KGL RESOURCES LIMITED — Capital/Financing Update 2021

Feb 21, 2021

KGL RESOURCES LTD

ACN 082 685 080

Entitlement Offer Information Booklet

1 for 13 pro rata non-renounceable entitlement offer at $0.42 per Share.

Last date for acceptance and payment: 5.00pm (AEDT) on 16 March 2021

If you are an Eligible Shareholder, this is an important document that requires your immediate attention. It should be read in its entirety. If, after reading this document you have any questions about the securities being offered for issue under it or any other matter, you should contact your stockbroker, solicitor, accountant or other professional adviser.

NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES EXCEPT BY KGL RESOURCES LIMITED TO APPROVED US SHAREHOLDERS

Lead Manager - Morgans Corporate Limited

Table of contents

IMPORTANT NOTICES -------------------------------------------------------------------------------------- 1	IMPORTANT NOTICES -------------------------------------------------------------------------------------- 1	IMPORTANT NOTICES -------------------------------------------------------------------------------------- 1
Chairman’s letter -------------------------------------------------------------------------------------------- 3
Summary of the Equity Raising ---------------------------------------------------------------------------- 5
Key	dates ----------------------------------------------------------------------------------------------------- 5
Enquiries ----------------------------------------------------------------------------------------------------- 6
1	Description and effect of the Offer --------------------------------------------------------------- 7
	1.1 Overview	7
	1.2 Lead Manager	7
	1.3 Shortfall	8
	1.4 Eligibility of Shareholders	8
	1.5 Ranking of New Shares	8
	1.6 Allotment	9
	1.7 Capital structure	9
	1.8 Effect on major shareholder voting power	10
	1.9 Effect on KGL’s financial position	10
	1.10 Broker handling fee	10
	1.11 Information Availability	10
2	Financial position ----------------------------------------------------------------------------------	11
3	Investor presentation -----------------------------------------------------------------------------	12
4	How to apply ---------------------------------------------------------------------------------------	28
	4.1 Shareholder’s choices	28
	4.2 Taking up all of your Entitlement	28
	4.3 Taking up part of your Entitlement and allowing the balance to lapse	29
	4.4 Allow your Entitlement to lapse	29
	4.5 Consequences of not accepting your Entitlement	29
	4.6 Payment	29
	4.7 Entitlement and Acceptance Form is binding	29
	4.8 Brokerage and Stamp Duty	30
	4.9 Notice to Nominees and Custodians	30
5	Definitions ------------------------------------------------------------------------------------------	31
6	Corporate information ----------------------------------------------------------------------------	33

KGL Resources Ltd | Entitlement Offer Information Booklet

IMPORTANT NOTICES

This Information Booklet is dated 22 February 2021. Capitalised terms in this section have the meaning given to them in this Information Booklet.

The Entitlement Offer is being made without a prospectus under section 708AA Corporations Act (as notionally modified by ASIC Corporations (Non-Traditional Rights Issues) Instrument 2016/84). This Information Booklet does not contain all of the information which a prospective investor may require to make an informed investment decision. The information in this Information Booklet does not constitute financial product advice and does not take into account your investment objectives, financial situation or particular needs.

This Information Booklet is important and should be read in its entirety before deciding to participate in the Entitlement Offer. This Information Booklet is not a prospectus under the Corporations Act and has not been lodged with ASIC.

KGL may make additional announcements after the date of this Information Booklet and throughout the period that the Entitlement Offer is open that may be relevant to your consideration about whether you should participate in the Entitlement Offer.

No party other than KGL has authorised or caused the issue of this Information Booklet, or takes any responsibility for, or makes, any statements, representations or undertakings in this Information Booklet.

By returning an Entitlement and Acceptance Form or otherwise paying for your New Shares through BPAY or cheque in accordance with the instructions on the Entitlement and Acceptance Form, you acknowledge that you have read this Information Booklet and you have acted in accordance with and agree to the terms of the Entitlement Offer detailed in this Information Booklet.

No overseas offering

This Information Booklet and the accompanying Entitlement and Acceptance Form do not constitute an offer or invitation in any place in which, or to any person to whom, it would not be lawful to make that offer or invitation. In particular, this Information Booklet does not constitute an offer to Ineligible Shareholders and may not be distributed in the United States and the New Shares may not be offered or sold, directly or indirectly, to persons in the United States, other than as specifically noted below.

This Information Booklet is not to be distributed in, and no offer of New Shares is to be made in countries other than Australia, New Zealand and Singapore, except to Approved US Shareholders (as defined below in the United States. The distribution of this Information Booklet (including an electronic copy) in other jurisdictions may be restricted by law and therefore persons who come into possession of this Information Booklet should seek advice on and observe these restrictions. Any failure to comply with these restrictions may constitute a violation of applicable securities laws.

No action has been taken to register or qualify the Entitlement Offer or the New Shares, or otherwise permit the public offering of the New Shares, in any jurisdiction outside Australia.

Your Application for New Shares is subject to all requisite authorities and clearances being obtained for KGL to lawfully receive your Application Monies.

New Zealand

The New Shares are not being offered to the public within New Zealand other than to existing shareholders of KGL with registered addresses in New Zealand to whom the offer of these securities is being made in reliance on the Financial Markets Conduct (Incidental Offers) Exemption Notice 2016.

This Information Booklet has been prepared in compliance with Australian law and has not been registered, filed with or approved by any New Zealand regulatory authority under the Financial Markets Conduct Act 2013. This Information Booklet is not a product disclosure statement under New Zealand law and is not required to, and may not, contain all the information that a product disclosure statement under New Zealand law is required to contain.

Singapore

This Information Booklet and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this Information Booklet and any other document or materials in connection with the offer or sale, or invitation for subscription or purchase, of New Shares may not be issued, circulated or distributed, nor may these securities be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore except pursuant to and in accordance with exemptions in Subdivision (4) Division 1, Part XIII of the Securities and Futures Act, Chapter 289 of Singapore (the "SFA"), or as otherwise pursuant to, and in

accordance with the conditions of any other applicable provisions of the SFA.

This Information Booklet has been given to you on the basis that you are an existing holder of KGL’s shares. In the event that you are not such a shareholder, please return this Information Booklet immediately. You may not forward or circulate this Information Booklet to any other person in Singapore.

Any offer is not made to you with a view to the New Shares being subsequently offered for sale to any other party. There are on-sale restrictions in Singapore that may be applicable to investors who acquire New Shares. As such, investors are advised to acquaint themselves with the SFA provisions relating to resale restrictions in Singapore and comply accordingly.

United States

The New Shares have not been, and will not be, registered under the US Securities Act of 1933 ( US Securities Act ) or the securities laws of any state or other jurisdiction of the United States. Accordingly, the New Shares may not be offered or sold in the United States except in transactions exempt from, or not subject to, the registration requirements of the US Securities Act and applicable US state securities laws. In particular, this Information Booklet may only be distributed by KGL, and the New Shares will only be offered and sold, in the United States to existing shareholders of KGL who are institutional "accredited investors" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the US Securities Act ( Approved US Shareholders ).

Definitions, currency and time

Defined terms used in this Information Booklet are contained in section 5. All references to currency are to Australian dollars and all references to time are to Australian Eastern Daylight Time ( AEDT ), unless otherwise indicated.

Taxation

There will be tax implications associated with participating in the Entitlement Offer and receiving New Shares. KGL considers that it is not appropriate to give advice regarding the tax consequences of subscribing for New Shares under this Information Booklet or the subsequent disposal of any New Shares. KGL recommends that you consult your professional tax adviser in connection with the Entitlement Offer.

Privacy

KGL collects information about each Applicant provided on an Entitlement and Acceptance Form for the purposes of processing the Application and, if the Application is successful, to administer the Applicant's shareholding in KGL.

By submitting an Entitlement and Acceptance Form, you will be providing personal information to KGL (directly or through the Share Registry). KGL collects, holds and will use that information to assess your Application. KGL collects your personal to process and administer your shareholding in KGL and to provide related services to you. KGL may disclose your personal information for purposes related to your shareholding in KGL, including to the Share Registry, KGL’s related bodies corporate, agents, contractors and third party service providers, including mailing houses and professional advisers, and to ASX and regulatory bodies. You can obtain access to personal information that KGL holds about you. To make a request for access to your personal information held by (or on behalf of) KGL, please contact KGL through the Share Registry.

Governing law

This Information Booklet, the Entitlement Offer and the contracts formed on acceptance of the Applications are governed by the law applicable in Queensland, Australia. Each Applicant submits to the exclusive jurisdiction of the Queensland courts and courts competent to hear appeals from those courts.

No representations

No person is authorised to give any information or to make any representation in connection with the Entitlement Offer which is not contained in this Information Booklet. Any information or representation in connection with the Entitlement Offer not contained in the Information may not be relied upon as having been authorised by KGL or any of its officers.

Past performance

Investors should note that KGL’s past performance, including past share price performance, cannot be relied upon as an indicator of (and provides no guidance as to) KGL’s future performance including KGL’s future financial position or share price performance.

KGL Resources Ltd | Entitlement Offer Information Booklet

Future performance

This Information Booklet contains certain forward-looking statements with respect to the financial condition, results of operations, projects and business of KGL and certain plans and objectives of the management of KGL. These forward-looking statements involve known and unknown risks, uncertainties and other factors which are subject to change without notice, and may involve significant elements of subjective judgement and assumptions as to future events which may or may not be correct.

Forward-looking statements are provided as a general guide only and there can be no assurance that actual outcomes will not differ materially from these statements. Neither KGL, nor any other person, gives any representation, warranty, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statement will actually occur. In particular, those forward-looking statements are subject to significant uncertainties and contingencies, many of which are outside the control of KGL. A number of important factors could cause actual results or performance to differ materially from the forward looking statements. Investors should consider the forward looking statements contained in this Information Booklet in light of those disclosures.

Risks

Refer to the ‘Key risk’ in the Investor Presentation for a summary of specific and general risk factors that may affect KGL.

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Chairman’s letter

22 February 2021

Dear Shareholder

I am pleased to write to you, as a valued shareholder of KGL Resources Ltd ( KGL ), and offer you the opportunity to participate in KGL’s recently announced 1 for 13 non-renounceable entitlement issue of new ordinary shares in KGL ( New Shares ) at an issue price of $0.42 per New Share ( Entitlement Offer ).

Equity Raising

On 22 February 2021, KGL announced its intention to raise approximately $23.77 million[1] , comprising $12 million through a placement to institutional investors ( Institutional Placement ) and $11.77 million through an Entitlement Offer (together, the Equity Raising ).

The Institutional Placement was a result of approaches by leading, highly regarded Australian Fund Managers, adding to the quality of the KGL register and providing a strong endorsement of the Jervois Project and prospectivity in surrounding areas.

Proceeds from the Equity Raising will be applied to KGL’s Jervois Copper Project and will enable KGL to optimise the mine planning, complete the full project feasibility study, undertake financing, and provide a pool of funds to test some of what KGL believes are exciting additional exploration targets in the area.

Further information regarding progress of the Jervois Copper Project and the use of funds from the Equity Raising is set out in the Investor Presentation lodged with the Australian Securities Exchange (ASX) on 22 February 2021, a copy of which is included in this Information Booklet in section 3.

Under the Entitlement Offer, eligible shareholders have the opportunity to invest at the price of $0.42 per New Share, which is the same price offered to institutional investors who participated in the Institutional Placement. The issue price of $0.42 per New Share represents an 8.7% discount to the closing price of KGL shares on 17 February 2021 (being the last trading day for Shares in KGL before announcement of the Equity Raising).

The number of New Shares you are entitled to subscribe for under the Entitlement Offer ( Entitlement ) is set out in your personalised Entitlement and Acceptance Form that is enclosed in this Information Booklet.

Major shareholders KMP Investments and the Denis Wood Entities have confirmed to KGL that they intend to subscribe for their full entitlement under the Entitlement Offer.

The Entitlement Offer is non-renounceable and therefore your entitlements will not be tradeable on ASX or otherwise transferable.

Other information

This Information Booklet contains important information, including:

1 Before Equity Raising costs.

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• the investor presentation referred to above, which was released to ASX on 22 February 2021, and provides information on KGL, the Entitlement Offer and key risks for you to consider;

• instructions on how to apply, detailing how to participate in the Entitlement Offer if you choose to do so, and a timetable of key dates;

• a personalised Entitlement and Acceptance Form which details your Entitlement, to be completed in accordance with the instructions; and

• instructions on how to take up all or part of your Entitlement via BPAY.

The Entitlement Offer closes at 5.00pm AEDT on 16 March 2021 .

Please read in full the details on how to submit your application, which are set out in this Information Booklet. For further information, telephone 1300 306 413 (inside Australia) and +61 1300 306 413 (outside Australia) between 8.30am and 5.30pm (AEDT), or visit our website at https://www.kglresources.com.au.

You should also consult your stockbroker, solicitor, accountant or other professional adviser to evaluate whether or not to participate in the Entitlement Offer.

On behalf of the Board of KGL, I encourage you to consider this investment opportunity and thank you for your ongoing support.

Yours sincerely

Denis Wood Chairman KGL Resources Limited

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Summary of the Equity Raising

Institutional Placement
Issue Price	$0.42 per Share
Size	28,571,427 Shares
Gross proceeds	$12,000,000 *
Entitlement Offer
Ratio	1 New Share for every 13 existing KGL ordinary shares
Issue Price	$0.42 per New Share
Size	28,024,573 New Shares
Gross proceeds	$11,770,321*
Total gross proceeds of the Equity Raising	$23,770,321*

• Before Equity Raising costs.

Key dates

Activity	Date
Announcement of the Entitlement Offer and completion of the Institutional Placement	22 February 2021
Settlement of Institutional Placement	24 February 2021
Shares traded on an ‘ex’ entitlement basis	24 February 2021
Allotment of Shares under the Institutional Placement	25 February 2021
Record Date for Entitlement Offer (7:00pm)	25 February 2021
Normal ASX trading for Shares issued under the Institutional Placement commences	26 February 2021
Information Booklet and Entitlement and Acceptance Form despatched	1 March 2021
Entitlement Offer opens	1 March 2021
Last date to extend the closing date for the Entitlement Offer	11 March 2021
Closing date for acceptances under Entitlement Offer (5:00pm)	16 March 2021
Announcement of results of Entitlement Offer and under-subscriptions	19 March 2021
Allotment of New Shares issued under the Entitlement Offer	23 March 2021
Normal ASX trading for New Shares issued under the Entitlement Offer commences	24 March 2021
Despatch of holding statements for New Shares issued under the Entitlement Offer	25 March 2021

Notes: All times are in Australian Eastern Daylight Time ( AEDT ).

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This timetable is indicative only and subject to change. The Directors may vary these dates, in consultation with the Lead Manager and subject to the Listing Rules. An extension of the Closing Date will delay the anticipated date for issue of the New Shares. The Directors also reserve the right not to proceed with the whole or part of the Entitlement Offer any time before the allotment and issue of the New Shares. In that event, the relevant Application Monies (without interest) will be returned in full to Applicants.

Enquiries

For further information, telephone 1300 306 413 (inside Australia) and +61 1300 306 413 (outside Australia) between 8.30am and 5.30pm (AEDT). Alternatively, contact your stockbroker, solicitor, accountant or other professional adviser.

If you have lost your Entitlement and Acceptance Form and would like a replacement form, you should contact the Share Registry on 1300 306 413 (within Australia) or +61 1300 306 413 (outside Australia) or at www.kglresources.com.au.

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1 Description and effect of the Offer

1.1 Overview

The Entitlement Offer is a non-renounceable offer of 28,024,573 New Shares at $0.42 per New Share to raise about $11,770,321 (before direct offer costs including fees paid to the Lead Manager, advisers and to providers of specific services to cover share registry, printing and postage costs).

Proceeds from the Equity Raising will be applied to KGL’s Jervois Copper Project and will enable KGL to optimise the mine planning, complete the full project feasibility study, undertake financing, and provide a pool of funds to test some of what KGL believes are exciting additional exploration targets in the area.

Further information regarding progress of the Jervois Copper Project and the use of funds from the Equity Raising is set out in the Investor Presentation lodged with the Australian Securities Exchange (ASX) on 22 February 2021, a copy of which is included in this Information Booklet in section 3.

Eligible Shareholders who are on KGL’s share register on the Record Date are entitled to acquire 1 New Share for every 13 Shares held on the Record Date ( Entitlement ).

Investors issued shares under the Institutional Placement will be entitled to participate in the Entitlement Offer.

Fractional Entitlements will be rounded up to the nearest whole number of New Shares.

The issue price of $0.42 per New Share represents a discount of 8.7% to the closing price of KGL shares on 17 February 2021 (being the last trading day for Shares in KGL before announcement of the Equity Raising).

An Entitlement and Acceptance Form setting out your Entitlement accompanies this Information Booklet. Eligible Shareholders may subscribe for all or part of their Entitlement.

Shareholders will have their interest in KGL diluted because of the issue of Shares under the Institutional Placement. In addition, Eligible Shareholders who do not take up all of their Entitlements will have their percentage shareholding in KGL further diluted.

Eligible Shareholders should be aware that an investment in KGL involves risks. The key risks identified by KGL are summarised in the Investor Presentation set out in section 3.

1.2 Lead Manager

Morgans Corporate Limited has been appointed by KGL as Lead Manager to the Equity Raising. The Lead Manager is responsible for lead managing the Equity Raising, including managing the Institutional Placement and placement of any Shortfall Shares under the Entitlement Offer.

Under the terms of the mandate letter between KGL and the Lead Manager:

• (a) the Lead Manager will receive a fee comprising of:

• (i) a management fee of up to 1.5% of the gross proceeds of the Equity Raising (excluding GST), excluding any proceeds raised from the placement of any Shortfall Shares; and

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• (ii) a selling fee of 3.5% of the gross proceeds of the Equity Raising (excluding GST), but excluding any proceeds raised from:

  • (A) New Shares that KMP Investments and/or the Denis Wood Entities and other agreed participants apply for under the Entitlement Offer;

  • (B) the placement of any Shortfall Shares.

• (b) the Lead Manager is entitled to reimbursement of certain expenses; and

• (c) KGL has agreed to indemnify the Lead Manager and others against their losses in connection with the Equity Raising.

1.3

Shortfall

A shortfall may arise if applications received for New Shares under the Entitlement Offer (including Entitlements of Ineligible Shareholders) are less than the number of New Shares offered.

The Directors reserve the right, subject to the requirements of the Listing Rules and the Corporations Act, to place Shortfall Shares within three months after the Closing Date to either existing or new Shareholders at their discretion. If issued, Shortfall Shares will be issued at a price not less than the Issue Price of New Shares under the Entitlement Offer. Shareholders will not receive any payment or value for the Entitlements not taken up under the Entitlement Offer that are subsequently taken up as Shortfall Shares.

1.4

Eligibility of Shareholders

The Entitlement Offer is being offered to all Eligible Shareholders.

An Eligible Shareholder is a Shareholder on the Record Date who:

• (a) (i) has a registered address on the KGL share register in Australia, New Zealand, Singapore or (ii) is an Approved US or a Shareholder that KGL has otherwise determined is eligible to participate;

• (b) is not in the United States and is not a person (including nominee or custodian) acting for the account or benefit of a person in the United States, excluding any Approved US Shareholders; and

• (c) is eligible under all applicable securities laws to receive an offer under the Entitlement Offer without any requirement for a prospectus to be lodged or registered.

The Entitlement Offer is not being extended to the Ineligible Shareholders because of the small number of those Shareholders, the number and value of the Shares they hold and the cost of complying with applicable regulations in jurisdictions outside Australia and New Zealand.

1.5

Ranking of New Shares

The New Shares issued under the Entitlement Offer will be fully paid and rank equally with Existing Shares.

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1.6 Allotment

KGL will make an application for quotation of the New Shares on ASX. It is expected that allotment of the New Shares under the Entitlement Offer will take place no more than six Business Days after the close of the Entitlement Offer.

Application Monies will be held by KGL on trust for Applicants until the New Shares are allotted. No interest will be paid on Application Monies.

It is the responsibility of Applicants to determine the number of New Shares allotted and issued to them before trading the New Shares. The sale by an Applicant of New Shares before receiving their holding statement is at the Applicant’s own risk.

1.7 Capital structure

Subject to the rounding up of fractional, the capital structure of KGL following the issue of New Shares (assuming the Entitlement Offer is fully subscribed) is expected to be as follows:

Existing Shares on issue as at 22 February 2021 (announcement of the Entitlement Offer) the date of this Information Booklet	335,748,021
Shares to be issued under the Institutional Placement	28,571,427
Shares on issue after allotment under the Institutional Placement	364,319,448
Approximate New Shares issued under the Entitlement Offer	28,024,573
Approximate total number of Shares after the Equity Raising	392,344,021

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1.8 Effect on major shareholder voting power

KGL’s top two major shareholders, KMP Investments and the Denis Wood Entities, did not participate in the Institutional Placement; as a result, their respective voting power will be diluted upon allotment of Shares under the Institutional Placement.

Following allotment of Shares under the Institutional Placement, approximately 7.84% of the share capital in KGL will be held by new investors introduced under the Institutional Placement.

The following table sets out the impact on voting power of KGL’s major shareholders and directors based on different levels of Shareholder participation under the Entitlement Offer:

Participation level	42%*	50%	75%	100%**
KMP Investments	25.60%	25.44%	24.98%	24.53%
Denis Wood Entities	9.46%	9.41%	9.24%	9.07%
Other KGL Directors	0.89%	0.89%	0.87%	0.86%
Placement investors***	8.18%	8.13%	7.98%	7.84%

• Assumes participation by only the Shareholders named in the table.

** Assumes full subscription under the Entitlement Offer or placement of any shortfall.

*** Each placement investor holds its shares separately, and are included in this table as a combined holding for the purpose of demonstrating the impact of the Institutional Placement on the voting power in KGL.

1.9 Effect on KGL’s financial position

Set out in section 2 is the consolidated balance sheet of KGL as at 30 June 2020 and a pro-forma balance sheet incorporating the $12 million raised under the Institutional Placement and assuming the total funds raised under the Entitlement Offer is $11.7 million.

1.10 Broker handling fee

A handling fee of 1% of the application amount (plus GST) of New Shares (subject to a maximum handling fee of $150) ( Broker Handling Fee ) under the Entitlement Offer will be paid by the Company or the Lead Manager to stockbrokers (being those entities being recognised as full service brokers or non-advisory brokers by ASX) who submit a valid claim for a Broker Handling Fee on successful Applications.

1.11 Information Availability

Eligible Shareholders can obtain a copy of this Information Booklet from the KGL website at https://www.kglresources.com.au or by calling the Share Registry on 1300 306 413 (within Australia) or +61 1300 306 413 (outside Australia) at any time from 8.30am to 5.30pm (AEDT) during the Entitlement Offer period. Persons who access the electronic version of this Information Booklet should ensure that they download and read the entire Information Booklet. The electronic version of this Information Booklet will not include an Entitlement and Acceptance Form. A replacement Entitlement and Acceptance Form can be downloaded at https://www.kglresources.com.au/.

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2 Financial position

The following shows the effect of the Equity Raising on the financial position of KGL:

Pro forma Balance Sheet (unaudited)	30 June 2020 ($‘000)	Institutional Placement ($‘000)	Entitlement Offer (Assumes 50% Participation) ($‘000)	Entitlement Offer (Assumes 100% Participation) ($‘000)
Cash at 30 June 2020	950	950	950	950
Term Deposits	2,503	2,503	2,503	2,503
Cash – Placement	-	12,000	12,000	12,000
Cash – Entitlement Offer	-	-	5,885	11,770
Total Cash & Term Deposits	3,453	15,453	21,338	27,223
Trade and Other Receivables	127	127	127	127
Property Plant and Equipment	224	224	224	224
Exploration and Evaluation	63,147	63,147	63,147	63,147
Prepayments	88	88	88	88
Intangibles	1	1	1	1
Financial Assets	333	333	333	333
Total Assets	67,373	79,373	85,258	91,143
Total Liabilities	816	816	816	816
Total Equity	66,557	78,557	84,442	90,327

Notes to pro forma balance sheet:

• Based on the Statement of Financial Position for the Half Year ended 30 June 2020.

• $12,000,000 in new equity capital raised under the Institutional Placement.

• Raise up to $11,770,321 in new equity capital under the Entitlement Offer.

• Assuming 100% take up of entitlement rights, capital raising expenses of up to ~$1.1 million will be paid (includes fees paid to the Lead Manager, advisers and to providers of specific services to cover share registry, printing and postage costs)

• As disclosed in the 30 September 2020 and 31 December 2020 quarterly 5B cashflow reports, KGL raised $3.7 million in net proceeds from an entitlement offer in July 2020, and has expended $1.6 million on exploration and evaluation between 1 July 2020 and 31 December 2020. KGL had cash of $5.2 million at 31 December 2020.

• There have been no other material balance sheet events since 30 June 2020.

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3 Investor presentation

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4 How to apply

4.1 Shareholder’s choices

The number of New Shares to which Eligible Shareholders are entitled under the Entitlement Offer (i.e. their Entitlement) is shown on the accompanying Entitlement and Acceptance Form. Eligible Shareholders may:

• (a) take up their Entitlement in full (refer to section 4.2);

• (b) take up part of their Entitlement, in which case the balance of the Entitlement lapses (refer to section 4.3);

• (c) allow their Entitlement to lapse (refer to section 4.4).

Ineligible Shareholders may not take up any of their Entitlements.

No top up facility is available under the Entitlement Offer for Eligible Shareholders to apply for New Shares in excess of their Entitlement. Any Application Monies received from a Shareholder in excess of their Entitlement will be refunded in accordance with section 4.2.

KGL reserves the right to reject any Entitlement and Acceptance Form that is not correctly completed or that is received after the Closing Date.

The Closing Date for acceptance of the Entitlement Offer is 5.00pm (AEDT) on 16 March 2021 (however, that date may be varied by KGL, in accordance with the Listing Rules and following consultation with the Lead Manager).

4.2 Taking up all of your Entitlement

If you wish to take up your Entitlement in full, follow the instructions set out in the Entitlement and Acceptance Form.

Please return your completed Entitlement and Acceptance Form together with your Application Monies in accordance with section 4.6 for the amount shown on the Entitlement and Acceptance Form to the Share Registry so that it is received no later than 5.00pm (AEDT) on 16 March 2021 at the address set out below:

KGL Resources Limited C/- Link Market Services Limited GPO Box 3560 SYDNEY NSW 2001

If you are an Approved US Shareholder, then you must also return a US Investor Certificate along with an Entitlement and Acceptance Form. The US Investor Certificate is available from KGL’s Company Secretary.

You may also take up all of your Entitlement by payment of the Application Monies through BPAY in accordance with the instructions on the Entitlement and Acceptance Form. If payment is being made through BPAY, you do not need to return the Entitlement and Acceptance Form. Your payment must be received by no later than 5.00pm (AEDT) on 16 March 2021 .

Refund amounts, if any, will be paid in Australian dollars. You will be paid either by cheque sent by ordinary post to your address as recorded on the share register (the registered address of the

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first-named in the case of joint holders), or by direct credit to the nominated bank account as noted on the share register as at the closing date of the offer. Any application monies received for more than your final allocation of New Shares will be refunded to you as soon as practicable (where the amount is $2.00 or greater). If you wish to advise or change your banking instructions with the Share Registry you may do so by going to investorcentre.linkmarketservices.com.au/ and following the instructions.

4.3 Taking up part of your Entitlement and allowing the balance to lapse

If you wish to take up part of your Entitlement, complete the Entitlement and Acceptance Form for the number of New Shares you wish to take up and follow the other steps required under section 4.2.

You may arrange for payment through BPAY in accordance with the instructions on the Entitlement and Acceptance Form. If payment is made through BPAY and KGL receives an amount that is less than the Issue Price multiplied by your Entitlement ( Reduced Amount ), your payment may be treated as an application for as many New Shares as your Reduced Amount will pay for in full.

4.4 Allow your Entitlement to lapse

If you do not wish to accept all or any part of your Entitlement, do not take any further action and that part of your Entitlement will lapse.

4.5 Consequences of not accepting your Entitlement

If you do not accept all of your Entitlement in accordance with the instructions set out above, your percentage shareholding in KGL Resources will be diluted.

4.6 Payment

The consideration for the New Shares is payable in full on application by a payment of $0.42 per New Share. The Entitlement and Acceptance Form must be accompanied by a cheque for the Application Monies. Cheques must be drawn in Australian currency on an Australian bank and made payable to ‘ KGL Resources Ltd – Entitlement Offer ’ and crossed ‘Not Negotiable’.

Alternatively, you may arrange for payment of the Application Monies through BPAY in accordance with the instructions on the Entitlement and Acceptance Form.

Eligible Shareholders must not forward cash by mail. Receipts for payment will not be issued.

4.7

Entitlement and Acceptance Form is binding

A completed and lodged Entitlement and Acceptance Form, or a payment made through BPAY, constitutes a binding offer to acquire New Shares on the terms of this Information Booklet and, once lodged or paid, cannot be withdrawn. If the Entitlement and Acceptance Form is not completed correctly it may still be treated as a valid Application for New Shares. The Directors' (or their delegates’) decision whether to treat an acceptance as valid and how to construe, amend or complete the Entitlement and Acceptance Form is final.

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By completing and returning your personalised Entitlement and Acceptance Form with the requisite Application Monies or making a payment by BPAY, you will also be deemed to have acknowledged, represented and warranted on behalf of each person on whose account you are acting that:

• (a) you are an Eligible Shareholder and are not in the United States, excluding any Approved US Shareholder, and are not a person (including nominees or custodians) acting for the account or benefit of a person in the United States, excluding any Approved US Shareholder, and are not otherwise a person to whom it would be illegal to make an offer or issue New Shares under the Entitlement Offer;

• (b) you acknowledge that the New Shares have not been, and will not be, registered under the US Securities Act or under the laws of any other jurisdiction outside Australia;

• (c) you have not and will not send any materials relating to the Entitlement Offer to any person in the United States or any other country outside Australia, except nominees and custodians may send materials relating to the Entitlement Offer to beneficial shareholders resident in New Zealand and Singapore; and

• (d) if you decide to sell or otherwise transfer any New Shares, you will only do so in regular way transactions on the ASX where neither you nor any person acting on your behalf knows, or has reason to know, that the sale has been pre-arranged with, or that the purchaser is, a person in the United States or is acting for or on behalf of a person in the United States.

4.8 Brokerage and Stamp Duty

No brokerage fee is payable by Eligible Shareholders who accept their Entitlement. No stamp duty is payable for subscribing for New Shares under the Entitlement Offer.

4.9 Notice to Nominees and Custodians

Nominees and custodians that hold Shares should note that the Entitlement Offer is only being made to Eligible Shareholders. KGL is not required to determine whether or not any registered holder is acting as a nominee or the identity or residence of any beneficial owners of Shares. Nominees and custodians may not distribute any part of this offer document, and may not permit any beneficial shareholder to participate in the Entitlement Offer, in any country outside Australia except:

• (a) to beneficial shareholders of KGL resident in New Zealand or Singapore; and

• (b) with the consent of KGL, to beneficial shareholders of KGL resident in certain other countries where KGL may determine it is lawful and practical to make the Offer.

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5 Definitions

These definitions are provided to assist the understanding some of the expressions used in this Information Booklet.

Term	Definition
KGL	means KGL Resources Ltd ACN 082 685 080.
$	means Australian dollars.
AEDT	means Australian Eastern Daylight Time.
Applicant	means an Eligible Shareholder who has applied to
	subscribe for New Shares by submitting an Entitlement
	and Acceptance Form or has arranged for payment
	through BPAY in accordance with the instructions on the
	Entitlement and Acceptance Form.
Application	means the submission of an Entitlement and Acceptance
	Form accompanied by the relevant Application Monies or
	arranging for payment of the relevant Application Monies
	through BPAY in accordance with the instructions on the
	Entitlement and Acceptance Form.
Application Monies	means the aggregate amount of money payable for the
	New Shares applied for in a duly completed Entitlement
	and Acceptance Form or through BPAY.
Approved US Shareholders	means existing shareholders of KGL who are institutional
	‘accredited investors’ within the meaning of Rule
	501(a)(1), (2), (3) or (7) under the US Securities Act.
ASIC	means the Australian Securities and Investments
	Commission.
ASX	means ASX Limited ACN 008 624 691 or the securities
	exchange operated by it (as the case requires).
Business Day	means a business day as defined in the Listing Rules.
Closing Date	means 16 March 2021, the day the Entitlement Offer
	closes, or any other date that the Directors in their
	absolute discretion determine, subject to the Listing
	Rules.
Corporations Act	means Corporations Act 2001 (Cth).
Denis Wood Entities	means entities associated with the KGL chairman, Denis
	Wood, specifically:
	(a) Coal Industry Services Pty Ltd; and
	(b) The Wood Investment Trust (the trustees of
	which are Denis Wood and Anne Wood).
Directors	means the directors of KGL.
Eligible Shareholder	means a Shareholder as at the Record Date who is not
	an Ineligible Shareholder.
Entitlement	means the right to subscribe for New Shares under the
	Entitlement Offer.

KGL Resources Ltd | Entitlement Offer Information Booklet

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Term	Definition
Entitlement and Acceptance	means the Entitlement and Acceptance Form
Form	accompanying this Information Booklet.
Entitlement Offer	means the non-renounceable entitlement offer to Eligible
	Shareholders to subscribe for 1 New Share for every 13
	Shares of which the Shareholder is the registered holder
	on the Record Date, at the Issue Price pursuant to this
	Information Booklet.
Equity Raising	means the Entitlement Offer and the Institutional
	Placement.
Existing Shares	means the Shares already on issue in KGL as at the
	Record Date.
Ineligible Shareholder	means a Shareholder as at the Record Date who does
	not satisfy the eligibility requirements set out in section
	1.4 of this Information Booklet.
Information Booklet	means this document.
Institutional Placement	means the offer of new Shares to institutional investors
	announced at the time of the Entitlement Offer.
Investor Presentation	means the update to investors, in section 3 of this
	Information Booklet, announced to ASX on 22 February
	2021.
Issue Price	means $0.42 per New Share.
KMP Investments	means KMP Investments Pte Ltd.
Lead Manager	means Morgans Corporate Limited ACN 010 539 607.
Listing Rules	means the official listing rules of ASX.
New Shares	means Shares to be allotted and issued under the
	Entitlement Offer.
Record Date	means 7.00pm AEDT on 25 February 2021.
Shareholders	mean holders of Shares.
Shares	means fully paid ordinary shares in the capital of KGL.
Share Registry	means Link Market Services Limited ACN 083 214 537.
Shortfall Shares	means those New Shares not taken up by Eligible
	Shareholders under the Entitlement Offer, together with
	those New Shares to which any Ineligible Shareholders
	would otherwise have been entitled.
US Securities Act	means the US Securities Act of 1933, as amended.

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6 Corporate information

Company

KGL Resources Limited Level 7, 167 Eagle Street BRISBANE QLD 4000 Tel: +61 7 3071 9003 www.kglresources.com.au

Directors

Denis Wood Executive Chairman Ferdian Purnamasidi Non-executive Director Peter Hay Non-executive Director Fiona Murdoch Non-executive Director

Lead Manager

Morgans Corporate Limited Level 29, 123 Eagle Street BRISBANE QLD 4000 Tel: +61 7 3334 4888 www.morgans.com.au

Lawyers

McCullough Robertson Lawyers Level 11, 66 Eagle Street BRISBANE QLD 4000 Tel: +61 7 3233 8888 www.mccullough.com.au

Company Secretary

Kylie Anderson

Principal Share Register

Link Market Services Limited Level 12, 680 George Street SYDNEY NSW 2000 Offer Information Line : +61 1300 306 413 General enquiries: +61 1300 554 474 www.linkmarketservices.com.au

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==> picture [113 x 55] intentionally omitted <==

KGL Resources Ltd

ACN 082 658 080

All Registry communications to: Link Market Services Limited Locked Bag A14 Sydney South NSW 1235 Australia Telephone: 1300 306 413 From outside Australia: +61 1300 306 413

ASX Code: KGL

Website: www.linkmarketservices.com.au

SRN/HIN:

Entitlement Number:

Number of Eligible Shares held as at the Record Date, 7.00pm (AEDT) on 25 February 2021:

Entitlement to New Shares (on a 1 New Share for 13 basis):

Amount payable on full acceptance at A$0.42 per Share:

Offer Closes 5.00pm (AEDT): 16 March 2021

ENTITLEMENT AND ACCEPTANCE FORM

As an Eligible Shareholder you are entitled to acquire 1 New Share for every 13 Existing Shares that you hold on the Record Date, at an Offer Price of A$0.42 per New Share. This is an important document and requires your immediate attention. If you do not understand it or you are in doubt as how to deal with it, you should contact your accountant, stockbroker, solicitor or other professional adviser.

IMPORTANT: The Offer is being made under the Information Booklet dated 22 February 2021. The Information Booklet contains information about investing in the New Shares. Before applying for New Shares, you should carefully read the Information Booklet. This Entitlement and Acceptance Form should be read in conjunction with the Information Booklet.

If you do not have a paper copy of the Information Booklet, you can obtain a paper copy at no charge, by calling the KGL Resources Ltd Offer Information Line on 1300 306 413 (within Australia) or +61 1300 306 413 (from outside Australia).

PAYMENT OPTIONS

If you wish to take up all or part of your entitlement, you have two payment options detailed below.

OPTION 1: PAYING BY Bpay[®]

If paying by Bpay[®] , refer to the instructions overleaf. You do NOT need to return the acceptance slip below if you elect to make payment by Bpay[®] . Payment must be received via Bpay[®] before 5.00pm (AEDT) on 16 March 2021. You should check the processing cut off-time for Bpay[®] transactions with your bank, credit union or building society to ensure your payment will be received by the Registry in time. By paying by Bpay[® ] you will be deemed to have completed an Application Form for the number of Shares subject of your application payment.

==> picture [98 x 46] intentionally omitted <==

Biller Code: [XXXXXX] Ref:

OPTION 2: PAYING BY CHEQUE

If paying by cheque, complete and return the acceptance slip below with your Application Monies. No signature is required on the acceptance slip. The acceptance slip with your Application Monies must be received by the Registry before 5.00pm (AEDT) on 16 March 2021.

Telephone & Internet Banking – Bpay[®]

Contact your bank or financial institution to make this payment from your cheque, savings, debit or transaction account. More info: www.bpay.com.au ® Registered to Bpay Pty Ltd ABN 69 079 137 518

See overleaf for details and further instructions on how to complete and lodge this Entitlement and Acceptance Form.

THIS IS A PERSONALISED FORM FOR THE SOLE USE OF THE SHAREHOLDER AND HOLDING RECORDED ABOVE.

==> picture [513 x 206] intentionally omitted <==

----- Start of picture text -----

Please detach and enclose with payment SRN/HIN:
Entitlement Number:
ACN 082 658 080
A Number of New Shares accepted (being not more B Payment amount 999999
than your Entitlement shown above) (Multiply the number in section A by A$0.42 )
A$
PLEASE INSERT CHEQUE DETAILS – Cheques must be drawn on an Australian branch of a financial institution in Australian currency, made payable to “KGL Resources
C
Ltd – Entitlement Offer” and crossed “Not Negotiable”.
Drawer Cheque Number BSB Number Account Number Amount of Cheque
A$
D CONTACT DETAILS – Telephone number Telephone number – after hours Contact name
( ) ( )
----- End of picture text -----

KGL RESOURCES LTD

The Entitlement Offer to which this Entitlement and Acceptance Form relates is not being made to investors located or resident outside of Australia and New Zealand, except to certain categories of investor in Singapore and the United States. In particular the Entitlement Offer is not being made to any person in the U.S. or to a U.S. person, other than to ‘Approved US Investors’ (as defined in the Information Booklet). The Information Booklet and Entitlement and Acceptance Form do not constitute an offer or invitation to acquire Shares in any place in which, or to any person to whom, it would be unlawful to make such an offer or invitation.

ACCEPTANCE OF ENTITLEMENT OFFER

By either returning the Entitlement and Acceptance Form with payment to the Registry, or making payment received by Bpay[®] :

• you represent and warrant that you have read and understood the Information Booklet and that you acknowledge the matters, and make the warranties and representations;

• you provide authorisation to be registered as the holder of New Shares acquired by you and agree to be bound by the Constitution of KGL Resources Ltd.

HOW TO APPLY FOR NEW SHARES

1. IF PAYING BY Bpay[®] (AVAILABLE TO SHAREHOLDERS WITH AN AUSTRALIAN BANK ACCOUNT ONLY)

• If you elect to make payment using Bpay[®] you must contact your bank or financial institution to make this payment from your cheque, savings, debit or transaction account. For more information on paying by Bpay[®] : www.bpay.com.au

2. IF PAYING BY CHEQUE

Complete all relevant sections of the Entitlement and Acceptance Form USING BLOCK LETTERS. These instructions are cross referenced to each section of the Entitlement and Acceptance Form.

• A. Acceptance of New Shares

• Enter into section A the number of New Shares you wish to apply for. The number of New Shares must be equal to or less than your Entitlement, which is set out overleaf.

B. Payment Amount

• Enter into section B the total amount payable by you. To calculate the total amount multiply the number in Section A by A$0.42 .

C. Cheque details

Enter your cheque details in section C. Cheques must be drawn on an Australian branch of a financial institution in Australian currency, made payable to “KGL Resources Ltd – Entitlement Offer” and crossed “Not Negotiable”. Please ensure sufficient cleared funds are held in your account, as your cheque will be banked as soon as it is received. If you provide a cheque or money order for the incorrect amount, KGL Resources Ltd may treat you as applying for as many New Shares as your cheque will pay for.

• D. Contact details

• Enter your contact telephone number where we may contact you regarding your acceptance of New Shares, if necessary.

Work out the total amount payable by you. To calculate the total amount, multiply the number of New Shares you wish to apply for by A$0.42 .

Refer overleaf for the Biller Code and Reference Number. The Reference Number is used to identify your holding. If you have multiple holdings you will have multiple Reference Numbers. You must use the Reference Number shown on each personalised Entitlement and Acceptance Form when paying for any New Shares that you wish to apply for in respect of that holding.

3. HOW TO LODGE YOUR ENTITLEMENT AND ACCEPTANCE FORM

A reply paid envelope is enclosed for your use. No postage stamp is required if it is posted in Australia. Alternatively, if you have lost the reply paid envelope, or you have obtained the Information Booklet electronically, your completed Entitlement and Acceptance Form with the payment for New Shares may be mailed to the postal address set out below. If paying by Bpay[® ] you do not need to complete or return the Entitlement and Acceptance Form. You should check the processing cut off-time for Bpay[®] transactions with your bank, credit union or building society to ensure your payment will be received by the Registry by the close of the offer.

Mailing Address

KGL Resources Ltd C/- Link Market Services Limited GPO Box 3560 Sydney NSW 2001

Make sure you send your Acceptance Slip and application payment allowing enough time for mail delivery, so Link Market Services Limited receives them no later than 5.00pm (AEDT) on 16 March 2021. Please ensure sufficient cleared funds are held in your account, as your cheque will be banked as soon as it is received. KGL Resources Ltd reserves the right not to process any Acceptance Slips and cheques received after the Closing Date.

If you require further information on how to complete this Entitlement and Acceptance Form, please contact the KGL Resources Ltd Offer Information Line on 1300 306 413 (within Australia) or +61 1300 306 413 (from outside Australia) between 8.30am and 5.30pm (AEDT) Monday to Friday.