	10%
15% increase in current Variable A 573,151,178 Shares	Shares issued	57,315,118	57,315,118	57,315,118
	Funds raised	$315,233	$630,466	$1,260,933
	Dilution	10%	10%	10%
100% increase in current variable A 996,784,658 Shares	Shares issued	99,678,466	99,678,466	99,678,466
	Funds raised	$548,232	$1,096,463	$2,192,926
	Dilution	10%	10%	10%

4. RESOLUTION 3 – APPROVAL TO ISSUE UP TO 10% PLACEMENT CAPACITY (CONTINUED)

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Notice of Annual General Meeting – November 2012

Note: this table assumes:

• (i) No Options or Performance Rights are exercised before the date of the issue of the Equity Securities;

• (ii) The Company issues the maximum number of Equity Securities under the Additional 10% Placement Capacity and the Equity Securities issues consists only of Shares;

• (iii) 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 Facility, based on that Shareholders holding at the date of the Annual General Meeting;

• (iv) The table shows only the effect of issues of Equity Securities under Listing Rule 7.1A, not under the 15% placement capacity under Listing Rule 7.1.

• (c) Approval of the Additional 10% Placement Capacity will be valid from the date of the Annual General Meeting and will expire on the earlier of:

• (i) the date that is 12 months after the date of the Annual General Meeting; and

• (ii) the date of the approval by Shareholders of a transaction under Listing Rules 11.1.2 (a significant change to the nature or scale of activities) or 11.2 (disposal of main undertaking),

or such longer period if allowed by ASX (‘Additional Placement Period’).

• (d) The Company may seek to issue the Equity Securities for the following purposes:

• (i) cash consideration. If Equity Securities are issued for cash consideration, the Company intends to use the funds to acquire new assets and finance the exploration and development of the assets and/or general working capital purposes; or

• (ii) non-cash consideration for the acquisition of new assets. If Equity Securities are issued for non-cash consideration, the Company will comply with the minimum issue price limitation under Listing Rule 7.1A.3 in relation to such issue and will release the valuation of the non-cash consideration to the market.

The Company will comply with the disclosure obligations under Listing Rules 7.1A.4and 3.10.5A upon issue of any Equity Securities.

• (e) The Company’s allocation policy for the issue of Equity Securities under the Additional 10% Placement Capacity will be dependent on the prevailing market conditions at the time of the proposed placement(s). Securities allotted pursuant to the allocation policy will be determined following consideration of a number of factors including, but not limited to, the following matters:

• (i) the ability of the Company to raise funds at the time of the proposed issue of Equity Securities;

• (ii) the dilutionary effect of the proposed of the issue of the Equity Securities on existing Shareholders at the time of proposed issued of Equity Securities;

• (iii) the financial situation and solvency of the Company; and

• (iv) advice from its professional advisers, including corporate, financial and broking advisers (if applicable).

At the date of this Notice, the Company has not formed an intention as to whether the securities will be offered to existing security holders, or to any class or group of existing security holders, or whether the securities will be offered exclusively to new investors that have not previously been security holders of the Company. The Company will give consideration before making any placement of securities under Listing Rule 7.1A whether the raising of any funds under such

4. RESOLUTION 3 – APPROVAL TO ISSUE UP TO 10% PLACEMENT CAPACITY (CONTINUED)

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Notice of Annual General Meeting – November 2012

placement could be carried out in whole, or in part, by an entitlements offer to existing security holders.

The allottees under the Additional 10% Placement Capacity have not been determined as at the date of this Notice but will not include related parties (or their associates) of the Company.

(f) The Company has not previously obtained Shareholder approval under Listing Rule 7.1A.

• (g) A voting exclusion statement is included in the Notice. At the date of the Notice, the Company has not determined its allocation policy for the issue of Equity Securities under the Additional 10% Placement Capacity. The Company has not approached, and has not yet determined to approach, any particular existing security holders or an identifiable class of existing security holders to participate in an offer under the Additional 10% Placement Capacity, and therefore no Shareholder will be excluded from voting on Resolution 3.

Board recommendation

The Board believes that the Additional 10% Placement Facility is beneficial for the Company as it will give the Company the flexibility to issue further securities representing up to 10% of the Company’s share capital during the next 12 months. Accordingly, the Board unanimously recommend that Shareholders approve Resolution 3.

5. RESOLUTION 4 – APPROVAL OF THE ALLOTMENT AND ISSUE OF SHARES TO RELATED PARTY, VELSBERRY PTY LTD

Background

The Company has entered into a loan agreement with Velsberry Pty Ltd, an entity in which Director Mr Terry Streeter has an interest in, whereby that entity agreed to advance the Company up to a total of $200,000 (Velsberry Loan Agreement). The loan is unsecured and interest is payable on the loan at 10.52% per annum. Pursuant to the terms of the Velsberry Loan Agreement, repayment can be made by the issue of Shares that is equal to the dollar amount of the loan balance or any part thereof divided by the issue price of $0.01 per Share, being the market price of Shares on the date that the Velsberry Loan Agreement was entered into. Currently Mr Terry Streeter is able to avail himself of the 3% creep exemption in section 611 Item 9 of the Corporations Act. Accordingly, the Company may need to issue any Shares to extinguish the debt in two tranches to ensure that the issue is done in compliance with the Corporations Act.

If Resolution 4 is not passed, the Company is required to repay the full loan amount including interest accruing within three months, or such other period as agreed between the parties, of this meeting.

If Resolution 4 is passed, the Company will repay the full loan amount including interest accruing within seven months of this meeting. The maximum amount to be repaid by the issue of Shares pursuant to Resolution 4, at an issue price of $0.01 each, is $210,753 (21,075,327 shares) , being the loan amount and interest that will be owing 7 months from the date of this meeting (assuming earlier repayment has not been made by the Company).

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Notice of Annual General Meeting – November 2012

5. RESOLUTION 4 – APPROVAL OF THE ALLOTMENT AND ISSUE OF SHARES TO RELATED PARTY, VELSBERRY PTY LTD (CONTINUED)

ASX Listing Rule 10.11

ASX Listing Rule 10.11 requires a listed company to obtain Shareholder approval by ordinary resolution prior to the issue of securities to a related party of the Company.

The Directors and companies controlled by Directors are related parties of the Company. Accordingly approval for the issue of Shares to repay the loan amount of $200,000 (or any part thereof including interest accrued thereon) to Velsberry Pty Ltd pursuant to the Velsberry Loan Agreement is required pursuant to ASX Listing 10.11.

For the purposes of ASX Listing Rule 10.13, the following information is provided in relation to Resolution 4.

• (a) The number of securities to be issued by the Company to Velsberry Pty Ltd will be determined by the loan balance (including any interest) owing at the time divided by the deemed issue price. The maximum number of securities to be issued is 21,075,327.

• (b) The Shares will be allotted and issued within one month from the date of this Annual General Meeting;

• (c) The Shares will be allotted and issued at the deemed issue price of $0.01 per Share;

• (d)

• The allottee of the Shares will be Velsberry Pty Ltd;

• (e) The Shares allotted and issued will rank equally with the existing Shares on issue; and

• (f) No funds will be raised from this issue as they will be issued in satisfaction of loan provided by Velsberry Pty Ltd pursuant to the Velsberry Loan Agreement.

Chapter 2E of the Corporations Act

The Company is seeking Shareholder approval for the purposes of Chapter 2E of the Corporations Act in respect of the Shares to be issued to Velsberry Pty Ltd.

Chapter 2E prohibits the Company from giving a “financial benefit” to a “related party” of the Company unless either:

• (a) The giving of the financial benefit falls within one of the nominated exceptions to the provisions; or

• (b) Prior Shareholder approval is obtained to giving of the financial benefits.

The issue of shares to Velsberry Pty Ltd constitutes the provision of a financial benefit to a related party of the Company within the meaning of Chapter 2E.

In accordance with the requirements of Chapter 2E of the Corporations Act and in particular, Section 219 of the Corporations Act, the following information is provided to allow Shareholders to assess the proposed issue of Shares:

• (a) The proposed financial benefit to be given to Velsberry Pty Ltd is the issue of Shares, which will be calculated on the loan balance divided by the deemed issue price of $0.01 per share.

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Notice of Annual General Meeting – November 2012

5. RESOLUTION 4 – APPROVAL OF THE ALLOTMENT AND ISSUE OF SHARES TO RELATED PARTY, VELSBERRY PTY LTD (CONTINUED)

• (b) The Shares will be issued in satisfaction of the loan balance (including interest, if any) made to the Company by Velsberry Pty Ltd;

• (c) Mr Terry Streeter, a Company Director, with an interest in Velsberry Pty Ltd declined to make a recommendation to Shareholders in relation to the issue of Shares as he has a material interest in the outcome of this Resolution 4;

• (d) In the 12 months prior to the date of this Notice, the highest and lowest closing trading price of the Shares on the ASX was $0.017 on 4 October 2012 and $0.006 on 28 June 2012. The last available closing price of the Shares on ASX prior to the date of this Notice was $0.010 on 24 October 2012. There is a potential benefit that occurs to Velsberry Pty Ltd if the market trading price exceeds the deemed issue price of $0.01 per share. This benefit would accrue on the sale of Shares by Velsberry Pty Ltd for an amount in excess of $0.01 per Share;

• (e) If Shareholders approve the issue of Shares to Velsberry Pty Ltd, the effect will be to dilute the shareholding of existing Shareholders. As an illustration a total of 21,075,327 Shares, being the maximum to be allotted for the purposes of this Resolution, will increase the number of Shares on issue from 498,392,329 to 519,467,656 with the effect that the shareholding of existing Shareholders will be diluted by approximately 4.06% (based on the Company’s undiluted capital structure at the date of this Notice);

(f) The interests of the Directors in Shares in the Company is set out in the table below:

below:
Director	Number of Shares	% of Shares on issue at date of Notice	% of Shares on issue including Shares the subject of Resolution 4
T Streeter	99,178,360	19.90%	23.15%
G Balfe	14,366,592	2.88%	2.77%
J Hopkins	3,533,334	0.71%	0.68%

(g) With the exception of Mr Terry Streeter, no other Director has a material interest in the outcome of Resolution 4. The Directors are not aware of any other information that would be reasonable required by Shareholders to allow them to make a decision whether it is in the best interest of the Company to pass Resolution 4.

The Board does not consider that from an economic and commercial point of view, there are any material costs or detriments, including opportunity costs or taxation consequences for the Company or material benefits foregone by the Company in issuing the Shares to Velsberry Pty Ltd pursuant to this Resolution 4.

Board recommendation

The Board, other than Director Terry Streeter, who has a material personal interest in Resolution 4, recommends that Shareholders approve Resolution 4 for the reasons that the Company will be able to repay the full loan amount including interest accruing under the Velsberry Loan Agreement without using the Company’s cash reserves and thereby will be able to otherwise apply such funds for working capital purposes.

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Notice of Annual General Meeting – November 2012

6. RESOLUTION 5 – APPROVAL OF THE ALLOTMENT AND ISSUE OF SHARES TO RELATED PARTY, NEEDMORE INVESTMENT PTY LTD

Background

The Company has entered into a loan agreement with Needmore Investments Pty Ltd, an entity in which Director Mr Geoff Balfe has an interest in, whereby that entity agreed to advance the Company up to a total of $100,000 (Needmore Loan Agreement). The loan is unsecured and interest is payable on the loan at the NAB base lending rate, which for the purposes of this notice is, 10.52% per annum.

Pursuant to the terms of the Needmore Loan Agreement, repayment can be made by the issue of Shares that is equal to the dollar amount of the loan balance or any part thereof divided by the issue price of $0.01 per Share, being the market price of Shares on the date that the Needmore Loan Agreement was entered into.

If Resolution 5 is not passed, the Company is required to repay the full loan amount including interest accruing within three months, or such other period as agreed between the parties, of this meeting.

If Resolution 5 is passed, the Company will repay the full loan amount including interest accruing within seven months of this meeting. The maximum amount to be repaid by the issue of Shares pursuant to Resolution 5, at an issue price of $0.01 each, is $105,376 (10,537,664 shares), being the loan amount and interest that will be owing 7 months from the date of this meeting (assuming earlier repayment has not been made by the Company).

ASX Listing Rule 10.11

ASX Listing Rule 10.11 requires a listed company to obtain Shareholder approval by ordinary resolution prior to the issue of securities to a related party of the Company.

The Directors and companies controlled by Directors are related parties of the Company. Accordingly approval for the issue of Shares to repay the loan amount of up to $100,000 (or any part thereof plus any interest accrued thereon) to Needmore Investments Pty Ltd pursuant to the Needmore Loan Agreement is required pursuant to ASX Listing 10.11.

For the purposes of ASX Listing Rule 10.13, the following information is provided in relation to Resolution 5.

• (a) The number of securities to be issued by the Company to Needmore Investments Pty Ltd will be determined by the loan balance (including any interest) owing at the time divided by the deemed issue price. The maximum number of securities to be issued is 10,537,664;

• (b) The Shares will be allotted and issued within one month from the date of this Annual General Meeting;

• (c) The Shares will be allotted and issued at the deemed issue price of $0.01 per share;

• (d) The allottee of the Shares will be Needmore Investments Pty Ltd;

• (e) The Shares allotted and issued will rank equally with the existing Shares on issue; and

• (f) No funds will be raised from this issue as they will be issued in satisfaction of a loan provided by Needmore Investments Pty Ltd pursuant to the Needmore Loan Agreement.

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Notice of Annual General Meeting – November 2012

6. RESOLUTION 5 – APPROVAL OF THE ALLOTMENT AND ISSUE OF SHARES TO RELATED PARTY, NEEDMORE INVESTMENT PTY LTD (CONTINUED)

Chapter 2E of the Corporations Act

The Company is seeking Shareholder approval for the purposes of Chapter 2E of the Corporations Act in respect of the Shares to be issued to Needmore Investments Pty Ltd.

Chapter 2 E prohibits the Company from giving a “financial benefit” to a “related party” of the Company unless either:

• (a) The giving of the financial benefit falls within one of the nominated exceptions to the provisions; or

• (b) Prior Shareholder approval is obtained to giving of the financial benefits.

The issue of shares to Needmore Investments Pty Ltd constitutes the provision of a financial benefit to a related party of the Company within the meaning of Chapter 2E.

In accordance with the requirements of Chapter 2E of the Corporations Act and in particular, Section 219 of the Corporations Act, the following information is provided to allow Shareholders to assess the proposed issue of Shares:

• (a) The proposed financial benefit to be given to Needmore Investments Pty Ltd is the issue of shares, which will be calculated on the loan balance divided by the deemed issue price of $0.01 per share.

• (b) The Shares will be issued in satisfaction of the loan balance (including interest, if any) made to the Company by Needmore Investments Pty Ltd;

• (c) Mr Geoff Balfe, a Company Director, with an interest in Needmore Investments Pty Ltd declined to make a recommendation to Shareholders in relation to the issue of Shares as he has a material interest in the outcome of this Resolution;

• (d) In the 12 months prior to the date of this Notice, the highest and lowest closing trading price of the Shares on the ASX was $0.017 on 4 October 2012 and $0.006 on 28 June 2012. The last available closing price of the Shares on ASX prior to the date of this Notice was $0.010 on 24 October 2012. There is a potential benefit that occurs to Needmore Investments Pty Ltd if the market trading price exceeds the deemed issue price of $0.01 per share. This benefit would accrue on the sale of Shares by Needmore Investments Pty Ltd for an amount in excess of $0.01 per Share;

• (e) If Shareholders approve the issue of Shares to Needmore Investments Pty Ltd, the effect will be to dilute the shareholding of existing Shareholders. As an illustration a total of 10,537,664 Shares being the maximum to be allotted for the purposes of this Resolution, will increase the number of Shares on issue from 498,392,329 to 508,929,993 with the effect that the shareholding of existing Shareholders will be diluted by approximately 2.07% (based on the Company’s undiluted capital structure at the date of this Notice);

• (f) The interests of the Directors in Shares in the Company is set out in the table below:

below:
Director	Number of Shares held at date of Notice	% of Shares on issue at date of Notice	% of Shares on issue including Shares the subject of Resolution 5
T Streeter	99,178,360	19.90%	19.49%
G Balfe	14,366,592	2.88%	4.89%
J Hopkins	3,533,334	0.71%	0.69%

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Notice of Annual General Meeting – November 2012

6. RESOLUTION 5 – APPROVAL OF THE ALLOTMENT AND ISSUE OF SHARES TO RELATED PARTY, NEEDMORE INVESTMENT PTY LTD (CONTINUED)

• (g) With the exception of Mr Geoff Balfe, no other Director has a material interest in the outcome of Resolution 5. The Directors are not aware of any other information that would be reasonable required by Shareholders to allow them to make a decision whether it is in the best interest of the Company to pass Resolution 5.

The Board does not consider that from an economic and commercial point of view, there are any material costs or detriments, including opportunity costs or taxation consequences for the Company or material benefits foregone by the Company in issuing the Shares to Needmore Investments Pty Ltd pursuant to this Resolution 5.

Board recommendation

The Board, other than Director Geoff Balfe, who has a material personal interest in Resolution 5, recommends that Shareholders approve Resolution 5 for the reasons that the Company will be able to repay the full loan amount including interest accruing under the Needmore Loan Agreement without using the Company’s cash reserves and thereby will be able to otherwise apply such funds for working capital purposes.

7. ENQUIRIES

Shareholders are required to contact the Company Secretary on (61 8) 9388 2211 if they have any queries in respect of the matters set out in these documents.

8. VOTING BY PROXY

Entitlement to vote

1 Voting Entitlement

For the purposes of determining voting entitlements at the Meeting, Shares will be taken to be held by the persons who are registered as holding the Shares at close of business (5pm WST) on 24 November 2012. Accordingly, transactions registered after that time will be disregarded in determining entitlements to attend and vote at the Meeting.

2 Proxies

Members are advised that:

• each member has a right to appoint a proxy to attend and vote for them;

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

• a member who is entitled to cast 2 or more votes may appoint either 1 or 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If the appointment is for 2 proxies and does not specify the proportion or number of votes each proxy may exercise, then, in accordance with section 249X(3) of the Corporations Act, each proxy may exercise half of the votes.

To vote by proxy, please complete and sign the proxy form enclosed and send the proxy form:

• (a) by post to Midas Resources Limited, PO Box 356, Subiaco, Western Australia, 6904;

• (b) deliver to the registered office of the Company at Level 1, 282 Rokeby Road, Subiaco, Western Australia, 6008; or

• (c) by facsimile to the Company on facsimile number (61 8) 9388 2600,

so that it is received not later than 2:00 pm (WST) on 24 November 2012.

Proxy forms received later than this time will be invalid

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Notice of Annual General Meeting – November 2012

8. VOTING BY PROXY (CONTINUED)

The proxy form must be signed by the Shareholder or his/her attorney duly authorised in writing or, if the Shareholder is a body corporate, in a manner permitted by the Corporations Act. In the case of Shares jointly held by two or more persons, at least one joint holder must sign the proxy form. A proxy form is attached to this Notice.

3 Voting Prohibition Statement

A vote on Resolution 1 must not be cast (in any capacity) by or on behalf of any Key Management Personnel (KMP) which includes the Directors of the Company, details of whose remuneration are included in the Remuneration Report, or any closely related party of that person (or those persons).

However, a person described above may vote on Resolution 1 if the person does so as a proxy appointed by writing, that specifies how the proxy is to vote on the Resolution, or where no voting directions have been given and the proxy votes consistent with the stated intention to vote valid undirected proxies, and the vote is not cast on behalf of a member of the Key Management Personnel or any closely related party of that person (or persons).

4 Voting Exclusion

The Company will disregard any votes cast on Resolutions 3, 4 and 5 by any person who participate in the proposed issue and any person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities if the Resolution is passes, and any person associated with those persons.

However, votes cast by a person as proxy for a person who is entitled to vote (in accordance with the directions on the proxy form) or 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) will be taken into account.

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Notice of Annual General Meeting – November 2012

GLOSSARY

• " ASX " means the Australian Stock Exchange Limited;

“ ASX Listing Rules ” or “ Listing Rules ” means the Listing Rules of the ASX;

“ Board ” means the board of Directors of the Company from time to time;

“ 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 " or " Midas " or “ MDS” means Midas Resources Limited (ACN 095 092 158);

" Corporations Act " means Corporations Act 2001 (Cth);

“ Constitution ” means the Company’s constitution;

" Director " means a director of the Company and, where the context required;

“Equity Securities” has the meaning given to that term in the Listing Rules;

“ Explanatory Statement ” means the Explanatory Statement accompanying this Notice of Meeting;

“Key Management Personnel” has the same meaning as in the accounting standards and broadly includes those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, including any director (whether executive or otherwise) of the Company;

“Listing Rules” means the listing rules of the ASX from time to time;

" Notice of Meeting " means the Notice of Annual General Meeting accompanying this Explanatory Memorandum;

“ Share ” means a fully paid ordinary share in the Capital of the Company;

“Shareholder” means a holder of Shares;

“Trading Day” has the meaning given to that term in the Listing Rules;

“ WST ” means Western Standard Time.

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Notice of Annual General Meeting – November 2012

PROXY FORM

APPOINTMENT OF PROXY - MIDAS RESOURCES LIMITED - ABN 87 095 092 158

GENERAL MEETING

I/We

being a Member of Midas Resources Limited entitled to attend and vote at the Meeting, hereby

Appoint

Name of proxy OR

Mark this box if you wish to appoint the Chairman of the Meeting as your proxy

or failing the person so named or, if no person is named, the Chairman of the Meeting or the Chairman’s nominee, to vote in accordance with the following directions or, if no directions have been given, as the proxy sees fit at the Annual General Meeting to be held at 2:00 pm (WST), on 26 November 2012 at The Park Business Centre, 45 Ventnor Ave, West Perth, Western Australia and at any adjournment thereof.

Important for Resolution 1:

Where I/We have appointed the Chairman of the Meeting as my/our proxy (or the Chairman becomes my/our proxy by default), I/we expressly authorise the Chairman to exercise my/our proxy on Resolution 1 (except where I/we have indicated a different voting intention below) the Chairman of the Meeting to vote in accordance with the Chairman’s voting intentions on Resolution 1.

I acknowledge that the Chairman of the meeting may exercise my proxy even though Resolution 1 is connected directly or indirectly with the remuneration of a member of key management personnel and/or even if the Chairman of the Meeting has an interest in the outcome of these items and that votes cast by the Chairman, other than those as proxy holder, would be disregarded because of that interest.

Voting on Business of the General Meeting

FOR AGAINST ABSTAIN

Resolution 1 – Adoption of the Remuneration Report Resolution 2 – Re-election of Mr John Hopkins Resolution 3 – Approval to issue up to 10% placement capacity Resolution 4 – Issue of securities to Velsberry Pty Ltd Resolution 5 – Issue of securities to Needmore Investments Pty Ltd

If you mark the abstain box for a particular item, you are directing your proxy not to vote on that item on a show of hands or on a poll and that your shares are not to be counted in computing the required majority on a poll.

If two proxies are being appointed, the proportion of voting rights this proxy represents is

%

Signed this day of 2012

By:

Individuals and joint holders

Individuals and joint holders Companies (affix common seal if appropriate) Signature Director Signature Director/Company Secretary Signature Sole Director and Sole Company Secretary

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Notice of Annual General Meeting – November 2012

MIDAS RESOURCES LIMITED ABN 87 095 092 158

Instructions for Completing ‘Appointment of Proxy’ Form

1.

A member entitled to attend and vote at a Meeting is entitled to appoint not more than two proxies to attend and vote on their behalf. Where more than one proxy is appointed, such proxy must be allocated a proportion of the member’s voting rights. If the shareholder appoints two proxies and the appointment does not specify this proportion, each proxy may exercise half the votes.

1. A duly appointed proxy need not be a member of the Company. In the case of joint holders, all must sign.

2. Corporate shareholders should comply with the execution requirements set out on the Proxy Form or otherwise with the provisions of Section 127 of the Corporations Act. Section 127 of the Corporations Act provides that a company may execute a document without using its common seal if the document is signed by:

3. 2 directors of the company;

4. a director and a company secretary of the company; or

5. for a proprietary company that has a sole director who is also the sole company secretary – that director.

For the Company to rely on the assumptions set out in Section 129(5) and (6) of the Corporations Act, a document must appear to have been executed in accordance with Section 127(1) or (2). This effectively means that the status of the persons signing the document or witnessing the affixing of the seal must be set out and conform to the requirements of Section 127(1) or (2) as applicable. In particular, a person who witnesses the affixing of a common seal and who is the sole director and sole company secretary of the company must state that next to his or her signature.

1. Completion of a Proxy Form will not prevent individual shareholders from attending the Meeting in person if they wish. Where a shareholder completes and lodges a valid proxy form and attends the Meeting in person, then the proxy’s authority to speak and vote for that shareholder is suspended while the shareholder is present at the Meeting.

2. Where a Proxy Form or form of appointment of corporate representative is lodged and is executed under power of attorney, the power of attorney must be lodged in like manner as this proxy.

To vote by proxy, please complete and sign the proxy form and send the proxy form:

• (a) by post to Midas Resources Limited PO Box 356 Subiaco

Western Australia, 6904;

• (b) deliver to the registered office of the Company at Level 1, 282 Rokeby Road, Subiaco, Western Australia, 6008; or

• (c) by facsimile to the Company on facsimile number (61 8) 9388 2600,

so that it is received not later than 2:00 pm (WST) on 24 November 2012.

Proxy forms received later than this time will be invalid.

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Notice of Annual General Meeting – November 2012