AUGUSTUS MINERALS LIMITED (TO BE RENAMED HASTINGS RARE METALS LIMITED) ACN 122 911 399

NOTICE OF GENERAL MEETING

TIME: 10.00am (WST)

DATE: 4 March 2011

PLACE: Suite 9, 1200 Hay Street West Perth WA 6005

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

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on (+61 8) 6460 4960.

CONTENTS PAGE
Notice of General Meeting (setting out the proposed resolutions)	3
Explanatory Statement (explaining the proposed resolutions)	7
Glossary	25
Schedule 1 – Terms and conditions of A Class Performance Shares	28
Schedule 2 – Terms and conditions of B Class Performance Shares	30
Schedule 3 – Terms and conditions of A Class Performance Options	32
Schedule 4 – Terms and conditions of B Class Performance Options	34
Schedule 5 – Terms and conditions of Placement Options	36
Schedule 6 – Terms and conditions of Consultant Options	38
Schedule 7 – Terms and conditions of Director Options	40
Schedule 8 – Valuation of Director Options	42
Proxy Form
Annexure A – Notices of candidature of proposed directors	Attachment
Annexure B – Independent Expert's Report	Attachment

TIME AND PLACE OF MEETING AND HOW TO VOTE

VENUE

The general meeting of the Shareholders to which this Notice of Meeting relates will be held at 10.00am (WST) on 4 March 2011 at:

Suite 9, 1200 Hay Street West Perth WA 6005

YOUR VOTE IS IMPORTANT

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

VOTING IN PERSON

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

VOTING BY PROXY

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

NOTICE OF GENERAL MEETING

Notice is given that the general meeting of Shareholders will be held at 10.00am (WST) on 4 March 2011 at Suite 9, 1200 Hay Street, West Perth, Western Australia.

The Explanatory Statement provides additional information on matters to be considered at the 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 General Meeting are those who are registered Shareholders of the Company at 7.00pm (Sydney time) on 2 March 2011.

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

AGENDA

1. RESOLUTION 1 – RATIFICATION OF PRIOR ISSUE – PLACEMENT

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

"That, for the purpose of ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify the allotment and issue of 4,849,093 Shares on the terms and conditions set out in the Explanatory Statement."

Voting Exclusion: The Company will disregard any votes cast on this Resolution by a person who participated in the issue and any of their associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

2. RESOLUTION 2 – CREATION OF NEW CLASS OF SHARES

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

"That, for the purposes of Section 246B of the Corporations Act and clause 2.4 of the Constitution and for all other purposes, the Company is authorised to issue Performance Shares on the terms and conditions set out in the Explanatory Statement."

3. RESOLUTION 3 – ACQUISITION OF HASTINGS RARE METALS PTY LIMITED

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

"That, subject to the passing of Resolutions 2, 4, 5, 7 and 8, for the purpose Item 7 of Section 611 of the Corporations Act and for all other purposes, approval is given for:

(a) the Directors to allot and issue:
(i) 10,500,000 Shares;
(ii) 6,250,000 A Class Performance Shares;
(iii) 6,250,000 B Class Performance Shares;
(iv) 7,500,000 A Class Performance Options; and
(v) 7,500,000 B Class Performance Options,

(together the Consideration Securities); and

(b) the potential acquisition of a relevant interest in the issued voting shares of the Company by the Vendor and the Relevant Interest Party in excess of the threshold prescribed by Section 606(1) of the Corporations Act by virtue of the issue of the Shares and the potential conversion of the Performance Shares and exercise of Performance Options,
on the terms and conditions set out in the Explanatory Statement."

Independent Expert's Report: Shareholders should carefully consider the Independent Expert's Report prepared by HLB Mann Judd for the purposes of the Shareholder approval required under Item 7 of Section 611 of the Corporations Act. The Independent Expert's Report comments on the fairness and reasonableness of the transaction to the nonassociated Shareholders. The Independent Expert has determined the issue of the Consideration Securities to the Vendor is fair and reasonable to the non-associated Shareholders.

Voting Exclusion: Under Item 7 of Section 611 of the Corporations Act, no votes may be cast in favour of the resolution by:

(a) the person proposing to make the acquisition and their associates; or
(b) the persons (if any) from whom the acquisition is to be made and their associates.

Accordingly, the Company will disregard any votes cast on this Resolution by the Vendor and any of its associates.

4. RESOLUTION 4 – ISSUE OF SHARES – CORPORATE ADVISORY SERVICES

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

"That, for the purpose of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Directors to allot and issue 2,000,000 Shares on the terms and conditions set out in the Explanatory Statement."

Voting Exclusion: The Company will disregard any votes cast on this Resolution by any person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, and any associates of those persons. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

5. RESOLUTION 5 – OPTION PLACEMENT

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

"That, for the purpose of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Directors to allot and issue 22,500,000 Placement Options on the terms and conditions set out in the Explanatory Statement."

6. RESOLUTION 6 – ELECTION OF DIRECTOR – JAMES ROBINSON

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

"That, subject to settlement of the Acquisition occurring, for the purpose of clause 13.3 of the Constitution and for all other purposes, approval is given for the election of James Robinson as a director of the Company effective from the date of settlement of the Acquisition."

7. RESOLUTION 7 – ELECTION OF DIRECTOR – DAVID NOLAN

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

"That, subject to settlement of the Acquisition occurring, for the purpose of clause 13.3 of the Constitution and for all other purposes, approval is given for the election of David Nolan as a director of the Company effective from the date of settlement of the Acquisition."

8. RESOLUTION 8 – CHANGE OF COMPANY NAME

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

"That, subject to the passing of Resolutions 2, 3, 4, 5 and 7, pursuant to Section 157(1) of the Corporations Act and for all other purposes, the name of the Company be changed to Hastings Rare Metals Limited."

9. RESOLUTION 9 – ISSUE OF CONSULTANT OPTIONS

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

"That, for the purpose of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Directors to allot and issue up to 5,000,000 Consultant Options on the terms and conditions set out in the Explanatory Statement."

10. RESOLUTION 10 – ISSUE OF DIRECTOR OPTIONS – MATHEW WALKER

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

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

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Mathew Walker (or his nominee) or any of his associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

11. RESOLUTION 11 – ISSUE OF DIRECTOR OPTIONS – JAMES ROBINSON

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

"That, for the purposes of Section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, approval is given for the Directors to allot and issue 2,000,000 Director Options to James Robinson (or his nominee) on the terms and conditions set out in the Explanatory Statement."

Voting Exclusion: The Company will disregard any votes cast on this Resolution by James Robinson (or his nominee) or any of his associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

12. RESOLUTION 12 – ISSUE OF DIRECTOR OPTIONS – DAVID NOLAN

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

"That, for the purposes of Section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, approval is given for the Directors to allot and issue 2,000,000 Director Options to David Nolan (or his nominee) on the terms and conditions set out in the Explanatory Statement."

Voting Exclusion: The Company will disregard any votes cast on this Resolution by David Nolan (or his nominee) or any of his associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

DATED: 14 JANUARY 2011

BY ORDER OF THE BOARD

JAMES ROBINSON COMPANY SECRETARY

EXPLANATORY STATEMENT

This Explanatory Statement has been prepared for the information of the Shareholders in connection with the business to be conducted at the General Meeting to be held at 10.00am (WST) on 4 March 2011 at Suite 9, 1200 Hay Street, West Perth, Western Australia.

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

1. BACKGROUND TO THE ACQUISITION

1.1 Details of the Agreement

On 7 December 2010, the Company announced it had entered into a conditional agreement (Agreement) to acquire 100% of the issued capital of Hastings Rare Metals Pty Limited (ACN 139 918 479) (Hastings) from Kongoni Nominees Pty Ltd (ACN 008 899 321) ATF The Shemesian Family Trust (Vendor), being the sole shareholder of Hastings at the time of execution of the Agreement (the Acquisition).

The material terms of the Agreement are as follows:

(a) (Conditions precedent): The Acquisition remains conditional upon the satisfaction or waiver of the following conditions precedent:
(i) Shareholder & Regulatory Approval: the Company has obtained all necessary shareholder and regulatory approvals required by the Corporations Act and the ASX Listing Rules in relation to the Acquisition including but not limited to:
- (A) ASX approval of the terms and conditions of the A Class Performance Shares and B Class Performance Shares;
- (B) approval by the Shareholders for the issue of the Consideration Securities pursuant to Item 7 of Section 611 of the Corporations Act (refer to Resolution 3);
- (C) approval by the Shareholders of the issue of the Placement Options comprising the Option Placement (refer to Resolution 5);
- (D) approval by the Shareholders of the change of name to Hastings Rare Metals Limited (refer to Resolution 8); and
- (E) approval by the Shareholders of the appointment of David Nolan as a director of the Company (refer to Resolution 7).
(ii) Third party consents: the Company obtaining any necessary third party consents, waivers and approvals in relation to the transaction contemplated by this agreement, including but not limited to, the novation of any material contract of Hastings or the consent to the change of control of the Hastings;
(iii) Silverwood Project: the Vendor receiving confirmation to its satisfaction (acting reasonably), that the Company has no material existing, future or potential liabilities or claims arising as a consequence of its ownership or rights and obligations in the

Silverwood Project, other than as previously disclosed by the Company to the Vendor;

(iv) Placement: the Placement is completed in accordance with its terms (refer to Resolution 1); and
(v) Option Placement: the Option Placement is completed in accordance with its terms (refer to Resolution 5).

on or before 4 March 2011 or a later date agreed by the parties.

(b) (Consideration): The Company will satisfy the consideration for the Acquisition through the issue of the Consideration Securities (refer to Resolution 3) and the payment of a total of \$1,500,000 (comprising \$50,000 on execution of the Agreement, \$700,000 on settlement of the Acquisition, \$500,000 on satisfaction of the milestone related to the A Class Performance Shares and \$250,000 on satisfaction of the milestone related to the B Class Performance Shares). The full terms and conditions of the Performance Shares and Performance Options are set out in Schedules 1 to 4.
(c) (Board composition): The Company agrees to procure the resignation of Garry Ralston and Jon Wild and the appointment of James Robinson and David Nolan as Directors (with David Nolan to also be appointed Chairman), all effective on and from settlement of the Acquisition (refer to Resolutions 6 and 7). In addition, the Company agrees to procure the appointment of two additional directors as nominated by the Vendor on satisfaction of the milestone set out in the terms and conditions of the A Class Performance Shares (or only one additional director in the event a director nominated by the Company has previously resigned).
(d) (Royalty): Hastings is liable to pay a 1% gross profit royalty on all minerals produced and sold from the Tenements (i.e. gross revenue less direct operational costs before tax).
(e) (Minimum expenditure): The Company must spend a minimum of \$1,500,000 on exploration and development on the Tenements within 24 months from settlement of the Acquisition.
(f) (Relinquishment): In the event that the Company fails to satisfy the minimum expenditure requirement the Vendor has a right to acquire (or appoint a nominee to acquire) 100% of the issued capital of Hastings (or the Tenements directly) for a total purchase price of \$1.
(g) (Warranties): The Agreement contains standard warranties and representations on behalf of the Vendor typical for an agreement of this nature.
(h) (Other): The Agreement otherwise contains terms and conditions typical for an agreement of this nature.

1.2 Details of Hastings

Hastings has a direct interest in ten granted prospecting licences located in the East Kimberley region of Western Australia covering approximately 1,990 hectares prospective for rare metals and rare earth elements (Tenements).

The Tenements contain a JORC Code compliant resource of 22.08 Mt ((0.79% ZrO2, 0.31% Nb2O5, 0.023% Ta2O5, 0.10% Y2O3) comprising 8.83 Mt in the indicated category and 13.25 Mt in the inferred category.

For further information in relation to the Tenements, refer to the Independent Technical Report prepared by Zephyr Consulting Group Pty Ltd and included as Appendix 3 to the Independent Expert's Report.

1.3 Proforma capital structure

The capital structure of the Company following settlement of the Acquisition and the issue of issues of Shares and Options contemplated by this Notice is set out below:

	Number
Shares on issue as at the date of this Notice	46,000,000
Shares to be issued pursuant to the Acquisition (Resolution 3)	10,500,000
Shares to be issued pursuant to Resolution 4	2,000,000
Total Shares on settlement of the Acquisition	58,500,000

Performance Shares

	Number
Performance Shares on issue as at the date of this Notice	NIL
A Class Performance Shares1 to be issued pursuant to Resolution 3	6,250,000
B Class Performance Shares2 to be issued pursuant to Resolution 3	6,250,000
Total Performance Shares on settlement of the Acquisition	12,500,000

1 Each A Class Performance Share converts to one Share on satisfaction of the performance hurdle set out in Schedule 1 which also sets out the full terms and conditions.

2 Each B Class Performance Share converts to one Share on satisfaction of the performance hurdle set out in Schedule 2 which also sets out the full terms and conditions.

Options

	Number
Options on issue as at the date of this Notice	NIL
A Class Performance Options1 – to be issued pursuant to Resolution 3 (exercise price \$0.25 / expiry date 3 years from the date of issue)	7,500,000
B Class Performance Options2 – to be issued pursuant to Resolution 3 (exercise price \$0.25 / expiry date 3 years from the date of issue)	7,500,000

Placement Options (listed)3 – to be issued pursuant to Resolution 5 (exercise price \$0.25 / expiry date 31 December 2013)	22,500,000
Consultant Options (unlisted)4 – to be issued pursuant to Resolution 9 (exercise price \$0.40 / expiry date 31 December 2013)	5,000,000
Director Options (unlisted)5 – to be issued pursuant to Resolutions 10 to 12 (exercise price \$0.40 / expiry date 31 December 2013)	10,000,000
Total Options on settlement of the Acquisition	52,500,000

1 Each A Class Performance Option can only be exercised after satisfaction of the performance hurdle set out in Schedule 3 which also sets out the full terms and conditions.

2 Each B Class Performance Option can only be exercised after satisfaction of the performance hurdle set out in Schedule 4 which also sets out the full terms and conditions.

3 Subject to the requirements of the ASX Listing Rules, the Company may apply for quotation of the Placement Options on ASX. The full terms and conditions of the Placement Options are set out in Schedule 5.

4 The full terms and conditions of the Consultant Options are set out in Schedule 6.

5 The full terms and conditions of the Director Options are set out in Schedule 7.

2. RESOLUTION 1 – RATIFICATION OF PRIOR ISSUE – SHARES

2.1 General

On 23 December 2010, the Company issued 4,849,093 Shares at an issue price of \$0.25 per Share to raise \$1,212,273.20 (Placement).

Resolution 1 seeks Shareholder ratification pursuant to ASX Listing Rule 7.4 for the Placement.

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

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

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

2.2 Technical information required by ASX Listing Rule 7.4

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

(a) 4,849,093 Shares were allotted;

(b) the issue price was \$0.25 per Share;
(c) the Shares issued were all fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company's existing Shares;
(d) the Shares were allotted and issued to various sophisticated investor clients, none of whom were a related party of the Company; and
(e) the funds raised from this issue are and will be used for working capital.

3. RESOLUTION 2 – CREATION OF NEW CLASS OF SHARES

Resolution 2 seeks Shareholder approval for the Company to be authorised to issue Performance Shares.

A company with a single class of shares on issue which proposes to issue new shares not having the same rights as its existing shares, is taken to vary the rights of existing shareholders unless the Constitution already provides for such an issue.

Section 246B of the Corporations Act, and clause 2.4 of the Constitution provides that the rights attaching to a class of shares cannot be varied without:

(a) a special resolution passed at a meeting of the holders of the issued shares of the affected class; or
(b) the written consent of the holders of 75% of the votes of the affected class.

Pursuant to the Agreement, the Company proposes issuing (amongst other securities) 6,250,000 A Class Performance Shares and 6,250,000 B Class Performance Shares (the terms and conditions of which are set out in Schedules 1 and 2 respectively) (together the Performance Shares) in part consideration for the Acquisition.

The purpose of the issue of the Performance Shares is to link part of the consideration to a milestone event. If the milestone is not achieved within the prescribed timeframe, the Company will redeem the relevant Performance Shares.

The Company currently has only one class of shares on issue being fully paid ordinary shares (Shares). The terms of the Performance Shares are not the same as the Shares. Accordingly, the Company seeks approval from Shareholders for the issue of the Performance Shares.

The terms of the Performance Shares have been approved by ASX.

4. RESOLUTION 3 – ACQUISITION OF HASTINGS RARE METALS PTY LIMITED

4.1 General

As outlined in Section 1.1, the Company has entered into the Agreement pursuant to which the Company will, amongst other things and subject to Shareholder approval, allot and issue the Consideration Securities to the Vendor in consideration for the Acquisition.

Resolution 3 seeks Shareholder approval for the allotment and issue of the Consideration Securities to the Vendor as well as the acquisition of a relevant interest in the issued voting shares of the Company by the Vendor and the Relevant Interest Party in excess of the threshold prescribed by Section 606(1) of the Corporations Act by virtue of the issue of the Shares and the potential conversion of the Performance Shares and exercise of the Performance Options (and in respect of the Relevant Interest Party only the potential exercise of the Placement Options issued to Carlow Castle Pty Ltd pursuant to Resolution 5).

Approval pursuant to ASX Listing Rule 7.1 is not required for the issue of the Consideration Securities proposed by Resolution 3 as approval is being obtained under Item 7 of Section 611 of the Corporations Act. Accordingly, the issue of Consideration Securities to the Vendor will not be included in the 15% calculation of the Company's annual placement capacity pursuant to ASX Listing Rule 7.1.

The Corporations Act and ASIC Regulatory Guide 74 set out a number of regulatory requirements which must be satisfied. These are summarised below.

4.2 Item 7 of Section 611 of the Corporations Act

Pursuant to Section 606(1) of the Corporations Act, a person must not acquire a relevant interest in issued voting shares in a listed company if the person acquiring the interest does so through a transaction in relation to securities entered into by or on behalf of the person and because of the transaction, that person's or someone else's voting power in the company increases:

(a) from 20% or below to more than 20%; or
(b) from a starting point that is above 20% and below 90%.

The voting power of a person in a body corporate is determined in accordance with Section 610 of the Corporations Act. The calculation of a person's voting power in a company involves determining the voting shares in the company in which the person and the person's associates have a relevant interest.

Associate

Subject to specified exclusions, a person (second person) will be an "associate" of the other person (first person) if:

(a) the first person is a body corporate and the second person is:
(i) a body corporate the first person controls;
(ii) a body corporate that controls the first person; or
(iii) a body corporate that is controlled by an entity that controls the first person; or
(b) the second person has entered or proposed to enter in a relevant agreement with the first person for the purpose of controlling or influencing the composition of the Company's board or the conduct of the Company's affairs; or
(c) the second person is a person with whom the first person is acting or proposed to act, in concert in relation to the Company's affairs; or
(d) the first person is a body corporate and the second person is:
(iv) a director or secretary of the body; or
(v) a related body corporate; or

(vi) a director or secretary of a related body corporate.

An entity controls another entity if it has the capacity to determine the outcome of decisions about that other entity's financial and operating policies.

Relevant interest

Pursuant to Section 608(1) of the Corporations Act, a person has a "relevant interest" in securities if they:

(a) are the holder of the securities;
(b) have the power to exercise, or control the exercise of, a right to vote attached to the securities; or
(c) have power to dispose of, or control the exercise of a power to dispose of, the securities.

It does not matter how remote the relevant interest is or how it arises. If two or more people can jointly exercise one of these powers, each of them is taken to have that power.

Pursuant to Section 608(3) of the Corporations Act, a person is deemed to have a "relevant interest" in securities that a company has if their voting power in the company is above 20% or they control the company.

Relevant Interest Party

Richard Shemesian (the Relevant Interest Party) is considered to be an associate of the Vendor or have a relevant interest in the securities of the Vendor by virtue of holding 100% of the voting rights in the Vendor.

No other parties are considered to be associates of the Vendor or have a relevant interest in the securities of the Vendor.

The Relevant Interest Party does not have a relevant interest in any securities of the Company as at the date of this Notice. However, the Relevant Interest Party will have a relevant interest in the Placement Options to be issued to Carlow Castle Pty Limited trading as Greenhill Capital Partners pursuant to Resolution 5 by virtue of holding 100% of the voting rights in Carlow Castle Pty Limited.

Acquisition in excess of threshold

At settlement of the Acquisition, the Vendor will be issued with the Consideration Securities. Subject to the conversion of the Performance Shares and exercise of the Performance Options this will result in the Vendor and Relevant Interest Party acquiring a relevant interest in the issued voting shares of the Company of greater than 20% (assuming no other Shares are issued (except as contemplated by Resolution 4) and no Options are exercised). This acquisition is in excess of the threshold prescribed by Section 606(1) of the Corporations Act.

In addition, in respect of the Relevant Interest Party only, the potential exercise of the Placement Options issued to Carlow Castle Pty Ltd pursuant to Resolution 5 will result in the Relevant Interest Party acquiring a relevant interest in the issued voting shares of the Company further in excess of the threshold prescribed by Section 606(1) of the Corporations Act.

Item 7 of Section 611 of the Corporations Act provides an exception to the prohibition in Section 606(1) of the Corporations Act, whereby a person may acquire a relevant interest in a company's voting shares with the approval of the shareholders of that company.

Accordingly, the Company seeks Shareholder approval under Item 7 of Section 611 of the Corporations Act for the issue of the Consideration Securities to the Vendor as well as the acquisition of a relevant interest in the issued voting shares of the Company by the Vendor and the Relevant Interest Party in excess of the threshold prescribed by Section 606(1) of the Corporations Act by virtue of the issue of the Shares and the potential conversion of the Performance Shares and exercise of the Performance Options (and in respect of the Relevant Interest Party only the potential exercise of the Placement Options issued to Carlow Castle Pty Ltd pursuant to Resolution 5).

4.3 Specific information required by Item 7 of Section 611 of the Corporations Act & ASIC Regulatory Guide 74

The following information is required to be provided to Shareholders under ASIC Regulatory Guide 74 and the Corporations Act in respect of obtaining approval pursuant to Item 7 of Section 611 of the Corporations Act.

The identity of the acquirer and their associates and any person who will have a relevant interest in the Shares to be acquired

The acquirer is the Vendor.

Details of the associates of the Vendor are set out in Section 4.2.

Details of the persons who will have a relevant interest in the Shares to be acquired by the Vendor are also set out in Section 4.2.

Full particulars (including the number and percentage) of the Shares to which the Vendor is or will be entitled immediately before and after the Acquisition AND the maximum extent of the increase in the Vendor's voting power in the Company (including their associates) as a result of the Acquisition.

As at the date of this Notice, neither the Vendor nor the Relevant Interest Party has a relevant interest in any securities of the Company. Although, the Relevant Interest Party will have a relevant interest in the Placement Options to be issued to Carlow Castle Pty Limited trading as Greenhill Capital Partners pursuant to Resolution 5.

Event	Vendor (and its associates)	Relevant Interest Party (and its associates)
The date of this Notice	Shares held – 0	Shares held – 0
(Total Shares = 46,000,000)	Voting Power – (0.00%)	Voting Power – (0.00%)
Settlement of the Acquisition1	Shares held – 10,500,000	Shares held – 10,500,000
(Total Shares = 58,500,000)	Voting Power – (17.95%)	Voting Power – (17.95%)
Conversion of the Performance Shares and exercise of the Performance Options2 (Total Shares = 86,000,000)	Shares held – 38,000,000 Voting Power – (44.19%)	Shares held – 38,000,000 Voting Power – (44.19%)

Exercise of Placement Options issued to Carlow Castle Pty Ltd only pursuant to Resolution 53 (Total Shares = 96,000,000)	Shares held – 38,000,000 Voting Power – (39.58%)	Shares held – 48,000,000 Voting Power – (50.00%)
On a fully diluted basis4	Shares held – 38,000,000	Shares held – 48,000,000
(Total Shares = 123,500,000)	Voting Power – (30.77%)	Voting Power – (38.87%)

1 Assuming no other Shares are issued (except as contemplated by Resolution 4) and no Options are exercised.

2 Assuming no further Shares are issued and no other Options are exercised after the date of the Meeting.

3 Assuming no further Shares are issued and only those Options issued to Carlow Castle Pty Ltd only pursuant to Resolution 5 are exercised after the date of the Meeting.

4 Assuming no further Shares are issued and only those Options issued pursuant to the Resolutions are exercised after the date of the Meeting.

The identity, associations (with the Vendor and any of its associates) and qualifications of any person who it is intended will become a Director if Shareholders approve the Acquisition.

As outlined in Section 1.1(c), the Company has agreed to procure the resignation of Garry Ralston and Jon Wild and the appointment of James Robinson and David Nolan as Directors, all effective on and from settlement of the Acquisition.

James Robinson is the current company secretary for the Company.

The appointment of David Nolan is as a professional advisor and representative of the Vendor.

The appointment of James Robinson and David Nolan is the subject of Resolutions 6 and 7 respectively and further information is set out in Section 7.

In addition, the Company agrees to procure the appointment of two additional directors as nominated by the Vendor on satisfaction of the milestone set out in the terms and conditions of the A Class Performance Shares (or only one additional director in the event a director nominated by the Company has previously resigned).

The identity of the additional directors is not known at the date of this Notice.

A statement of the Vendor's intentions regarding the future of the Company if Shareholders agree to the Acquisition.

Other than as disclosed elsewhere in this Explanatory Statement, at the date of this Notice the Company understands that the Vendor does not intend to:

(a) make any significant changes to the business of the Company;
(b) inject further capital into the Company;
(c) make any changes to the future employment of the present employees of the Company;
(d) any property will be transferred between the Company and the Vendor or any person associated with any of them;
(e) otherwise redeploy the fixed assets of the Company; and
(f) change significantly the financial or dividend policies of the Company.

Further details of the Acquisition are set out throughout this Explanatory Statement. Shareholders are also referred to the Independent Expert's Report set out in Annexure B.

4.4 Assessment of the Acquisition

Advantages

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

(a) the opportunity to diversify and expand the current exploration focus of the Company to include rare metals;
(b) the Agreement required the Company to conduct a placement of Shares to raise approximately \$1.2mn before costs (which was completed in December 2010 and is the subject of Resolution1);
(c) the potential increase in market capitalisation of the Company following settlement of the Acquisition may lead to increased coverage from investment analysts, access to improved equity capital market opportunities and increased liquidity which are not currently present;
(d) the Tenements contain an existing JORC Code compliant resource and there is opportunity for more upside in terms of another drilling program;
(e) the absence of alternative projects; and
(f) since the date of the announcement of the Acquisition up to the date of this Notice, the Shares have traded between 27 to 38 cents, which supports the market's assessment of the value of the Tenements.

Disadvantages

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

(a) current Shareholders will have their interests in the Company diluted by the Acquisition;
(b) there is no guarantee that:
(i) exploration on the Tenements by the Company will result in the discovery of a larger JORC Code compliant resource than already exists;
(ii) the existing JORC Code compliant resource is accurate as it is an estimate only which is imprecise and depends to some extent on interpretations, which may prove to be inaccurate; and
(iii) the existing JORC Code compliant resource can be economically exploited; and

(c) current Shareholders may only want exposure to the Company's existing assets and the Acquisition will result in unwanted diversification of the Company's asset portfolio.

4.5 Recommendations of Directors

The Directors do not have any personal interests in the outcome of Resolution 3 and recommend that Shareholders vote in favour of the Resolution as they consider the proposed issue of Consideration Securities to the Vendor to be in the best interests of Shareholders for the following reasons:

(a) after assessment of the advantages and disadvantages referred to in Section 4.4 the Directors are of the view that the advantages outweigh the disadvantages; and
(b) the Independent Expert has determined the issue of Consideration Securities to the Vendor to be fair and reasonable to the non-associated Shareholders.

4.6 Independent Expert's Report

The Independent Expert's Report prepared by HLB Mann Judd sets out a detailed examination of the proposed Acquisition to enable non-associated Shareholders to assess the merits and decide whether to approve the issue of Consideration Securities to the Vendor.

To the extent that it is appropriate, the Independent Expert's Report sets out further information with respect to the Acquisition and concludes that the issue of Consideration Securities to the Vendor is fair and reasonable to the non-associated Shareholders.

Shareholders are urged to carefully read the Independent Expert's Report set out in Annexure B to understand its scope, the methodology of the valuation and the sources of information and assumptions made.

5. RESOLUTION 4 – ISSUE OF SHARES – CORPORATE ADVISORY SERVICES

5.1 General

Resolution 4 seeks Shareholder approval for the allotment and issue of a total of 2,000,000 Shares to an advisor in consideration for their services in facilitating the Acquisition (Advisor Placement).

A summary of ASX Listing Rule 7.1 is set out in Section 2.1 above.

The effect of Resolution 4 will be to allow the Directors to issue the Shares pursuant to the Advisor Placement during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company's 15% annual placement capacity.

5.2 Technical information required by ASX Listing Rule 7.1

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

(a) the maximum number of Shares to be issued is 2,000,000;

(b) the Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that allotment will occur on the same date;
(c) the Shares will be issued for nil cash consideration;
(d) the Shares will be allotted and issued to Berwick Capital Limited (or its nominees), who is not a related party of the Company;
(e) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company's existing Shares; and
(f) no funds will be raised from the Advisor Placement as the issue is being made in consideration for services by an advisor in facilitating the Acquisition.

6. RESOLUTION 5 – OPTION PLACEMENT

6.1 General

As outlined in Section 1.1, the Agreement is conditional upon the Company completing the placement of 22,500,000 Placement Options at 0.1 cents per Placement Option (Option Placement).

Resolution 5 seeks Shareholder approval for the allotment and issue of the Placement Options comprising the Option Placement.

A summary of ASX Listing Rule 7.1 is set out in Section 6.1 above.

The effect of Resolution 5 will be to allow the Directors to issue the Options pursuant to the Option Placement during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company's 15% annual placement capacity.

6.2 Technical information required by ASX Listing Rule 7.1

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

(a) the maximum number of Placement Options to be issued is 22,500,000;
(b) the Placement Options will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that allotment will occur on the same date;
(c) the issue price will be 0.1 cents per Placement Option;
(d) the Placement Options will be allotted and issued to:
(i) 10,000,000 to Carlow Castle Pty Limited trading as Greenhill Capital Partners (or its nominees); and
(ii) 12,500,000 to Risely Resources Pty Ltd (or its nominees);

neither of whom are a related party of the Company;

(e) the Placement Options will be issued on the terms and conditions set out in Schedule 5; and
(f) the Company intends to use the funds raised from the Option Placement towards working capital.

7. RESOLUTIONS 6 AND 7 – ELECTION OF DIRECTORS

7.1 Background

As outlined in Section 1.1(c), the Company has agreed to procure the resignation of Garry Ralston and Jon Wild and the appointment of James Robinson and David Nolan as Directors (with David Nolan to also be appointed Chairman), all effective on and from settlement of the Acquisition.

James Robinson is the current company secretary for the Company.

The appointment of David Nolan is as a representative of the Vendor.

The identity of the additional directors is not known at the date of this Notice and their appointment will be made at the appropriate time in the future.

7.2 Constitution requirements

Clause 13.3 of the Constitution provides for the Company to elect a person as a director of the Company by resolution passed in general meeting.

No person other than a Director seeking re-election shall be eligible for election to the office of Director at any general meeting unless the person or some Shareholder intending to propose his or her nomination has, at least 30 Business Days before the meeting, left at the registered office of the Company a notice in writing duly signed by the nominee giving his or her consent to the nomination and signifying his or her candidature for the office or the intention of the Shareholder to propose the person.

A copy of the respective notices of candidature for James Robinson and David Nolan are enclosed at Annexure A.

A director elected at a general meeting is taken to have been elected with effect immediately after the end of that general meeting unless the resolution by which the director was appointed or elected specifies a different time.

Resolutions 6 and 7 seek the election of James Robinson and David Nolan respectively as a director of the Company with effect from the date of settlement of the Acquisition.

7.3 Background and qualifications

The background and qualifications of each proposed director is set out below.

James Robinson

Mr Robinson gained extensive capital markets experience during 10 years with one of Western Australia's leading corporate advisory and stockbroking firms. He currently serves as Company Secretary of Tango Petroleum Limited (ASX: TNP) and is also a Director of corporate advisory firm Cicero Corporate Services. He is a member of the Australian Institute of Company Directors and holds a Bachelor of Economics from the University of Western Australia.

David Nolan

Mr Nolan is a corporate lawyer with over 13 years experience advising on corporate acquisitions, capital raisings and financing for mining companies. Mr Nolan is a partner in the Sydney corporate advisory practice of Mills Oakley Lawyers and was previously a senior adviser at the London Stock Exchange. Mr Nolan holds a Bachelor of Laws (Hons) and Bachelor of Arts from Bond University in Queensland.

8. RESOLUTION 8 – CHANGE OF COMPANY NAME

Section 157(1) of the Corporations Act provides that a company may change its name if the company passes a special resolution adopting a new name.

Resolution 8 seeks the approval of Shareholders to the adoption of Hastings Rare Metals Limited as the new name for the Company.

If Resolution 8 is passed, the Company will lodge a copy of the special resolution with ASIC following the Meeting in order to effect the change and the change of name will take effect when ASIC alters the details of the Company's registration.

The Board proposes this change of name on the basis that it more accurately reflects the proposed future operations of the Company.

9. RESOLUTION 9 – ISSUE OF CONSULTANT OPTIONS

9.1 General

Resolution 9 seeks Shareholder approval for the allotment and issue of up to 5,000,000 Consultant Options to consultants to be engaged by the Company in consideration for providing advisory services in relation to the Tenements (Consultant Issue).

A summary of ASX Listing Rule 7.1 is set out in Section 2.1 above.

The effect of Resolution 9 will be to allow the Directors to issue the Consultant Options pursuant to the Consultant Issue during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company's 15% annual placement capacity.

9.2 Technical information required by ASX Listing Rule 7.1

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

(a) the maximum number of Consultant Options to be granted is 5,000,000;
(b) the Consultant Options will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that allotment will occur on the same date;
(c) the Consultant Options will be issued for nil cash consideration;
(d) the Consultant Options will be allotted and issued to consultants to be engaged by the Company to provide advisory services in relation to the Tenements. As at the date of this Notice, no consultants have been identified by the Company, however, no Consultant Options will be issued to a related party of the Company;
(e) the Consultant Options will be issued on the terms and conditions set out in Schedule 6; and
(f) no funds will be raised from the Consultant Issue as the Consultant Options are being issued in consideration for advisory services in relation to the Tenements to be provided by consultants to be engaged by the Company.

10. RESOLUTIONS 10 TO 12 – ISSUE OF DIRECTOR OPTIONS

10.1 General

The Company has agreed, subject to obtaining Shareholder approval, to allot and issue a total of 10,000,000 Director Options to Mathew Walker, James Robinson and David Nolan (Related Parties) on the terms and conditions set out below.

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

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

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

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

The grant of the Director Options to the Related Parties requires the Company to obtain Shareholder approval because:

(a) the grant of Director Options constitutes giving a financial benefit; and
(b) as Directors or proposed Directors, Mathew Walker, James Robinson and David Nolan are each a related party of the Company.

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

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

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

(a) the related parties the reasons for their classification as a related party of the Company are:
(i) Mathew Walker Director;
(ii) James Robinson proposed Director (refer to Resolution 6); and
(iii) David Nolan proposed Director (refer to Resolution 7); and
(b) the maximum number of Director Options (being the nature of the financial benefit being provided) to be granted to the Related Parties is:
(i) 6,000,000 to Mathew Walker;
(ii) 2,000,000 to James Robinson; and
(iii) 2,000,000 to David Nolan;
(c) the Director Options will be granted to the Related Parties no later than 1 month after the date of the Meeting (or such later date as permitted by any ASX waiver or modification of the ASX Listing Rules) and it is anticipated the Director Options will be issued on one date;
(d) the Director Options will be granted for nil cash consideration, accordingly no funds will be raised;
(e) the terms and conditions of the Director Options are set out in Schedule 7;
(f) the value of the Director Options and the pricing methodology is set out in Schedule 8;
(g) the relevant interests of the Related Parties in securities of the Company as at the date of this Notice are set out below;

Related Party	Shares	Options
Mathew Walker	4,500,000	Nil
James Robinson	850,000	Nil
David Nolan	170,000	Nil

(h) the amounts paid by the Company to the Related Parties, in remuneration and emoluments or otherwise, for the previous financial year and the current financial year to the date of this Notice are set out below:

Related Party	Current Financial Year	Previous Financial Year
Mathew Walker	\$66,000	\$120,000
James Robinson	\$27,500	\$40,000

David Nolan	Nil	Nil
-------------	-----	-----

(i) if the Director Options granted to the Related Parties are exercised, a total of 10,000,000 Shares would be allotted and issued. This will increase the number of Shares on issue from 58,000,000 to 68,000,000 (assuming that no other Options are exercised and no Shares other than those contemplated by the Resolutions of this Notice of Meeting are issued) with the effect that the shareholding of existing Shareholders would be diluted by an aggregate of 14.7%, comprising 8.82% by Mathew Walker, 2.94% by James Robinson and 2.94% by David Nolan.

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

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

	Price	Date
Highest	47.0 cents	22 April 2010
Lowest	15.0 cents	15 September 2010
Last	35.0 cents	13 January 2011

(k) the primary purpose of the grant of Director Options to the Related Parties is to provide cost effective consideration for their ongoing commitment and contribution to the Company in his their respective roles as Directors. The Board does not consider that there are any significant opportunity costs to the Company or benefits foregone by the Company in issuing the Director Options upon the terms proposed;
(l) the Board acknowledges the grant of Director Options to James Robinson and David Nolan is contrary to Recommendation 8.2 of the ASX Corporate Governance Principles and Recommendations. However, the Board considers the grant of Director Options to James Robinson and David Nolan reasonable in the circumstances, given the necessity to attract the highest calibre of professionals to the Company, whilst maintaining the Company's cash reserves;
(m) Mathew Walker declines to make a recommendation to Shareholders in relation to Resolution 10 due to his material personal interest in the outcome of the Resolution. The other Directors, who do not have a material interest in the outcome of Resolution 10, recommend that Shareholders vote in favour of Resolution 10 because, having considered the experience of Mathew Walker, the current market price of Shares and current market practices when determining the number and exercise price of the Director Options to be granted to Mathew Walker, in their view, the grant of the Director Options to Mathew Walker is a reasonable and appropriate method to provide a cost effective market linked incentive package for his ongoing commitment and contribution to the Company in his role as a Director. The Board (other than Mathew Walker) is not aware of any other information that would be reasonably required by

Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass the Resolution; and

(n) The Board recommends that Shareholders vote in favour of Resolutions 11 and 12 because, having considered the respective experience of James Robinson and David Nolan, the current market price of Shares and current market practices when determining the number and exercise price of the Director Options to be granted to each of James Robinson and David Nolan, in their view, the grant of the Director Options to each of James Robinson and David Nolan is a reasonable and appropriate method to provide a cost effective market linked incentive package for their ongoing commitment and contribution to the Company in their proposed roles as Directors. The Board is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass these Resolutions.

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

11. ENQUIRIES

Shareholders are requested to contact the Company Secretary on +61 8 6460 4960 if they have any queries in respect of the matters set out in these documents.

GLOSSARY

\$ means Australian dollars.

A Class Performance Option means an option to acquire a Share with the terms and conditions set out in Schedule 3.

A Class Performance Share means a performance share in the capital of the Company with the terms and conditions set out in Schedule 1.

Acquisition means the acquisition of 100% of the issued capital in Hastings by the Company from the Vendor pursuant to the Agreement.

Advisor Placement means the placement of Shares contemplated by Resolution 4 and as further described in Section 5 of this Explanatory Statement.

Agreement means the agreement between the Company and the Vendor in relation to the Acquisition and as further described in Section 1.1.

ASIC means the Australian Securities and Investments Commission.

ASX means ASX Limited.

ASX Listing Rules means the Listing Rules of ASX.

B Class Performance Option means an option to acquire a Share with the terms and conditions set out in Schedule 4.

B Class Performance Share means a performance share in the capital of the Company with the terms and conditions set out in Schedule 2.

Board means the board of directors of the Company.

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

Company means Augustus Minerals Limited (ACN 122 911 399).

Consideration Securities means the Shares, Performance Shares and Performance Options to be issued at settlement of the Acquisition, being the securities of the Company subject of Resolution 3.

Constitution means the Company's constitution.

Consultant Issue means the placement of Consultant Options contemplated by Resolution 9 and as further described in Section 9 of this Explanatory Statement.

Consultant Option means an option to acquire a Share with the terms and conditions set out in Schedule 6.

Corporations Act means the Corporations Act 2001 (Cth).

Director Option means an option to acquire a Share with the terms and conditions set out in Schedule 7.

Directors means the directors of the Company.

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

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

Independent Expert means HLB Mann Judd Corporate (WA) Pty Ltd (ACN 008 878 555).

Independent Expert's Report means the report prepared by the Independent Expert and annexed to this Notice as Annexure B.

Hastings means Hastings Rare Metals Pty Limited (ACN 139 918 479).

JORC Code means the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.

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

Option means an option to acquire a Share.

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

Option Placement means the placement of Placement Options contemplated by Resolution 5 and as further described in Section 6 of this Explanatory Statement.

Performance Options means the A Class Performance Options and B Class Performance Options or either one as the context requires.

Performance Shares means the A Class Performance Shares and B Class Performance Shares or either one as the context requires.

Placement means the placement of Shares the subject of Resolution 1 and as further described in Section 2 of this Explanatory Statement.

Placement Option means an option to acquire a Share with the terms and conditions set out in Schedule 5.

Proxy Form means the proxy form accompanying the Notice.

Relevant Interest Party means the party deemed to have a relevant interest in the securities that the Vendor has as further described in Section 4.2 of this Explanatory Statement.

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

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

Shareholder means a holder of a Share.

Silverwood Project means the Silverwood Prospect in Louisiana, USA in which the Company will earn a 40% working interest and which is currently undergoing completion operations.

Tenements means the mining tenements owned by Hastings in which the Company will acquire an interest on settlement of the Acquisition and as further described in Section 1.2 of this Explanatory Statement and the Independent Technical Report prepared by Zephyr Consulting Group Pty Ltd and included as Appendix 3 to the Independent Expert's Report.

Vendor means Kongoni Nominees Pty Ltd (ACN 008 899 321) ATF The Shemesian Family Trust, being the sole shareholder of Hastings at the time of execution of the Agreement.

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

SCHEDULE 1 – TERMS AND CONDITIONS OF A CLASS PERFORMANCE SHARES

The terms and conditions of the A Class Performance Shares are as follows:

Rights attaching to the A Class Performance Shares

(a) (A Class Performance Shares) Each A Class Performance Share is a share in the capital of Augustus Minerals Limited ACN 122 911 399 (Company).
(b) (General meetings) The A Class Performance Shares shall confer on the holder (Holder) the right to receive notices of general meetings and financial reports and accounts of the Company that are circulated to holders of fully paid ordinary shares in the capital of the Company (Shareholders). Holders have the right to attend general meetings of Shareholders.
(c) (No voting rights) The A Class Performance Shares do not entitle the Holder to vote on any resolutions proposed at a general meeting of Shareholders.
(d) (No dividend rights) The A Class Performance Shares do not entitle the Holder to any dividends.
(e) (Rights on winding up) The A Class Performance Shares participate in the surplus profits or assets of the Company upon winding up of the Company only to the extent of \$0.000001 per A Class Performance Share.
(f) (Not transferable) The A Class Performance Shares are not transferable.
(g) (Reorganisation of capital) If at any time the issued capital of the Company is reconstructed, all rights of a Holder will be changed to the extent necessary to comply with the applicable ASX Listing Rules at the time of reorganisation.
(h) (Application to ASX) The A Class Performance Shares will not be quoted on ASX. However, upon conversion of the A Class Performance Shares into fully paid ordinary shares (Shares), the Company must within 2 Business Days after the conversion, apply for the official quotation of the Shares arising from the conversion on ASX.
(i) (Participation in entitlements and bonus issues) Holders of A Class Performance Shares will not be entitled to participate in new issues of capital offered to holders of Shares such as bonus issues and entitlement issues.
(j) (No other rights) The A Class Performance Shares give the Holders no rights other than those expressly provided by these terms and those provided at law where such rights at law cannot be excluded by these terms.

Conversion of the A Class Performance Shares

(k) (Conversion on achievement of milestones) Each A Class Performance Share will automatically convert into one Share upon achievement of an Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code) compliant mineral resource in respect of the area comprising the Tenements (defined as those being acquired under the acquisition of Hastings) within 3 years from the date of issue of the A Class Performance Shares of a minimum of 25 million tonnes with a Nb2O5 cut-off grade of 1500ppm (Milestone).
(l) (Redemption if Milestone not achieved) If the Milestone is not achieved by the required date, then the A Class Performance Shares held by a Holder will be

automatically redeemed by the Company for the sum of \$0.000001 within 10 Business Days of non satisfaction of the Milestone.

(m) (Conversion procedure) The Company will issue the Holder with a new holding statement for the Shares within 10 Business Days following the conversion of the A Class Performance Shares into Shares.
(n) (Ranking upon conversion) The Shares into which the A Class Performance Shares may convert will rank pari passu in all respects with existing Shares.

SCHEDULE 2 – TERMS AND CONDITIONS OF B CLASS PERFORMANCE SHARES

The terms and conditions of the B Class Performance Shares are as follows:

Rights attaching to the B Class Performance Shares

(a) (B Class Performance Shares) Each B Class Performance Share is a share in the capital of Augustus Minerals Limited ACN 122 911 399 (Company).
(b) (General meetings) The B Class Performance Shares shall confer on the holder (Holder) the right to receive notices of general meetings and financial reports and accounts of the Company that are circulated to holders of fully paid ordinary shares in the capital of the Company (Shareholders). Holders have the right to attend general meetings of Shareholders.
(c) (No voting rights) The B Class Performance Shares do not entitle the Holder to vote on any resolutions proposed at a general meeting of Shareholders.
(d) (No dividend rights) The B Class Performance Shares do not entitle the Holder to any dividends.
(e) (Rights on winding up) The B Class Performance Shares participate in the surplus profits or assets of the Company upon winding up of the Company only to the extent of \$0.000001 per B Class Performance Share.
(f) (Not transferable) The B Class Performance Shares are not transferable.
(g) (Reorganisation of capital) If at any time the issued capital of the Company is reconstructed, all rights of a Holder will be changed to the extent necessary to comply with the applicable ASX Listing Rules at the time of reorganisation.
(h) (Application to ASX) The B Class Performance Shares will not be quoted on ASX. However, upon conversion of the B Class Performance Shares into fully paid ordinary shares (Shares), the Company must within 2 Business Days after the conversion, apply for the official quotation of the Shares arising from the conversion on ASX.
(i) (Participation in entitlements and bonus issues) Holders of B Class Performance Shares will not be entitled to participate in new issues of capital offered to holders of Shares such as bonus issues and entitlement issues.
(j) (No other rights) The B Class Performance Shares give the Holders no rights other than those expressly provided by these terms and those provided at law where such rights at law cannot be excluded by these terms.

Conversion of the B Class Performance Shares

(k) (Conversion on achievement of milestones) Each B Class Performance Share will automatically convert into one Share upon achievement of an Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code) compliant mineral resource in respect of the area comprising the Tenements (defined as those being acquired under the acquisition of Hastings) within 3 years from the date of issue of the B Class Performance Shares of a minimum of 35 million tonnes with a Nb2O5 cut-off grade of 1500ppm (Milestone).
(l) (Redemption if Milestone not achieved) If the Milestone is not achieved by the required date, then the B Class Performance Shares held by a Holder will be automatically redeemed by the Company for the sum of \$0.000001 within 10 Business Days of non satisfaction of the Milestone.
(m) (Conversion procedure) The Company will issue the Holder with a new holding statement for the Shares within 10 Business Days following the conversion of the B Class Performance Shares into Shares.
(n) (Ranking upon conversion) The Shares into which the B Class Performance Shares may convert will rank pari passu in all respects with existing Shares.

SCHEDULE 3 – TERMS AND CONDITIONS OF A CLASS PERFORMANCE OPTIONS

The A Class Performance Options entitle the holder (Optionholder) to subscribe for Shares on the following terms and conditions:

(a) Subject to (b) and (l), each A Class Performance Option gives the Optionholder the right to subscribe for one Share.
(b) An A Class Performance Option is not capable of being exercised until achievement of a Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code) compliant mineral resource in respect of the area comprising the Tenements within 3 years from the date of issue of the A Class Performance Options of a minimum of 25 million tonnes with a Nb2O5 cut-off grade of 1500ppm. In the event this vesting condition is not satisfied the A Class Performance Option will automatically lapse one day after the final day the condition is capable of being satisfied.
(c) The A Class Performance Options will expire at 5.00pm (WST) on that date which is 3 years after the date of issue of the A Class Performance Options (Expiry Date). Any A Class Performance Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.
(d) The amount payable upon exercise of each A Class Performance Option will be \$0.25 (Exercise Price).
(e) The A Class Performance Options held by each Optionholder may be exercised in whole or in part, and if exercised in part, multiples of 1,000 must be exercised on each occasion.
(f) An Optionholder may exercise their A Class Performance Options by lodging with the Company, before the Expiry Date:
(i) a written notice of exercise of A Class Performance Options specifying the number of A Class Performance Options being exercised; and
(ii) a cheque or electronic funds transfer for the Exercise Price for the number of A Class Performance Options being exercised;
(g) An Exercise Notice is only effective when the Company has received the full amount of the Exercise Price in cleared funds.
(h) Within 2 Business Days of receipt of the Exercise Notice accompanied by the Exercise Price, the Company will allot the number of Shares required under these terms and conditions in respect of the number of A Class Performance Options specified in the Exercise Notice.
(i) The A Class Performance Options are freely transferable.
(j) All Shares allotted upon the exercise of A Class Performance Options will upon allotment rank pari passu in all respects with other Shares.
(k) The Company will not apply for quotation of the A Class Performance Options on ASX. However, the Company will apply for quotation of all Shares allotted pursuant to the exercise of A Class Performance Options on ASX within 2 Business Days after the date of allotment of those Shares.
(l) If at any time the issued capital of the Company is reconstructed, all rights of an Optionholder are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reconstruction.
(m) There are no participating rights or entitlements inherent in the A Class Performance Options and Optionholders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the A Class Performance Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least 6 Business Days after the issue is announced. This will give Optionholders the opportunity to exercise their A Class Performance Options prior to the date for determining entitlements to participate in any such issue.
(n) Subject to (l), an A Class Performance Option does not confer the right to a change in exercise price or a change in the number of underlying securities over which the A Class Performance Option can be exercised.

SCHEDULE 4 – TERMS AND CONDITIONS OF B CLASS PERFORMANCE OPTIONS

The B Class Performance Options entitle the holder (Optionholder) to subscribe for Shares on the following terms and conditions:

(a) Subject to (b) and (l), each B Class Performance Option gives the Optionholder the right to subscribe for one Share.
(b) A B Class Performance Option is not capable of being exercised until achievement of a Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code) compliant mineral resource in respect of the area comprising the Tenements within 3 years from the date of issue of the B Class Performance Options of a minimum of 35 million tonnes with a Nb2O5 cut-off grade of 1500ppm. In the event this vesting condition is not satisfied the B Class Performance Option will automatically lapse one day after the final day the condition is capable of being satisfied.
(c) The B Class Performance Options will expire at 5.00pm (WST) on that date which is 3 years after the date of issue of the B Class Performance Options (Expiry Date). Any B Class Performance Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.
(d) The amount payable upon exercise of each B Class Performance Option will be \$0.25 (Exercise Price).
(e) The B Class Performance Options held by each Optionholder may be exercised in whole or in part, and if exercised in part, multiples of 1,000 must be exercised on each occasion.
(f) An Optionholder may exercise their B Class Performance Options by lodging with the Company, before the Expiry Date:
(i) a written notice of exercise of B Class Performance Options specifying the number of B Class Performance Options being exercised; and
(ii) a cheque or electronic funds transfer for the Exercise Price for the number of B Class Performance Options being exercised;
(g) An Exercise Notice is only effective when the Company has received the full amount of the Exercise Price in cleared funds.
(h) Within 2 Business Days of receipt of the Exercise Notice accompanied by the Exercise Price, the Company will allot the number of Shares required under these terms and conditions in respect of the number of B Class Performance Options specified in the Exercise Notice.
(i) The B Class Performance Options are freely transferable.
(j) All Shares allotted upon the exercise of B Class Performance Options will upon allotment rank pari passu in all respects with other Shares.
(k) The Company will not apply for quotation of the B Class Performance Options on ASX. However, the Company will apply for quotation of all Shares allotted pursuant to the exercise of B Class Performance Options on ASX within 2 Business Days after the date of allotment of those Shares.
(l) If at any time the issued capital of the Company is reconstructed, all rights of an Optionholder are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reconstruction.
(m) There are no participating rights or entitlements inherent in the B Class Performance Options and Optionholders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the B Class Performance Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least 6 Business Days after the issue is announced. This will give Optionholders the opportunity to exercise their B Class Performance Options prior to the date for determining entitlements to participate in any such issue.
(n) Subject to (l), a B Class Performance Option does not confer the right to a change in exercise price or a change in the number of underlying securities over which the B Class Performance Option can be exercised.

SCHEDULE 5 – TERMS AND CONDITIONS OF PLACEMENT OPTIONS

The Placement Options entitle the holder (Optionholder) to subscribe for Shares on the following terms and conditions:

(a) Subject to (k), each Placement Option gives the Optionholder the right to subscribe for one Share.
(b) The Placement Options will expire at 5.00pm (WST) on 31 December 2013 (Expiry Date). Any Placement Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.
(c) The amount payable upon exercise of each Placement Option will be \$0.25 (Exercise Price).
(d) The Placement Options held by each Optionholder may be exercised in whole or in part, and if exercised in part, multiples of 1,000 must be exercised on each occasion.
(e) An Optionholder may exercise their Placement Options by lodging with the Company, before the Expiry Date:
(i) a written notice of exercise of Placement Options specifying the number of Placement Options being exercised; and
(ii) a cheque or electronic funds transfer for the Exercise Price for the number of Placement Options being exercised;
(f) An Exercise Notice is only effective when the Company has received the full amount of the Exercise Price in cleared funds.
(g) Within 2 Business Days of receipt of the Exercise Notice accompanied by the Exercise Price, the Company will allot the number of Shares required under these terms and conditions in respect of the number of Placement Options specified in the Exercise Notice.
(h) The Placement Options are freely transferable.
(i) All Shares allotted upon the exercise of Placement Options will upon allotment rank pari passu in all respects with other Shares.
(j) Subject to the requirements of the ASX Listing Rules, the Company may apply for quotation of the Placement Options on ASX. In any event, the Company will apply for quotation of all Shares allotted pursuant to the exercise of Placement Options on ASX within 2 Business Days after the date of allotment of those Shares.
(k) If at any time the issued capital of the Company is reconstructed, all rights of an Optionholder are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reconstruction.
(l) There are no participating rights or entitlements inherent in the Placement Options and Optionholders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Placement Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least 6 Business Days after the issue is announced. This will give Optionholders the opportunity to exercise their Placement Options prior to the date for determining entitlements to participate in any such issue.

(m) Subject to (k), a Placement Option does not confer the right to a change in exercise price or a change in the number of underlying securities over which the Placement Option can be exercised.

SCHEDULE 6 – TERMS AND CONDITIONS OF CONSULTANT OPTIONS

The Consultant Options entitle the holder (Optionholder) to subscribe for Shares on the following terms and conditions:

(a) Subject to (k), each Consultant Option gives the Optionholder the right to subscribe for one Share.
(b) The Consultant Options will expire at 5.00pm (WST) on 31 December 2013 (Expiry Date). Any Consultant Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.
(c) The amount payable upon exercise of each Consultant Option will be \$0.40 (Exercise Price).
(d) The Consultant Options held by each Optionholder may be exercised in whole or in part, and if exercised in part, multiples of 1,000 must be exercised on each occasion.
(e) An Optionholder may exercise their Consultant Options by lodging with the Company, before the Expiry Date:
(i) a written notice of exercise of Consultant Options specifying the number of Consultant Options being exercised; and
(ii) a cheque or electronic funds transfer for the Exercise Price for the number of Consultant Options being exercised;
(f) An Exercise Notice is only effective when the Company has received the full amount of the Exercise Price in cleared funds.
(g) Within 2 Business Days of receipt of the Exercise Notice accompanied by the Exercise Price, the Company will allot the number of Shares required under these terms and conditions in respect of the number of Consultant Options specified in the Exercise Notice.
(h) The Consultant Options are not transferable except with the prior approval of the board of directors of the Company.
(i) All Shares allotted upon the exercise of Consultant Options will upon allotment rank pari passu in all respects with other Shares.
(j) The Company will not apply for quotation of the Consultant Options on ASX. However, the Company will apply for quotation of all Shares allotted pursuant to the exercise of Consultant Options on ASX within 2 Business Days after the date of allotment of those Shares.
(k) If at any time the issued capital of the Company is reconstructed, all rights of an Optionholder are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reconstruction.
(l) There are no participating rights or entitlements inherent in the Consultant Options and Optionholders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Consultant Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least 6 Business Days after the issue is announced.

This will give Optionholders the opportunity to exercise their Consultant Options prior to the date for determining entitlements to participate in any such issue.

(m) Subject to (k), a Consultant Option does not confer the right to a change in exercise price or a change in the number of underlying securities over which the Consultant Option can be exercised.

SCHEDULE 7 – TERMS AND CONDITIONS OF DIRECTOR OPTIONS

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

(a) Subject to (k), each Director Option gives the Optionholder the right to subscribe for one Share.
(b) The Director Options will expire at 5.00pm (WST) on 31 December 2013 (Expiry Date). Any Director Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.
(c) The amount payable upon exercise of each Director Option will be \$0.40 (Exercise Price).
(d) The Director Options held by each Optionholder may be exercised in whole or in part, and if exercised in part, multiples of 1,000 must be exercised on each occasion.
(e) An Optionholder may exercise their Director Options by lodging with the Company, before the Expiry Date:
(i) a written notice of exercise of Director Options specifying the number of Director Options being exercised; and
(ii) a cheque or electronic funds transfer for the Exercise Price for the number of Director Options being exercised;
(f) An Exercise Notice is only effective when the Company has received the full amount of the Exercise Price in cleared funds.
(g) Within 2 Business Days of receipt of the Exercise Notice accompanied by the Exercise Price, the Company will allot the number of Shares required under these terms and conditions in respect of the number of Director Options specified in the Exercise Notice.
(h) The Director Options are not transferable except with the prior approval of the board of directors of the Company.
(i) All Shares allotted upon the exercise of Director Options will upon allotment rank pari passu in all respects with other Shares.
(j) The Company will not apply for quotation of the Director Options on ASX. However, the Company will apply for quotation of all Shares allotted pursuant to the exercise of Director Options on ASX within 2 Business Days after the date of allotment of those Shares.
(k) If at any time the issued capital of the Company is reconstructed, all rights of an Optionholder are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reconstruction.
(l) There are no participating rights or entitlements inherent in the Director Options and Optionholders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Director Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least 6 Business Days after the issue is announced. This will give

Optionholders the opportunity to exercise their Director Options prior to the date for determining entitlements to participate in any such issue.

(m) Subject to (k), a Director Option does not confer the right to a change in exercise price or a change in the number of underlying securities over which the Director Option can be exercised.

SCHEDULE 8 – VALUATION OF DIRECTOR OPTIONS

The Director Options to be issued to the Related Parties pursuant to Resolutions 10 to 12 have been independently valued.

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

Assumptions:

Valuation date		17 January 2011

Market price of Shares		32 cents

Exercise price		40 cents

Expiry date		31 December 2013

Risk free interest rate		5.00%
Volatility	70%	80%	90%

Indicative value per Director Option	13.8 cents	15.7 cents	17.4 cents

Total Value of Director Options	\$1,382,773.25	\$1,567,555.44	\$1,741,801.91

- Mathew Walker	\$829,663.95	\$980,533.26	\$1,045,081.14
- James Robinson	\$276,554.65	\$313,511.09	\$348,360.38
- David Nolan	\$276,554.65	\$313,511.09	\$348,360.38

Note: The valuation ranges noted above are not necessarily the market prices that the Director Options could be traded at and they are not automatically the market prices for taxation purposes.

PROXY FORM

APPOINTMENT OF PROXY AUGUSTUS MINERALS LIMITED ACN 122 911 399

GENERAL MEETING

I/We
of
Appoint	being a member of Augustus Minerals Limited entitled to attend and vote at the General Meeting, hereby
	Name of proxy
OR	the Chair of the General Meeting as your proxy

or failing the person so named or, if no person is named, the Chair of the General Meeting, or the Chair's nominee, to vote in accordance with the following directions, or, if no directions have been given, as the proxy sees fit, at the General Meeting to be held at 10.00am (WST), on 4 March 2011 at Suite 9, 1200 Hay Street, West Perth, Western Australia, and at any adjournment thereof.

If no directions are given, the Chair will vote in favour of all the Resolutions.

If the Chair of the General Meeting is appointed as your proxy, or may be appointed by default, and you do not wish to direct your proxy how to vote as your proxy in respect of Resolutions 10 to 12 please place a mark in this box.

By marking this box, you acknowledge that the Chair of the General Meeting may exercise your proxy even if he has an interest in the outcome of Resolutions 10 to 12 and that votes cast by the Chair of the General Meeting for Resolutions 10 to 12 other than as proxy holder will be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy how to vote, the Chair will not cast your votes on Resolutions 10 to 12 and your votes will not be counted in calculating the required majority if a poll is called on Resolutions 10 to 12.

OR

Voting on Business of the General Meeting
	FOR	AGAINST	ABSTAIN
Resolution 1 – Ratification of prior issue – Placement
Resolution 2 – New class of securities
Resolution 3 – Acquisition of Hastings Rare Metals Pty Limited
Resolution 4 – Issue of Shares – Corporate Advisory Services
Resolution 5 – Option Placement
Resolution 6 – Election of director – James Robinson
Resolution 7 – Election of director – David Nolan
Resolution 8 – Change of company name
Resolution 9 – Issue of Consultant Options
Resolution 10 – Issue of Director Options – Mathew Walker
Resolution 11 – Issue of Director Options – James Robinson
Resolution 12 – Issue of Director Options – David Nolan

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

If two proxies are being appointed, the proportion of voting rights this proxy represents is	%
Signature of Member(s):		Date: ____
Individual or Member 1	Member 2	Member 3

Sole Director/Company Secretary	Director	Director/Company Secretary

Contact Name: ______________________________________ Contact Ph (daytime): ______________________________

AUGUSTUS MINERALS LIMITED ACN 122 911 399

Instructions for Completing 'Appointment of Proxy' Form

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

3. (Signing Instructions):

(Individual): Where the holding is in one name, the member must sign.
(Joint Holding): Where the holding is in more than one name, all of the members should sign.
(Power of Attorney): If you have not already provided the Power of Attorney with the registry, please attach a certified photocopy of the Power of Attorney to this form when you return it.
(Companies): Where the company has a sole director who is also the sole company secretary, that person must sign. Where the company (pursuant to Section 204A of the Corporations Act) does not have a company secretary, a sole director can also sign alone. Otherwise, a director jointly with either another director or a company secretary must sign. Please sign in the appropriate place to indicate the office held.
1. (Attending the Meeting): Completion of a Proxy Form will not prevent individual members from attending the General Meeting in person if they wish. Where a member completes and lodges a valid Proxy Form and attends the General Meeting in person, then the proxy's authority to speak and vote for that member is suspended while the member is present at the General Meeting.
1. (Return of Proxy Form): To vote by proxy, please complete and sign the enclosed Proxy Form and return by:
(a) post to Augustus Minerals Limited, PO Box 281, WEST PERTH WA 6872; or
(b) facsimile to the Company on facsimile number +61 8 9324 3045; or
(c) email to the Company at [email protected],

so that it is received not less than 48 hours prior to commencement of the Meeting.

Proxy forms received later than this time will be invalid.

ATTACHMENT TO

AUGUSTUS MINERALS LIMITED (TO BE RENAMED HASTINGS RARE METALS LIMITED) ACN 122 911 399

NOTICE OF GENERAL MEETING

West Perth WA 6005 ANNEXURE A – NOTICES OF CANDIDATURE OF PROPOSED DIRECTORS

ANNEXURE B – INDEPENDENT EXPERT'S REPORT

ANNEXURE A – NOTICES OF CANDIDATURE OF PROPOSED DIRECTORS

ANNEXURE B – INDEPENDENT EXPERT'S REPORT

Independent Expert's Report – 14 January 2011 Augustus Minerals Limited

In connection with the proposed acquisition of Hastings Rare Metals Pty Limited

FINANCIAL SERVICES GUIDE

Dated 1 January 2011

1. HLB Mann Judd Corporate (WA) Pty Ltd

HLB Mann Judd Corporate (WA) Pty Ltd ABN 69 008 878 555 ("HLB Mann Judd Corporate" or "we" or "us" or "ours" as appropriate) has been engaged to issue general financial product advice in the form of a Report to be provided to you.

2. Financial Services Guide

In the above circumstances we are required to issue to you, as a retail client, a Financial Services Guide ("FSG"). This FSG is designed to help retail clients make a decision as to their use of the general financial product advice and to ensure that we comply with our obligations as a financial services licensee.

This FSG includes information about:

who we are and how we can be contacted;
the services we are authorised to provide under our Australian Financial Services Licence, Licence No. 250903;
remuneration that we and/or our staff and any associates receive in connection with the general financial product advice;
any relevant associations or relationships we have; and
our complaints handling procedures and how you may access them.

3. Financial services we are licensed to provide

We hold an Australian Financial Services Licence which authorises us to provide financial product advice in relation to:

securities;
interests in managed investment schemes excluding investor directed portfolio services;
superannuation; and
debentures, stocks or bonds issued or proposed to be issued by a government

We provide financial product advice by virtue of an engagement to issue a Report in connection with a financial product of another person. Our Report will include a description of the circumstances of our engagement and identify the person who has engaged us. You will not have engaged us directly but will be provided with a copy of the Report as a retail client because of your connection to the matters in respect of which we have been engaged to Report.

Any Report we provide is provided on our own behalf as a financial services licensee authorised to provide the financial product advice contained in the Report.

4. General financial product advice

In our Report we provide general financial product advice, not personal financial product advice, because it has been prepared without taking into account your personal objectives, financial situation or needs.

You should consider the appropriateness of this general advice having regard to your own objectives, financial situation and needs before you act on the advice. Where the advice relates to the acquisition or possible acquisition of a financial product and there is no statutory exemption relating to the matter, you should also obtain a product disclosure statement relating to the product and consider that statement before making any decision about whether to acquire the product.

HLB Mann Judd Corporate (WA) Pty Ltd AFSL 250903

Level 4 130 Stirling Street Perth 6000 PO Box 263 West Perth 6872 Western Australia. Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533. Email: [email protected]. Website: http://www.hlb.com.au

1012 AUG012 REP

14 January 2011

The Directors Augustus Minerals Limited Suite 9, 1200 Hay Street WEST PERTH WA 6005

Dear Sirs

INDEPENDENT EXPERT'S REPORT – AUGUSTUS MINERALS LIMITED

1. INTRODUCTION

HLB Mann Judd Corporate (WA) Pty Ltd ("HLB") has been engaged by the directors of Augustus Minerals Limited ("AUJ" or the "Company") to prepare an Independent Expert's Report ("Report") to determine the fairness and reasonableness of the acquisition of Hastings Rare Metals Pty Limited as detailed in the Notice of General Meeting of AUJ shareholders ("the Notice") for the meeting to be held on or about 14 February 2011.

As announced to the Australian Securities Exchange ("ASX") on 7 December 2010, the Company has entered into a Share Sale Agreement ("Sale Agreement") with Kongoni Nominees Pty Ltd as trustee for the Shemesian Family Trust ("Vendor") to acquire 100% of the share capital of Hastings Rare Metals Pty Limited, owner of the Hastings Rare Metals Deposit ('the Transaction'). A summary of the material terms of the Sale Agreement (in the context of this Report) is set out at Section 4 of this Report, with a full explanation contained in Section 3 of the explanatory statement accompanying the Notice ("Explanatory Statement").

This Report has been divided into the following sections:

1. Introduction
1. Purpose of the Report
1. Summary of Opinion
1. Summary of Sale Agreement
1. Implications of the Transaction to AUJ
1. Corporate History and Nature of Business
1. Basis of Evaluation
1. Assessment as to Fairness
1. Assessment as to Reasonableness
1. Premium for Control
1. Conclusion
Appendices

HLB Mann Judd Corporate (WA) Pty Ltd AFSL 250903

Level 4 130 Stirling Street Perth 6000 PO Box 263 West Perth 6872 Western Australia. Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533. Email: [email protected]. Website: http://www.hlb.com.au

2. PURPOSE OF THE REPORT

HLB has been engaged by the directors of the Company to prepare this Report to accompany the Notice and Explanatory Statement to be sent to shareholders in connection with the Transaction.

Our Report has been prepared solely for the purpose of assisting the non-associated shareholders of AUJ in considering the Transaction, details of which are included in the Explanatory Statement and summarised in Section 4 of this Report.

We note that there are numerous resolutions to be put before the shareholders at the meeting to be held on or about 14 February 2011. Resolution 3 relates to the Transaction and is subject to the passing of Resolutions 2, 4, 5, 7 and 8. As such, all of these resolutions are considered to be interdependent. This Report addresses the impact of these resolutions but not the remaining resolutions as they are considered to be independent of Resolution 3, which is the subject of this Report.

Section 606 of the Corporations Act 2001 ("Act") prohibits the acquisition of an interest in a public company with more than 50 members by a person if the Transaction increases that person's interest from 20% or below to more than 20%. An exception to this general prohibition is set out in Section 611(7), whereby such an acquisition is allowed when approved by a majority of shareholders at a general meeting and where no votes are cast in respect of shares held by the acquirer or its associates.

Currently, the Vendor holds no shares in the issued capital of AUJ. Should the Transaction be approved, the Vendor and its associates will have the ability to own up to 44.19% of the share capital of AUJ, on a maximum voting power basis. This basis assumes the conversion of the performance shares and vesting and subsequent exercise of the performance options, which form part of the consideration for the Transaction, but that no other shares are issued and no other options are exercised after the date of the general meeting to approve the Transaction.

Regulatory Guide 111 issued by the Australian Securities and Investments Commission ("ASIC") suggests that the obligation to supply shareholders with all information that is material to the decision on how to vote on the resolution can be satisfied by the commissioning of an Independent Expert's Report.

The independent expert should state whether a proposal is fair and reasonable to the non-associated shareholders and the opinion should be formed after considering all the circumstances of a proposal. The independent expert must compare the likely advantages and disadvantages for the nonassociated shareholders if a proposal is agreed to, with the advantages and disadvantages to those shareholders if it is not.

This Report is to be included with the Notice and Explanatory Statement to assist the Company's nonassociated shareholders in their consideration of Resolution 3.

3. SUMMARY OF OPINION

We have considered the terms of the Sale Agreement between the Company and the Vendor and have concluded that the Transaction is fair and reasonable to the non-associated shareholders of the Company.

A summary of our analysis in forming this opinion is provided below.

Fairness

Due to the factors outlined in Section 8 of this Report, the Transaction is considered to be fair to the non-associated shareholders.

Reasonableness

We have considered the analysis in Section 9 of this Report, in terms of the advantages and disadvantages of approving the Transaction and the position of non-associated shareholders if the Transaction does not proceed.

The respective advantages and disadvantages considered are summarised below:

Advantages and Disadvantages of Approving the Transaction:

Advantages	Disadvantages
Opportunity to diversify and expand the current exploration focus of the Company to include rare metals;	Dilution of current shareholders' interests; There is no guarantee that:
The Sale Agreement included as a condition precedent the requirement for the Company to complete a placement of shares amounting to \$1,212,273, which was completed in December 2010;	exploration on the Hastings Rare Metals Deposit by the Company will result in the discovery of a larger JORC Code compliant resource than already exists;
The potential increase in market capitalisation of the Company following settlement of the Transaction may lead to increased coverage from investment analysts, access to improved equity capital market opportunities and increased liquidity;	the existing JORC Code compliant resource is accurate as it is an estimate only which is imprecise and depends to some extent on interpretations, which may prove to be inaccurate; or the existing JORC Code compliant resource can be economically exploited;
The Hastings Rare Metals Deposit has an existing JORC Code compliant resource and there is opportunity for more upside in terms of another drilling program;	and Current shareholders may prefer exposure to the Company's existing assets; the Transaction may result in
Absence of alternative projects; and	unwanted diversification of the Company's asset portfolio.
Since the date of the announcement of the entering into of the Sale Agreement up to the date of the Notice of Meeting, AUJ's share price has traded between 27 – 38 cents, which supports the market's assessment of the value of the new project.

In our opinion, the position of non-associated shareholders if the Transaction proceeds is more advantageous than the position if the Transaction does not proceed. Accordingly, we believe that the Transaction is reasonable to the non-associated shareholders of the Company.

4. SUMMARY OF SALE AGREEMENT

AUJ has entered into the Sale Agreement to acquire 100% of the issued capital of Hastings Rare Metals Pty Limited, owner and operator of the Hastings Rare Metals Deposit located near Halls Creek in the East Kimberley Region of Western Australia.

The consideration for the acquisition is as follows:

To the Vendor of the project:

\$1,500,000 comprising:
o \$50,000 cash upon signature of the Sale Agreement,
o \$700,000 cash upon completion of the Sale Agreement,
o \$500,000 cash upon achievement of a JORC Code compliant mineral resource in respect of the area comprising the tenements listed in the Sale Agreement within three years from the date of issue of the A Class Performance Shares of a minimum of 25 million tones with a Nb2O5 cut-off grade of 1500ppm ("Milestone 1"),
o \$250,000 cash upon achievement of a JORC Code compliant mineral resource in respect of the area comprising the tenements listed in the Sale Agreement within three years from the date of issue of the A Class Performance Shares of a minimum of 35 million tones with a Nb2O5 cut-off grade of 1500ppm ("Milestone 2"),
10,500,000 fully paid AUJ ordinary shares on completion of the Sale Agreement,
6,250,000 A class performance shares which shall automatically convert into an equivalent number of ordinary shares upon achievement of Milestone 1,
6,250,000 B class performance shares which shall automatically convert into an equivalent number of ordinary shares upon achievement of Milestone 2,
7,500,000 A class performance options exercisable at \$0.25 on or before three years from the date of issue to be vested upon achievement of Milestone 1,
7,500,000 B class performance options exercisable at \$0.25 on or before three years from the date of issue to be vested upon achievement of Milestone 2.

To the Consultants, Berwick Capital Limited:

2,000,000 fully paid AUJ ordinary shares on completion of the Sale Agreement,

The Sale Agreement is conditional upon the satisfaction of the following conditions precedent, all of which are fundamental to the Transaction proceeding:

(i) AUJ obtaining all shareholder and regulatory approvals required by the Corporations Act and the ASX Listing Rules in relation to the Transaction;
(ii) AUJ completing a capital placement of 4,849,093 fully paid AUJ ordinary shares at \$0.25 to raise \$1,212,273;
(iii) AUJ completing a placement of 10,000,000 AUJ options at \$0.001 to Carlow Castle Pty Limited (or its nominees) to raise \$10,000. The options expire on 31 December 2013 and are exercisable at \$0.25;
(iv) AUJ completing a placement of 12,500,000 AUJ options at \$0.001 to Risely Resources Pty Limited (or its nominees) to raise \$12,500. The options expire on 31 December 2013 and are exercisable at \$0.25;
(v) the Company obtaining any necessary third party consents, waivers and approvals in relation to the Transaction, including but not limited to, the novation of any material contract of Hastings Rare Metals Pty Limited or the consent to the change of control of the Hastings Rare Metals Pty Limited; and
(vi) the Vendor receiving confirmation to its satisfaction (acting reasonably), that the Company has no material existing, future or potential liabilities or claims arising as a consequence of its ownership or rights and obligations in the Silverwood Project, other than as previously disclosed by the Company to the Vendor.

Additionally upon completion of the Sale Agreement, the Board has agreed to the resignation of Mr Gary Ralston and Mr Jon Wild from the Board and the appointment of two new directors, Mr James Robinson and Mr David Nolan. Mr James Robinson is the current company secretary of AUJ and Mr David Nolan is a director of Hastings Rare Metals Pty Limited.

Additionally, the Directors have agreed to issue the following securities to the continuing director of the Company, Mathew Walker, and the two proposed directors, James Robinson and David Nolan:

10,000,000 AUJ options – expire on 31 December 2013 and exercisable at \$0.40. This is contemplated by Resolutions 10, 11 and 12 to be put to shareholders at the forthcoming general meeting.

The acquisition will result in the Vendor and its associates owning an initial 17.95% of the issued capital of AUJ, with the potential to own up to 44.19% on a maximum voting power basis.

A full explanation of the principal terms of the Sale Agreement, together with details of the tenements listed in the Sale Agreement is contained in Section 4 of the Explanatory Statement.

5. IMPLICATIONS OF THE TRANSACTION TO AUJ

5.1 If the Transaction is approved by shareholders, in addition to various cash payments noted above, AUJ will issue 10,500,000 fully paid ordinary shares in AUJ; 6,250,000 A class performance shares in AUJ which shall automatically convert into an equivalent number of ordinary shares in AUJ upon achievement of Milestone 1; 7,500,000 A class performance options in AUJ exercisable at \$0.25 on or before three years from the date of issue to be vested upon achievement of Milestone 1; 6,250,000 B class performance shares in AUJ which shall automatically convert into an equivalent number of ordinary shares in AUJ upon achievement of Milestone 1; and 7,500,000 B class performance options in AUJ exercisable at \$0.25 on or before three years from the date of issue to be vested upon achievement of Milestone 2;
5.2 If the Transaction is approved by shareholders, AUJ will issue 2,000,000 fully paid ordinary shares in AUJ to the consultants, Berwick Capital Limited (or its nominees);
5.3 As contemplated by Resolutions 10, 11 and 12, AUJ will issue 10,000,000 options in AUJ to certain related parties of AUJ. The options expire on 31 December 2013 and are exercisable at \$0.40;
5.4 The Sale Agreement included as a condition precedent the requirement for the Company to complete a placement of shares amounting to \$1,212,273, which was completed in December 2010; and
5.5 As contemplated by Resolution 5, AUJ will issue 10,000,000 options in AUJ at \$0.001 to Carlow Castle Pty Limited (or its nominees) and 12,500,000 options in AUJ at \$0.001 to Risely Resources Pty Limited (or its nominees). The options expire on 31 December 2013 and are exercisable at \$0.25.
5.6 As at 7 December 2010 the number of issued shares in AUJ totalled 41,150,907 and the top 20 shareholders were as follows:

HOLDER NAME	UNITS	% OF ISSUED
* WALKER MATHEW DONALD	4,500,000	10.94%
* DONGRAY RICHARD S + J S/F A/C	2,000,000	4.86%
VERIGREEN PL	1,850,000	4.50%
ABN AMRO CLEARING SYDNEY CUST A/C	1,670,500	4.06%
* MCNEIL NOM PL	1,500,000	3.65%
* VIENNA HLDGS PL RONJEN S/F A/C	1,300,000	3.16%
* LUNDY S/F NO 2 PL LUNDY NO2 S/F A/C	1,000,000	2.43%
* VITICULTURAL PROP MGNT PL	1,000,000	2.43%
YALTA AG	1,000,000	2.43%
* SABRELINE PL JPR INV A/C	850,000	2.07%

-5-

-6-
ROKEBA NOM PL SILMAN PROP A/C	800,000	1.94%
* RALSTON GARRY B + T M RALSTON S/F A/C	750,000	1.82%
* GMBH MARE	750,000	1.82%
BATIO PL WILD S/F A/C	700,000	1.70%
VITICULTURAL PROP MGNT PL	600,000	1.46%
* MCELROY BRAD	500,000	1.22%
WECK LORAINE VON DER W	500,000	1.22%
* SCHNURA GEORG	500,000	1.22%
AGONIC HLDGS PL	442,085	1.07%
JP MORGAN NOM AUST LTD CASH A/C	420,650	1.02%
TOP 20 TOTAL	22,633,235	55.00 %

* DENOTES MERGED HOLDER

5.7 The top 20 shareholders therefore control 55.00% of the Company. If the Transaction is approved, the effects on the percentage shareholdings of these shareholders and the Vendor would be as follows:

	AUJ shares	% held by Top	% held by	% held by
	on issue	20 shareholders	Vendors and	other
			associates	shareholders
Balance at 7 December 2010	41,150,907	55.00%	0.00%	45.00%
Placement	4,849,093
Acquisition of Hastings Rare	10,500,000
Metals Limited
Issued to Advisor	2,000,000
TOTAL (post meeting)	58,500,000	38.69%1	17.95%	43.36%
Deferred consideration
A Class Performance Shares	6,250,000
B Class Performance Shares	6,250,000
TOTAL (milestones met)2	71,000,000	31.88%	32.39%	35.73%
Options
A Class Performance Options	7,500,000
B Class Performance Options	7,500,000
TOTAL (max. voting power)3	86,000,000	26.32%	44.19%4	29.49%
Placement	22,500,000
Issued to Consultants4	5,000,000
Issued to Directors	10,000,000
TOTAL (fully diluted)	123,500,000	24.80%	32.39%	57.19%

1 – Assumes that none of the Top 20 participated in the proposed placement.

²– Assumes all performance conditions are met.

³– Assumes all performance conditions are met and only the options issued to the Vendor are exercised – maximum voting ability.

⁴ – Assumes that Resolution 9 of the Notice of Meeting is passed. Resolution 9 states "that for the purpose of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Directors to allot and issue up to 5,000,000 Consultant Options on the terms and conditions set out in the Explanatory Statement."

6. CORPORATE HISTORY AND NATURE OF BUSINESS

6.1. AUJ

AUJ was incorporated on 29 November 2006. The company listed on the ASX on 15 February 2008.

Currently, the principal activities of AUJ, as outlined in its most recent Annual Report, are the exploration for natural resources.

The current directors of AUJ are Mr Garry Ralston, Mr Mathew Walker and Mr Jon Wild.

6.2. HASTINGS RARE METALS PTY LIMITED

Hastings Rare Metals Pty Limited is a Sydney based private company, which is focused on exploration of the Hastings Rare Metals Deposit located near Halls Creek in the East Kimberley Region of Western Australia.

The Hastings deposit has a JORC compliant indicated/inferred resource to 250m depthof 22.08M tonnes at 0.79%ZrO2, 0.10%Y2O3 0.31%Nb2O5 and 0.023%Ta2O5. Tenure over the project area comprises ten granted Prospecting Licences (P80/1626 – P80/1635) totaling 1,990 hectares. Prospecting Licences were granted 20 March 2009 and expire 19 March 2013.

Further details are set out in the Executive Summary of the Independent Technical Report by Zephyr Consulting Group Pty Ltd ("Zephyr") dated 22 December 2010 at Appendix 3.

7. BASIS OF EVALUATION

In determining whether the Transaction is fair and reasonable, we have referred to Regulatory Guides 111 and 112 issued by the ASIC.

Regulatory Guide 111 requires that we should identify the advantages and disadvantages of the Transaction to security holders not associated with the Transaction, as well as providing an opinion on whether the advantages of the Transaction outweigh the disadvantages.

We have satisfied the requirements of Regulatory Guide 111 by completing the following comparisons:

A comparison of the value of the consideration being given up by the Company and the value of assets being acquired (see Section 8 of our Report, "Assessment as to Fairness"); and
An analysis of the reasonableness of the Transaction by reference to the advantages and disadvantages of the Transaction (see Section 9 of our Report, "Assessment as to Reasonableness").

In determining the consideration being given up by the Company, we have considered the following methodologies in valuing AUJ:

7.1 Capitalised Maintainable Earnings/Discounted Cash Flow

AUJ currently does not have a reliable cash flow or profit history from a business undertaking. Therefore, we do not believe that this methodology is appropriate to use for the purposes of this Report. AUJ's primary operational focus is on exploration activities.

7.2 Takeover Bid

We have been advised by the directors of AUJ that they do not believe that there would be a likelihood of a takeover bid for the Company. To the best of our knowledge, there are no current bids in the market place for the shares in AUJ.

7.3 Market Price of AUJ Shares (based on recent capital raisings)

In the last 12 months AUJ issued the following shares:

On 29 April 2010, AUJ issued 30,000 shares at \$0.25 upon the exercise of listed options.

On 12 July 2010, AUJ issued 250,000 shares at \$0.25 upon the exercise of listed options.

On 14 July 2010, AUJ issued 50,000 shares at \$0.25 upon the exercise of listed options.

On 19 July 2010, AUJ issued 100,000 shares at \$0.25 upon the exercise of listed options.

On 20 July 2010, AUJ issued 200,000 shares at \$0.25 upon the exercise of listed options.

On 23 July 2010, AUJ issued 500,000 shares at \$0.25 upon the exercise of listed options.

On 6 August 2010, AUJ issued 20,907 shares at \$0.25 upon the exercise of listed options.

On 23 December 2010, AUJ issued 4,849,093 shares at \$0.25 to satisfy a condition precedent to the Transaction.

As a result, this reduces the reliability of the ASX market price valuation and its impact on our assessment on the value of AUJ's shares.

Based on the above a value per share of \$0.25 is indicated.

7.4 Market Price of AUJ Shares (based on recent trading history)

AUJ share price movements in the 12 months prior to the announcement of the Transaction and the volumes traded are presented in the graph below:

A total of 29,671,221 shares have been traded over this period in a range from \$0.44 to \$0.15, representing 72.1% of the total issued capital.

A total of 5,866,204 shares have been traded over the past 2 months in a range from \$0.28 to \$0.18, representing 14.3% of the total issued capital.

Whilst this trading cannot be considered to be 'deep', the trading range is not inconsistent with the value per share in Section 7.3.

Based on the above, a value per share of \$0.18 to \$0.28 is indicated.

7.5 Adjusted Net Asset Backing

A summary of the unaudited statement of financial position of AUJ as at 30 September 2010 is presented below, together with a proforma statement of financial position comprising the statement of financial position at 30 September 2010 adjusted for changes in the valuations of certain assets and liabilities and other transactions we considered appropriate for the purposes of this Report.

Based on our assessment, the following valuation adjustments and adjustments for other transactions are required as at 30 September 2010:

i) Other financial assets have decreased by \$145,660 due to the decrease in market value of listed shares classed as available-for-sale assets;
ii) Cash and Share Capital have increased by \$1,212,273 due to the capital raising on 23 December 2010; and
iii) Deferred exploration expenditure has decreased by \$1,834,674, which comprises an impairment of the Silverwood prospects of \$1,853,137, an impairment of \$25,176 for exploration expenditure which does not meet requirements for capitalisation and an increase of \$43,639 due to Zephyr's valuation Report which gave a preferred value for the Mt Palmer project of \$300,000.

The impairment of the Silverwood prospects has been determined to be appropriate given the change in the Company's direction.

Augustus Minerals Limited	Audited 30 June 2010	Unaudited 30 September 2010	Adjustments	Valuation
	\$	\$	\$	\$
Current Assets
Cash and cash equivalents	3,960,171	4,234,707	1,212,273	5,446,980
Trade and other receivables	65,859	42,653	-	42,653
Other financial assets	2,034,532	1,728,533	(145,660)	1,582,873
Total Current Assets	6,060,562	6,005,893	1,066,613	7,072,506
Non-Current Assets
Deferred exploration expenditure	1,848,360	2,134,674	(1,834,674)	300,000
Total Non-Current Assets	1,848,360	2,134,674	(1,834,674)	300,000
Total Assets	7,908,922	8,140,567	(768,061)	7,372,506
Liabilities
Current Liabilities
Trade and other payables	16,749	11,947	-	11,947
Total Current Liabilities	16,749	11,947	-	11,947
Total Liabilities	16,749	11,947	-	11,947
Net Assets	7,892,173	8,128,620	(768,061)	7,360,559

Equity
Issued capital	7,866,570	8,146,797	1,212,273	9,359,070
Reserves	1,047,752	1,047,752	43,639	1,091,391
Accumulated losses	(1,022,149)	(1,065,929)	(2,023,973)	(3,089,902)
Total Equity	7,892,173	8,128,620	(768,061)	7,360,559

				Number
Fully paid shares on issue				46,000,000
Adjusted net asset backing per share				16 cents

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7.6 Summary

The following values (per ordinary share) have been determined from the above information:

	Value
Market value (based on recent capital raisings)	25 cents
Market value (based on recent trading history)	18 - 28 cents

We are of the opinion that the best indicator of the value of a share is based on recent capital raisings. The adjusted net asset backing per share is not considered to be an appropriate guide to the fair market value per share, as it includes a substantial impairment charge in relation to the Silverwood prospects resulting from the change in the Company's direction.

Therefore, we consider that the underlying net asset value of a share in AUJ to be 25 cents, which is also consistent with the range of recent trading history noted above.

8. ASSESSMENT AS TO FAIRNESS

8.1 Comparison of the Value of Assets acquired to consideration
8.1.1 Valuation of Hastings Rare Metals Pty Limited

A summary of the unaudited statement of financial position of Hastings Rare Metals Pty Limited as at 30 November 2010 is presented below, together with a proforma statement of financial position comprising the statement of financial position as at 30 November 2010 adjusted for changes in the valuations of certain assets and liabilities and other transactions we considered appropriate for the purposes of this Report.

Based on our assessment, the following valuation adjustments and adjustments for other transactions are required as at 30 November 2010:

i) Deferred exploration expenditure increased by \$3,875,967 due to the valuation of the Hastings Rare Metals Deposit by Zephyr. Zephyr was engaged to provide an independent technical report on the mineral assets being acquired. Full details of Zephyr's report are contained in Appendix 3.

The assets being acquired have been determined to have the following values by Zephyr.

	Low (\$)	High (\$)	Preferred (\$)
Hastings Rare Metals Deposit	2,100,000	7,700,000	4,000,000

ii) Other current receivables decreased by \$400 due to the write off of formation expenses.

Hastings Rare Metals Pty Limited	Unaudited 30 November 2010	Adjustments	Valuation
	\$	\$	\$
Current Assets
Cash and cash equivalents	37,777	-	37,777
Other current receivables	400	(400)	-
Total Current Assets	38,177		37,777
Non-Current Assets
Deferred exploration expenditure	124,033	3,875,967	4,000,000
Total Non-Current Assets	124,033	3,875,967	4,000,000
Total Assets	162,210	3,875,567	4,037,777
Liabilities
Current Liabilities
Trade and other payables	6,111	-	6,111
Total Liabilities	6,111	-	6,111
Net Assets	156,099	3,875,567	4,031,666
Equity
Issued capital	196,612	-	196,612
Reserves		3,875,967	3,875,967
Accumulated losses	(40,513)	(400)	(40,913)
Total Equity	156,099	3,875,567	4,031,666

We have not included deferred tax on the uplift on deferred exploration expenditure in our valuation as once the Transaction is complete the Company will be able to form a consolidated group for income tax purposes and any potential deferred tax will be offset against the unused tax losses.

8.1.2 Value of consideration:

Consideration for the acquisition of Hastings Rare Metals Pty Limited includes various deferred components which are only payable upon the achievement of certain milestones. The value ascribed to all components of deferred consideration has not been determined as the likelihood of achievement of the milestones cannot be determined with any certainty.

a) Cash

\$1,500,000 cash as consideration for the acquisition of Hastings Rare Metals Pty Limited. \$750,000 of this cash is deferred until certain performance conditions are met. As a result, the balance of \$750,000 has been included in our assessment of consideration below.

b) Valuation of shares

23,500,000 shares are to be issued as consideration for the acquisition of Hastings Rare Metals Pty Limited. Of these shares, 13,000,000 are performance based. As a result, the balance of 10,500,000 shares have been valued based on values determined in Section 7 (25 cents per share) and the resulting value of \$2,625,000 has been included in our assessment of consideration below. In addition, 2,000,000 ordinary shares are to be issued to consultants, Berwick Capital Limited. Based on the values determined in Section 7, the value of these shares has been determined to be 25 cents per share and the resulting value of \$500,000 has been included in our assessment of consideration below.

c) Valuation of options

15,000,000 performance options are to be issued as deferred consideration for the acquisition of Hastings Rare Metals Pty Limited. For the same reasons noted above, the value of these options has not been included in our assessment of consideration below.

The assumptions on which our calculations are based are set out in Appendix 3.

Summary
Consideration:	Low \$A	High \$A	Preferred \$A
Vendor consideration
Issue of shares	1,890,000	2,940,000	2,625,000
Cash	750,000	750,000	750,000
Consultants
Issue of shares	360,000	560,000	500,000
Total	3,000,000	4,250,000	3,875,000
Deferred consideration (1)
\$500,000 cash to be paid upon attainment of	-	-	-
Milestone 1 (2)
6.25 million A class performance shares which	-	-	-
shall automatically convert into an equivalent
number of ordinary shares upon attainment of
Milestone 1 (2) 7.5 million A class performance options	-	-	-
exercisable at \$0.25 on or before three years from
the date of issue to be vested upon attainment of
Milestone 1 (2)
\$250,000 cash to be paid upon attainment of	-	-	-
Milestone 2 (3)
6.25 million B class performance shares which	-	-	-
shall automatically convert into an equivalent
number of ordinary shares upon attainment of
Milestone 2 (3)
7.5 million B class performance options	-	-	-
exercisable at \$0.25 on or before three years from the date of issue to be vested upon attainment of
Milestone 2 (3)

Total	3,000,000	4,250,000	3,875,000

(1) The value ascribed to all components of deferred consideration has not been determined as the likelihood of achievement of the milestones cannot be determined with any certainty. The full value of the deferred consideration would only be realised if Milestone 1 (2) and Milestone 2 (3) would have to be met.
(2) Milestone 1 achievement of a JORC Code compliant mineral resource in respect of the area comprising the tenements listed in the Sale Agreement within three years from the date of issue of the A Class Performance Shares of a minimum of 25 million tones with a Nb2O5 cut-off grade of 1500ppm.
(3) Milestone 2 achievement of a JORC Code compliant mineral resource in respect of the area comprising the tenements listed in the Sale Agreement within three years from the date of issue of the A Class Performance Shares of a minimum of 35 million tones with a Nb2O5 cut-off grade of 1500ppm.

8.2 Conclusion as to Fairness of the Transaction

Based on the above assessment, the Transaction is considered to be fair to the non-associated shareholders of the Company as the preferred value of the assets acquired is higher than the preferred value of the consideration.

The deferred consideration is not included in the calculation of the consideration as it is payable on achieving milestones that at this stage are not able to be predicted with any accuracy.

9. ASSESSMENT AS TO REASONABLENESS

ASIC Regulatory Guide 111 considers an offer to be reasonable if:

the offer is fair; or
despite not being fair, but considering other significant factors, shareholders should approve the Transaction in the absence of any superior offer.

Our conclusion that the Transaction is not fair has caused us to consider whether it is reasonable. In doing so, we have considered the advantages and disadvantages of the Transaction.

9.1 Advantages
Opportunity to diversify and expand the current exploration focus of the Company to include rare metals;
The Sale Agreement included as a condition precedent the requirement for the Company to complete a placement of shares amounting to \$1,212,273, which was completed in December 2010;
The potential increase in market capitalisation of the Company following settlement of the Transaction may lead to increased coverage from investment analysts, access to improved equity capital market opportunities and increased liquidity;
The Hastings Rare Metals Deposit has an existing JORC Code compliant resource and there is opportunity for more upside in terms of another drilling program;
Absence of alternative projects; and
Since the date of the announcement of the entering into of the Sale Agreement up to the date of the Notice of Meeting, AUJ's share price has traded between 27 – 38 cents, which supports the market's assessment of the value of the new project.

9.2 Disadvantages

Dilution of current shareholders' interests;
There is no guarantee that exploration on the Hastings Rare Metals Deposit by the Company will result in the discovery of a larger JORC Code compliant resource than already exists; the existing JORC Code compliant resource is accurate as it is an estimate only which is imprecise and depends to some extent on interpretations, which may prove to be inaccurate; or, the existing JORC Code compliant resource can be economically exploited; and
Current shareholders may prefer exposure to the Company's existing assets; the Transaction may result in unwanted diversification of the Company's asset portfolio.

9.3 Conclusion as to the Reasonableness of the Transaction

Based on the above assessment, the Transaction is considered to be reasonable to the non-associated shareholders of the Company as, in our opinion, the advantages of approving the Transaction outweigh the disadvantages.

10. PREMIUM FOR CONTROL

The share market can be expected to provide an objective assessment of the fair market value of a listed entity, where the market is well informed and liquid. Market prices incorporate the influence of all publicly known information relevant to the value of an entity's securities.

Share prices from share market trading do not reflect the market value for control of a company as they are for portfolio holdings. Traditionally, the premiums required to obtain control of companies range between 15% and 25% of the portfolio holding values.

The Vendor and its associates will hold at least 17.95% of the issued capital of AUJ at the completion of the Transaction and at least half of the board of directors will change. In addition, there is no other shareholder or group of shareholders with a significant shareholding in AUJ. Given that the Vendor and its associates will have the ability to own up to 44.19% of the share capital of AUJ, on a maximum voting power basis, it is likely that control of AUJ will pass to the Vendor and its associates in these circumstances and therefore we are required to consider if a premium for control is being paid.

Based on the assessed value of the consideration being given and the value of the assets being acquired, no premium is being paid by the Vendor for control of the Company.

11. CONCLUSION

Based on the foregoing, we are of the opinion that the Transaction is fair and reasonable to the nonassociated shareholders of the Company.

Yours faithfully HLB MANN JUDD CORPORATE (WA) PTY LTD Licensed Investment Advisor (AFSL Licence number 250903)

L DI GIALLONARDO Authorised Representative

APPENDIX 1 SOURCES OF INFORMATION

In preparing this Report we have had access to the following principal sources of information:

AUJ'S annual report for the year ended 30 June 2010 and unaudited management reports for the period ended 30 September 2010;
Sale Agreement between the Vendor and Augustus Minerals Limited dated 6 December 2010;
Unaudited management reports of Hastings Rare Metals Pty Limited for the period to 30 November 2010;
Draft Notice of General Meeting and Explanatory Statement which this Report will accompany;
Independent Technical Review performed by Zephyr Consulting Group Pty Ltd dated 23 December 2010;
Discussions with, and information provided by, the directors and management of AUJ; and
Announcements to the ASX by AUJ during the 2010 year.

APPENDIX 2 QUALIFICATIONS, DECLARATIONS AND CONSENTS

HLB, which is a wholly owned entity of HLB Mann Judd (WA Partnership), is a Licensed Investment Adviser and holder of an Australian Financial Services Licence under the Corporations Act ("Act") and its authorised representative is qualified to provide this Report. The authorised representative of HLB responsible for this Report has not provided financial advice to AUJ.

Prior to accepting this engagement, HLB considered its independence with respect to AUJ with reference to ASIC Regulatory Guide 112. In HLB's opinion, it is independent of AUJ.

This Report has been prepared specifically for the shareholders of AUJ. It is not intended that this Report be used for any other purpose other than to accompany the Notice of General Meeting and Explanatory Statement to be sent to the AUJ shareholders. In particular, it is not intended that this Report should be used for any purpose other than as an expression of the opinion as to whether or not the Transaction is fair and reasonable to the non-associated shareholders of AUJ. HLB disclaims any assumption of responsibility for any reliance on this Report to any person other than those for whom it was intended, or for any purpose other than that for which it was prepared.

The statements and opinions given in this Report are given in good faith and in the belief that such statements and opinions are not false or misleading. In the preparation of this Report, HLB has relied on and considered information believed, after due inquiry, to be reliable and accurate. HLB has no reason to believe that any information supplied to it was false or that any material information has been withheld.

HLB has evaluated the information provided to it by AUJ and other parties, through inquiry, analysis and review, and nothing has come to its attention to indicate the information provided was materially misstated or would not provide a reasonable basis for this Report. HLB has not, nor does it imply that it has, audited or in any way verified any of the information provided to it.

In accordance with the Act, HLB provides the following information and disclosures:

HLB will be paid its usual professional fees (estimated to be \$12,000 plus GST) based on time involvement at normal professional rates, for the preparation of this Report.
Apart from the aforementioned fee, neither HLB, nor any of its associates will receive any other benefits, either directly or indirectly, for or in connection with the preparation of this Report.
HLB, nor any of its directors or associates, have any interest in AUJ or the tenements.
Neither HLB nor HLB Mann Judd (WA Partnership) has had any relationship with AUJ or any associate of AUJ or the Vendors, other than HLB Mann Judd (WA Partnership) acts as auditor of AUJ.

APPENDIX 3 INDEPENDENT TECHNICAL REPORT

INDEPENDENT TECHNICAL REVIEW of the

MINERAL ASSETS of AUGUSTUS MINERALS LIMITED and HASTINGS RARE METALS PTY LIMITED

Prepared by Zephyr Consulting Group Pty Ltd on behalf of:

HLB Mann Judd Corporate (WA) Pty Ltd

Authors: Ian Prentice, B.Sc. (Geol), GradDipAppFin (Sec Inst), MAusIMM, Director of Zephyr Consulting Group Pty Ltd

John Holmes, B.Sc.(Geol), MAIG

Director of Zephyr Consulting Group Pty Ltd

Date: 23 December 2010

		EXECUTIVE SUMMARY 4
1.		INTRODUCTION 7
	1.1. 1.2. 1.3.	TERMS OF REFERENCE 7 QUALIFICATIONS, EXPERIENCE AND INDEPENDENCE 8 PRINCIPAL SOURCES OF INFORMATION 8
2.		RARE EARTHS AND RARE METALS INDUSTRY OVERVIEW 9
	2.1.1	Rare earth and rare metal supply 10
3.		TECHNICAL SUMMARY OF THE HASTINGS RARE METALS PTY LIMITED MINERAL ASSETS 11
	3.1. 3.1.1	HASTINGS (P80/1626 – P80/1635) 11 Project Location 11
	3.1.2	Tenure 11
	3.1.3	Local Geology 12
	3.1.4	Previous Exploration 16
	3.1.5	Exploration Potential 19
		TECHNICAL SUMMARY OF THE AUGUSTUS MINERALS LIMITED MINERAL ASSETS 21
	3.2.	MT PALMER PROJECT (E77/987 AND E77/1290) 21
	3.2.1	Project Location 21
	3.2.2	Tenure 21
	3.2.3	Local Geology 22
	3.2.4	Previous Exploration 24
	3.2.5	Exploration Potential 27
4.		TECHNICAL VALUATION BACKGROUND 28
	4.1.	VALUATION METHODS 28
5.		VALUATION OF THE HASTINGS RARE METALS PTY LIMITED MINERAL ASSETS 30
	5.1. 5.2.	HASTINGS (P80/1626 – P80/1635) 30 VALUATION SUMMARY 32
6.		VALUATION OF THE AUGUSTUS MINERALS LIMITED MINERAL ASSETS 33

	6.1. 6.2.	E77/987 33 E77/1290 33
	6.3.	VALUATION SUMMARY 34

Table of Figures and Tables

Figure 1 – Hastings Project Location 5
Figure 2 - Hastings Project Geology and Drill Hole Summary Plan 14
Figure 3 - Hastings Project Cross Sections 15
Figure 4- Hastings Deposit Long Section 20
Figure 5 - Mt Palmer Project Location Plan 22
Figure 6 - Mt Palmer Regional Geology (after GSWA 1:250,000 mapping Southern Cross Sheet) 24

Table 1 – Hastings Rare Metals Pty Limited Valuation Summary 6
Table 2 – Augustus Minerals Limited Valuation Summary 6
Table 3 - Tenement Summary 11
Table 4 - Estimated Percentage of the Various Rare Earth Oxides in the Hastings Deposit 18
Table 5 - 2010 JORC Compliant Resource Estimate (Coxhell) 19
Table 6 - Mt Palmer Project Tenement Summary 21
Table 7 - Valuation on JORC compliant Resource - Lower end of Range 30
Table 8 - Valuation on JORC compliant Resource and REO - Upper end of Range 31
Table 9 - Hastings Rare Metals Pty Limited Valuation Summary 32
Table 10 - Augustus Minerals Limited Valuation Summary 34

EXECUTIVE SUMMARY

This Independent Technical Report ("ITR") has been prepared at the request of HLB Mann Judd Corporate (WA) Pty Ltd to provide an opinion as to the present value of the current mineral assets of Augustus Minerals Limited ("Augustus") and the mineral assets of Hastings Rare Metals Pty Limited ("Hastings Rare Metals"). HLB Mann Judd Corporate (WA) Pty Ltd has been engaged by Augustus to prepare an Independent Expert's Report in relation to Augustus's proposed purchase of all the issued capital of Hastings Rare Metals. Hastings Rare Metals is the owner of the Hastings Rare Metals and Heavy Rare Earths Project (the "Project" or "Hastings") comprising of ten (10) wholly owned prospecting licenses in the East Kimberley region of Western Australia. Tenure over the project area comprises ten granted Prospecting Licences (P80/1626 – P80/1635) totaling 1,990 hectares.

The Project contains a combined JORC-compliant indicated/inferred resource to 250m depth of 22.08 million tonnes at 0.79% ZrO2, 0.10% Y2O3, 0.31% Nb2O5 and 0.023% Ta2O5. The resources remain open along strike in both directions and at depth, and drilling should upgrade the existing resource categories and increase the total tonnage. Historical analysis did not systematically assay for other rare earth elements including dysprosium, europium, and terbium and as such were not included in the JORC compliant resource. Comprehensive analytical data from previous drilling suggest potential exists to host significant quantities of these elements and hence increase the in-situ value of the resource.

The rare metals deposit is hosted by a fine-grained silica-sericite, fluorite-bearing, tuffaceous rhyolitic volcaniclastic unit informally termed the Niobium Tuff. This volcaniclastic unit is the lowermost unit of a sequence of trachyte-to-rhyolite lavas, trachyandesite subvolcanic rocks, and volcaniclastic units of the Brockman Volcanics located within the Halls Creek Group, a thick, early Proterozoic volcano-sedimentary sequence. The Niobium Tuff can be traced over a strike length of 3.5km and has a vertical or steep easterly dip. Diamond drilling has confirmed the Niobium Tuff extends to a depth of 250m, however further drilling below 100m is required to better define the geometry and thickness, as well as upgrade the existing resource.

Previous explorers have completed extensive engineering studies including open cut mine design and mineral processing evaluation. There have been significant advances in mineral processing technologies since the last major phase of work on the Projects mineralisation. A programme of metallurgical testwork is required to develop the optimum processing route to maximise the economic potential of the deposit.

Figure 1 – Hastings Project Location

The valuation of the mineral assets of Hastings Rare Metals based on a 100% equity interest in the assets is provided in the table below. The valuations are expressed in Australian dollars (A\$) unless otherwise stated.

Hastings Rare Metals Pty Limited Mineral Assets Valuation Summary
(as at 23 December 2010)
	Low (\$m)	High (\$m)	Preferred (\$m)
P80/1626 – P80/1635	2.1	7.7	4.0

Table 1 – Hastings Rare Metals Pty Limited Valuation Summary

The value of the 100% interest in Hastings Rare Metals mineral assets is considered to lie in a range from \$2.1 million to \$7.7 million, with Zephyr selecting a preferred technical value of \$4.0 million.

Augustus's mineral asset consists of the Mt Palmer gold and iron ore project located approximately 40km east south east of Southern Cross in Western Australia. The project which includes E77/987 and E77/1290 surrounds the historical Mt Palmer Gold mine, which produced 157,933 oz (305,799 tonnes at 15.9g/t) between 1935 and 1944.

The valuation of the mineral assets of Augustus based on a 100% equity interest in the assets is provided in the table below. The valuations are expressed in Australian dollars (A\$) unless otherwise stated.

Augustus Minerals Limited Mineral Assets Valuation Summary (as at 23 December 2010)
	Low (\$m)	High (\$m)	Preferred (\$m)
E77 / 987	0.16	0.24	0.21
E77 / 1290	0.08	0.10	0.09
TOTAL 0.24 0.34 0.30

Table 2 – Augustus Minerals Limited Valuation Summary

The value of the 100% interest in Augustus's mineral assets is considered to lie in a range from \$0.24 million to \$0.34 million, with Zephyr selecting a preferred technical value of \$0.30 million.

1. INTRODUCTION

1.1. TERMS OF REFERENCE

Zephyr Consulting Group Pty Ltd ("Zephyr") has been commissioned by HLB Mann Judd Corporate (WA) Pty Ltd to provide an Independent Technical Report ("ITR") on the mineral assets Augustus is proposing to acquire through the purchase of 100% of the issued capital in Hastings Rare Metals Pty Limited ("Hastings Rare Metals"). Hastings Rare Metals is the owner of the Hastings Rare Metals and Heavy Rare Earths Project (the "Project" or "Hastings") comprising of ten (10) wholly owned prospecting licenses in the East Kimberley region of Western Australia.

As part of the ITR, Zephyr will provide an opinion as to the value of the mineral assets being acquired as well as the currently owned Augustus Mineral assets.

This valuation has been prepared in accordance with the Code for the Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Expert Reports ("The VALMIN Code"), 2005 edition. Where mineral resources have been referred to in this Report, the classifications are consistent with the Australasian Code for Reporting of Mineral Resources and Ore Reserves ("JORC Code"), prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, the Australian Institute of Geoscientists and the Minerals Council of Australia, effective December 2004.

The valuations expressed in the ITR are valid as at the valuation date, being 23 December 2010, and may vary with time. All dollar values included in the report are in Australian dollars (A\$) unless otherwise stated.

Zephyr has not been requested to provide comment on the fairness or reasonableness of the transaction contemplated and has therefore not offered any opinion on these matters.

Zephyr has based its report on information provided by Augustus and Hastings Rare Metals, as well as investigations of all public domain data that may have relevance to the review of the mineral assets. Zephyr is not aware of any material data not disclosed by any of the above mentioned parties and is not responsible for the exclusion of any such data in this report. A final draft of this report has been provided to HLB Mann Judd Corporate (WA) Pty Ltd for verification prior to publication. The information in this report that relates to exploration results and mineral resources is based on information compiled by Ian Prentice and John Holmes. Ian Prentice and John Holmes each consents to the inclusion in this report of this information in the form and context in which it appears.

1.2. QUALIFICATIONS, EXPERIENCE AND INDEPENDENCE

Zephyr is an independent privately owned consulting firm providing exploration management and project assessment services to the Australian minerals industry.

The report has been prepared by Ian Prentice and John Holmes whom are both Directors of Zephyr Consulting.

Ian Prentice, is a geologist with over 20 years experience in exploration and mining geology and property evaluation. He is a Director of Zephyr and a Member of the Australasian Institute of Mining and Metallurgy ("AusIMM") and has the appropriate relevant qualifications, experience, competence and independence to be considered as an "Expert" and "Competent Person" under the VALMIN and JORC Codes respectively.

John Holmes, is a geologist with over 20 years experience in exploration and mining geology and property evaluation. He is a Director of Zephyr and a Member of the Australian Institute of Geoscientists ("AIG") and has the appropriate relevant qualifications, experience, competence and independence to be considered as an "Expert" and "Competent Person" under the VALMIN and JORC Codes respectively.

Zephyr, its employees and associates are not, nor intend to be directors, officers or other direct employees of Augustus and have no material interest in the Projects owned by or being acquired by Augustus.

1.3. PRINCIPAL SOURCES OF INFORMATION

The statements and opinion contained in this report are given in good faith and this review is based on information provided by the title holders, along with technical reports by consultants, previous tenements holders and other relevant published and unpublished data for the area. Zephyr has endeavoured, by making all reasonable enquiries, to confirm the authenticity, accuracy and completeness of the technical data upon which this report is based.

A listing of the principal sources of information is included in Section 5 of this report.

2. RARE EARTHS AND RARE METALS INDUSTRY OVERVIEW

Rare earths and rare metals are a range of metals with varying abundance levels and which represent a relatively small market (total rare earth oxide sales in 2008 have been estimated at US\$1.2 billion). Demand and application varies across the range of metals, albeit that they are generally grouped together for convenience and are often assumed to represent a single supply and demand group.

Applications for rare earths and rare metals include magnets, phosphors, metal alloys, catalysts, polishing, ceramics and glass, with the magnets and phosphors accounting for about 70% of demand.

Magnets are the biggest rare earths sector by revenue, accounting for 38% of demand in 2008, and are expected to be the area of highest growth over the next few years. The vast majority of neodymium and dysprosium produced in the world is consumed in magnet manufacture, with the Neo magnet (neodymium – iron – boron) first commercialized in 1982. Neo magnets, which in the late 1980's enabled the miniaturisation of the hard disk drive, have no substitute in electric devices which demand a high power density.

Neo magnets have a monopoly use in hybrid, plug in hybrid and electric vehicles, which is expected to account for ongoing demand growth for neodymium. Neodymium metal usage in hybrid electric vehicles ranges from 450 to 1,000 grams, with the average intensity of use expected to increase with ongoing improvements in hybrid electric vehicles. The increasing intensity of use combined with the expected increased adoption of hybrid electric vehicles indicates that there will be ongoing demand growth for neodymium.

The heavy rare earth dysprosium is often substituted for neodymium to improve the Neo magnets resistance to demagnetising fields, replacing up to 6% of the neodymium. Neo magnets containing dysprosium are expensive and are therefore only used in the most demanding of applications such as electric drive train motors.

The phosphor sector accounted for 32% of demand by value in 2008, with growth in this sector due to the increased use of compact fluorescent light bulbs to replace incandescent bulbs. Rare earth phosphors, consisting of europium, terbium and yttrium, are a key component of fluorescent lamp performance. Incandescent bulbs are currently being phased out, due to ongoing regulatory efforts around the world, and are generally being replaced by compact fluorescent light bulbs, indicating an expected ongoing growth in demand for phosphors.

2.1.1 RARE EARTH AND RARE METAL SUPPLY

China has dominated production of rare earths and rare metals since emerging as a major producer in the 1980's, supplying more than 80% of the worlds REE since 1998. The majority of the Chinese production comes from the Bayan Obo iron – REE – niobium deposit in Inner Mongolia , where REE are a by-product of iron ore production.

China's Ministry of Industry and Information Technology drafted a six year plan for rare earth production in August 2009. The plan called for the reduction in the export quota for rare earth oxides over the next 6 years, a total ban on some rare earths including dysprosium and terbium and the reduction of rare earth separation and smelting facilities from 100 to 20.

Further to this in July 2010 China's Ministry of Finance announced major reductions in export quotas for rare earth metals for the second half of 2010, which resulted in significant price rises across the rare earth and rare metal group.

These developments in the Chinese rare earth and rare metal industry have resulted in increased focus on developing rare earth and rare metal production outside of China, including a number of projects in Australia. The increasing price of the rare earth and rare metal group, due to both the Chinese supply constraints and the increased usage for selected rare earths and rare metals, has enhanced the potential economics of known deposits as well as providing significant capital for exploration aimed at defining new deposits.

In Australia Lynas Corporation is developing the Mt Weld Project near Laverton in Western Australia, Arafura Resources is planning to develop the Nolans Project in the Northern Territory and Navigator Resources is looking at opportunities to commercialise the Cummins Range Project in the East Kimberley of Western Australia.

3. TECHNICAL SUMMARY OF THE HASTINGS RARE METALS PTY LIMITED MINERAL ASSETS

Augustus Minerals Limited announced to the ASX on 7 December 2010 that it had entered into a binding Share Sale Agreement to purchase all of the issued capital of Hastings Rare Metals Pty Limited ("Hastings Rare Metals"). Hastings Rare Metals is the owner of the Hastings Rare Metals and Heavy Rare Earths Project (the "Project" or "Hastings") comprising of ten (10) wholly owned prospecting licenses in the East Kimberley region of Western Australia.

3.1. HASTINGS (P80/1626 – P80/1635)

3.1.1 PROJECT LOCATION

The Hastings Project is located 18km southeast of the Great Northern Highway at Halls Creek and 180km south of the Argyle Diamond Mine in the East Kimberley Region of Western Australia. The project site is accessed from the Great Northern Highway, which links Broome and Derby (450km from site) to Wyndham (380km from site), at Halls Creek via tracks leading southeast to Palm Springs on the Black Elvire River. A number of smaller tracks leave this main track and provide access to the Hastings Project site.

3.1.2 TENURE

Tenure over the project area comprises ten granted Prospecting Licences (P80/1626 – P80/1635) totaling 1,990 hectares. The Prospecting Licences were granted 20 March 2009 and expire 19 March 2013. Annual exploration expenditure and rental commitments for the project are \$84,197. There are no known encumbrances with regard to the tenements. Tenement details are summarized in Table 3.

Tenement	Registered Holder	Interest (%)	Granted	Expiry	Area (ha)	Expenditure Commitment (\$)	Rental (\$)
P80/1626	Hastings Resources Pty Ltd	100	20/03/09	19/03/13	200	8,000	462.00
P80/1627	Hastings Resources Pty Ltd	100	20/03/09	19/03/13	200	8,000	462.00
P80/1628	Hastings Resources Pty Ltd	100	20/03/09	19/03/13	200	8,000	462.00
P80/1629	Hastings Resources Pty Ltd	100	20/03/09	19/03/13	200	8,000	462.00
P80/1630	Hastings Resources Pty Ltd	100	20/03/09	19/03/13	200	8,000	462.00
P80/1631	Hastings Resources Pty Ltd	100	20/03/09	19/03/13	190	7,600	438.90
P80/1632	Hastings Resources Pty Ltd	100	20/03/09	19/03/13	200	8,000	462.00
P80/1633	Hastings Resources Pty Ltd	100	20/03/09	19/03/13	200	8,000	462.00
P80/1634	Hastings Resources Pty Ltd	100	20/03/09	19/03/13	200	8,000	462.00
P80/1635	Hastings Resources Pty Ltd	100	20/03/09	19/03/13	200	8,000	462.00

Table 3 ‐ Tenement Summary

3.1.3 LOCAL GEOLOGY

The Hastings rare metals deposit is hosted by a fine-grained silica-sericite, fluorite-bearing, tuffaceous rhyolitic volcaniclastic unit informally termed the Niobium Tuff. This volcaniclastic unit is the lowermost unit of a sequence of trachyte-to-rhyolite lavas, trachyandesite subvolcanic rocks, and volcaniclastic units of the Brockman Volcanics located within the Halls Creek Group, a thick, early Proterozoic volcano-sedimentary sequence. The host volcanics were erupted from a small shield volcanic complex probably in an intraplate riftrelated basin in a shallow-marine setting. The Niobium Tuff has been dated at 1870±4Ma.

The Niobium Tuff unit would have been an extremely liquid fractionated differentiate of the magma chamber forming a volatile-enriched "cap". The lithophile-element enriched facies are characterised geochemically by elevated Fl, Th, Zr, Nb, Ta, REE, Sn, W and Be. Nb in stream sediments and soils, Th-band radiometric anomalism and fluorite mineralisation all proved to be useful path finders to Zr, Nb/Ta, and REE polymetallic mineralisation in the Hastings project area.

There is ample outcrop within the Hastings area, and the Niobium Tuff can be traced over a strike length of 3.5km (Figure 2). It occurs here on the western flank and northern closure of a major south-west plunging synclinal structure. The Niobium Tuff varies in width to 35m, and has a vertical or steep easterly dip. The geometry of the deposit is locally complicated due to the influence of tight, parasitic folding.

The Tuff can be split into two units, a lower, western crystal-rich tuff layer and an upper, eastern pumice/mica rich layer. The upper pumice rich layer hosts grades that are approximately 10% higher than the crystal rich layer. This might prove to be of significance in future economic evaluations.

Only minor faulting is evident, and diamond drilling has established continuity of the unit to a vertical depth of 250m. Weathering is limited, with oxidation observed only down to depths of 20-30m. The mineralisation is believed to be syngenetic but it has been modified by fluorine rich solutions moving through the cooling and consolidating tuff units soon after deposition.

Facies mapping carried out by Union Oil suggest that the source vent for the Niobium Tuff unit is located around 1,000m below present surface and it is reasonable to consider that the unit would thicken towards the vent. This provides the deposit with considerable potential for additional tonnage at depth, and a potential for 50-150 million tonnes has been suggested by one previous explorer.

Electron microprobe studies by the CSIRO defined the ore mineral assemblage. The ore minerals identified include zircon and its unusual hydrous counterpart gel-zircon, along with columbite and yttrium-bearing rare earth niobates. Hastings rare earths show more of an affinity to the xenotime (YPO4)-rich deposits of Quangdong, China than to other lower Y- and light rare earth-bearing deposits.

Minor amounts of bertrandite, bastnaesite, calcian-bastnaesite, parisite, synchisite, cassiterite, chalcopyrite, galena, pyrite, sphalerite, thorite, gelthorite and ilmenite have also been observed. Potassium mica is the host for gallium which is found within the lattice structure. The potential ore minerals are found dispersed throughout the quartz, potassium mica and albite host, usually occurring in layers and on grain boundaries.

All the ore minerals are fine grained, with few grains larger than 10 microns. Columbite occurs only in grains of 1-2 micron diameter.

As yet there does not appear to have been any efforts to determine whether there are any significant differences in mineralogy between oxidised and primary mineralisation. This could prove to be an important factor in determining future processing routes.

Figure 2 ‐ Hastings Project Geology and Drill Hole Summary Plan

Figure 3 ‐ Hastings Project Cross Sections

3.1.4 PREVIOUS EXPLORATION

The earliest significant exploration of the Hastings area occurred in 1954 when Rio Tinto detected anomalous radiation in the area during regional radiometric surveys. In the 1960s the Geological Survey of Western Australia (GSWA) conducted geological mapping which fed into the publication of the Gordon Downs 1:250,000 Geological Sheet and a Bulletin on the Geology of the East Kimberley Region.

In 1973, Trend Exploration located an area of anomalous niobium during follow up of airradiometric anomalies identified by the Bureau of Mineral Resources (BMR). Later in the 1970s to 1981, Mobil Oil flew aerial magnetics and radiometrics and carried out soil sampling and drilling in search for uranium mineralisation.

The main geological investigations on the Hastings rare metals deposit were undertaken during the period 1982-85 by Union Oil Development Corporation (UODC). In 1983-84, UODC completed detailed geological mapping at 1:5000 scale, and reconnaissance stream sediment, soil and rock-chip geochemistry. 88 rock chip samples returned values up to 166,600ppm Zr, 6,400ppm Nb, 600ppm Ta, 2,220ppm Y, 620ppm Sn, 920ppm Th, 2,840ppm Ba, 710ppm La and 890ppm Ce. Maximum rare earth oxide values were therefore 2,820ppm Y2O3, 830ppm La2O3, and 1,040ppm Ce2O3 indicating the potential grades that might be derived from the deposit. 19 trenches (3,500m) were established across the outcrop of the Niobium Tuff (Figure 2), returning grades up to 0.45% Nb and 0.23% Ta.

Follow up drilling commenced with six RC/DD holes (BR1-6) completed. Logs are not available for BR4, which failed to intersect the target horizon. Of the other holes, one was drilled to test for possible gold potential associated with a sulphidic shale unit. Total drilling was 282.5m of RC and 318.5m of NQ core.

In the next field season, 1984-85, UODC drilled 13 RC holes numbered from BR37 and BR50 excluding BR47. These holes totaled 957.5m, and the results were used to interpret the deposit and allow initial resource estimations to be undertaken. Drilling was 702m of RC and 255.5m of NQ core.

In 1985, UODC commissioned mineralogical studies at the CSIRO which identified the finegrained nature of the mineralisation, with an average grain size of less than 10 microns.

Later in 1985, UODC passed management of the project to its joint venture partner, West Coast Holdings (WCH). WCH carried out further drilling in 1988, with an additional 23 RC/DD holes with numbers between BR51 and BR92 drilled totaling 1,281.9m, being 878m of RC and 409.3m of NQ core.

The collar locations and traces of the drillholes are shown in Figure 2. Total metres drilled were 1,862.5m of RC and 977.9m of NQ core.

Mineralogical studies and metallurgical testwork were undertaken including the building of a pilot plant, but WCH fell into receivership in 1989 before work was completed.

The project was acquired from the receiver-manager of WCH by Aztec Resources Limited. Aztec applied for Mining Leases to cover the project area in 2001. That company carried out development studies based on the 1988 data which concluded that the project appeared to be financially viable. Aztec then recommended proceeding to a Feasibility Study. However, in January 2007 Mount Gibson Iron Limited completed its takeover of Aztec.

During 2007 a notice of intention to withdraw the MLAs was given and application was made for the ten Prospecting Licences to cover the project area. These applications were granted in March 2009.

As at the end of 1989, total expenditure by all parties on the project was in excess of \$7.6 million (based on annual inflation over the period 1989-2010 of 2.82%, this equates to in excess of \$13 million in current dollar terms). The bulk of this was spent in the period 1987- 89 with the construction and operation of a sophisticated pilot plant at Warren Springs Laboratory in Stevenage in England.

Subsequently, both Aztec and its short-term joint venture partner Tantalum Australia would have spent significant funds evaluating the project. The actual amount of this expenditure has not been verified.

The exposed portion of the deposit has been drilled on sections ranging from 30m to 130m apart along the full strike of the deposit (Figure 2), to an average depth of 70m. The deepest drillhole intersection is some 250m below surface. Only five holes intersect the Niobium Tuff at or below 100m from surface. Two cross sections are provided as examples of the costean and drill results through the mineralisation in Figure 3.

Drilling results confirm the findings of earlier trench sampling with the target minerals confined to the Niobium Tuff hence providing a strong control for evaluation of the deposit. Within the Niobium Tuff, lower grade zones are readily identifiable. The Tuff itself can be divided into an Upper Tuff and a Lower Tuff, with the Upper Tuff hosting grades some 10% higher than the Lower Tuff for all target elements.

One metre samples have been analysed with West Coast Holding's analyses carried out by Classic Comlabs using pressed powder XRF for the potential ore elements Zr, Y, Nb, Ta, Hf and Ga. These results were then converted to oxide equivalents using standard factors.

Comprehensive analyses for the rare earth elements (other than Y) were only carried out on two holes. However, using the range of values returned from the non systematic analysing for the other rare earths throughout the drilling programmes, and taking account of the homogenous distribution of all minerals within the Niobium Tuff unit, it has been possible to establish estimates for the whole suite of rare earth oxides present in the deposit. These are shown in Table 4.

The total estimated rare earth oxide content (TREO) of the deposit is 0.22% (2213ppm) and the proportion of heavy rare earths (HREO, including Y) to light rare earths (LREO) in the Hastings deposit appears to be significantly different to the majority of other deposits.

The HREO at 0.17% (1696ppm) accounts for 77% of TREO. This proportion compares very well with other rare earth deposits, other than Thor Lake.

Based on limited data, Hastings has a total of 231ppm of dysprosium which is one of a number of high value HREO oxides. This makes Hastings very well placed with respect to most other rare earth deposits.

Rare Earth Oxide	Estimated ppm	% of REO
	in deposit	in deposit
Light REO
Lanthanum Oxide	129	5.83
Cerium Oxide	372	16.81
Praseodymium Oxide	2	0.09
Neodymium Oxide	8	0.36
Promethium Oxide
Samarium Oxide	6	0.27

Heavy REO
Europium Oxide	0
Gadolinium Oxide	9	0.41
Terbium Oxide	3	0.14
Dysprosium Oxide	231	10.44
Holmium Oxide	5	0.23
Erbium Oxide	171	7.73
Thulium Oxide	3	0.14
Ytterbium Oxide	112	5.06
Lutetium Oxide	2	0.09
Yttrium Oxide	1160	52.42
TOTAL	2213	100.02

Table 4 ‐ Estimated Percentage of the Various Rare Earth Oxides in the Hastings Deposit

The Hastings Deposit is a significant deposit enriched in Zr, Nb, Ta and REE. Analyses have been systematically undertaken for Zr, Nb, Ta and Y but not so for the other rare earth oxides. Hence the estimated JORC-compliant resources based on the historical data only the four main oxides were reported. The Hastings rare metals deposit contains a combined JORC-compliant indicated/inferred resource to 250m depth of 22.08 million tonnes at 0.79% ZrO2, 0.10% Y2O3, 0.31% Nb2O5 and 0.023% Ta2O5. Resources are summarized in Table 5.

Resources	mt	%ZrO2	%Nb2O5	%Ta2O5	%Y2O3
Indicated	8.83	0.77	0.31	0.022	0.09
Inferred	13.25	0.81	0.32	0.024	0.10
Total	22.08	0.79	0.31	0.023	0.10

Table 5 ‐ 2010 JORC Compliant Resource Estimate

3.1.5 EXPLORATION POTENTIAL

The resource remains open along strike in both directions although surface mapping by previous explorers implies that the host Niobium Tuff thins to both north and south. At depth the resources are open and, based on Union Oil's theory that the host Tuff is likely to widen at depth, this provides a sound target for a significant expansion of the resource.

Figure 4‐ Hastings Deposit Long Section

TECHNICAL SUMMARY OF THE AUGUSTUS MINERALS LIMITED MINERAL ASSETS

Augustus's existing mineral asset is the Mt Palmer gold and iron ore project located approximately 40km east south east of Southern Cross in Western Australia. The project which includes E77/987 and E77/1290 surrounds the historical Mt Palmer Gold mine, which produced 157,933 oz (305,799 tonnes at 15.9g/t) between 1935 and 1944.

3.2. MT PALMER PROJECT (E77/987 AND E77/1290)

3.2.1 PROJECT LOCATION

The Mt Palmer Project is located approximately 40 kilometres east south east of the township of Southern Cross in Western Australia (Figure 5). Access to the project area is via the Great Eastern Highway and then via a well maintained gravel track heading south from Yellowdine roadhouse. Access within the project area is via a number of well established tracks to prospect areas and also along the Lake edge.

E77/987 surrounds the historical Mt Palmer Gold mine (excised), which produced 157,933 oz (305,799 tonnes at 15.9g/t) between 1935 and 1944. E77/1290 is located 5km to the north of the historical Mt Palmer Gold mine.

3.2.2 TENURE

The project comprises two tenements; E77/987 (Mt Palmer), which was granted on 27 November 2006, and E77/1290 (Heaneys Find), which was granted on 17 November 2008. Both tenements are wholly owned by Augustus Minerals Limited.

Tenement details are summarized in Table 6.

Tenement	Registered Holder	(%)	Granted	Expiry	Area (Blocks)
E77/987	Augustus Minerals Ltd	100	27/11/2006	26/11/2011	2
E77/1290	Augustus Minerals Ltd	100	17/11/2008	16/11/2013	3

Table 6 ‐ Mt Palmer Project Tenement Summary

Figure 5 ‐ Mt Palmer Project Location Plan

3.2.3 LOCAL GEOLOGY

The Mount Palmer Project is situated in the Southern Cross province of the Archaean Yilgarn Craton. It lies within the Southern Cross greenstone belt that extends along strike for 300km from Mt Jackson in the north to Hatter Hill in the south (Figure 6).

The elongate belt is a strongly deformed, metamorphosed remnant of a once larger greenstone assemblage. It has been shaped and attenuated by the emplacement of the Ghooli domal syn-tectonic granitoids (Gee, 1995). These granitoid domes include the Parker, Ghooli, and Ranking Domes (Gee 1982, Keats, 1991). The Mount Palmer Project lies within a narrow slither of greenstone on the eastern side of the Ghooli Dome

Outcrop is well develop within E77/987, particularly in the area surrounding the historic Mt Palmer Gold mine (excised), with an amphibolite sequence extending from the greenstonegranite contact located near the western boundary of the tenement to a banded iron formation unit (BIF) located 200m east of the mine and basalt on the eastern side of the BIF. Outcrop is obscured to the south by the remnant mine tailings dump and by recent lake sediments and aeolian sands in the south eastern half of the tenement.

The amphibolite is foliated and consists of aligned amphibole/actinolite with specs of feldspar. Remnant vesicles and flattened pillow structures are evident in the outcrops which extend along the western edge of Lake Julia. The BIF unit is approximately 5m wide and forms a prominent north north easterly trending ridge. Basalt is more common along the east side of the BIF ridge. Both the amphibolites and the basalts show varying amounts of biotite alteration. Pegmatite is common along the granite greenstone contact and occurs throughout the area as dykes. Minor quartz veins occur throughout the tenement.

The Mt Palmer Gold mine operated from 1934 to 1944 and in that time produced a total of 305,799 tonnes of ore for a return of 157,933oz at an average grade of 15.9g/t Au. The deposit was mined over a distance of 360m. Gold mineralisation occurs within 5 quartz reefs within amphibolite facies quartz-biotite schists, two of which were mined. The lodes are tabular bodies plunging both to the north and south. The lode material has been described as sugary quartz with irregularly distributed coarse gold. An alteration zone of biotite and sulphides including pyrite and pyrrhotite is associated with the mineralisation.

The eastern most lode forms along the contact between the prominent BIF ridge and amphibolite sequence and extends in a north north easterly direction north of the Mt Palmer workings. There are a large number of shallow shafts and pits marking this lode which extends though the northern half of E77/987 and in to E77/1290.

The Heaney's Find area, E77/1290, is located 5km to the north of the historical Mt Palmer Gold mine. The project overlies the narrow attenuated north east extension of the Southern Cross greenstone belt, with the western third of the area dominated by sub-cropping granodiorite of the Ghooli Dome. These granitoids are in contact with a chlorite-tremolite ultramafic unit which forms the western most part of the greenstone belt. Foliated amphibolite rocks with intercalated banded cherts overlie the ultramafics. Basalt has been mapped along the east side of the amphibolites. Both the amphibolites and the basalts show varying amounts of biotite alteration. To the east of the greenstone belt lie the regionally extensive biotite adamellites. Recent lake sediments and aeolian sands dominate the southern and eastern parts of the tenement.

Minor quartz veining and small pegmatite dykes occur, particularly near the granitegreenstone contact. Several Proterozoic dykes interpreted from aeromagnetics strike eastnortheast through the project area.

Gold mineralisation is largely associated with quartz reefs within the altered amphibolites. It has been suggested by work undertaken by the GSWA that the highest grade mineralisation is associated with the wider quartz reefs, particularly within fold noses. The lode material has been described as sugary quartz with irregularly distributed coarse gold. An alteration zone of biotite and sulphides including pyrite, arsenopyrite, and pyrrhotite is associated with mineralisation. The majority of old workings at Heaneys Find are shallow and insignificant.

Figure 6 ‐ Mt Palmer Regional Geology (after GSWA 1:250,000 mapping Southern Cross Sheet)

3.2.4 PREVIOUS EXPLORATION

There has been a considerable amount of exploration undertaken over the project area, with intensive activity in the 1930's and 1940's while the Mt Palmer Gold mine was in operation and in the early 1970's when the area was explored for nickel.

Broken Hill Metals NL explored the Mt Palmer tenement area for nickel between 1969 and 1972, completing costeaning, RC and diamond drilling, IP and rock chip sampling.

In 1985 Delta Gold NL carried out a review on previous exploration, reconnaissance geological mapping, stream sediment sampling, rock chip sampling and an airborne aeromagnetic survey.

Broken Hill Metals NL explored for gold on an area adjacent to and along the eastern boundary of the excluded Mt Palmer mining lease between 1987 and 1989. Work completed included a ground magnetic survey and a hand auger soil sampling program, which defined several contiguous soil anomalies within lake clays in the eastern half of E77/987. Broken Hill Metals NL also completed a series of RC drilling programs to test the extensions of the main lode of the Mt Palmer Gold mine. There were no significant results from this drilling.

Reynolds Australia explored the area between 1991 and 1994, completing soil and hand auger sampling, which identified zones of weak gold anomalism, detailed geological mapping of the Mt Palmer Gold mine area, regional mapping that extended through E77/987 and soil sampling along the western contact zone. RC and diamond drilling was completed in the area of the Mt Palmer Gold mine, with mixed results, the best of which was 3m @ 5.68g/t Au (from 27m) from RC drilling beneath the main lode. No significant intercepts were reported from the diamond drilling. In 1994 Reynolds Australia carried out geological mapping, soil sampling (25 samples), RAB and RC drilling (3 holes) plus diamond drilling (4 holes) below the main workings. Logging of the diamond holes suggests that a pegmatite intrusive may have stoped out the depth extensions of the Mt Palmer mineralisation. There were no significant results from the diamond drilling.

Sons of Gwalia completed gold exploration across the western half of E77/987 between 1994 and 1999, completing auger drilling on 200m by 40m centres which defined a 1.3km long Au – As anomaly extending along the BIF unit to the east of the Mt Palmer Gold mine. Reconnaissance RAB drilling was completed along the strike extensions to the Mt Palmer Mine, with two traverses to the north and two to the south. There were no significant results.

On the Heaneys Find tenement area, the earliest reported work consisted of the sinking of several exploratory shafts in the 1930's on weak mineralisation associated with banded cherts similar to that within the Mt Palmer area along strike to the south. No significant production was reported.

In the 1970's Amax Exploration (Australia) Inc and ASARCO (Australia) Pty Ltd explored the area for nickel with no mineralisation encountered.

Between 1988 and 1991 Reynolds Yilgarn Gold Operation Ltd explored for gold in the area of E77/1290 completing remote sensing imagery and aeromagnetics interpretation, geological mapping and grid based soil sampling throughout the tenements. Low level analyses defined a gold soil anomaly over an area of 200m x 100m with a peak value of 490 ppb Au and situated south of the Heaney's Find workings. This anomaly was interpreted to represent a transported anomaly related to nearby gold occurrences and was not tested.

An RC drilling programme of 10 holes for 500m on four traverses was completed, targeting the BIF horizon at Heaneys Find. Best assays were from a pair of holes on one section and ranged from 0.16 to 0.28 g/t.

Australian Goldfields NL explored the area for gold between 1995 and 1997, including the acquisition and interpretation of multi-client aeromagnetic data and combined false colour Landsat TM / Spot panchromatic data, geological mapping, soil and rock chip sampling. A total of 19 rock chip samples were collected with a best result of 4.7g/t Au being returned from quartz vein material in a shallow working at the Heaney's Find prospect. A total of 260 soil samples were collected on a 250m x 50m grid and analysed for Au, returning a best result of 1200 ppb Au. Follow up sampling on a 100 x 50m grid was completed as well resampling of the 1200ppb Au assay, which failed to repeat. However, several weak anomalies were outlined (>8ppb Au contours), proximal to the banded chert horizon and historical exploration test pits. A total of 47 RAB holes were drilled over the more significant anomalies to an average depth of 20.4m. Results were disappointing with only a maximum assay of 43ppb Au returned.

A detailed structural geological assessment of the project was undertaken in 1997 by Dr Roger Majoribanks. Part of the recommendation from this review was to undertake further soil sampling over an aeromagnetic target to the east of the Heaney's Find workings. A total of 41 samples were collected. There were no significant results. No further work was recommended for the project.

Since acquisition Augustus has completed a number of programs including compilation of all public domain data, surface geochemistry and a limited RC drilling program.

In October 2007 a program of prospecting and surface geochemistry was undertaken over the north western half of E77/987, incorporating lag sampling over the extensions to the Mt Palmer deposit and along the western edge of Lake Julia. Lag sampling was completed on a 400m x 100m grid along strike to the north and south of the Mt Palmer gold mine. A total of 120 samples (+2mm/-6mm size fraction) were collected during the program. Results from the lag sampling included a number of relatively high assay values along strike from Mt Palmer. In addition, a contiguous 5-9 ppb Au anomaly was outlined over a 1km strike length of the granite-greenstone contact in the north west part of the project area

In August 2008 a program of costean sampling was undertaken, utilising some of the old costeans that had been excavated by Broken Hill Metals in the early 1970's. These costeans, which had not originally been assayed for gold, cross the strike extensions of the historical workings. Four of the historic costeans were selected for re-sampling, three just to the north of the Mt Palmer Gold Mine (one of which extends further east across the prospective stratigraphy) and one 2.3km north of the historic workings. Grab samples on 2m intervals were collected from the continuous spoil along the top of the costean, with a total of 396 samples submitted to the laboratory to be assayed for gold and other alteration indicator elements. The samples were also analysed on site using a Niton XRF.

The best results were returned from the costeans nearest to the Mt Palmer Gold mine, with a total of 63 assays greater than 20ppb Au (peak assay of 202ppb Au). This work defined the Mt Palmer North anomaly, a +250m long by 50m wide geochemical anomaly extending north from the Mt Palmer workings. The anomaly is coincident with a major north south trending shear zone identified from aeromagnetic interpretation. Arsenic results from the Niton XRF complimented the analytical results received. RC drill testing of the Mt Palmer North anomaly, which consisted of 12 holes for 850m on four east – west traverses, failed to identify significant near surface mineralisation.

An assessment of the iron ore potential of the BIF unit on E77/987 was also undertaken in August 2008. The BIF is approximately 3 – 5m wide and extends over a 5km strike length. Interpretation of aeromagnetic data suggests the unit may be isoclinally folded with the eastern limb concealed by the lake sediments. The western limb forms a prominent north north easterly trending ridge to the north of the Mt Palmer historical gold workings. The unit is largely un-deformed and is best described as an iron rich banded chert. A total of 14 rock chip samples were collected at nominal 100m spacings along the main ridge extending north of the Mt Palmer gold workings. Analytical results from this program showed that the iron formation is low grade, with hematite (Fe2O3) values ranging from 24.0 to 39.3%. Average Fe2O3 content was 32.6%. Average Fe content was 22.8%.

3.2.5 EXPLORATION POTENTIAL

Work completed on E77/1290 has identified two minor untested target zones including a weak soil anomaly over a 700m strike length immediately south of the historical workings, and a partially tested >8ppb Au soil anomaly on the north end of Lake Julia. These targets have scope to host small to modest sized high grade quartz vein hosted gold mineralisation.

The RC drilling carried out by Augustus immediately north of the historic Mt Palmer workings on E77/987 downgraded the near surface potential for extensions of the Mt Palmer mineralisation, however scope remains for down plunge extensions of the historic mineralisation beneath the depth of the recent drilling. There is also scope for the discovery of a southern extension to the historic Mt Palmer mineralisation beneath the tailings from the old workings along the edge of Lake Julia.

4. TECHNICAL VALUATION BACKGROUND

4.1. VALUATION METHODS

There are a range of recognised methods used in valuing mineral assets, with the selection of the most appropriate method dependent on a number of factors, including the type and quantity of information available and the relative stage of the mineral asset. The VALMIN Code defines the various stages of mineral assets as:

Exploration Areas – properties where mineralisation may or may not have been identified, but where a mineral resource has not been identified

Advanced Exploration Areas – properties where considerable exploration has been undertaken and specific targets have been identified that warrant further detailed evaluation. A resource estimate may or may not have been made but sufficient work will have been undertaken to provide both a good understanding of the type of mineralisation present and encouragement that further work will elevate one or more of the prospects to the resource category.

Pre–Development Projects – properties where mineral resources have been identified and their extent estimated but where a decision to proceed with development has not been made.

Development Projects – properties for which a decision has been made to proceed with construction and/or production, but which are not yet commissioned or are not yet operating at design levels.

Operating Mines – properties that have been commissioned and are in production.

The range of recognised valuation methods are designed to provide the most accurate estimate of the asset value in each of these stages. In some instances a mineral property may include assets that fall under more than one of these stages.

Regardless of valuation method used, the consideration must reflect the perceived "fair market value", being "the estimated amount of money, or the cash equivalent, for which in the opinion of the Expert reached in accordance with the provisions of the VALMIN Code, the mineral asset should change hands on the valuation date between a willing buyer and a willing seller in an arms length transaction, wherein each party has acted knowledgeably, prudently and without compulsion".

For Pre-Development, Development and Operating Mine Projects where measured and indicated resources (and/or proven and probable reserves) have been estimated, and mining and processing considerations are known or can reasonably be determined, valuations can be derived by developing a discounted cashflow ("DCF") and determining the net present value ("NPV") of the project.

Where mineral resources are in the inferred category, indicating that the use of mining and processing considerations is not possible, the use of DCF and NPV is not appropriate. In this situation it can be appropriate to use the in-situ resource ("Benchmark") method to value the asset. This method involves the use of a heavily discounted value of the contained insitu metal, usually in the range of 2 – 4.5% of the metal price at the time of valuation. This range may vary subject to a series of factors such as proximity to processing facilities, infrastructure, physiography and geometry of the mineralisation.

The potential of Exploration and Advanced Exploration Areas is speculative compared to projects which contain estimated mineral resources, making valuation of these assets more dependent on the informed, professional opinion of the valuer.

An appropriate valuation technique where previous and committed future exploration expenditure is known or can be estimated is the Multiple of Exploration Expenditure ("MEE") method. This involves applying a discount or premium to the past and committed future expenditure, known as the Effective Base ("EB"), by the use of a Prospectivity Enhancement Multiplier ("PEM") which relates to the success of previous exploration and an assessment of the future potential of the asset.

Sale transactions relating to mineral assets of a similar nature to the asset being valued can be used to assist in confirming the findings of the MEE method, subject to the sale being on an "arms length" basis in accordance with the VALMIN Code.

5. VALUATION OF THE HASTINGS RARE METALS PTY LIMITED MINERAL ASSETS

The following valuation of the Hastings Rare Metals mineral assets are based on a 100% equity interest in the assets.

5.1. HASTINGS (P80/1626 – P80/1635)

The Hastings Project (P80/1626 – P80/1635 ) has been valued using the Benchmark method which involves the use of a heavily discounted value applied to the contained in-situ resources. In this case, the discount factor applied is 0.1% of the in-situ value primarily due to the complex metallurgy and depth of inferred resources, leading to an expectation of high extraction costs, and the lack of transparency in the markets for the contained minerals.

A valuation of the Project at the lower end of the range has been estimated using the indicated JORC resources only. Pricing has been based on published estimates from various sources of the current value of oxide concentrates.

Oxide	Grade (%)	Tonnes	Discounted In Situ Value
ZrO2	0.77	67,991	\$407,946
Nb2O	0.31	27,373	\$684,325
Ta2O5	0.022	1,943	\$342,519
Y2O3	0.09	7,947	\$635,760
TOTAL			\$2,070,550

Table 7 ‐ Indicated JORC compliant Resource – Discounted In Situ Value

A valuation of the Project at the upper end of the range has been estimated using the indicated and inferred JORC resources and includes the estimated TREO content. There is insufficient data to classify the TREO content as JORC compliant. Pricing has been based on published estimates from various sources of the current value of oxide concentrates and also rare earth oxides.

Oxide	Grade (%)	Tonnes	Discounted In Situ Value
ZrO2	0.77	174,432	\$1,046,592
Nb2O	0.31	68,448	\$1,711,200
Ta2O5	0.022	5,078	\$895,423
Y2O3	0.09	22,080	\$1,766,400
Sub-Total			\$5,419,615

Light REO	Grade (ppm)	Tonnes	Discounted
			In-Situ Value
Lanthanum Oxide	129	2848.32	\$173,748
Cerium Oxide	372	8213.76	\$509,253
Praseodymium Oxide	2	44.16	\$3,886
Neodymium Oxide	8	176.64	\$15,633
Promethium Oxide		0	\$0
Samarium Oxide	6	132.48	\$4,637
Heavy REO	Grade (ppm)	Tonnes	Discounted
			In-Situ Value
Europium Oxide	0	0	\$0
Gadolinium Oxide	9	198.72	\$0
Terbium Oxide	3	66.24	\$40,738
Dysprosium Oxide	231	5100.48	\$1,555,646
Holmium Oxide	5	110.4	\$0
Erbium Oxide	171	3775.68	\$0
Thulium Oxide	3	66.24	\$0
Ytterbium Oxide	112	2472.96	\$0
Lutetium Oxide	2	44.16	\$0
Sub-Total			\$2,303,540
Grand Total			\$7,723,155

Table 8 ‐ JORC compliant Resource and Estimated TREO – Discounted In Situ Value

NB – Pricing for some REO unavailable for valuation

The selected preferred value is \$4.0m which falls within the lower half of the valuation range. The value of the Hastings Project could be significantly enhanced through further drilling and also analytical results on the TREO.

5.2. VALUATION SUMMARY

Hastings Rare Metals Pty Limited Mineral Assets Valuation Summary
(as at 23 December 2010)
	Low (\$m)	High (\$m)	Preferred (\$m)
P80/1626 – P80/1635	\$2.1	\$7.7	\$4.0

Table 9 ‐ Hastings Rare Metals Pty Limited Valuation Summary

6. VALUATION OF THE AUGUSTUS MINERALS LIMITED MINERAL ASSETS

The following valuation of the Mt Palmer project is based on a 100% equity interest in the tenements.

6.1. E77/987

E77/987 has been valued by applying the MEE method, which provides a valuation range for the projects exploration potential. Recorded exploration expenditure undertaken by Augustus as far as has been reasonably ascertained is approximately \$0.16 million (the applicable EB). This exploration expenditure has been related to data compilation, reconnaissance work, surface geochemistry and limited shallow RC drilling.

The majority of the exploration work completed is considered to have been effective, albeit that it has downgraded the potential for significant near surface high grade mineralisation directly to the north of the historic Mt Palmer gold mine. Targets defined on E77/987 consist of the southern extension or repetition of the Mt Palmer mineralised trend beneath the tailings from the old workings and the down plunge extension of the Mt Palmer mineralisation to the north. These targets are conceptual in nature, however the proximity of the historic high grade Mt Palmer gold mine indicates that there is a reasonable likelihood of future exploration success given the continuation of systematic exploration activities. As such it has been decided to apply a PEM range of 1.0 to 1.5, with the upper end of the range reflecting the potential of identifying small to modest sized high grade zones of mineralisation, indicating that every dollar spent on exploration has returned between \$1.00 and \$1.50 in value.

Using the range of PEM's from 1.0 to 1.5 and an EB of \$0.16 million derives a valuation range for the exploration potential of E77/987 of \$0.16 to \$0.24 million. The selected preferred value of \$0.21 million reflects the exploration potential of the project area.

6.2. E77/1290

E77/1290 has been valued by applying the MEE method, which provides a valuation range for the projects exploration potential. Recorded exploration expenditure undertaken by Augustus as far as has been reasonably ascertained is approximately \$0.08 million (the applicable EB). This exploration expenditure has been related to data compilation and reconnaissance work.

The majority of the exploration work completed is considered to have been effective, albeit that it is at an early stage and that the exploration targets defined, a weak soil anomaly over a 700m strike length and a partially tested >8ppb Au soil anomaly, only have scope to host small to modest sized high grade quartz vein hosted gold mineralisation. As such it has been decided to apply a PEM range of 1.0 to 1.2, indicating that every dollar spent on exploration has returned between \$1.00 and \$1.20 in value.

Using the range of PEM's from 1.0 to 1.2 and an EB of \$0.08 million derives a valuation range for the exploration potential of E77/1290 of \$0.08 to \$0.10 million. The selected preferred value of \$0.09 million reflects the exploration potential of the project area.

6.3. VALUATION SUMMARY

Augustus Minerals Limited Mineral Assets Valuation Summary (as at 23 December 2010)
	Low (\$m)	High (\$m)	Preferred (\$m)
E77 / 987	0.16	0.24	0.21
E77 / 1290	0.08	0.10	0.09
TOTAL	0.24	0.34	0.30

Table 10 ‐ Augustus Minerals Limited Valuation Summary

7. PRINCIPAL SOURCES OF INFORMATION

Aztec Resources Limited 2001. - Process Development Strategy. Brockman Niobium Tantalum Rare Earths Project

Border. A.J.M., 2010 - The Hastings Rare Metals Deposit, Western Australia

Chalmers. I., 2008. - Alkane Resources Ltd - The Dubbo Zirconia Project

Chalmers. D.J. - Brockman Multi-Metal and Rare Earth Deposit. Geology of the Minerals Deposits of Australia and Papua New Guinea

Coxhell. S.,2010. - Resource Report for the Brockman Polymetal Project in Western Australia for Hastings Metals Pty Ltd.

West Coast Holdings Ltd. 1991. - Annual Report 1991 Brockman Project-East Kimberley Region, Western Australia. Report prepared by Multi Metal Consultants November 1991

West Coast Holdings Ltd. - Annual Report 1990. Brockman Project-East Kimberley Region, Western Australia. Report prepared by Multi Metal Consultants November 1990

AI assistant

HASTINGS TECHNOLOGY METALS LTD — AGM Information 2011

65037_rns_2011-02-01_18ac8419-9ceb-483f-8070-fca4b122f299.pdf

AUGUSTUS MINERALS LIMITED (TO BE RENAMED HASTINGS RARE METALS LIMITED) ACN 122 911 399

NOTICE OF GENERAL MEETING

TIME AND PLACE OF MEETING AND HOW TO VOTE

VENUE

YOUR VOTE IS IMPORTANT

VOTING IN PERSON

VOTING BY PROXY

NOTICE OF GENERAL MEETING

AGENDA

1. RESOLUTION 1 – RATIFICATION OF PRIOR ISSUE – PLACEMENT

2. RESOLUTION 2 – CREATION OF NEW CLASS OF SHARES

3. RESOLUTION 3 – ACQUISITION OF HASTINGS RARE METALS PTY LIMITED

(together the Consideration Securities); and

4. RESOLUTION 4 – ISSUE OF SHARES – CORPORATE ADVISORY SERVICES

5. RESOLUTION 5 – OPTION PLACEMENT

6. RESOLUTION 6 – ELECTION OF DIRECTOR – JAMES ROBINSON

7. RESOLUTION 7 – ELECTION OF DIRECTOR – DAVID NOLAN

8. RESOLUTION 8 – CHANGE OF COMPANY NAME

9. RESOLUTION 9 – ISSUE OF CONSULTANT OPTIONS

10. RESOLUTION 10 – ISSUE OF DIRECTOR OPTIONS – MATHEW WALKER

11. RESOLUTION 11 – ISSUE OF DIRECTOR OPTIONS – JAMES ROBINSON

12. RESOLUTION 12 – ISSUE OF DIRECTOR OPTIONS – DAVID NOLAN

DATED: 14 JANUARY 2011

BY ORDER OF THE BOARD

EXPLANATORY STATEMENT

1. BACKGROUND TO THE ACQUISITION

1.1 Details of the Agreement

1.2 Details of Hastings

1.3 Proforma capital structure

Shares

Performance Shares

Options

2. RESOLUTION 1 – RATIFICATION OF PRIOR ISSUE – SHARES

2.1 General

2.2 Technical information required by ASX Listing Rule 7.4

3. RESOLUTION 2 – CREATION OF NEW CLASS OF SHARES

4. RESOLUTION 3 – ACQUISITION OF HASTINGS RARE METALS PTY LIMITED

4.1 General

4.2 Item 7 of Section 611 of the Corporations Act

Associate

Relevant interest

Relevant Interest Party

Acquisition in excess of threshold

4.3 Specific information required by Item 7 of Section 611 of the Corporations Act & ASIC Regulatory Guide 74

The identity of the acquirer and their associates and any person who will have a relevant interest in the Shares to be acquired

The identity, associations (with the Vendor and any of its associates) and qualifications of any person who it is intended will become a Director if Shareholders approve the Acquisition.

A statement of the Vendor's intentions regarding the future of the Company if Shareholders agree to the Acquisition.

4.4 Assessment of the Acquisition

Advantages

Disadvantages

4.5 Recommendations of Directors

4.6 Independent Expert's Report

5. RESOLUTION 4 – ISSUE OF SHARES – CORPORATE ADVISORY SERVICES

5.1 General

5.2 Technical information required by ASX Listing Rule 7.1

6. RESOLUTION 5 – OPTION PLACEMENT

6.1 General

6.2 Technical information required by ASX Listing Rule 7.1

7. RESOLUTIONS 6 AND 7 – ELECTION OF DIRECTORS

7.1 Background

7.2 Constitution requirements

7.3 Background and qualifications

James Robinson

David Nolan

8. RESOLUTION 8 – CHANGE OF COMPANY NAME

9. RESOLUTION 9 – ISSUE OF CONSULTANT OPTIONS

9.1 General

9.2 Technical information required by ASX Listing Rule 7.1

10. RESOLUTIONS 10 TO 12 – ISSUE OF DIRECTOR OPTIONS

10.1 General

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

11. ENQUIRIES

GLOSSARY

SCHEDULE 1 – TERMS AND CONDITIONS OF A CLASS PERFORMANCE SHARES

Rights attaching to the A Class Performance Shares

Conversion of the A Class Performance Shares

SCHEDULE 2 – TERMS AND CONDITIONS OF B CLASS PERFORMANCE SHARES

HASTINGS TECHNOLOGY METALS LTD AGM Information 2011