HAMMER METALS LIMITED — AGM Information 2015

Oct 21, 2015

HAMMER METALS LIMITED ACN 095 092 158

NOTICE OF ANNUAL GENERAL MEETING

AND

EXPLANATORY MEMORANDUM

IMPORTANT INFORMATION

This is an important document that should be read in its entirety. If you do not understand it you should consult your professional advisers without delay.

If you wish to discuss any aspect of this document with the Company please contact Mr Mark Pitts on telephone (+61 8) 9316 9100.

The Annual Report is available online at www.hammermetals.com.au

HAMMER METALS LIMITED ACN 095 092 158

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Annual General Meeting of the Shareholders of Hammer Metals Limited will be held at Suite 8, 7 The Esplanade Mt Pleasant, Western Australia at 9:30am (WST) on 20 November 2015 to conduct the following business and to consider, and if thought fit, to pass the following Resolutions.

AGENDA

ORDINARY BUSINESS

FINANCIAL & OTHER REPORTS

To receive and consider the financial report for the year ended 30 June 2015 and the accompanying Directors’ Report, Directors’ Declaration, and Auditor’s Report.

RESOLUTION 1 – ADOPTION OF THE REMUNERATION REPORT

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

“That the Remuneration Report that forms part of the Directors’ Report for the financial period ended 30 June 2015, be adopted.”

The Remuneration Report is set out in the Directors’ Report in the Annual Report. Please note that the vote on this Resolution is advisory only and does not bind the Directors or the Company.

Voting Exclusion

In accordance with sections 250R and 250BD of the Corporations Act 2001, the Company will disregard any votes cast on this Resolution by any Key Management Personnel (“ KMP ”) and a closely related party of a KMP. However, the Company need not disregard a vote if it is cast by a KMP or a closely related party of a KMP as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form, or it is cast by a chairperson of the Meeting as proxy for a person who is entitled to vote, in accordance with the direction on the proxy form to vote as the proxy decides, or it is cast by a chairperson of the Meeting as proxy for a person who is entitled to vote, the proxy is undirected and the proxy form expressly authorises the chairperson to vote the proxy on this Resolution.

KMPs and their closely related parties will commit an offence under the Corporations Act if they vote in relation to this Resolution in breach of the voting restrictions.

RESOLUTION 2 – RE-ELECTION OF MR SIMON BODENSTEINER

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

“That Mr Simon Bodensteiner, having retired in accordance with clause 7.3(f) of the Company’s Constitution and, being eligible, offers himself for re-election, be re-elected as a Director of the Company with immediate effect.”

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RESOLUTION 3 – RE-ELECTION OF MR ALEXANDER HEWLETT AS A DIRECTOR

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

“That Mr Alexander Hewlett, having retired in accordance with clause 7.3(b) the Company’s Constitution and, being eligible, offers himself for re-election, be re-elected as a Director of the Company with immediate effect.”

SPECIAL BUSINESS

RESOLUTION 4 - APPROVAL OF 10% PLACEMENT FACILITY

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

“That, pursuant to and in accordance with Listing Rule 7.1A and for all other purposes, Shareholders approve the issue of Equity Securities up to 10% of the issued capital of the Company (at the time of issue) calculated in accordance with the formula prescribed by 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 a person (and any associates of such person) who may participate in the 10% Placement Facility and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of Shares, if this Resolution is passed. 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.

RESOLUTION 5 - APPROVAL OF OPTION ISSUE TO CONSULTANT

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

“That, pursuant to and in accordance with Listing Rule 7.1 and for all other purposes, Shareholders approve the issue of unlisted Options to a Consultant of the Company, on the terms and conditions set out in the Explanatory Memorandum.

Voting Exclusion: The Company will disregard any votes cast on Resolution 5 by the relevant Consultant and any person who is to receive the securities the subject of the relevant Resolution; any person who might obtain a benefit if the relevant Resolution is passed, except a benefit solely in the capacity of a holder of ordinary securities, and any associates of those persons respectively.

Notwithstanding the above, the Company will not disregard a vote if it is 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 a 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 14th DAY OF OCTOBER 2015 BY ORDER OF THE BOARD

MARK PITTS COMPANY SECRETARY

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Notes:

Definitions

Terms which are used in this Notice and which are defined in Section 7 of the Explanatory Memorandum have the meanings ascribed to them therein.

Note

If you have recently changed your address or if there is any error in the name and address used for this notice please notify the Company Secretary. In the case of a corporation, notification is to be signed by a director or company secretary.

Proxies

A Shareholder who is entitled to vote at this Meeting has a right to appoint a proxy and should use the proxy form enclosed with this notice. The proxy need not be a Shareholder of the Company and can be an individual or a body corporate.

A body corporate appointed as a Shareholder’s proxy may appoint a representative to exercise any of the powers the body may exercise as a proxy at the Meeting. The representative should bring to the Meeting evidence of this appointment, including any authority under which the appointment is signed, unless it has previously been given to the Company.

A Shareholder 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 a Shareholder appoints 2 proxies and the appointment does not specify the proportion or number of the Shareholder’s votes each proxy may exercise, section 249X of the Corporations Act will take effect so that each proxy may exercise half of the votes (ignoring fractions).

A proxy’s authority to speak and vote for a Shareholder at the meeting is suspended if the Shareholder is present at the meeting.

The proxy form must be signed and dated by the Shareholder or the Shareholder’s attorney. Joint Shareholders must each sign.

Proxy forms and the original or a certified copy of the power of attorney (if the proxy form is signed by an attorney) must be received:

• at Suite 8, 7 The Esplanade, Mount Pleasant, Western Australia, 6153; or

• on facsimile number (+61 8) 9 315 5475,

not later than 9am (WST) on 18 November 2015.

Pursuant to regulation 7.11.37 of the Corporations Regulations, the Board has determined that the shareholding of each Shareholder for the purposes of ascertaining the voting entitlements for the Meeting will be as it appears in the share register at 4 pm (WST) on 18 November 2015.

Bodies Corporate

A body corporate may appoint an individual as its representative to exercise any of the powers the body may exercise at meetings of a company’s shareholders. The appointment may be a standing one.

Unless the appointment states otherwise, the representative may exercise all of the powers that the appointing body could exercise at a meeting or in voting on a resolution.

The representative should bring to the Meeting evidence of his or her appointment, including any authority under which the appointment is signed, unless it has previously been given to the Company.

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HAMMER METALS LIMITED ACN 095 092 158

EXPLANATORY MEMORANDUM

This Explanatory Memorandum forms part of a Notice convening the Annual General Meeting of Shareholders of Hammer Metals Limited to be held at Suite 8, 7 The Esplanade Mt Pleasant Western Australia at 9:30am (WST) on 20 November 2015. This Explanatory Memorandum is to assist Shareholders in understanding the background to and the legal and other implications of the Notice and the reasons for the Resolutions proposed. Certain terms used in the Notice and Explanatory Memorandum are defined in Section 7.

1. FINANCIAL AND OTHER REPORTS

As required by section 317 of the Corporations Act, the financial report for the year ended 30 June 2015 and the accompanying Directors’ Report, Directors’ Declaration and Auditor’s Report will be laid before the Meeting.

Neither the Corporations Act nor the Company’s Constitution requires a vote on the reports. However, Shareholders will have an opportunity to ask questions about the report at the Annual General Meeting. Shareholders will also be given a reasonable opportunity to ask the Auditor questions about the auditor’s report and audit conduct. Written questions may be submitted 5 business days prior to the Meeting addressed to the Chairman and sent to the Company’s registered office, about the management of the Company, or addressed to the Company’s auditor and sent to the Company’s registered office about audit conduct, accounting policies used by the Company and auditor independence. General questions about the management of the Company will also be taken.

2. RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT

As required by the Corporations Act, the Board is presenting the Remuneration Report to Shareholders for consideration and adoption by a non-binding vote. The Remuneration Report contains:

• information about Board Policy for determining the nature and amount of remuneration of the Company’s Directors and senior executives;

• a description of the relationship between remuneration policy and the Company’s performance;

• a summary of performance conditions, including a summary of why they were chosen and how performance is measured against them; and

• remuneration details for each executive and non-executive Directors, and Key Management Personnel.

The Remuneration Report, which is part of the 2015 Annual Report, has been sent to Shareholders (except those who have made an election not to receive the Annual Report). Copies of the 2015 Annual Report are available by contacting the Company’s Share Registry or visiting the Company’s web site (www.hammermetals.com.au).

The Meeting presents an opportunity to discuss the Remuneration Report for Shareholders who are interested in doing so. The vote on this Resolution is advisory only and does not bind the Directors or the Company.

Shareholders are informed that under recent reforms to the Corporations Act, if 25% or more of the vote on this Resolution are against adopting the Remuneration Report, the Company will be required to consider and report to Shareholders in the next Remuneration Report on what action is proposed to be (if any) or has been taken in response to Shareholder concerns, and if no action is proposed to be taken, the Board’s reasons for this.

Shareholders also need to be aware that as a result of the legislation which became effective on 1 July 2011 a “two strikes” process will apply to the results of voting in relation to this Resolution. This means that if the resolution proposing adoption of the Remuneration Report receives a “no” vote of over 25% of

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votes cast by those attending in person or by proxy and permitted to vote, at two successive annual general meetings, then at the Company’s 2016 annual general meeting, an extra resolution must be put to the meeting proposing that another general meeting should be held within 90 days of the second annual general meeting. A simple majority of over 50% of the votes cast at the 2016 annual general meeting is required to pass this extra resolution. If the resolution is passed, within 90 days another general meeting must be held at which all the Directors, except the Managing Director and any new Directors appointed since the date of the 2015 annual general meeting, will be required to resign and offer themselves for reelection. These provisions are colloquially referred to as the “two strikes rule” and the “spill resolution” to be put to the “spill meeting”.

If at the spill meeting, the resolutions are all passed against re-electing the relevant Directors, the legislation includes a mechanism to ensure the Board continues with the statutory required minimum of 3 Directors. After the Managing Director, the remaining two positions will be filled by the Directors whose re-election resolutions at the spill meeting received the highest percentage of votes in favour of reelection. If the number of votes is the same for two Directors, the Managing Director and any other Director whose re-election has been confirmed at this spill meeting, can choose who is to become the third Director, with such appointment to be confirmed by shareholders at the 2017 annual general meeting. The ramifications of this mechanism being invoked include that the Company would not be in compliance with its corporate governance policies as a result of not having three independent directors on the Company’s audit committee or any other committees requiring independent directors.

Furthermore, depending on the outcome of voting at the subsequent annual general meeting, Shareholders may be obliged to consider a resolution to requiring the full Board (excluding the Managing Director) to seek re-election.

The Chairman intends to vote all available proxies in favour of adopting the Remuneration Report. If the Chairman of the Meeting is appointed as your proxy and you have not specified the way the Chairman is to vote on Resolution 1, by signing and returning the proxy form the Shareholder is considered to have provided the Chairman with express authorisation for the Chairman to vote the proxy in accordance with the Chairman’s intentions.

3. RESOLUTION 2 - RE-ELECTION OF MR SIMON BODENSTEINER AS A DIRECTOR

Resolution 2 deals with the re-election of Mr Simon Bodensteiner who retires in accordance with clause 7.4(g) of the Company’s Constitution and Listing Rule 14.4, and being eligible, has offered himself for reelection.

Mr Simon Bodensteiner is an Engineering Professional, holding a Masters degree in Mining Engineering. Simon is the Chief Mining Engineer for major shareholder Deutsche Rohstoff AG, a Germany based resource and investment company. He is an experienced mining professional and has previously held operational and senior technical positions at several Rio Tinto operations across Australia.

Simon brings significant bulk and selective mining experience from underground and open pit operations to the Board. Before joining Deutsche Rohstoff, Simon worked as a Consultant for The Boston Consulting Group.

All the Directors except for Mr Bodensteiner recommend that Shareholders vote in favour of Resolution 2.

The Chairman intends to vote all available proxies in favour of Resolution 2.

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4. RESOLUTION 3 - RE-ELECTION OF MR ALEXANDER HEWLETT AS A DIRECTOR

Resolution 3 deals with the re-election of Mr Alexander Hewlett who retires by rotation as required by the Company’s Constitution and the Listing Rules and being eligible, has offered himself for re-election.

Mr Alexander Hewlett is a professional Geologist having graduated from the University of Western Australia. Alex worked as a resource-modelling geologist for CSA Global, before taking on management positions at ASX listed explorers as Managing Director of US Nickel Ltd and Chairperson of Groote Resources Ltd (now Northern Manganese Limited).

Alex has also periodically consulted in a technical capacity for a New York resource focused hedge fund. Alex is a member of the Australasian Institute of Mining and Metallurgy.

All the Directors except for Mr Hewlett recommend that Shareholders vote in favour of Resolution 3.

The Chairman intends to vote all available proxies in favour of Resolution 3.

5. RESOLUTION 4 – APPROVAL OF 10% PLACEMENT FACILITY

5.1 General

Listing Rule 7.1A enables eligible entities to issue Equity Securities up to 10% of its issued share capital through placements over a 12 month period after the annual general meeting ( “10% Placement Facility” ). The 10% Placement Facility is in addition to the Company's 15% placement capacity under Listing Rule 7.1.

An eligible entity for the purposes of Listing Rule 7.1A is an entity that is not included in the S&P/ASX 300 Index and has a market capitalisation of $300 million or less. The Company is an eligible entity.

The Company is now seeking shareholder approval by way of a special resolution to have the ability to issue Equity Securities under the 10% Placement Facility.

The exact number of Equity Securities to be issued under the 10% Placement Facility will be determined in accordance with the formula prescribed in Listing Rule 7.1A.2 (refer to Section 5.2(c) below).

The primary purpose for the 10% Placement Facility is to enable the Company to raise additional capital without additional regulatory impediments and to pursue possible future investment opportunities that may arise.

The Directors of the Company believe that Resolution 4 is in the best interests of the Company and unanimously recommend that Shareholders vote in favour of this Resolution.

5.2 Description of Listing Rule 7.1A

(a) Shareholder approval

The ability to issue Equity Securities under the 10% Placement Facility is subject to shareholder approval by way of a special resolution at an annual general meeting.

(b) Equity Securities

Any Equity Securities issued under the 10% Placement Facility must be in the same class as an existing quoted class of Equity Securities of the Company.

The Company, as at the date of the Notice, has on issue one class of quoted Equity Securities, being Shares (having the ASX code HMX).

(c) Formula for calculating 10% Placement Facility

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Listing Rule 7.1A.2 provides that eligible entities which have obtained shareholder approval at an annual general meeting may issue or agree to issue, during the 12 month period after the date of the annual general meeting, a number of Equity Securities calculated in accordance with the following formula:

(A x D) – E

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

• (A) plus the number of fully paid shares issued in the 12 months under an exception in Listing Rule 7.2;

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

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

• (D) less the number of fully paid shares cancelled in the 12 months.

Note that A is 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.

(d) Listing Rule 7.1 and Listing Rule 7.1A The ability of an entity to issue Equity Securities under Listing Rule 7.1A is in addition to the entity's 15% placement capacity under Listing Rule 7.1.

At the date of this Notice, the Company has on issue 107,668,735 Shares and has a capacity to issue:

• (i) 16,150,310 Equity Securities under Listing Rule 7.1; and

• (ii) 10,766,874 Equity Securities under Listing Rule 7.1A.

The actual 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 formula prescribed in Listing Rule 7.1A.2 (refer to Section 5.1 (c) above).

(e) Minimum Issue Price The issue price of Equity Securities issued under Listing Rule 7.1A must be not less than 75% of the VWAP of Equity Securities in the same class calculated 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.

(f) 10% Placement Period

Shareholder approval of the 10% Placement Facility under Listing Rule 7.1A is valid from the date of the annual general meeting at which the approval is obtained and expires on the earlier to occur of:

• (i) the date that is 12 months after the date of the annual general meeting at which the approval is obtained; or

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• (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 ( “10% Placement Period” ).

5.3 Listing Rule 7.1A

The effect of Resolution 4 will be to allow the Directors to issue the Equity Securities under Listing Rule 7.1A during the 10% Placement Period without using the Company’s 15% placement capacity under Listing Rule 7.1.

Resolution 4 is a special resolution and therefore requires 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).

5.4 Specific information required by Listing Rule 7.3A

Pursuant to and in accordance with Listing Rule 7.3A, information is provided in relation to the approval of the 10% Placement Facility as follows:

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

• (b) If Resolution 4 is approved by Shareholders and the Company issues Equity Securities under the 10% Placement Facility, the existing Shareholders' voting power in the Company will be diluted as shown in Table A (below). There is 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 are issued as part of consideration for the acquisition of a new asset.

which may have an effect on the amount of funds raised by the issue of the Equity Securities.

Table A shows the dilution of existing Shareholders on the basis of the current market price of Shares and the current number of ordinary securities for variable "A" calculated in accordance with the formula in Listing Rule 7.1A(2) as at the date of this Notice.

The table also shows:

• (i) two examples where variable “A” has increased, by 50% and 100%. Variable “A” is based on the number of ordinary securities the Company has on issue. The number of ordinary securities on issue may increase as a result of issues of ordinary securities that do not require Shareholder approval (for example, a pro rata entitlements issue or scrip issued under a takeover offer) or future specific placements under Listing Rule 7.1 that are approved at a future Shareholders’ meeting; and

• (ii) two examples of where the issue price of ordinary securities has decreased by 50% and increased by 50% as against the current market price.

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TABLE A

			**Dilution **
Variable “A” in Listing Rule 7.1A.2		$0.033 50% decrease in issue price	$0.065 Issue price	$0.13 100% increase in issue price
Current Variable “A” 107,668,735 Shares	10% voting dilution	10,766,873 Shares	10,766,873 Shares	10,766,873 Shares
	Funds raised	$355,307	$699,847	$1,399,693
50% Increase in current Variable “A” 161,503,103 Shares	10% voting dilution	16,150,310 Shares	16,150,310 Shares	16,150,310 Shares
	Funds raised	$532,960	$1,049,770	$2,099,540
100% Increase in current Variable “A” 215,337,470 Shares	10% voting dilution	21,533,747 Shares	21,533,747 Shares	21,533,747 Shares
	Funds raised	$710,614	$1,399,694	$2,799,387

The table has been prepared on the following assumptions:

• (i) The Company issues the maximum number of Equity Securities available under the 10% Placement Facility.

• (ii) No Options (including any Options under the 10% Placement Facility) are exercised into Shares before the date of the issue of the Equity Securities.

• (iii) 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 at 10%.

• (iv) 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.

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

• (vi) The issue of Equity Securities under the 10% Placement Facility consists only of Shares. If the issue of Equity Securities includes the issue of Listed Options, it is assumed that those Listed Options are exercised into Shares for the purpose of calculating the voting dilution effect on existing Shareholders.

• (vii) The Issue Price is $0.065, being the closing price of Shares on ASX on 9 October 2015.

• (viii) The Company has not issued any Equity Securities in the 12 months prior to the Meeting that were not issued under an exception in Listing Rule 7.2 or without approval under Listing Rule 7.1.

• (ix) The Company has not issued any Equity Securities in the 12 months prior to the Meeting that were not issued under an exception in Listing Rule 7.2 or without approval under Listing Rule 7.1, and the total number of Shares on issue and approved or deemed approved at the date hereof for the purpose of Listing Rule 7.1 is 107,668,735.

• (c) The Company will only issue and allot the Equity Securities during the 10% Placement Period. The approval under Resolution 4 for the issue of the Equity Securities will cease to be valid in the event that Shareholders approve a transaction under Listing Rule 11.1.2 (a significant change to the nature or scale of activities or Listing Rule 11.2 (disposal of main undertaking).

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

• (i) non-cash consideration for the acquisition of the new assets and investments. In such circumstances the Company will provide a valuation of the non-cash consideration as required by Listing Rule 7.1A.3; or

• (ii) cash consideration. In such circumstances, the Company intends to use the funds raised towards an acquisition of new assets or investments (including expense associated with such acquisition), continued exploration and feasibility study expenditure on the Company’s current assets and/or general working capital.

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

The Company’s allocation policy is dependent on the prevailing market conditions at the time of any proposed issue pursuant to the 10% Placement Facility. The identity of the allottees of Equity Securities will be determined on a case-by-case basis having regard to the factors including but not limited to the following:

• (i) the methods of raising funds that are available to the Company, including but not limited to, rights issue or other issue in which existing security holders can participate;

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

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

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

The allottees under the 10% Placement Facility have not been determined as at the date of this Notice but may include existing substantial Shareholders and/or new Shareholders who are not related parties or associates of a related party of the Company.

Further, if the Company is successful in acquiring new assets or investments, it is likely that the allottees under the 10% Placement Facility will be the vendors of the new assets or investments.

• (e) The Company has obtained Shareholder approval under Listing Rule 7.1A at its 2014 Annual General Meeting.

The Company has issued any Equity Securities under Listing Rule 7.1A during the preceding 12 months. However, all such issues have subsequently been ratified by Shareholders under Listing Rules 7.4 and 7.5. During the preceding 12 month period a total of 25,520,920 Shares, being the existing class of quoted securities, were issued; which based on the number of Equity Securities currently on issue comprises 23.70% of the Company’s Shares. Information relating to the issue of Equity Securities in the preceding 12 months is set out in Table B below.

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TABLE B

Date of Appendix 3B	Number of Equity Securities	Class of Equity Securities and summary of terms	Names of recipients or basis on which recipients determined	Issue price of Equity Securities and discount to Market Price1 on the trading day prior to the issue	If issued for cash – the total consideration, what it was spent on and the intended use of any remaining funds If issued for non-cash consideration – a description of the consideration and the current value of the consideration
5/12/14	6,000,000	Unlisted Options exercisable for $0.135 on or before 30 Nov 2017	Messrs Russell Davis, Alexander Hewlett, Patrick Corr and Nader El Sayed ( all Directors of the Company) pursuant to Shareholder approval obtained 28th November 2014.	These Options were issued for nil cash consideration. Market price for Shares on date prior to issue was $0.085	Options issued to Directors of the Company for no cash consideration. At the date of this Notice, the options have nil fair value as the exercise price of the options exceeds the underlying market value of the Company’s shares.
8/12/14	1,100,000	Unlisted Options exercisable for $0.135 on or before 30 Nov 2017	Certain consultants of the Company.	These Options were issued for nil cash consideration as they were issue as incentives to certain consultants of the Company. The market price of Shares on the date prior to issue was $0.082	Options issued to consultants of the Company as incentive and were issued for no cash consideration. At the date of this Notice, the options have nil fair value as the exercise price of the options exceeds the underlying market value of the Company’s shares.
6/2/15	15,625,000	Fully paid ordinary shares	Issued to Deutsche Rohstoff AG	Issued at $0.08. Market price on date prior to issue was $0.088.	$1,250,000 in cash, the funds received were used to fund planned exploration projects in Mt. Isa and Mt. Morgan (Queensland). At the date of this notice there are no remainingfunds.
6/2/15	3,811,953	Unlisted Options exercisable for $0.15 on or before 6 Feb 2018	Issued to Deutsche Rohstoff AG	These Options were issued for nil cash consideration as they were issued as free attaching options. The market price of Shares on the date prior to issue was $0.088.	These Options were issued for nil cash considerations as they were issued as free attaching options. At the date of this Notice, the options have nil fair value as the exercise price of the options exceeds the underlying market value of the Company’s shares
9/2/15	3,881,867	Fully paid ordinary shares	Conversion of Preference shares held by Santana Minerals Limited	Ordinary shares issued on a 1 for 1 basis with converted preference shares in accordance with their terms, price deemed at $0.10. Market price on date prior to issue was$0.09	Ordinary shares issued in consideration for the conversion of preference shares in accordance with their terms. Value as at the date of this notice $252,321
20/3/15	170,719	Fully paid ordinary shares	Conversion of Preference shares held by Santana Minerals Limited	Ordinary shares issued on a 1 for 1 basis with converted preference shares in accordance with their terms, price deemed at $0.10. Market price on date prior to issue was $0.085	Ordinary shares issued in consideration for the conversion of preference shares in accordance with their terms. Value as at the date of this notice $11,096

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Date of Appendix 3B	Number of Equity Securities	Class of Equity Securities and summary of terms	Names of recipients or basis on which recipients determined	Issue price of Equity Securities and discount to Market Price1 on the trading day prior to the issue	If issued for cash – the total consideration, what it was spent on and the intended use of any remaining funds If issued for non-cash consideration – a description of the consideration and the current value of the consideration
31/7/15	4,260,000	Fully paid ordinary shares	Issued to sophisticated investors	Issued at $0.06. Market price on the date prior to issue was $0.076	$255,600 in cash, the funds received were used to fund planned exploration projects in Mt. Isa and Mt. Morgan (Queensland). At the date of this notice all of these funds are remaining.
31/7/15	2,130,000	Unlisted Options exercisable for $0.10 on or before 30 July 2017.	Issued to sophisticated investors as free attaching options to the shares issued in this Appendix 3B of 31/7/15	These Options were issued for nil cash consideration as they were issued as free attaching options. The market price of Shares on the date prior to issue was $0.076.	These Options were issued for nil cash considerations as they were issued as free attaching options. At the date of this Notice, the options have nil fair value as the exercise price of the options exceeds the underlying market value of the Company’s shares
31/7/15	5,416,667	Unlisted Options exercisable for $0.10 on or before 30 July 2017	Issued to Deutsche Rohstoff AG	These Options were issued for nil cash consideration as they were issue as free attaching options in relation to the Convertible Note issued to Deutsche Rohstoff AG. The market price of Shares on the date prior to issue was $0.076.	These Options were issued for nil cash consideration as they were issued as free attaching options. At the date of this Notice, the options have nil fair value as the exercise price of the options exceeds the underlying market value of the Company’s shares
7/8/15	500,000	Unlisted Options exercisable for $0.10 on or before 6 Aug 2017	Issued in lieu of services rendered	These Options were issued for nil cash consideration and were issued in lieu of services rendered by a consultant to the Company. The market price of Shares on the date prior to issue was $0.073.	These Options were issued for nil cash consideration in lieu services rendered. At the date of this Notice, the options have nil fair value as the exercise price of the options exceeds the underlying market value of the Company’s shares
15/9/15	1,583,334	Fully paid ordinary shares	Issued to Messrs Russell Davis and Alexander Hewlett, both Directors, pursuant to Shareholder approval on 11 September 2015.	Issued at $0.06 Market price on the date prior to issue was $0.064	$95,000 in cash, the funds received to be used to fund planned exploration projects in Mt. Isa and Mt. Morgan (Queensland). At the date of this notice all of these funds are remaining.
15/9/15	791,667	Unlisted Options exercisable for $0.10 on or before 30 July 2017	Issued to Messrs Russell Davis and Alexander Hewlett, both Directors, pursuant to Shareholder approval on 11 September 2015.	These Options were issued for nil cash consideration as they were issued as free attaching options. The market price of Shares on the date prior to issue was $0.064.	These Options were issued for nil cash considerations as they were issued as free attaching options. At the date of this Notice, the options have nil fair value as the exercise price of the options exceeds the underlying market value of the Company’s shares

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• (e) A voting exclusion statement is included in the Notice. At the date of the Notice, the Company has not approached any particular existing Shareholder or security holder or an identifiable class of existing security holder to participate in the issue of the Equity Securities. No existing Shareholder's votes will therefore be excluded under the voting exclusion in the Notice.

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 recommends that Shareholders approve Resolution 4.

The Chairman intends to vote all available proxies in favour of Resolution 4.

6. RESOLUTION 5 – APPROVAL OF ISSUE OF OPTIONS TO CONSULTANT

6.1 Background

The Company is concerned to preserve its cash resources with a view to ensuring it is able to continue the exploration and discovery being carried out on its projects in the Mt Isa district in Queensland.

The Company has resolved to issue 1,000,000 unlisted Options to acquire ordinary shares to a consultant to the Company.

The Option terms are set out in Appendix A, however in summary it is proposed to issue 1,000,000 unlisted Options each exercisable by payment of $0.10 on or before 30 November 2017. ( Consultant Options )

The Company is able to issue the Options the subject of Resolution 5 without prior Shareholder approval out of its 15% annual placement capacity under ASX listing Rule 7.1. However, the Shareholder approval sought under Resolution 5 for the Option issue means that the Company’s 15% placement capacity under listing Rule 7.1 will not be reduced and the Company will retain the flexibility to issue equity securities in the future in accordance with Listing Rule 7.1 without the requirement to obtain prior Shareholder approval.

6.2 Technical Information required by Listing Rule 7.5

Listing Rule 7.5 requires that the following information be provided to shareholders for the purpose of obtaining shareholder approval for Resolution 5 pursuant to Listing Rule 7.4:

• (a) the total number of Consultant Options to be issued is 1,000,000;

• (b) The Consultant Options will be issued to Mr Ziggy Lubieniecki or his nominee;

• (c) the unlisted Options will issued for nil cash consideration and are exercisable by payment of 10 cents on or before 30 November 2017;

• (d) the consultant is not a related party of the Company;

• (e) The Options were issued as an incentive. No funds were raised from the issue as the Options were issued for nil in cash consideration.

The Chairman intends to vote all available proxies in favour of Resolution 5.

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7. DEFINITIONS

In this Notice and Explanatory Memorandum:

“10% Placement Facility” has the meaning given to it in Section 5.1;

“10% Placement Period” has the meaning given to it in Section 5.2(f);

“ASIC” means the Australian Securities and Investments Commission;

“ASX” means ASX Limited ACN 008 624 691;

“Board” means the board of Directors;

“Business Day” has the meaning given to it in the Listing Rules;

“Chairman” means the chairman of the Board;

“Company” means Hammer Metals Limited (ACN 095 092 158);

“Constitution” means the constitution of the Company;

“Consultant Issue” has the meaning contemplated by Section 6.1;

“Corporations Act” means the Corporations Act 2001 (Cth);

“Director” means a director of the Company;

“Equity Securities” has the same meaning as in the Listing Rules;

“Explanatory Memorandum” means this Explanatory Memorandum;

“Listing Rules” means the official listing rules of the ASX;

“Notice” and “Notice of Meeting” means the notice of meeting to which this Explanatory Memorandum is attached;

“Official List” means the official list of ASX;

“Option” means an option to acquire one Share and “Optionholder” has a corresponding meaning;

“Placement” has the meaning contemplated by Section 6.1;

“Resolution” means a resolution set out in this Notice;

“Schedule” means a schedule to this Notice and Explanatory Memorandum;

“Section” means a section of this Explanatory Memorandum;

“Share” means an ordinary fully paid ordinary share in the capital of the Company and “Shareholder” has a corresponding meaning;

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

“VWAP” has the meaning ascribed to the term “volume weighted average market price” in the Listing Rules;

“WST” means Western Standard Time.

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SCHEDULE A – TERMS AND CONDITIONS OF 10 CENT CONSULTANT OPTIONS

A summary of the terms and conditions of the 10 Cent Consultant Options the subject of Resolution 5 are set out below ( “Options” ):

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

• (a) Each Option entitles the holder to subscribe for and be allotted one Share at an exercise price of $0.10.

• (b) The Options are exercisable at any time prior to 5.00 pm WST time on 30 November 2017 by notice in writing to the Company accompanied by payment of the exercise price.

• (c) Subject to the Corporations Act, the Listing Rules and the Company's Constitution, the Options are freely transferable.

• (d) Shares will be allotted and issued pursuant to the exercise of Options following receipt of a properly executed notice of exercise of the Options and payment of the requisite application monies.

• (e) Shares issued upon exercise of the Options will rank equally in all respects with the other quoted Shares then on issue. The Company will apply for official quotation by ASX of all Shares issued upon exercise of the Options, subject to the requirements of the Listing Rules.

• (f) There are no participating rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered or made to Shareholders during the currency of the Options. However, the Company will ensure that for the purposes for determining entitlements to any such issue, the record date will be the date as is prescribed by the Listing Rules. This will give optionholders the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue.

• (g) In the event of any new or bonus issues, there are no rights to a change in the exercise price or the number of underlying securities over which the Options can be exercised.

• (h) In the event of any re-organisation (including a consolidation, sub-division, reduction or return) of the issued capital of the Company on or prior to the expiry date, the rights of the optionholder will be changed to the extent necessary to comply with the applicable Listing Rules at the time of re-organisation.

• (i) The Company will as required by the Listing Rules send notice to the optionholders stating the name of the optionholder, the number of the Options held and the number of Shares to be issued on exercise of the Options, the exercise price, the due date for payment, and the consequence of non-payment.

HAMMER METALS LIMITED ACN 095 092 158 PROXY FORM

The Secretary Hammer Metals Limited Suite 8, 7 The Esplanade, Mount Pleasant, WA 6153

Fax Number: +61 8 9315 5475

I/We

of

being a shareholder/(s) of Hammer Metals Limited hereby appoint _____

of or failing him/her _____________ of

or failing him/her the Chairman as my/our proxy to vote for me/us and on my/our behalf at the General Meeting of the Company to be held at Suite 8, 7 The Esplanade, Mt Pleasant, Western Australia at 9.30am (WST) on Friday, 20 November 2015, and at any adjournment thereof in respect of [ ]% of my/our shares or, failing any number being specified, ALL of my/our shares in the Company. If two proxies are appointed, the proportion of voting rights this proxy is authorised to exercise is [ ]%. (An additional proxy form will be supplied by the Company on request.)

If you wish to indicate how your proxy is to vote, please tick the appropriate places below. If no indication is given on a Resolution, the proxy may abstain or vote at his or her discretion.

I/we direct my/our proxy to vote as indicated below:

			FOR	AGAINST	ABSTAIN
Resolution	1	Adoption of the Remuneration Report	□	□	□
Resolution	2	Re-election of Mr Simon Bodensteiner as a Director	□	□	□
Resolution	3	Re-election of Mr Alexander Hewlett as a Director	□	□	□
Resolution	4	Approval of 10% Placement Facility	□	□	□
Resolution	5	Approval of issue of Options to Consultant	□	□	□

Proxies given by a natural person must be signed by each appointing shareholder or the shareholder's attorney duly authorised in writing. Proxies given by companies must be executed in accordance with section 127 of the Corporations Act or signed by the appointor's attorney duly authorised in writing.

THE CHAIRMAN INTENDS TO VOTE ALL UNDIRECTED PROXIES IN FAVOUR OF EACH RESOLUTION EVEN IF THAT RESOLUTION IS CONNECTED DIRECTLY OR INDIRECTLY WITH THE REMUNERATION OF A MEMBER OF KEY MANAGEMENT PERSONNEL.

As witness my/our hand/s this day of 2015

If a natural person: SIGNED by:

Signature

Signature (if joint holder)

If a company: Executed in accordance with section 127 of the Corporations Act

Signature of Director

Signature of Director / Secretary

HAMMER METALS LIMITED ACN 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.

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

3. 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:

4. 2 directors of the company;

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

6. 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.

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

4. (a) by post or hand delivery to Hammer Metals Limited C/- Suite 8, 7 The Esplanade

   • Mt Pleasant

   • Western Australia, 6153;

5. (b) by facsimile to the Company on facsimile number (61 8) 9315 5475, so that it is received not later than 9:30 am (WST) on 18 November 2015.

Proxy forms received later than this time will be invalid .