HILLGROVE RESOURCES LIMITED — AGM Information 2012

May 28, 2012

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Tuesday, 29 May 2012

Dear Shareholder

ANNUAL GENERAL MEETING NOTICE OF MEETING

Hillgrove Resources Limited (ASX:HGO) is pleased to advise its next Annual General Meeting will be held in Sydney on Thursday, 28 June 2012. Please find all details outlined in the following Notice of Meeting.

For a copy of the Annual Report please visit the Hillgrove Resources Limited website at http://www.hillgroveresources.com.au/ and click the Annual Report 2012 button on the right side of the page.

We hope you can join us for the Annual General Meeting on Thursday 28 June 2012 at 10:30am at Press Room 1&2, Radisson Blue Plaza Hotel, 66 Pitt Street, Sydney NSW 2000. If you are unable to attend the meeting, we encourage you to complete and return the personalised Proxy Form that has been mailed to you, or should it not have arrived please contact Boardroom Limited regarding a replacement.

Yours faithfully

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Russell Middleton

Company Secretary

IIII HILLGROVE RESOURCES LIMITED Level 41 Australia Square, 264 George Street, Sydney NSW 2000, Australia T +61 2 8221 0404 F +61 2 8221 0407 www.hillgroveresources.com ACN 004 297 116

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This document is important and requires your immediate attention. The matters raised in this document will affect your shareholding in the company. You are advised to read this document in its entirety before the General Meeting referred to below is convened If you are in any doubt about the action you should take, please consult your stockbroker, solicitor, accountant or other professional adviser.

hillgrove resources limited ACN 004 297 116 Notice of ANNuAl geNerAl meetiNg ANd relAted documeNtAtioN

Notice of Annual General Meeting to be held at 10:30am (Sydney time) on Thursday 28 June 2012 is included with these documents.

To be valid, forms of proxy for use at this meeting must be completed and returned to the company no later than 10:30am (Sydney time) on Tuesday 26 June 2012.

coNteNts

coNteNts
Part A: About These Documents	3
Part B: Letter From The Company Secretary	4
Part C: Notice of Annual General Meeting	5
Part D: Notice Requirements For Resolutions	9
Part E: Glossary	15
Proxies and Proxy Forms	Attached

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hillgrove resources limited AcN 004 297 116

PArt A: ABout these documeNts

Shareholders in Hillgrove Resources Limited ABN 73 004 297 116 ( Company ) are requested to consider and vote upon each of the Resolutions set out in the Notice.

You can vote by:

• attending and voting at the Meeting; or

• appointing someone as your proxy to attend and vote at the Meeting on your behalf, by completing and returning the Proxy Form DIRECTLY to the Company or its share registry in the manner set out on the Proxy Form. The Company or its share registry must receive your duly completed Proxy Form by no later than 10:30am (Sydney time) on Tuesday 26 June 2012 .

A glossary of the key terms used throughout this document (including the Proxy Form) is contained in Part E of this Document.

Please read the whole of this Document carefully, determine how you wish to vote and then cast your vote accordingly, either in person or by proxy.

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PArt B: letter from the comPANY secretArY

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28 May 2012

Dear Shareholder

I am pleased to invite you to attend our Annual General Meeting, being held in the Press Room, Radisson Blu Plaza Hotel, 66 Pitt Street, Sydney, New South Wales on Thursday 28 June 2012 at 10:30am (Sydney time). Enclosed with this letter is the Notice of Meeting which details the items of business to be dealt with.

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If you are unable to join us you are encouraged to complete the enclosed Proxy Form. The signed Proxy Form should be returned as instructed in the Notice by no later than 10:30am (Sydney time), Tuesday 26 June 2012. For details regarding voting by proxy please refer to the Notice of Meeting and instructions on the back of the Proxy Form. If you plan to attend the Meeting, please bring a copy of the Proxy Form with you to facilitate registration.

Shareholders that did not elect to receive a copy of the Company’s 2012 Annual Report by mail are able to access it via the Investor Centre section of our website, at www.hillgroveresources.com.au, by clicking the ‘Annual Report’ button on the left side of each page.

Your vote is important and we encourage you to either attend the Meeting in person or complete the Proxy Form accompanying the Notice and return it in accordance with the directions provided.

Yours faithfully

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Russell Middleton Company Secretary

hillgrove resources limited AcN 004 297 116 level 41 Australia square, 264 george street, sydney NsW 2000 Australia t +61 2 8221 0404 f +61 2 8221 0407 www.hillgroveresources.com.au

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PArt c: Notice of ANNuAl geNerAl meetiNg

HILLGROVE RESOURCES LIMITED (ACN 004 297 116)

Notice is hereby given that the annual general meeting of the members of Hillgrove Resources Limited (ACN 004 297 116) ( Company ) will be held at the place, date and time set out in Section 1 below and for the purpose of considering and voting upon the Resolutions set out in Section 2 below.

SECTION 1: TIME AND PLACE OF MEETING

Venue

The annual general meeting of members of the Company will be held at: Press Room 1 & 2, Radisson Blu Plaza Hotel 66 Pitt Street SYDNEY NSW 2000

Time and Date

The meeting will commence at 10:30am (Sydney time) on Thursday 28 June 2012.

How to Vote

You may vote by attending the Meeting in person, by proxy or authorised representative.

Voting in Person

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

Voting by Proxy

To vote by proxy, please complete and sign the Proxy Form enclosed with this Document as soon as possible and either send, deliver, courier or mail the duly completed Proxy Form:

• directly to the Company, attention Company Secretary at Level 41 Australia Square Tower, 264 George Street, Sydney NSW 2000, Australia;

• by facsimile to Boardroom Limited on facsimile number +61 (02) 9290 9655;

• online at www.boardroomlimited.com.au/vote/hillgroveagm2012;

• deliver to Boardroom Limited at Level 7, 207 Kent Street, Sydney NSW 2000, Australia; or

• mail to Boardroom Limited at GPO Box 3993, Sydney NSW 2001, Australia.

so that it is received no later than 10:30am (Sydney time) on Tuesday 26 June 2012.

Complete details on how to vote by proxy are set out on the back of your Proxy Form.

Please read this Document carefully and in its entirety, determine how you wish to vote in relation to each of the Resolutions and then cast your vote accordingly, either in person or by proxy. If you do not understand any part of this Document, or are in any doubt as to the course of action you should follow, you should contact your financial or other professional adviser immediately.

Determination of Membership and Voting Entitlement for the Purpose of the Meeting

For the purpose of determining a person’s entitlement to vote at the Meeting and in accordance with regulation 7.11.37 of the Corporations Regulations 2001 (Cth), a person will be recognised as a member and the holder of Shares if that person is registered as a holder of Shares at 5:00pm (Sydney time) on Tuesday 26 June 2012.

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Voting Exclusion Statement

In accordance with the Corporations Act and the Listing Rules, the following persons must not cast any votes on the following Resolutions, and the Company will disregard any votes cast on that Resolution by:

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Resolution excluded VoteRs
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Resolution	excluded VoteRs
1	All Directors, other Key Management Personnel and their respective associates or any other closely related party (other than by means of a directed proxy)
2 and 3	None
4 and 5	Mr. D. A. Simonsen and his associates
6	Macquarie Bank Limited and its associates

However, the Company need not disregard a vote if it is cast by:

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

• (b) the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form to vote as the proxy decides.

Proxies

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A Shareholder, entitled to attend and vote at this Meeting pursuant to the Constitution, is entitled to appoint no more than two proxies. Where more than one proxy is appointed each proxy may be appointed to represent a specific proportion of the member’s voting rights. A proxy need not be a Shareholder. Any instrument of proxy deposited or received by the Company in which the name of the appointee is not filled in shall be deemed to be given in the favour of the Chair of the Meeting.

The instrument appointing a proxy must be lodged, and any power of attorney or an office copy of a notarially certified copy thereof under which an attorney for a member appoints a proxy must be lodged by no later than 10:30AM (SYDNEY TIME) on 26 JUNE 2012 in accordance with the instructions provided in the Proxy Form.

The instrument appointing a proxy shall be in writing under the hand of the appointor or of his/her attorney or if such appointor is a corporation, under the hand of its attorney or the hand of a person duly authorised by the corporation. The Proxy Form which accompanies this Notice may be used.

SECTION 2: RESOLUTIONS OF ANNUAL GENERAL MEETING

BUSINESS

A. Accounts

To receive and consider the Company’s financial statements for the 12 months ended 31 January 2012 and the related reports of the Directors and auditors.

B. Remuneration Report

The Remuneration Report is in the Directors’ Report section of the Company’s 2012 Annual Report (pages 41-53). Listed companies are required to submit the Remuneration Report to a vote for adoption at the Company’s Annual General Meeting. The resolution will be determined as an ordinary resolution but is advisory only and does not bind the Directors or the Company.

To consider and, if thought fit, to pass, with or without amendment, the following in accordance with section 250R(2) of the Corporations Act:

Resolution 1 – Remuneration Report

“That the Remuneration Report in the 2012 Annual Report of the Company be adopted.”

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C. Re-Election of Director

In accordance with the Company’s constitution, John Andrew Quirke retires by rotation pursuant to Article 6.3, effective at the conclusion of this Meeting, and being eligible, offers himself for re-election.

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

Resolution 2 – Re-election of Director Retiring By Rotation

“That Mr John Andrew Quirke is re-elected as a Director of the Company.”

D. Election of Director

In accordance with the Company’s constitution, Mr Douglas Norman Snedden who has been appointed since the Company’s last annual general meeting, retires pursuant to Article 6.3, effective at the conclusion of this meeting, and being eligible, offers himself for election.

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

Resolution 3 – Election of Director

“That Mr Douglas Norman Snedden is elected as a Director of the Company.”

E. Approval of Managing Director’s Long Term Incentive

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

Resolution 4 – Approval of Managing Director’s Long Term Incentive

“For the purposes of complying with the provisions of Listing Rule 7.1 and Listing Rule 10.14 and for all other purposes, the shareholders approve the proposed issue by the Company to Mr Drew Anthony Simonsen of 2,475,000 Performance Rights in accordance with the Hillgrove Option and Performance Rights Plan and as more particularly described in Part D of this document.”

F. Approval of Managing Director/CEO Termination Payment

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

Resolution 5 – Approval of Managing Director/CEO termination payment:

“That, for the purposes of Chapter 2D Division 2 of the Corporations Act and all other purposes, the Shareholders approve the payment by the Company to Mr Drew Anthony Simonsen of the retirement benefit described in the Explanatory Notes accompanying this Notice of Meeting, when and if Mr Drew Anthony Simonsen becomes entitled to receive that benefit.”

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G. Ratification of Issue of Options to Macquarie Bank

On the 19 December 2012, the Company allotted and issued 27,777,777 options each exercisable at $0.27 per share on or before 19 December 2014 ( Macquarie Options ), in partial consideration for the provision of a $10,000,000 mezzanine debt facility to the Company ( Macquarie Facility ) (see ASX Announcement by the Company dated 9 December 2011)

The exercise of each Macquarie Option will entitle Macquarie Bank to be allotted with one (1) Share.

The ratification of the issue of the Macquarie Options is now being sought for the issue under Listing Rule 7.4.

Other than as a result of funds made available to the Company under the Macquarie Facility, no cash funds were received by the Company as a result of the issue of the Macquarie Options.

The effect of Shareholders passing Resolution 6 will be to enable the Company to issue Shares upon the exercise of any of the Macquarie Options in accordance with their terms that will not be included in the determination of the number of Shares that the Company is otherwise permitted to issue within any 12 month period in accordance with Listing Rule 7.1.

Resolution 6 – Ratification of issue of Macquarie Options

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“That, for the purpose of Listing Rule 7.4, Exception 4 of Listing Rule 7.2 and for all other purposes, the members ratify the allotment and issue of 27,777,777 options to Macquarie Bank Limited, each exercisable at $0.27 per option on or before 19 December 2014 and that when exercised, will entitle the holder of each option to one (1) Share.”

I. Other Business

To transact any other business as may be brought before the Meeting.

By order of the Board

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Russell Middleton Company Secretary Dated: 28 May 2012

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hillgrove resources limited AcN 004 297 116

PArt d: eXPlANAtorY Notes

This Explanatory Statement is included in and forms part of the Notice of Meeting. It contains an explanation of, and information about, the Resolutions to be considered at the Meeting. It is given to Shareholders to help them determine how to vote on the Resolutions set out in the accompanying Notice of Meeting.

Shareholders should read this Explanatory Statement in full because individual sections do not necessarily give a comprehensive review of the Resolutions contemplated in this Explanatory Statement.

If you are in doubt about what to do in relation to a Resolution, you should consult your financial or other professional advisor.

No specific explanation is proposed for any of Resolution 1, Resolution 2, or Resolution 3, as the Directors feel that their intent and, if approved, effect is self-explanatory.

1. Resolution 4 – Approval of Managing Director’s Long Term Incentive

Background and reasons for Resolution 4

The Board proposes to offer participation in the Options and Performance Rights Plan (“ Plan ”) to Mr Drew Anthony Simonsen, the Managing Director and Chief Executive Officer of the Company. Under Listing Rule 10.14, the ASX requires that Shareholders approve the grant of securities to a Director.

The Board proposes to offer participation in the Plan to Mr Simonsen for the grant of performance rights (“ Performance Rights ”) as described in this explanatory statement.

Shareholder approval is sought for the grant of Performance Rights to Mr Simonsen under the Plan for up to 2,475,000 Performance Rights under the 2012 Long Term Incentive Plan (“ LTIP ”) invitation (“ 2012 LTIP Invitation ”)

The terms of the grant is explained in more detail below.

Director’s remuneration

The proposed 2012 LTIP Invitation represents a gross dollar value equal to approximately 82.5% of Mr Simonsen’s Total Fixed Remuneration.

Maximum number of shares

Each vested Performance Right will convert into one Share. Accordingly, the maximum number of Shares that may be acquired by Mr Simonsen, for which Shareholder approval is required, is 2,475,000 Shares.

Price payable on grant or exercise of Performance Rights

Mr Simonsen will not be required to pay any amount on the grant or vesting of his Performance Rights under the 2012 LTIP Invitation. The Performance Rights are not transferable.

Names of all persons who received Shares or Performance Rights under the last approval

At the Company’s 2011 annual general meeting, Shareholders approved the grant of 1,875,000 Performance Rights to Mr Simonsen under the Plan. No Performance Rights have been issued or vested to Mr Simonsen since the date of the last approval.

Terms of any loan relating to the acquisition of Shares

There are no loans relating to the acquisition of Shares under the Plan.

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Date by which grants of Performance Rights may be made

It is proposed that the Performance Rights will be granted to Mr Simonsen no later than 3 months after shareholder approval is received in respect of the 2012 LTIP Invitation.

Requirements for approval

Shareholder approval of the participation of Mr Simonsen in the Plan and his acquisition of Performance Rights as detailed above and of Shares on vesting of those Performance Rights is sought for all purposes under the Corporations Act and the Listing Rules of ASX, including Listing Rule 10.14.

ASX Listing Rule 10.14

Under Listing Rule 10.14, an entity must not issue securities to a related party (such as a Director or a company controlled by a Director) under an employee incentive scheme without the approval of Shareholders. Accordingly, approval of Shareholders is sought for the purpose of Listing Rule 10.14 to enable the Company to make grants of Performance Rights, and subsequently issue or transfer Shares, to Mr Simonsen.

The Board (other than Mr Simonsen) unanimously recommends that Shareholders vote in favour of the issue of securities to Mr Simonsen under the HOPRP.

Assessed value of the benefit

The value of the Performance Rights has been assessed by an independent consultant applying a modified binomial valuation methodology.

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The values attributable are based on variables determined at the date of valuation and are indicative only. The Company will prepare and report a valuation based on actual variables at the date of issue, if approved and granted.

The input variables applied in the model for the purposes of the indicative value are as follows:

Input variables:
Indicative date*	21 May 2012
Share price**	$0.19
Exercise Price	$0.00
Risk free rate	3.25%
Expected dividend yield	0.00%
Standard deviation	55%
Number of days	1,096
Assessed value per Performance Right	$0.1909
Number of Performance Rights	2,475,000

Gross estimated annualised value

(before discount for performance probabilities)***

2013	Financial Year	$91,870
2014	Financial Year	$157,493
2015	Financial Year	$157,493
2016	Financial Year	$65,622

• Being the date of the preparation of this notice

** Being the closing price of Shares on 21 May 2012

*** Assumes 1 July 2012 grant

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Potential value of the benefit to Mr Simonsen

Depending on the future value of the Shares, and assuming all the conditions of offer are met, the estimated value of the benefit under a number of future Share price assumptions, is as follows:

		company Market capitalisation
	Potential Value of the beneft	if potential beneft achieved
Future share Price	($m)*	($m)*
$0.19	$0.47	$170.6
$0.30	$0.74	$238.1
$0.50	$1.24	$396.8
$1.00	$2.48	$793.7

• Assumes performance and service conditions met and does not include any dividend benefit.

^ Assumes constant issued capital of 793,698,575 Shares.

Performance conditions

The number of Performance Rights which will vest in accordance with the Plan Rules and the invitation is dependent on performance conditions which can be summarised as follows:

Performance Condition: External Performance Condition (TSR outperformance)	Performance Condition: External Performance Condition (TSR outperformance)
100% of the Performance Rights are subject to an external Performance Condition, namely, the Company’s Total Shareholder Return (TSR) performance relative to the component companies in the S&P/ASX Small Resources Accumulation Index measured over the Measurement Period. Vesting of the Performance Rights subject to the TSR outperformance condition will be calculated based on the following percentile results in the table below:
TSR Ranking versus component companies in the S&P/ASX Small Resources Accumulation Index	% of Performance Rights to vest
Below the 50th percentile	0% vest
At the 50th percentile	50% vest
Between the 50th and 75th percentile	2% vesting on a straight line interpolation for each percentile ranking
At or above the 75th percentile	100% vest
TSR will be measured by an independent third party over the Measurement Period being the period from the Grant Date to the third anniversary of the Grant Date.

Service conditions

The vesting of the Performance Rights is also subject to Mr Simonsen remaining continuously employed with the Company until the Vesting Date.

The Vesting Date in relation to Mr Simonsen’s 2012 LTIP Invitation Performance Rights will be the third anniversary of the Grant Date.

Price payable on grant or exercise of Performance Rights

Mr Simonsen will not be required to pay an amount on the grant or vesting of the Performance Rights.

Change of control

Subject to the Listing Rules, if a “Change of Control Event” occurs, all unvested Performance Rights will vest on a pro-rata basis. Subject to the Listing Rules, the balance of unvested Performance Rights may also vest at the discretion of the Board.

Automatic exercise on vesting

Any Performance Rights that vest having met the performance and service conditions will automatically be exercised and Shares provided. Any unvested Performance Rights will lapse.

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No right to dividends, bonus or rights issues

The Performance Rights to be issued pursuant to the 2012 LTIP Invitation do not confer on the holder an entitlement to dividends or to participate in bonus issues or rights issues until such time as the Performance Rights vest and Shares are issued or transferred.

No voting rights

The Performance Rights to be issued pursuant to the 2012 LTIP Invitation do not confer an entitlement to vote at general meetings of the Company until such time as the Performance Rights vest and Shares are issued or transferred.

Non-quotation

The Company will not apply to the ASX for official quotation of the Performance Rights to be issued pursuant to the 2012 LTIP Invitation. Shares issued pursuant to the vesting of a Performance Right will rank equally with the Shares then on issue.

Disclosure of grants under the Plan

Details of any securities, including Performance Rights, granted under the Plan will be disclosed in the Company’s annual report relating to the period in which those securities have been issued, and that approval for the issue of those securities was obtained under ASX LR 10.14.

Voting Exclusion Statement

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In accordance with Listing Rule 10.15.5, the Company will disregard any votes cast on Resolution 4 by:

• Mr Drew Anthony Simonsen; and

• any associate of Mr Drew Anthony Simonsen.

However, the Company will not disregard a vote if:

• it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the

Proxy Form; or

• it is cast by the person chairing the Meeting as a proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

2. Resolution 5 – Approval of Managing Director/CEO Termination Benefit

Background and reasons for Resolution 5

Under section 200B of the Corporations Act, a corporation can only give a person who holds a “managerial or executive office” (as defined in the Corporations Act) a “benefit” (as defined in the Corporations Act) in connection with their retirement from that office or position of employment in the corporation or a “related body corporate” (again as defined in the Corporations Act), if it is approved by shareholders or one of the limited exemptions apply.

In 2009, the Corporations Act was amended in particular to:

• reduce the maximum termination amount without shareholder approval to the average annual base salary over the last three years;

• increase the time period to which the Corporations Act applied to the last three years before retirement; and

• define “benefit” to include early vesting.

• The Corporations Act defines “retirement” broadly to include loss of office, resignation and death.

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Reasons for shareholder approval

The Company is seeking Shareholder approval, for the purposes of sections 200B and 200E of the Corporations Act, to any “termination benefits” that the Company proposes to provide to Mr Simonsen under the Performance Rights Plan and under his Executive Services Agreement dated 8 October 2010 ( Employment Agreement ).

Value of the termination benefits - Employment Agreement

The termination benefits that may be given under the Employment Agreement include permitted dealings with Performance Rights issued to Mr Simonsen, following the termination by the Company of Mr Simonsen’s employment by written notice (which carries a 12 month notice period applies for “without cause” termination, all of which may be payable in lieu).

The value of the termination benefits that the Board may give under the Employment Agreement is equivalent to up to 12 months of Mr Simonsen’s then current salary if the Company elects to make a payment in lieu of the required 12 month notice period following termination, plus any accrued leave entitlements.

Value of the termination benefits - Performance Rights Plan

The value of the termination benefits that the Board may give under the Performance Rights Plan cannot be determined in advance. This is because various matters will or are likely to affect that value. Specifically, the value of the particular benefit will depend on factors such as the Share price at the time of vesting, the number of Performance Rights that the Board decides to vest and Mr Simonsen’s length of service.

The termination benefits that may be given under the Performance Rights Plan includes the early vesting of Performance Rights in certain circumstances of retirement from office. For example, if Mr Simonsen ceases to be employed by the Company due to redundancy, retirement, permanent incapacity, death or another reason with the approval of the Board, he may be deemed a “good leaver” in accordance with the Plan Rules. Where Mr Simonsen becomes a “good leaver,” all unvested Performance Rights will automatically lapse, unless the Board determines in its sole andabsolute discretion to allow some or all of those Performance Rights to vest, in which case those Performance Rights will be automatically exercised.

If Mr Simonsen becomes a “good leaver” in accordance with the Plan Rules and the Board determines to allow Mr Simonsen to exercise some of Mr Simonsen’s unvested Performance Rights, the Board intends to take into account all relevant factors, including:

• Mr Simonsen’s duration of service; and

• Mr Simonsen’s and the Company’s performance, including by reference to the performance conditions described in the Explanatory Notes to the Notice of Annual General Meeting approving Performance Right grants,

in determining the number of Mr Simonsen’s unvested Performance Conditions which will become exercisable.

Therefore, the specific value of the termination benefits which may become payable under the Performance Rights Plan will depend on factors such as the Share price at the time of vesting, Mr Simonsen’s length of service and Mr Simonsen’s and the Company’s performance.

The Board (excluding Mr Simonsen) unanimously recommends that Shareholders vote in favour of the approval of the Managing Director/CEO termination payment on the basis set out.

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Voting Exclusion Statement

In accordance with Listing Rule 10.15.5, the Company will disregard any votes cast on Resolution 5 by:

• Mr Drew Anthony Simonsen; and

• any associate of Mr Drew Anthony Simonsen.

However, the Company will not disregard a vote if:

• it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or

• it is cast by the person chairing the Meeting as a proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

3. Resolution 6 – Ratification of issue of Macquarie Options

The Company issued 27,777,777 options each exerciseable at $0.27 per option on or before 19 December 2014 (each a Macquarie Option ), in partial consideration for the provision of a $10,000,000 mezzanine debt facility to the Company ( Macquarie Facility ) (see ASX Announcement by the Company dated 9 December 2011).

In accordance with the disclosure requirements of Listing Rule 7.5:

• (a) 27,777,777 Macquarie Options were issued.

• (b) The price at which each Macquarie Option was issued was nil cash consideration, but rather as partial consideration for the provision by Macquarie Bank Limited of a $10,000,000 mezzanine debt facility to the Company.

• (c) The allottee of all the Macquarie Options was Macquarie Bank Limited.

• (d) The material terms of the Macquarie Options are:

i. Issue price: nil cash consideration; ii. Exercise price: $0.27 per Macquarie Option; iii. Exercise period: at any time on or before 19 December 2014; iv. Conversion ratio: one (1) Share for each Macquarie Option exercised in accordance with its terms of issue.

(e) In accordance with Listing Rule 7.5.6, the Company will disregard any votes cast on Resolution 6 by:

• the allottee referred to in paragraph (c) immediately above; and

• any associate of any of those persons.

However, the Company will not disregard a vote if:

• it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or

• it is cast by the person chairing the Meeting as a proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

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PArt e: glossArY

For the purposes of this document, including Annexure A, the following terms have the meanings prescribed below:

2012 Annual Report

ASX

Board

Change of Control

the Company’s Annual Report for the 12 month period ended 31 January 2012.

ASX Limited ACN 008 624 691 or the securities exchange market operated by it, as the context requires.

the board of Directors.

an event:

• (a) where:

• (i) a person has, or is entitled to acquire, the right or power to secure, whether directly or indirectly, 50.1% or more in number of the issued share capital of the Company as a result of a takeover bid; and

• (ii) that takeover bid has become unconditional; or

• (b) being the announcement by the Company that:

• (i) shareholders of the Company have, at a court convened meeting of those shareholders, voted in favour of, by the necessary majority, a proposed scheme of arrangement under which all the issued share capital of the Company is to be either:

  • (A) cancelled; or

  • (B) transferred to a third party; and

• (ii) the court, by order, approved that proposed scheme of arrangement.

For the purposes of this Document and any part thereof, the acquisition of all or any of the Consideration Securities and the acquisition of all or any Shares that are issued as a result of the conversion or enforcement of any Performance Rights, will not be taken into account when determining whether or not a Change of Control Event has occurred.

Company Hillgrove Resources Limited ACN 004 297 116.

Constitution the constitution of the Company.

Corporations Act the Corporations Act 2001 (Cth).

Director a director of the Company.

Document this document entitled “Notice of Annual General Meeting and Related Documentation” and any annexures or schedules to or of the foregoing.

Eligible Person a member of the senior executive management of the Company and any other person nominated by the Board.

Grant Date the date upon which the Performance rights are issued to Mr Simonsen in accordance with the HOPRP.

HOPRP the Hillgrove Option and Performance Rights Plan as constituted by the Rules adopted by the Company on 3 December, 2010, and the material terms and conditions of which are more particularly set out in Annexure A .

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Invitation an invitation from the Board to an Eligible Person to participate in the HOPRP. JORC the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, as more particularly set out in Appendix 5A of the Listing Rules.

Key Management

Personnel those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, including any Director (whether executive or otherwise). Listing Rules the listing rules of the ASX as amended from time to time. LOM life of mine.

Meeting the Annual General Meeting referred to in the Notice. mt a million tonnes of any and all categories of resources as defined by the JORC guidelines and as confirmed to the Company by an independent JORC compliant combined Mineral Resource Estimate.

Notice or Notice

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of Meeting

the Notice of Annual General Meeting, forming part of this Document.

Option the right to acquire a Share. Performance Right a right to acquire a Share, the terms and conditions of which are set out in Annexure A .

the proxy form attached to this Document. a resolution set out in the Notice. a fully paid ordinary share in the Company. a registered holder of Shares.

Proxy Form Resolution Share Shareholder

the volume weighted average price of Shares sold on a market operated by ASX during the 5 trading days immediately preceding and including the date on which such price is to be determined, but does not include any transactions defined in the ASX Business Rules as ‘special’ crossings prior to the commencement of normal trading, crossings during the after hours adjust phase nor any overseas trades or trades pursuant to the exercise of options over ordinary shares in the capital of the Company.

VWAP

hillgrove resources limited AcN 004 297 116

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ANNEXURE A - MATERIAL TERMS AND CONDITIONS OF HILLGROVE OPTION AND PERFORMANCE RIGHTS PLAN

Plan Rules

The Hillgrove Resources Option & Performance Rights Plan ( OPR Plan ) Rules will establish the OPR Plan. The specific terms of a particular grant, including any conditions of offer will be contained in the Invitation and associated documentation attached to any offer to an Eligible Person.

Eligible Persons

The OPR Plan will be used for offers to eligible invited executives of the Hillgrove group of companies ( Hillgrove Group ) as approved by the Board of the Company ( Board ). Each such person who participates in the OPR Plan is hereafter referred to as a Participant.

Options or Rights to Acquire Shares

Grants under the OPR Plan will be of options or rights to acquire shares in the Company (each a Performance Right ). The grants may comprise one or several tranches.

Invitation to Participate

Under the OPR Plan Rules, the Board may invite an Eligible Person to apply for Performance Rights. At the request of the Participant and with the approval of the Board, to the extent that the Participant does not personally apply for the full number of Performance Rights referred to in an Invitation, some or all of the balance of the Performance Rights may be granted to an Associate of, and as nominated in writing by, the Participant. “Associate” for this purpose has the meaning given in the Income Tax Assessment Act.

Performance Rights are Non-transferable

A Performance Right granted to a Participant (including a nominated Associate) is not transferable and may not otherwise be dealt with, except with the Board’s approval, or by force of law on death or legal incapacity.

Exercise Price

The exercise price, if any, of a Performance Right will be an amount determined by the Board, fixed at the date of grant or determined by application of methodology approved by the Board.

Consideration

A Participant may be required to pay nominal consideration to the Company to receive the Performance Rights or the Performance Rights may be offered for no consideration, at the discretion of the Board.

Exercise of Performance Rights

Performance Rights will have a term as determined by the Board ( Exercise Period ). The Board may prescribe the date or the method of calculating the date on which a Performance Right becomes exercisable ( Exercise Date ). On or after the prescribed Exercise Date and provided any conditions to the exercise of a Performance Right prescribed by the Board have been achieved, including the achievement of any performance hurdles as referred to below, and where applicable, to the extent they have been achieved, a Participant may then acquire Shares by exercising his or her Performance Rights. In certain circumstances this exercise process may be automatic. A Performance Right will lapse if not exercised on or before the expiry of the Exercise Period pertaining to that Performance Right, and otherwise in accordance with its terms of issue.

Early Cessation of Employment

If the Participant ceases employment with any member of the Hillgrove Group prior to the Exercise Date as a result of death or incapacity, the Board will have the discretion to allow some or all of the Performance Rights to be exercised. In accordance the applicable provisions of the Corporations Act, the number and value of the Performance Rights able to be exercised will be determined by the Board having regard to the individual circumstances of the cessation event.

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17

Change of Control

If as a result of a takeover, scheme of arrangement or other change of control, the conditions attaching to the Performance Rights are rendered incapable of being met, the Board may determine that either a pro-rata number of, or all, the Performance Rights may be exercised, depending on the individual circumstances.

Performance Hurdles

The Board is aware that best practice executive equity incentive design requires that long-term equity-based rewards should be linked to the achievement of relevant performance hurdles. The performance hurdle(s) to be applied to an Invitation will be determined by the Board and may vary from offer to offer or from person to person.

Restrictions on Disposal

The Board may implement an appropriate procedure to restrict the disposal of or other dealing with any Shares converted on the exercise of the Performance Rights to meeting any market or inside trading restrictions or holding locks.

Source of Shares

Shares required for the purposes of the OPR Plan may be sourced either by issuing new Shares or by, in accordance with the requirements of the Corporations Act, acquiring existing Shares off market or on market, at the Board’s discretion.

Payment for Shares

Any costs associated with Shares issued, purchased or otherwise acquired for the purposes of the OPR Plan will be paid by the Company. Any Exercise Price payable on the exercise of a Performance Right will be paid by the Participant or his Associate.

No Loans

Loans made by the Company or any other member of the Hillgrove Group will not be permitted as part of the OPR Plan.

No Hedging of Unvested Options or Performance Rights

No Participant will be permitted to enter into transactions or arrangements, including by way of derivatives or similar financial products, which limit the economic risk of holding unvested Performance Rights or of exercising any right attaching to any Performance Right.

Trust

To manage the vesting conditions attaching to any Performance Right, exercise procedures, any holding lock or restrictions and the employee share scheme reporting requirements, settlement of vested Performance Rights may be arranged using an employee share trust.

Reconstructions, Bonus and Rights Issues

The Exercise Price of a Performance Right will be adjusted in a manner contemplated by the Listing Rules from time to time to take account of capital reconstructions and bonus issues.

If there is a rights issue by the Company to all Shareholders before a Performance Right under the OPR Plan is exercised, the Exercise Price for a Performance Right will be appropriately adjusted in the same manner as provided in the formula applicable to options, as set out in the Listing Rules.

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hillgrove resources limited AcN 004 297 116

Limitation on Issues

The number of Shares that may be issued under the OPR Plan is set with regard to the limits prescribed by the Australian Securities & Investments Commission ( ASIC ) with respect to employee share scheme offers that may be made without the issue of a prospectus. Currently these limits provide that the number of shares that may be issued, when aggregated with the number of shares issued during the previous 5 years from share issues under all employee share schemes established by the Company (including as a result of exercise of options or rights to acquire shares granted during the previous 5 years under any such employee share scheme), must not exceed five per cent. (5%) of the total number of shares on issue disregarding certain unregulated offers.

Amendments to Plan Rules

Subject to the provisions of the OPR Plan, the Board may amend the OPR Plan Rules or the terms of grant, if required to do so. However, the OPR Rules may not be amended if, broadly, in the Board’s opinion the amendment would materially reduce the rights of the relevant Participant in respect of Performance Rights already granted.

Exceptions to this permit amendment for the purpose of complying with State or Commonwealth legislation or to address any adverse tax implications for Participants generally or by any member of the Hillgrove Group.

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hillgrove resources limited Level 41 Australia Square 264-278 George Street Sydney N.S.W. 2000 Australia Tel: + 61 2 8247 9300 Fax: + 61 2 8221 0407

www.hillgroveresources.com.au

Hillgrove Resources Limited

ABN 72 004 297 116

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PLEASE DO NOT USE THIS FORM TO VOTE – CONTACT BOARDROOM FOR YOUR OWN PERSONALISED COPY IF ONE HAS NOT ARRIVED BY MAIL

FOR ALL ENQUIRIES CALL:

Boardroom Limited (within Australia) 1300 737 760 (outside Australia) +61 2 9290 9600

FACSIMILE +61 2 9290 9655

POSTAL ADDRESS: Boardroom Limited GPO Box 3993 Sydney NSW 2001 Australia

�

YOUR VOTE IS IMPORTANT

FOR YOUR VOTE TO BE EFFECTIVE IT MUST BE RECORDED BEFORE 10.30AM (AEST) TUESDAY 26 JUNE 2012

Your Address: This is your address as it appears on the company’s share register. If incorrect, please mark the box with an “X” and correct on the form and return or correct via the Boardroom website. Securityholders sponsored by a broker should advise the broker of any changes required. Please note you cannot change ownership of your securities using this form.

Reference Number:

Please note it is important you keep this confidential

TO VOTE ONLINE

STEP 1: VISIT www.boardroom.com.au/vote/hillgroveagm2012 STEP 2: Enter your holding/Investment type STEP 3: Enter your Reference Number and VAC

TO VOTE BY COMPLETING THE PROXY FORM

STEP 1 Appointment of Proxy

Indicate here who you want to appoint as your Proxy

If you wish to appoint the Chairman of the Meeting as your proxy, mark the box. If you wish to appoint someone other than the Chairman of the Meeting as your proxy please write the full name of that individual or body corporate. If you leave this section blank, or your named proxy does not attend the meeting, the Chairman of the Meeting will be your proxy. A proxy need not be a security holder of the company. Do not write the name of the issuer company or the registered securityholder in the space.

Proxy which is a Body Corporate

Where a body corporate is appointed as your proxy, the representative of that body corporate attending the meeting must have provided an “Appointment of Corporate Representative” prior to admission. An Appointment of Corporate Representative form can be obtained from the company’s securities registry.

Appointment of a Second Proxy

You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you wish to appoint a second proxy, an additional Proxy Form may be obtained by telephoning the company’s securities registry or you may copy this form.

To appoint a second proxy you must:

• (a) complete two Proxy Forms. On each Proxy Form state the percentage of your voting rights or the number of securities applicable to that form. If the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded.

• (b) return both forms together in the same envelope.

STEP 2 Voting Directions to your Proxy

You can tell your Proxy how to vote

To direct your proxy how to vote, place a mark in one of the boxes opposite each item of business. All your securities will be voted in accordance with such a direction unless you indicate only a portion of voting rights are to be voted on any item by inserting the percentage or number of securities you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on a given item, your proxy may vote as he or she chooses. If you mark more than one box on an item your vote on that item will be invalid.

STEP 3 Sign the Form

The Proxy Form must be signed

In the spaces provided you must sign this form as follows:

Individual: This form is to be signed by the securityholder.

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

Power of Attorney: to sign under a Power of Attorney, you must have already lodged it with the registry. Alternatively, attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: this form must be signed by a Director jointly with either another Director or a Company Secretary. Where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. Please indicate the office held by signing in the appropriate place.

STEP 4 Lodgement of a Proxy

This Proxy Form (and any Power of Attorney under which it is signed) must be received at an address given below not later than 48 hours before the commencement of the meeting at 10.30am (AEST) on Tuesday, 26 June 2012 . Any Proxy Form received after that time will not be valid for the scheduled meeting.

Proxies may be lodged:

BY MAIL: Share Registry – Boardroom Limited GPO Box 3993, Sydney NSW 2001, Australia BY FAX : + 61 2 9290 9655 IN PERSON: Share Registry – Boardroom Limited Level 7, 207 Kent Street, Sydney NSW 2000, Australia

Vote online at:

www.boardroom.com.au/vote/hillgroveagm2012 OR turn over to complete the Proxy Form 

Hillgrove Resources Limited

PROXY FORM

PLEASE DO NOT USE THIS FORM TO VOTE CONTACT BOARDROOM FOR YOUR OWN PERSONALISED COPY IF ONE HAS NOT ARRIVED BY MAIL

STEP 1 – Appointment of Proxy

I/We being a member/s of Hillgrove Resources Limited and entitled to attend and vote hereby appoint:

the Chairman of the Meeting OR (mark with an ‘X’)

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If you are not appointing the Chairman of the Meeting as your proxy please write here the full name of the individual or body corporate (excluding the registered Securityholder) you are appointing as your proxy.

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy at the Annual General Meeting of Hillgrove Resources Limited to be held at the Press Room, Radisson Blu Plaza Hotel, 66 Pitt Street, Sydney, New South Wales, 2000 on Thursday, 28 June 2012 at 10.30am (AEST) and at any adjournment of that meeting, to act on my/our behalf and to vote in accordance with the following directions or if no directions have been given, as the proxy sees fit.

If the Chairman of the Meeting is appointed as your proxy or may be appointed by default, and you do not wish to direct your proxy how to vote in respect of a resolution, please mark this box. By marking this box, you acknowledge that the Chairman of the Meeting may vote as your proxy even if he has an interest in the outcome of the resolution and votes cast by the Chairman of the Meeting for the resolution, 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 Chairman of the Meeting will not cast your votes on this resolution and your votes will not be counted in calculating the required majority if a poll is called. The Chair will vote all undirected proxies in favour of the resolution.

STEP 2 – Voting Directions to Your Proxy - please mark  to indicate your directions

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Ordinary Business For Against Abstain
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Resolution 1 Adoption of the Remuneration Report in the 2012 Annual Report
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Resolution 2 Re-election of John Andrew Quirke as Director of the Company
� � �
Resolution 3 Election of Douglas Norman Snedden as Director of the Company
� � �
Resolution 4 Approval of issue of 2,475,000 Performance Rights to Managing Director
� � �
Resolution 5 Approval of Managing Director/CEO termination benefit
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Resolution 6 Ratification of issue of 27,777,777 Options to Macquarie Bank Limited
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In addition to the intentions advised above. The Chairman of the Meeting will vote 100% of all undirected proxies in favour of each of the items of business.

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

STEP 3 – Sign Here

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

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Individual or Securityholder 1 Securityholder 2 Securityholder 3
Individual or Sole Director/Company Secretary Director Director/Company Secretary
Contact Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Contact Daytime Telephone . . . . . . . . . . . . . . . . . . . . . . . . Date / / 2012 / 2012
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Date / / 2012 / 2012