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==> picture [57 x 50] intentionally omitted <==

2
October
2012

Company
Announcements
Office Australian
Securities
Exchange
Limited Level
6,
20
Bridge
Street SYDNEY
NSW
2000

**Notice

of
Meeting**

Please
be
advised
that
the
Notice
of
Meeting
&
Explanatory
Memorandum
for
the
Annual
General
Meeting of
Shareholders
to
be
held
on
1
November
2012
was
despatched
today.

Additionally,
the
documents
can
be
accessed
on
the
Company’s
website
www.kingsrosemining.com.au

Yours
Faithfully

==> picture [91 x 35] intentionally omitted <==

**CHRIS

START MANAGING
DIRECTOR KINGSROSE
MINING
LIMITED**

For
more
information
please
contact: Investors: Chris
Start Managing
Director +61
8
9486
1149 www.kingsrsosemining.com.au [email protected]

Media: Paul
Armstrong Read
Corporate +61
8
9388
1474

**About

Kingsrose
Mining
Limited:**

Kingsrose
Mining
Limited
is
a
gold
producer
that
has
an
85%
interest
in
the
Way
Linggo
mine
in
South
Sumatra,
Indonesia.
The
project
has
emerged
as a
small
but
highly
profitable
miner
from
its
high
grade
gold
and
silver
mine,
largely
due
to
its
low
operating
costs.
The
Way
Linggo
project
hosts
a JORC
compliant
resource
of
2,188,500
tonnes
with
a
grade
of
6.91/t
gold
containing
485,900
ounces
and
135.6g/t
silver
containing
3,183,200
ounces. The
Way
Linggo
Project
produced
37,650
ounces
of
gold
and
432,754
ounces
of
silver
at
a
cash
cost
of
US$254
(after
silver
credits)
for
the
year
end
30 June
2012.

Kingsrose
owns
a
highly
prized
4th
Generation
contract
of
work
(mining
title
of
10,000
hectares)
in
Indonesia
which
regionally
sits
on
the
pacific
rim
of fire
and
in
close
proximity
to
the
prolifically
mineralised
Trans-‐Sumatra
Fault.

The
area
is
considered
highly
prospective
for
low-‐sulphidation epithermal
gold-‐silver
deposits.
Kingsrose
has
recently
made
a
second
high
grade
epithermal
gold
discovery
at
its
Talang
Santo
Prospect,
7km
NNE
of the
Way
Linggo
mine
and
has
already
commenced
trial
mining
of
that
ore
system
to
supplement
and
sustain
its
gold
production.

At
the
end
of
the
June
2012
quarter,
Kingsrose
had
$34
million
in
cash
and
bullion.
The
Company’s
operations
generate
strong
free
cash
flow
and importantly,
the
Company
has
just
paid
a
maiden
interim
dividend.

Suite
2,
Level
9
|
12
–
14
Thelma
Street West
Perth
WA
6005 ABN:
49
112
389
910

T
+
61
8
9486
1149
|
F
+
61
8
9486
1151 www.kingsrosemining.com.au [email protected]

==> picture [30 x 800] intentionally omitted <==

==> picture [82 x 75] intentionally omitted <==

NOTICE OF MEETING and EXPLANATORY MEMORANDUM

for the Annual General Meeting of Shareholders to be held at

The Celtic Club, 48 Ord St, West Perth, 6005 Western Australia

on Thursday, 1 November 2012

at 10.30am (WST)

This is an important document. Please read it carefully. If Shareholders are in doubt as to how they should vote, they should seek advice from their accountant, solicitor or other professional adviser prior to voting.

If you are unable to attend the Annual General Meeting, please complete the enclosed Proxy Form and return it in accordance with the instructions set out on that form.

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2012

==> picture [25 x 22] intentionally omitted <==

**NOTICE

OF
ANNUAL
GENERAL
MEETING**

**TIME

AND
PLACE
OF
MEETING
AND
HOW
TO
VOTE**

Venue

The
Annual
General
Meeting
of
Kingsrose
Mining
Limited
will
be
held
at:

The
Celtic
Club,
48
Ord
Street West
Perth,
6005 Western
Australia on Thursday,
1
November
2012 commencing
at
10.30am
(WST)

**How

to
Vote**

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

**Voting

in
Person**

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

The
meeting
will
commence
at
10.30am
(WST).

**Voting

by
Proxy**

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

In
accordance
with
section
249L
of
the
Corporations
Act,
members
are
advised
that:

each
member
has
a
right
to
appoint
a
proxy;
the
proxy
need
not
be
a
member
of
the
Company;
and
a
member
who
is
entitled
to
cast
2
or
more
votes
may
appoint
2
proxies
and
may
specify
the proportion
or
number
of
votes
each
proxy
is
appointed
to
exercise.
If
the
member
appoints
2
proxies and
the
appointment
does
not
specify
the
proportion
or
number
of
the
member’s
votes,
then
in accordance
with
section
249X(3)
of
the
Corporations
Act,
each
proxy
may
exercise
one-‐half
of
the votes.

New
sections
250BB
and
250BC
of
the
Corporations
Act
came
into
effect
on
1
August
2011
and
apply
to
voting by
proxy
on
or
after
that
date.
Shareholders
and
their
proxies
should
be
aware
of
these
changes
to
the Corporations
Act,
as
they
will
apply
to
this
Meeting.
Broadly,
the
changes
mean
that:

if
proxy
holders
vote,
they
must
cast
all
directed
proxies
as
directed;
and
any
directed
proxies
which
are
not
voted
will
automatically
default
to
the
Chair,
who
must
vote
the proxies
as
directed.

Further
details
on
these
changes
are
set
out
below.

Page
2

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2012

==> picture [25 x 22] intentionally omitted <==

**NOTICE

OF
ANNUAL
GENERAL
MEETING**

_**Proxy

vote
if
appointment
specifies
way
to
vote**_

Section
250BB(1)
of
the
Corporations
Act
provides
that
an
appointment
of
a
proxy
may
specify
the
way
the
proxy is
to
vote
on
a
particular
resolution
and,
if
it
does:

the
proxy
need
not
vote
on
a
show
of
hands,
but
if
the
proxy
does
so,
the
proxy
must
vote
that
way (i.e.
as
directed);
and
if
the
proxy
has
2
or
more
appointments
that
specify
different
ways
to
vote
on
the
resolution
–
the proxy
must
not
vote
on
a
show
of
hands;
and
if
the
proxy
is
the
chair
of
the
meeting
at
which
the
resolution
is
voted
on
–
the
proxy
must
vote
on
a poll,
and
must
vote
that
way
(i.e.
as
directed);
and
if
the
proxy
is
not
the
chair
–
the
proxy
need
not
vote
on
the
poll,
but
if
the
proxy
does
so,
the
proxy must
vote
that
way
(i.e.
as
directed).

Transfer
of
non-‐chair
proxy
to
chair
in
certain
circumstances

Section
250BC
of
the
Corporations
Act
provides
that,
if:

an
appointment
of
a
proxy
specifies
the
way
the
proxy
is
to
vote
on
a
particular
resolution
at
a meeting
of
the
Company's
members;
and
the
appointed
proxy
is
not
the
chair
of
the
meeting;
and
at
the
meeting,
a
poll
is
duly
demanded
on
the
resolution;
and
either
of
the
following
applies:
the
proxy
is
not
recorded
as
attending
the
meeting;
the
proxy
does
not
vote
on
the
resolution,

the
chair
of
the
meeting
is
taken,
before
voting
on
the
resolution
closes,
to
have
been
appointed
as
the
proxy
for the
purposes
of
voting
on
the
resolution
at
the
meeting.

**Your

proxy
form
is
enclosed.**

Page
3

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2012

==> picture [25 x 22] intentionally omitted <==

**NOTICE

OF
ANNUAL
GENERAL
MEETING**

Notice
is
hereby
given
that
the
Annual
General
Meeting
of
Shareholders
(“Meeting”)
of
Kingsrose
Mining
Limited (“Kingsrose
or
Company”)
will
be
held
on
Thursday,
1
November
2012
at
10.30am
(WST),
at
The
Celtic
Club,
48 Ord
Street,
West
Perth,
6005,
Western
Australia,
and
at
any
adjournment
of
that
meeting,
for
the
purpose
of dealing
with
the
business
set
out
below
including
considering
and,
if
thought
fit,
passing
the
following
proposed resolutions
set
out
below.

The
Explanatory
Memorandum
to
this
Notice
provides
additional
information
on
matters
to
be
considered
at
the Meeting.
The
Explanatory
Memorandum
and
the
Proxy
Form
forms
part
of
this
Notice.

The
Company’s
2012
Annual
Report
can
be
accessed
on
the
Company’s
website
www.kingsrosemining.com.au.

**BUSINESS

OF
THE
MEETING**

Financial Statements and Reports

To
receive
the
financial
statements
and
reports
of
the
Directors
and
the
Auditors
for
Kingsrose
Mining Limited
and
its
controlled
entities
for
the
year
ended
30
June
2012.

Ordinary Resolution 1
– Adoption of Remuneration Report

“That,
for
the
purpose
of
Section
250R(2)
of
the
Corporations
Act
and
for
all
other
purposes,
the Remuneration
Report
for
the
year
ended
30
June
2012
as
disclosed
in
the
2012
Annual
Report
be adopted.”

Note:

The
Corporations
Act
provides
that
a
resolution
to
approve
the
adoption
of
the
remuneration
report
must
be
put
to the
vote
at
a
listed
company’s
annual
general
meeting.
The
vote
on
Resolution
1
is
advisory
only
and
does
not
bind the
directors
of
the
Company.

However,
pursuant
to
recent
amendments
to
the
Corporations
Act,
if
25%
or
more
of
votes
cast
are
voted
against the
adoption
of
the
Remuneration
Report
at
two
consecutive
annual
general
meetings,
shareholders
will
be
required to
vote
at
the
second
annual
general
meeting
on
a
resolution
(a
“spill
resolution”)
for
another
meeting
to
be
held within
90
days
of
the
second
annual
general
meeting
at
which
all
of
the
Company’s
Directors,
other
than
the Managing
Director,
must
stand
for
re-‐election.
Votes
cast
against
the
Remuneration
Report
for
the
year
ended
30 June
2011
did
not
total
25%.

In
accordance
with
the
Corporations
Act
the
Board
is
submitting
this
Remuneration
Report
to
shareholders
for consideration
and
adoption
by
way
of
a
non-‐binding
resolution.
The
Remuneration
Report
is
set
out
within
the Directors’
Report.

Please
see
Explanatory
Memorandum
for
more
information.

_**Voting

Prohibition
Statement:**_

A
vote
on
this
Resolution
must
not
be
cast
(in
any
capacity)
by
or
on
behalf
of
any
of
the
following
persons:

(a) a
member
of
the
Key
Management
Personnel,
details
of
whose
remuneration
are
included
in
the
Remuneration Report;
or
(b) a
Closely
Related
Party
of
such
a
member.

However,
a
person
(the
voter)
described
above
may
cast
a
vote
on
this
Resolution
as
a
proxy
if
the
vote
is
not
cast
on behalf
of
a
person
described
above
and
either:

(c) the
voter
is
appointed
as
a
proxy
by
writing
that
specifies
the
way
the
proxy
is
to
vote
on
the
Resolution;
or
(d) the
voter
is
the
Chair
and
the
appointment
of
the
Chair
as
proxy:

Page
4

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2012

==> picture [25 x 22] intentionally omitted <==

**NOTICE

OF
ANNUAL
GENERAL
MEETING**

(i) does
not
specify
the
way
the
proxy
is
to
vote
on
this
Resolution;
and (ii) expressly
authorises
the
Chair
to
exercise
the
proxy
even
if
the
Resolution
is
connected directly
or
indirectly
with
the
remuneration
of
a
member
of
the
Key
Management
Personnel for
the
Company,
or
if
the
Company
is
part
of
a
consolidated
entity,
for
the
entity

_**Ordinary Resolution 2

– Re-‐election of Director
– Mr. James (Bill) W. Phillips**_

“That
J.
William
Phillips,
a
director,
retires
by
rotation
in
accordance
with
the
clause
12.11
of
the Company’s
Constitution,
and
being
eligible,
is
re-‐elected
as
a
director
of
the
Company.”

Ordinary Resolution 3
– Re-‐election of Director
– Mr. Timothy G. Spencer

“That
Timothy
G.
Spencer,
a
director,
retires
by
rotation
in
accordance
with
the
clause
12.11
of
the Company’s
Constitution,
and
being
eligible,
is
re-‐elected
as
a
director
of
the
Company.”

_**Ordinary Resolution 4

– Increase in non-‐executive Directors’ fee pool**_

“That
pursuant
to
and
in
accordance
with
Listing
Rule
10.17
and
for
the
purposes
of
clause
14
of
the Company’s
Constitution
and
for
all
other
purposes,
the
maximum
aggregate
amount
payable
to
non-‐ executive
Directors
by
way
of
Directors’
fees
be
increased
by
$190,000,
from
$110,000
per
annum
to $300,000
per
annum.”

_Voting
Exclusion :

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

_**Voting

Prohibition
Statement**_

A
person
appointed
as
a
proxy
must
not
vote,
on
the
basis
of
that
appointment,
on
this
Resolution
if:

(a) the
proxy
is
either: (i) a
member
of
the
Key
Management
Personnel;
or

(ii) a
Closely
Related
Party
of
such
a
member;
and

(b) the
appointment
does
not
specify
the
way
the
proxy
is
to
vote
on
this
Resolution.

However,
the
above
prohibition
does
not
apply
if:

(c) the
proxy
is
the
Chair
of
the
Meeting;
and (d) the
appointment
expressly
authorises
the
Chair
to
exercise
the
proxy
even
if
the
Resolution
is
connected directly
or
indirectly
with
remuneration
of
a
member
of
the
Key
Management
Personnel.

• _**Ordinary Resolution 5

–_ Adoption and approval of issues _under the Kingsrose Limited Employee Options and Share Rights Plan**_

“That
shareholders
approve,
pursuant
to
ASX
Listing
Rules
7.1
and
7.2
(Exception
9)
and
for
all
other purposes,
the
adoption
and
issue
of
securities
under
the
Company’s
employee
share
plan
called
the Kingsrose
Limited
Employee
Options
and
Share
Rights
Plan
(‘the
Plan’),
upon
and
subject
to
the
rules
of the
Plan,
as
explained
in
the
accompanying
Explanatory
Memorandum.”

Short
Explanation :
the
Plan
is
a
means
of
rewarding
employees
for
their
ongoing
service
and
commitment
to
the Company.
Please
refer
to
the
Explanatory
Memorandum
for
details.

Page
5

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2012

==> picture [25 x 22] intentionally omitted <==

**NOTICE

OF
ANNUAL
GENERAL
MEETING**

Voting
Exclusion: The
Company
will
disregard
any
votes
cast
on
this
Resolution
by
any
Director,
other
than
any Directors
who
are
ineligible
to
participate
in
the
Plan,
and
any
associates
of
those
Directors.
However,
the
Company need
not
disregard
a
vote
if
it
is
cast
by
a
person
as
a
proxy
for
a
person
who
is
entitled
to
vote,
in
accordance
with the
directions
on
the
Proxy
Form,
or,
it
is
cast
by
the
person
chairing
the
meeting
as
proxy
for
a
person
who
is entitled
to
vote,
in
accordance
with
a
direction
on
the
Proxy
Form
to
vote
as
the
proxy
decides.

• _**Ordinary Resolution 6

– Approval of proposed issue of Share Rights to the Managing Director
– Mr. Christopher N. Start
– 2012-‐2013 long term incentive**_

“Subject
to
the
passing
of
Resolution
5,
that
approval
is
given
for
the
purposes
of
section
208
of
the Corporations
Act
and
Listing
Rule
10.14,
and
for
all
other
purposes,
for
the
issue
of
172,972
Share
Rights to
Mr.
Chris
Start
as
the
long-‐term
incentive
component
of
his
remuneration
package
for
the
2012/2013 financial
year,
in
accordance
with
the
terms
detailed
in
the
Explanatory
Memorandum
accompanying and
forming
part
of
this
Notice
of
Meeting.”

Voting
Exclusion :

The
Company
will
disregard
any
votes
cast
on
this
Resolution
by
any
Director,
other
than
any Directors
who
are
ineligible
to
participate
in
the
Plan,
and
any
associates
of
those
Directors.

However,
the Company
need
not
disregard
a
vote
if
it
is
cast
by
a
person
as
a
proxy
for
a
person
who
is
entitled
to
vote,
in accordance
with
the
directions
on
the
Proxy
Form,
or,
it
is
cast
by
the
person
chairing
the
meeting
as
proxy
for
a person
who
is
entitled
to
vote,
in
accordance
with
a
direction
on
the
Proxy
Form
to
vote
as
the
proxy
decides.

• _**Ordinary Resolution 7

– Approval of proposed issue of Share Rights to the Finance Director
–Mr. Timothy G. Spencer
– 2012-‐2013 long term incentive**_

“Subject
to
the
passing
of
Resolution
5,
that
approval
is
given
for
the
purposes
of
section
208
of
the Corporations
Act
and
Listing
Rule
10.14,
for
the
issue
of
97,297
Share
Rights
to
Mr.
Tim
Spencer
as
the long-‐term
incentive
component
of
his
remuneration
package
for
the
2012/2013
financial
year,
in accordance
with
the
terms
detailed
in
the
Explanatory
Memorandum
accompanying
and
forming
part
of this
Notice
of
Meeting.”

Voting
Exclusion :

The
Company
will
disregard
any
votes
cast
on
this
Resolution
by
any
Director,
other
than
any Directors
who
are
ineligible
to
participate
in
the
Plan,
and
any
associates
of
those
Directors.

However,
the Company
need
not
disregard
a
vote
if
it
is
cast
by
a
person
as
a
proxy
for
a
person
who
is
entitled
to
vote,
in accordance
with
the
directions
on
the
Proxy
Form, or,
it
is
cast
by
the
person
chairing
the
meeting
as
proxy
for
a person
who
is
entitled
to
vote,
in
accordance
with
a
direction
on
the
Proxy
Form
to
vote
as
the
proxy
decides.

_**Ordinary Resolution 8

– Approval for Unlisted Options issue to Mr. Andrew P Spinks– Non-‐Executive Director**_

“Subject
to
the
passing
of
Resolution
5,
and
that
for
the
purposes
of
ASX
Listing
Rules
10.12
(Exception 4)
and
10.14,
section
208
of
the
Corporations
Act
and
for
all
other
purposes,
the
shareholders
of
the Company
approve
the
issue
under
the
Kingsrose
Mining
Limited
Employee
Option
and
Share
Rights
Plan 2012
of
1,000,000
Options
to
subscribe
for
fully
paid
ordinary
shares
in
the
capital
of
the
Company
on the
terms
and
conditions
described
in
the
accompanying
Explanatory
Memorandum
to
Mr.
Andrew Spinks,
being
a
related
party
of
the
Company.”

Voting
Exclusion :

The
Company
will
disregard
any
votes
cast
on
this
Resolution
by
any
Director,
other
than
any Directors
who
are
ineligible
to
participate
in
the
Plan,
and
any
associates
of
those
Directors.

Page
6

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2012

==> picture [25 x 22] intentionally omitted <==

**NOTICE

OF
ANNUAL
GENERAL
MEETING**

• _**Ordinary Resolution 9

-‐ Ratification of Issue of Options under ASX 15% rule to Commissioner of subsidiary company**_

“That
for
the
purposes
of
ASX
Listing
Rules
7.1
and
7.4,
and
for
all
other
purposes,
the
issue
on
22 February
2012
of
500,000
options
over
ordinary
shares
to
a
Commissioner
of
the
Company’s
subsidiary at
an
exercise
price
of
$1.53
each
on
or
before
22
February
2014
if
ratified
and
approved.”

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

_**Special Resolution 10

– Amendments to Company’s Constitution**_

(Resolution 10A)

“That,
for
the
purpose
of
Section
136(2)
of
the
Corporations
Act
and
for
all
other
purposes,
the
existing Article
20.1
be
deleted
and
replaced
with
a
new
Article
20.1
on
the
following
terms:

20.1 (1)
Subject
to
Article
20.1
(2)
below,
a
dividend
may
only
be
paid
upon
each
of
the
following three
tests
being
satisfied:

1. Balance
Sheet
Test:

The
Company’s
assets
exceed
its
liabilities
immediately
before
the
dividend
is
declared
and
the excess
is
sufficient
for
the
payment
of
the
dividend.

2. Fair
to
Shareholders
Test:

The
payment
of
the
dividend
is
fair
and
reasonable
to
the
Company’s
shareholders
as
a
whole.

3. No
Material
Prejudice
to
Creditors
Test: The
payment
of
the
dividend
does
not
materially
prejudice
the
Company’s
ability
to
pay
its creditors.

(2)
A
dividend
may
also
be
paid
in
such
other
circumstances
as
the
Corporations
Act
2001
(as amended
from
to
time
to
time)
may
from
time
to
time
permit.”

(Resolution 10B)

“That,
for
the
purpose
of
Section
136(2)
of
the
Corporations
Act
and
for
all
other
purposes, the
existing Article
13.20
be
amended
by
inserting
a
new
Article
13.20A
in
the
Constitution
of
the
Company
on
the following
terms:

That
a
resolution
in
writing
signed
only
by
directors
eligible
to
vote
on
the
resolution
be
treated
as
a determination
of
the
Board
passed
at
a
meeting
of
the
Board
duly
convened
and
held”.

By
order
of
the
Board

Jeannette
P.
Smith Company
Secretary 2
October
2012

Page
7

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

**PROXY

AND
VOTING
INSTRUCTIONS**

A
Shareholder
of
the
Company
entitled
to
attend
and
vote
is
entitled
to
appoint
not
more
than
two proxies.

Where
more
than
one
proxy
is
appointed,
each
proxy
must
be
appointed
to
represent
a specified
proportion
of
the
Shareholder's
voting
rights.
If
the
Shareholder
appoints
two
proxies
and the
appointment
does
not
specify
this
proportion,
each
proxy
may
exercise
half
of
the
votes.
A
proxy need
not
be
a
Shareholder
of
the
Company.

In
accordance
with
Regulation
7.11.37
of
the
Corporations
Act,
the
Directors
have
set
a
date
to determine
the
identity
of
those
entitled
to
attend
and
vote
at
the
Meeting.

The
date
is
Tuesday, 30
October
2012
at
10.30am
(WST).

A
proxy
form
is
attached.
This
is
to
be
used
by
shareholders
if
they
wish
to
appoint
a
representative (a
“proxy”)
to
vote
in
their
place.
All
shareholders
are
invited
and
encouraged
to
attend
the
Meeting, or
if
they
are
unable
to
attend
in
person,
the
Proxy
Form
should
be
completed,
signed
and
returned to
the
Company's
registered
office
in
accordance
with
the
instructions
on
that
form.
Shareholder
questions
-‐
At
the
Meeting,
the
Chairman
will
allow
a
reasonable
opportunity
for shareholders
to
ask
questions
or
make
comments
on
the
management
of
the
Company
or
the Remuneration
Report.

Mr.
Greg
Meyerowitz
of
Ernst
&
Young,
as
the
auditor
responsible
for preparing
the
auditor’s
report
for
the
year
ended
30
June
2012
(or
his
representative)
will
attend
the Meeting.
The
Chairman
will
also
allow
a
reasonable
opportunity
for
shareholders
to
ask
the
auditor questions
about:

(a) the
conduct
of
the
audit;
(b) the
preparation
and
content
of
the
auditor’s
report;
(c) the
accounting
policies
adopted
by
the
Company
in
relation
to
the
preparation
of
the
financial statements;
and
(d) the
independence
of
the
auditor
in
relations
to
the
conduct
of
the
audit.

To
assist
the
management
of
the
Company
and
the
auditor
of
the
Company
in
responding
to
questions please
submit
any
questions
you
may
have
in
writing
to
the
Company
Secretary
no
later
than
5pm (WST)
on
30
October
2012.

In
person
or
by
post: Kingsrose
Mining
Limited Suite
9,
Level
2 12-‐14
Thelma
Street West
Perth
WA
6005 By
facsimile: 08
9486
1151
(within
Australia) +61
8
9486
1151
(outside
Australia)

This
Explanatory
Memorandum
has
been
prepared
for
the
information
of
Shareholders
of
Kingsrose
Mining Limited
Annual
General
Meeting
of
Shareholders
to
be
held
at
The
Celtic
Club,
48
Ord
Street,
West
Perth
6005, Western
Australia
on
Thursday,
1
November
2012
at
10.30am
(WST)
(“the
Meeting”)
and
at
any
adjournment of
that
meeting.

This
Explanatory
Memorandum
should
be
read
in
conjunction
with
the
accompanying
Notice
of
Annual General
Meeting
(“the
Notice”).

Page
8

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

The
following
matters
should
be
noted
in
respect
of
the
resolutions
in
the
Notice:

• Financial Statements and Reports

Appropriate
time
will
be
devoted
to
the
consideration
of
the
Financial
Report
of
the
Company
for
the year
ended
30
June
2012
and
the
Directors'
and
Auditor’s
reports
thereon.

A
copy
of
the
Financial
Report
for
the
Company
and
the
Directors’
and
Auditor’s
reports
thereon
are contained
within
the
Company’s
2012
Annual
Report.
For
those
shareholders
who
have
made
an election
to
receive
a
hard
copy
of
the
Company’s
Annual
Report,
a
copy
is
included
with
this
Notice
of Meeting.
For
those
shareholders
who
have
not
made
an
election
to
receive
a
hard
copy
of
the
Annual Report,
please
note
that
it
is
available
on
the
Company’s
web
site
via
the
following
link www.kingsrosemining.com.au

• **Resolution 1

– Adoption of Remuneration Report**

In
accordance
with
section
250R(2)
of
the
Corporations
Act,
the
Company
presents
to
shareholders for
their
consideration
and
adoption
by
way
of
non-‐binding
resolution
the
Company's
Remuneration Report
as
disclosed
in
the
Directors’
Report
in
the
Company's
2012
Annual
Report.

The
Corporations
Act
requires
that
at
a
listed
company’s
annual
general
meeting,
a
resolution
that
the remuneration
report
be
adopted
must
be
put
to
the
shareholders.
However,
such
a
resolution
is advisory
only
and
does
not
bind
the
Directors
or
the
Company.

The
remuneration
report
sets
out
the
Company’s
remuneration
arrangements
for
the
Directors
and senior
management
of
the
Company.

The
Remuneration
Report
is
part
of
the
Directors’
Report contained
in
the
annual
financial
report
of
the
Company
for
the
financial
year
ending
30
June
2012.

A
reasonable
opportunity
will
be
provided
for
discussion
of
the
remuneration
report
at
the
Annual General
Meeting.

NB: Voting Consequences

Under
changes
to
the
Corporations
Act
that
came
into
effect
on
1
July
2011,
if
at
least
25%
of
the votes
cast
on
a
remuneration
report
resolution
are
voted
against
adoption
of
the
remuneration
report in
two
consecutive
annual
general
meetings,
the
Company
will
be
required
to
put
to
shareholders
a resolution
proposing
the
calling
of
a
general
meeting
to
consider
the
appointment
of
directors
of
the Company
(Spill
Resolution)
at
the
second
annual
general
meeting.

If
more
than
50%
of
shareholders
vote
in
favour
of
the
Spill
Resolution,
the
company
must
convene the
general
meeting
(Spill
Meeting)
within
90
days
of
the
second
annual
general
meeting.

All
of
the
directors
of
the
company
who
were
in
office
when
the
directors'
report
(as
included
in
the company’s
annual
financial
report
for
the
financial
year
ended
immediately
before
the
second
annual general
meeting)
was
approved,
other
than
the
Managing
Director
of
the
company,
will
cease
to
hold office
immediately
before
the
end
of
the
Spill
Meeting
but
may
stand
for
re-‐election
at
the
Spill Meeting.

Following
the
Spill
Meeting
those
persons
whose
election
or
re-‐election
as
Directors
is approved
will
be
the
Directors
of
the
Company.

Page
9

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

At
the
Company’s
previous
annual
general
meeting,
the
votes
cast
against
the
remuneration
report
at that
general
meeting
were
less
than
25%.

Accordingly,
the
Spill
Resolution
is
not
relevant
for
this Annual
General
Meeting.

NB: Proxy Restrictions

Shareholders
appointing
a
proxy
for
Resolution
1
should
note
the
following:

If you appoint a member of the Key Management Personnel as your proxy

If
you
elect
to
appoint
a
member
of
Key
Management
Personnel
whose
remuneration
details
are included
in
the
Remuneration
Report,
or
a
Closely
Related
Party
of
that
member, you
must
direct
the proxy
how
they
are
to
vote. Undirected
proxies
granted
to
these
persons
will
not
be
included
in
any vote
on
Resolution
1.

If you appoint the Chair as your proxy

If
you
elect
to
appoint
the
Chair
as
your
proxy,
you
do not
need
to
direct
the
Chair
how
you
wish
to your
vote
to
be
exercised
on
Resolution
1;
however
if
you
do
not
direct
the
Chair
how
to
vote, you must
tick
the
acknowledgement
on
the
Proxy
Form
to
acknowledge
that
the
Chair
may
exercise
its discretion
in
exercising
your
proxy
even
though
Resolution
1
is
connected
directly
or
indirectly
with
the remuneration
of
Key
Management
Personnel.

If you appoint any other person as your proxy

You do not need
to
direct
your
proxy
how
to
vote
and
you do not need
to
tick
any
further acknowledgement
on
the
Proxy
Form.

• **Resolution 2

– Re-‐election of Directors
– Mr. J. William Phillips**

Clause
12.11
of
the
Constitution
requires
that
if
the
Company
has
three
or
more
Directors,
one
third (or
the
number
nearest
one-‐third
rounded
upwards
in
case
of
doubt)
of
those
Directors
must
retire
at each
annual
general
meeting,
provided
always
that
no
Director
(except
a
Managing
Director)
shall hold
office
for
a
period
in
excess
of
3
years,
or
until
the
third
annual
general
meeting
following
his
or her
appointment,
whichever
is
the
longer,
without
submitting
himself
or
herself
for
re-‐election.

Mr.
Phillips
retires
by
rotation
and
under
the
Company’s
Constitution
is
required
to
submit
himself
for re-‐election
at
the
next
Annual
General
Meeting.
Mr.
Phillips
offers
himself
for
re-‐election.

Mr.
Phillips
has
over
32
years
experience
in
mining
contracting
and
mine
management,
much
of which
has
been
gained
in
Western
Australia.

He
is
highly
regarded
as
a
leading
specialist
in underground
narrow
vein
mining.

He
has
managed
or
been
instrumental
in
the
successful
development
of
16
mines
either
in
the
role
of contractor
or
as
owner/shareholder.
Until
May
2010
Mr.
Phillips
oversaw
mining
and
production
at Medusa
Mining
Limited’s
Co-‐O
gold
mine
and
processing
plant
in
the
southern
Philippines.

Mr. Phillips
also
serves
on
the
Remuneration
Committee.

Mr.
Phillips
does
not
hold
any
other
directorships
of
public
companies.

• **Resolution 3

– Re-‐election of Director
– Mr. Timothy G. Spencer**

Page
10

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

hold
office
for
a
period
in
excess
of
3
years,
or
until
the
third
annual
general
meeting
following
his
or her
appointment,
whichever
is
the
longer,
without
submitting
himself
or
herself
for
re-‐election.

Mr.
Spencer
retires
by
rotation
and
under
the
Company’s
Constitution
is
required
to
submit
himself for
re-‐election
at
the
next
Annual
General
Meeting.
Mr.
Spencer
offers
himself
for
re-‐election.

Mr.
Spencer
has
over
18
years
experience
in
the
precious
metals
markets,
from
mining
to
refining
and bullion
distribution
to
in-‐depth
precious
metals
market
analysis,
gained
from
working
in
various accounting,
treasury
and
finance
roles
including
two
gold
mining
companies
and
a
large
gold
refining and
trading
enterprise.
Mr.
Spencer
holds
an
Economics
degree
(accounting
major)
from
Monash University,
Victoria
and
is
a
qualified
CPA
accountant.

Mr.
Spencer
does
not
hold
any
other
directorships
of
public
companies;
however
he
is
a
director
of the
Company’s
Indonesian
subsidiary,
PT
Natarang
Mining,
having
being
appointed
to
that
Board
on
1 July
2011.

Resolution 4
– Increase in Non-‐executive directors’ fee pool

Under
clause
14
of
the
Company’s
Constitution
non-‐executive
Directors
are
entitled
to
be remunerated
for
their
services
as
Diretors
and
the
total
amount
of
fees
for
all
non-‐executive
Directors must
not
exceed
the
amount
determined
by
the
Company
in
general
meeting.
The
remuneration
is
to be
divided
among
the
non-‐executive
Directors
in
the
proportion
and
manner
greed
by
the
Directors or,
in
default
of
agreement,
equally.
The
remuneration
is
taken
to
accrue
from
day
to
day.
Additional remuneration
may
be
paid
to
Directors
for
performing
additional
or
special
duties
for
the
Company.

The
current
fee
pool
of
$110,000
has
remained
unchanged
since
the
Company’s
listing
on
the
ASX
in December
2007.
Pursuant
to
Resolution
4,
the
Company
seeks
Shareholder
approval
to
increase
non-‐ executive
Director
remuneration
by
$190,000,
from
$110,000
per
annum
to
$300,000
per
annum.

The
Directors’
remuneration
for
the
year
ended
30
June
2012
is
disclosed
in
the
Remuneration
Report set
out
on
pages
10
to
17
inclusive
of
the
2012
Annual
Report.
The
aggregate
fees
paid
to
the
non-‐ executive
Directors
for
that
year
amounted
to
$379,132,
which
includes
superannuation
of
$15,300 and
consulting
fees
of
$168,832
for
additional
services
provided
to
the
Company.

Based
upon
an
external
review
of
non-‐executive
Director
compensation
which
was
commissioned
by the
Remuneration
Committee,
the
fees
for
the
new
financial
year
will
total
$210,000,
comprising $150,000
for
the
Chairman
and
$30,000
to
each
of
the
other
two
non-‐executive
Directors.

The balance
will
remain
in
the
fee
pool.
This
does
not
include
superannuation
or
any
consulting
fees
for additional
services
which
may
be
provided
to
the
Company.

The
increase
is
proposed:

(a) to
provide
sufficient
flexibility
to
accommodate
unexpected
increases
in
non-‐executive Directors’
fees
during
2012-‐13
financial
year
for
example
should
the
need
arise
to
appoint
a new
or
replacement
Director;
(b) to
allow
the
Company
to
continue
to
be
able
to
attract
and
retain
Directors
with
appropriate experience,
calible
and
integrity,
especially
in
recognition
of
the
significantly
increased responsibiities
under
the
Corporations
Act
2001,
the
Listing
Rules,
other
regulatory requirements
and
community
expectations;
(c) to
respond
to
market
rate
annual
inceases
for
Directors
over
the
next
three
years
based
upon advice
received;

Page
11

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

(d) to
continue
the
development
and
growth
of
the
Company
and
shareholder
value
which
have been
experienced
since
the
Company
listed
in

ASX
Listing
Rule
10.17
and
Article
14
of
the
Company’s
Constitution
require
shareholder
approval
be obtined
for
any
proposed
increase
in
total
non-‐executive
directors’
fees.

Resolution 5
– Adoption and approval of issue under the Kingsrose Mining Limited Employee Options and Share Rights Plan 2012 (the
“Plan”)

ASX
Listing
Rule
7.1
allows
the
Company
to
issue
a
maximum
of
15%
of
its
capital
in
any
12-‐month period
without
requiring
shareholder
approval.
Listing
Rule
7.1
does
not
apply
in
certain
cases
set
out in
Listing
Rule
7.2
which
allows
certain
issues
of
securities
to
be
excluded
from
the
calculation
of
the number
of
securities
issued
in
a
12
month
period.
This
includes
Exception
9,
where
an
issue
under
an employee
incentive
plan
is
made
if
within
three
years
before
the
date
of
issue
the
terms
of
the
plan are
approved
by
shareholders.
This
resolution
proposes
that
Shareholders
consider
and
approve adoption
of
the
Plan
in
accordance
with
ASX
Listing
Rule
7.2,
Exception
9,
which
would
enable securities
issued
under
the
Plan
over
the
next
three
years
to
be
excluded
from
any
such
calculations.

At
the
2010
Annual
General
Meeting,
shareholders
approved
the
issuing
of
Options
under
an
earlier version
of
the
Plan.
The
Plan
has
not
changed
in
relation
to
the
issuing
of
Options,
but
has
now
been amended
to
also
make
provision
for
the
granting
of
Share
Rights.

The
following
is
a
summary
of
the
main
terms
of
the
Plan,
as
amended.
The
full
terms
of
the
Plan
are set
out
in
Schedule
One.

The
Plan
provides
for
the
issue
of
Options
and/or
the
grant
of
Share
Rights
to
Eligible
Persons or
their
permitted
nominees
subject
to
the
rules
of
the
Plan,
where
an
offer
from
the
Board
is accepted.
By
accepting
an
offer,
an
Eligible
Person
or
their
permitted
nominee
will
be
taken
to
have agreed
to
be
bound
by
the
Plan
rules.

Upon
the
issue
of
Options
and/or
Share
Rights,
the Eligible
Person
or
permitted
nominee
becomes
a
Participant.

The
purpose
of
the
Plan
is
to
recognise
the
efforts
of
and
provide
incentives
for
Employees
and Directors.
There
is
a
limit
on
the
number
of
Options
and/or
Share
Rights
that
may
be
issued
or
granted such
that
at
any
time
the
number
of
Options
and/or
Share
Rights
issued
or
granted
under
the Plan
or
a
previous
plan
when
aggregated
with
shares
issued
in
the
previous
five
(5)
years
under the
Plan
or
a
previous
plan
will
not
exceed
5%
of
the
issued
shares
in
the
Company
(assuming all
Options
were
exercised
and
Share
Rights
vest).

The
5%
limit
does
not
apply
to
offers
of Options
and/or
Share
Rights
made
outside
Australia
or
made
under
section
708
of
the Corporations
Act
or
made
under
a
disclosure
document.

Eligible
Persons
include
Directors
and
employees,
whether
full
or
part
time.
The
Board
will
determine
which
Eligible
Persons
are
to
be
offered
Options
and/or
Share
Rights under
the
Plan,
having
regard
to
a
number
of
criteria,
including
seniority,
length
of
service, potential
contribution
and
other
matters.
The
Board
will
determine
how
many
Options
and/or Share
Rights
are
to
be
offered
in
each
instance
and
the
terms.

Page
12

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

The
Board
has
discretionary
powers
in
relation
to
the
administration
of
the
Plan.

The
Board has
the
power
to
partly
or
fully
waive
any
Forfeiture
or
Performance
Conditions
applicable
to Share
Rights,
and
may
vary
such
conditions
provided
the
variation
is
not
adverse
to
the Participant
and
is
permitted
under
the
Listing
Rules.

If
there
is
a
reorganisation
of
the
issued
capital
of
the
Company
before
Options
expire
or
Share Rights
vest,
the
rights
of
a
Participant
(including
the
number
of
Share
Rights
to
which
the Participant
is
entitled)
may
be
changed
by
the
Board
to
the
extent
necessary
to
comply
with the
Listing
Rules
applying
to
a
reorganisation
of
capital
at
the
time
of
the
reorganisation.
The
Board
may
amend
the
Plan
rules
at
any
time,
subject
to
obtaining
the
consent
of Participants
holding
not
less
than
75%
of
the
Options
and
Share
Rights
held
by
all
Participants
if the
amendments
would
adversely
affect
the
rights
of
Participants.
Participation
in
the
Plan
does
not
affect
the
terms
of
a
Participant’s
employment
with
the Company.

The
Plan
rules
do
not
form
part
of
any
contract
of
employment
between
a Participant
and
the
Company.

Participation
in
the
Plan
does
not
confer
any
rights
to compensation
or
damages
as
a
result
of
termination
of
employment
with
the
Company.

In relation to options
–

The
Board
will
take
into
account
the
market
price
of
the
Company’s
shares
in
determining
the exercise
price
for
the
Options
but
the
exercise
price
may
be
higher
than
the
market
price.
The
Board
will
determine
the
Expiry
Date
of
Options,
which
must
not
exceed
seven
(7)
years from
the
date
of
issue.
The
Board
may
impose
forfeiture
conditions
which
if
not
satisfied
will
cause
the
Options
to
be cancelled.
No
consideration
will
be
payable
for
the
grant
of
an
Option
unless
the
Board
determines otherwise.
The
Options
will
not
be
listed
for
quotation
on
the
ASX
and
will
not
be
transferable
except
with the
consent
of
the
Company.
Upon
exercise
of
Options,
the
Company
will
make
application
for
quotation
on
ASX
of
shares issued
pursuant
to
exercise
of
the
Options.
Options
not
exercised
by
the
Expiry
Date
will
lapse.
If
the
Eligible
Person
ceases
to
be
an
Eligible
Person,
then
generally
the
Options
will
lapse
if
not exercised
within
one
(1)
month
or
within
such
longer
period
as
the
Board
determines.

_In relation to Share Rights

–_

Each
Share
Right
is
a
right
to
acquire
a
Share
in
the
Company,
subject
to
satisfaction
of
the specified
Forfeiture
and
Performance
Conditions.

Share
Rights
for
which
the
relevant Forfeiture
and
Performance
Conditions
are
met
(i.e.
that
‘vest’)
will
be
automatically
exercised to
provide
Shares
to
the
Participant.

Page
13

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

In
accordance
with
the
clause
13.2
of
the
Plan,
at
the
discretion
of
the
Board,
Share
Rights
may alternatively
be
settled
by
payment
of
a
cash
amount
of
equivalent
value
to
the
value
of
the Share
Rights.
This
discretion
will
be
applied
when
Share
Rights
will
vest
after
the
Participant has
ceased
employment
with
the
Company.
The
cash
amount
will
be
calculated
with
reference to
the
number
of
Shares
that
would
have
otherwise
vested
from
the
exercise
of
the
Share Rights
and
the
closing
Share
price
on
the
date
of
cessation
of
the
Participants
employment.
No
consideration
will
be
payable
by
executives
for
the
grant
of
Share
Rights
or
the
provision
of Shares
or
the
payment
of
a
cash
amount
consequent
upon
the
vesting
of
Share
Rights
(unless the
Board
determines
otherwise).
If
Share
Rights
are
settled
in
cash,
the
amount
paid
to
the
Participant
will
be
reduced
by
any required
withholdings
in
relation
to
tax,
superannuation
etc.
The
Board
will
determine
which
executives
are
to
be
offered
Share
Rights
under
the
Plan, having
regard
to
relevant
factors,
including
the
role
being
performed
and
the
importance
of the
executive’s
contribution
to
the
Company.
Share
Rights
will
provide
the
performance-‐based equity
remuneration
element
for
selected
Company
executives.
The
Board
will
determine
how
many
Share
Rights
are
to
be
offered
in
each
instance
and
the terms
upon
which
those
Share
Rights
are
offered.

The
Board
may
impose
Forfeiture
and Performance
Conditions
which
if
not
satisfied
will
cause
the
Share
Rights
to
be
forfeited
and cancelled.

Participants
will
be
provided
with
a
certificate
confirming
the
number
of
Share
Rights
issued
to them.
Share
Rights
will
only
vest
if
the
Forfeiture
and
Performance
Conditions
in
respect
of
those Share
Rights
are
met
by
the
end
of
the
Performance
Period,
or
otherwise
in
accordance
with the
Plan
Rules.
Share
Rights
in
respect
of
which
the
Performance
Condition
is
not
met
over
the
Performance Period
will
automatically
lapse.
Share
Rights
will
not
be
listed
for
quotation
on
the
ASX
and
will
not
be
transferable
except
in accordance
with
the
terms
of
the
Plan
Rules
and
with
the
consent
of
the
Company.
Upon
the vesting
of
Share
Rights
and
the
issue
of
Shares,
the
Company
will
make
application
for quotation
on
ASX
of
those
Shares.
Share
Rights
do
not
carry
the
rights
or
entitlements
of
Shares.

Like
other
shareholders,
Plan participants
will
only
be
entitled
to
dividends,
to
vote
at
a
general
meeting
of
the
Company (subject
to
restrictions
on
key
management
personnel
voting
on
remuneration
resolutions)
and to
participate
in
bonus
and
rights
issues
in
relation
to
Shares
that
they
hold,
including
Shares acquired
after
Share
Rights
vest.

Unvested
Share
Rights
will
generally
lapse
on
cessation
of
employment
unless
the
cessation
is the
result
of
a
Specified
Reason
(i.e.
death,
total
and
permanent
disablement,
bona
fide redundancy
or
such
other
reason
as
the
Board
determines).

Page
14

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

Resolutions 6 and 7
– Grant of Share Rights to the Managing Director, Mr. Chris Start and Finance Director, Mr. Tim Spencer.

Background

Under
ASX
Listing
Rule
10.14,
the
acquisition
of
securities
by
a
Director
under
an
employee
incentive scheme
requires
shareholder
approval
unless
the
shares
required
for
the
scheme
are
purchased
on market.

It
is
proposed
that
the
Managing
Director,
Mr
Chris
Start,
and
the
Finance
Director,
Mr
Tim
Spencer, each
be
granted
rights
to
be
provided
with
Shares
in
the
Company
or,
alternatively,
at
the
discretion of
the
Company,
the
equivalent
cash
value
(“Share
Rights”)
in
accordance
with
their
participation
in the
Plan.

The
Plan
is
intended
to
support
the
achievement
of
the
Company’s
business
strategy
by
linking executive
rewards
to
improvements
in
the
financial
performance
of
the
Company
and
aligning
the interests
of
executives
with
shareholders.

The
Share
Rights
granted
to
Messrs
Start
and
Spencer
will
vest
subject
to
satisfaction
of
the performance
condition
and,
subject
to
the
exceptions
noted
below,
to
the
continued
employment
of Messrs
Start
and
Spencer
with
the
Company.
Share
Rights
that
do
not
vest
will
automatically
lapse.
No amount
is
payable
by
Mr
Start
or
Mr
Spencer
in
respect
of
the
grant
or
vesting
of
Share
Rights.

Share
Rights
to
be
granted
to
Mr
Start
and
Mr
Spencer
are
conditional
and
non-‐transferable;
they cannot
be
hedged,
sold,
transferred,
mortgaged,
charged
or
otherwise
disposed
of
or
dealt
with.

Shareholder Approval (Section 208 of the Corporations Act)

Chapter
2E
of
the
Corporations
Act
regulates
the
provision
of
financial
benefits
to
related
parties
by
a public
company.

Section
208
of
the
Corporations
Act
provides
that,
for
a
public
company
to
give
a financial
benefit
to
a
related
party
of
the
company,
the
company
must:

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

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

The
provision
the
issue
of
Share
Rights
by
the
Company
constitute
the
giving
of
a
financial
benefit,
and as
Directors,
each
of
Messrs
Start
and
Spencer
(“Participating
Directors”)
is
considered
to
be
related parties
of
the
Company.

In
accordance
with
the
requirements
of
Sections
217
to
227
of
the
Corporations
Act,
the
following information
is
provided
to
Shareholders
to
allow
them
to
assess
the
proposed
issue
of
Share
Rights:

(a) as
Directors,
the
Participating
Directors
are
each
related
parties
of
the
Company
to
whom proposed
Resolutions
6
and
7
would
permit
the
financial
benefit
to
be
given;
(b) the
nature
of
the
financial
benefit
to
be
given
to
Mr
Start
is
the
issue
of
172,972
Share
Rights;
(c) the
nature
of
the
financial
benefit
to
be
given
to
Mr
Spencer
is
the
issue
of
97,297
Share
Rights;
(d) the
Share
Rights
will
be
issued
under
the
terms
and
conditions
of
the
Plan,
a
summary
of
which
is set
out
on
page
29
of
this
Explanatory
Memorandum;

Page
15

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

(e) as
at
the
date
of
this
Notice
of
Meeting,
the
Participating
Directors
hold
the
following
securities
in the
Company:

Director	Listed Shares	Options
Chris Start	Nil	3,000,0001
Tim Spencer	1,050,000	-

Note:

1
1,000,000
unlisted
Options
which
vested
on
17
September
2011
are
exercisable
at
$1.54
on or
before
17
September
2013;
1,000,000
unlisted
Options
which
will
vest
on
1
October
2012 are
exercisable
at
$1.54
on
or
before
1
October
2014;
1,000,000
unlisted
Options
which
will vest
on
1
October
2013
are
exercisable
at
$1.54
on
or
before
1
October
2015.

(f) the
remuneration
and
emoluments
payable
by
the
Company
to
the
Participating
Directors
for both
the
current
financial
year
and
previous
financial
year
are
set
out
below:

Director	Current Financial Year 2012	Previous Financial Year 2011
Chris Start	$1,143,364*	$449,372*
Tim Spencer	$290,562	$220,491

*These
amounts
include
$793,593
(2012)
and
$357,439
(2011)
relating
to
options
and
are
not related
to
or
indicative
of
the
benefit
(if
any)
that
Mr.
Start
may
ultimately
realise.
The
fair value
of
these
options
as
at
their
date
of
grant
was
determined
in
accordance
with
AASB2 “Share
Based
Payments”
applying
valuation
models.

(g) in
the
event
Resolutions
6
and
7
are
approved,
a
total
of
270,269
Share
Rights
will
be
allotted
and issued.

If
the
Share
Rights
are
exercised
this
will
increase
the
number
of
Shares
on
issue
from 289,243,617
to
289,513,886
(assuming
that
no
Options
are
exercised
and
no
other
Shares
issued) with
the
effect
that
the
shareholding
of
existing
Shareholders
would
be
diluted
as
follows:

Holder	Share Rights issued to Participating Directors	Dilutionary effect upon exercise of Share Rights
Chris Start	172,972	0.06%
Tim Spencer	97,297	0.03%
TOTAL	270,269	0.09%

(h) the
issue
price
at
which
Share
Rights
will
be
issued
to
the
Participating
Directors
will
be
$1.11
per Share
Right;
(i) the
value
of
the
financial
benefit
to
be
provided
to
the
Participating
Directors
is
$299,998.59;

Page
16

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

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

g is set out below:
	Price	Date
Highest	$1.635	08/12/2011
Lowest	$1.00	09/05/2012
Last	$1.165	04/09/2012

(k) the
primary
purpose
for
the
provision
of
the
issue
of
the
Share
Rights
to
Chris
Start
is
to
provide
a market
linked
incentive
package
in
his
capacity
as
Managing
Director
and
to
assist
in
the
reward, retention
and
motivation
of
Chris
Start
in
managing
the
operations
and
strategic
direction
of
the Company
whilst
maintaining
the
Company’s
cash
reserves.

The
Board
(other
than
Chris
Start) considered
the
extensive
experience
and
reputation
of
Chris
Start,
the
current
market
price
of Shares
and
current
market
practices
when
determining
the
number
of
Share
Rights
to
be
issued
to Chris
Start.
The
Board
considers
the
issue
of
the
Share
Rights
to
Chris
Start
to
be
reasonable
upon the
terms
proposed;

(l) the
primary
purpose
for
the
provision
of
the
issue
of
the
Share
Rights
to
Tim
Spencer
is
to
provide a
market
linked
incentive
package
in
his
capacity
as
Finance
Director
and
to
assist
in
the
reward, retention
and
motivation
of
Tim
Spencer
in
the
ongoing
operations
and
strategic
direction
of
the Company
whilst
maintaining
the
Company’s
cash
reserves.
The
Board
(other
than
Tim
Spencer) considered
the
extensive
experience
and
reputation
of
Tim
Spencer,
the
current
market
price
of Shares
and
current
market
practices
when
determining
the
number
of
Share
Rights
to
be
issued
to Tim
Spencer.
The
Board
considers
the
issue
of
the
Share
Rights
to
Tim
Spencer
to
be
reasonable upon
the
terms
proposed;
(m) the
Company
will
not
incur
any
costs
or
fees
in
relation
to
issuing
the
Share
Rights
to
the Participating
Directors,
other
than:
a. listing
fees
of
the
Share
Rights
convert
into
Shares
will
be
payable
to
ASX.
These
fees
are not
expected
to
be
any
more
than
$2,350;
and
b. a
value
equal
as
determined
in
accordance
with
the
accounting
standards
attached
to
the issue
of
the
Share
Rights
to
each
Participating
Director
will
be
included
as
wages
for
the purpose
of
pay
roll
tax.

If
this
value
together
with
other
wages
paid
by
the
Company during
any
month
exceeds
a
defined
threshold,
then
pay
roll
tax
may
become
payable
by the
Company;

(n) if
the
Share
Rights
are
not
issued
to
the
Participating
Directors,
the
Company
could
remunerate the
Directors
for
additional
amounts.

However,
the
Board
considers
it
reasonable
for
the remuneration
of
the
Directors
to
have
a
cash
component
and
an
equity
component
to
further align
the
Participating
Directors’
interests
with
Shareholders.

As
outlined
above,
there
are
alternate
options
available
to
issuing
Share
Rights
in
respect
of remunerating
the
Directors
and
accordingly,
Shareholders
should
consider
the
above
matters carefully
before
deciding
how
to
vote
on
these
Resolutions;

(o) Messrs
Start
and
Spencer
decline
to
make
a
recommendation
to
Shareholders
in
relation
to Resolutions
6
and
7
due
to
their
material
personal
interests
in
the
outcome
of
Resolutions
6
and 7;

Page
17

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

(p) John
Morris
who
does
not
have
a
material
personal
interest
in
the
outcome
of
Resolutions
6
and
7 recommends
that
Shareholders
vote
in
favour
of
Resolutions
6
and
7
for
the
reasons
set
out
in sub-‐paragraphs
(k)
and
(l)
above.
Mr
Morris
is
not
aware
of
any
other
information
that
would
be reasonably
required
by
Shareholders
to
allow
them
to
make
a
decision
whether
it
is
in
the
best interests
of
the
Company
to
pass
Resolutions
4
and
5;
(q) J.
William
Phillips
who
does
not
have
a
material
personal
interest
in
the
outcome
of
Resolutions
6 and
7
recommends
that
Shareholders
vote
in
favour
of
Resolutions
6
and
7
for
the
reasons
set
out in
sub-‐paragraphs
(k)
and
(l)
above.
Mr
Phillips
is
not
aware
of
any
other
information
that
would be
reasonably
required
by
Shareholders
to
allow
them
to
make
a
decision
whether
it
is
in
the
best interests
of
the
Company
to
pass
Resolutions
6
and
7;
and
(r) Andrew
Spinks
who
does
not
have
a
material
personal
interest
in
the
outcome
of
Resolutions
6 and
7
recommends
that
Shareholders
vote
in
favour
of
Resolutions
6
and
7
for
the
reasons
set
out in
sub-‐paragraphs
(k)
and
(l)
above.
Mr
Spinks
is
not
aware
of
any
other
information
that
would be
reasonably
required
by
Shareholders
to
allow
them
to
make
a
decision
whether
it
is
in
the
best interests
of
the
Company
to
pass
Resolutions
6
and

Shareholder approval (ASX Listing Rule 10.14)

ASX
Listing
Rule
10.14
provides
that
a
company
must
not
permit
a
director
of
the
company
to
acquire securities
under
an
employee
incentive
scheme
without
the
approval
of
shareholders
for
the acquisition.
The
Plan
is
considered
to
be
an
employee
incentive
scheme
for
the
purposes
of
the
ASX Listing
Rules.

In
accordance
with
ASX
Listing
Rule
10.15,
the
following
information
is
provided
to
Shareholders
in relation
to
Resolutions
6
and
7:

(a) the
maximum
number
of
securities
that
may
be
issued
to
the
Participating
Directors
under Resolutions
6
and
7
is
270,269
Share
Rights;
(b) the
issue
price
of
the
Share
Rights
will
be
as
$1.11
per
Share
Right;
(c) no
Share
Rights
have
yet
been
issued
under
the
Plan;
(d) Directors
may
participate
in
the
Plan;
(e) the
Company
will
not
provide
a
loan
to
each
of
the
Participating
Directors
to
fund
the
payment
for the
subscription
price
for
the
Share
Rights;
(f) it
is
proposed
that
the
Share
Rights
will
be
issued
on
one
date
within
12
months
from
the
date
of the
Meeting,
however,
the
Company
reserves
the
right
to
issue
the
Share
Rights
progressively; and
(g) the
Shares
issued
upon
conversion
of
the
Share
Rights
issued
pursuant
to
Resolutions
6
and
7
will rank
equally
with
all
other
Shares
on
issue.

Performance Conditions/Vesting of Performance Rights

Subject
to
the
Plan
Rules,
the
number
of
Share
Rights
that
vest
under
the
2012
Share
Rights
Offers
will be
determined
according
to
the
Company’s
total
shareholder
return
(“ TSR ”)
performance
compared with
the
TSR
performance
of
a
group
of
comparable
ASX-‐listed
gold
mining
companies
over
the
period from
1
July
2012
to
30
June
2015
(the
‘Performance
Period’).

TSR is
the
change
in
a
company’s
total
shareholder
return
(basically
share
price
growth
plus
dividends and
distributions,
on
the
assumption
that
all
dividends
and
distributions
are
re-‐invested,
together with
any
other
shareholder
returns)
over
the
Performance
Period.
TSR
therefore
reflects
the
change in
shareholder
value
of
KRM
and
the
comparator
companies
over
the
Performance
Period.

Page
18

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

The
Company’s
relative
TSR
ranking
will
be
assessed
as
at
30
June
2015
(using
the
average
closing price
of
shares
over
the
3
months
up
to
and
including
that
date)
by
comparing
the
Company’s
TSR performance
with
the
TSR
performance
of
the
entities
in
the
comparator
group
over
the
same
period.

For
the
2012
Share
Rights
Offer,
the
comparator
group
will
consist
of
20
selected
ASX-‐listed
gold mining
companies.
All
of
the
comparator
group
companies
that
continue
to
be
listed
on
the
ASX
will remain
in
the
comparator
group,
but
companies
that
cease
to
be
listed
because
of
mergers,
de-‐listings etc.
will
drop
out
of
the
comparator
group
and
will
not
be
replaced.

KRM Relative TSR LTI Comparator Group Companies

The
peer
group
is
comprised
of
companies
that
focus
on
gold
exploration
and/or
production
that
have a
market
capitalization
that
is
around
one
third
to
3
times
that
of
Kingsrose’s
market capitalization.

The
peer
group
was
selected
with
the
assistance
of
analyses
by
the
Board's independent
adviser,
Guerdon
Associates.

The
list
below
shows
the
19
comparator
on
these
selection
criteria,
as
well
as
Kingsrose
Mining Limited
and
its
relative
positioning
as
at
4
September
2012.

			Market
ASX Ticker	Name	Revenues	Capitalisation	Sector
EVN	Evolution Mining Ltd	$122m	$1,164m	Gold
MML	Medusa Mining Ltd	$79m	$992m	Gold
RSG	Resolute Mining Ltd	$577m	$974m	Gold
SLR	Silver Lake Resources Ltd	$135m	$731m	Gold
KCN	Kingsgate Consolidated Ltd	$357m	$670m	Gold
BDR	Beadell Resources Ltd	$0m	$580m	Gold
GDO	Gold One International Ltd	$188m	$538m	Gold
SBM	St Barbara Ltd	$541m	$492m	Gold
NST	Northern Star Resources Ltd	$100m	$480m	Gold
IGR	Integra Mining Ltd	$40m	$467m	Gold
TRY	Troy Resources Ltd	$209m	$387m	Gold
PIR	Papillon Resources Ltd	$0m	$295m	Gold
TAM	Tanami Gold NL	$58m	$227m	Gold
SAR	Saracen Mineral Holdings Ltd	$184m	$208m	Gold
RED	Red 5 Ltd	$0m	$188m	Gold
FML	Focus Minerals	$99m	$177m	Gold
RMS	Ramelius Resources Ltd	$84m	$143m	Gold
SIH	Sihayo Gold Ltd	$0m	$104m	Gold
				Diversified
CDG	Cleveland Mining Co Ltd	$0m	$91m	Metals &
				Mining
KRM	Kingsrose Mining Ltd	$45m	$338m	Gold
	Krm Percentile Ranking	29	42

• None
of
the
Share
Rights
in
the
2012
Plan
offer
will
vest
unless
the
Company’s
TSR
over
the Performance
Period
is
at
least
equal
to
the
TSR
of
the
company
that
is
at
the
50[th] percentile (median)
of
the
companies
in
the
comparator
group,
ranked
by
their
TSR
performance,
at which
point
50%
of
the
Share
Rights
in
the
2012
Share
Rights
Offer
will
vest.

Page
19

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

All
of
the
Share
Rights
in
the
2012
Share
Rights
Offer
will
vest
if
the
Company’s
TSR
over
the Performance
Period
is
equal
to
or
greater
than
the
TSR
of
the
company
that
is
at
the
75[th] percentile
of
the
companies
in
the
comparator
group,
ranked
by
their
TSR
performance.
The
proportion
of
the
Share
Rights
in
the
2012
Share
Rights
Offer
that
vests
increases progressively
on
a
linear
basis
for
the
Company’s
relative
TSR
performance
between
that
of
the companies
at
the
50[th] percentile
and
the
75[th] percentile
of
the
companies
in
the
comparator group,
ranked
by
their
TSR
performance.

**Resolution 8

– Issue of Options to Mr. Andrew Spinks
– Non-‐Executive Director**

For
the
purposes
of
Rule
10.14
of
the
Official
Listing
Rules
of
the
Australian
Securities
Exchange, section
208
of
the
Corporations
Act
and
for
all
other
purposes,
Resolution
8
seeks
Shareholder approval
for
the
issue
of
one
million
Options
in
two
tranches
to
Mr.
Andrew
Spinks
under
the
Plan. The
Options
will
be
exercisable
on
the
terms
and
conditions
set
out
below
and
will
otherwise
be subject
to
the
terms
and
conditions
of
the
Plan.

Shareholder
approval
for
the
issue
of
Options
to
the
named
Director
is
required
by
ASX
Listing
Rule 10.14
which
requires
the
approval
of
Shareholders
before
any
securities
are
issued
to
a
Director
or any
associate
of
a
Director
under
an
employee
incentive
scheme.
Shareholder
approval
is
also
sought under
Section
208
of
the
Corporations
Act
because
the
Mr.
Spinks
is
a
“related
party”
of
the
Company as
defined
in
the
Corporations
Act
by
virtue
of
being
a
Director.

ASX Listing Rule 10.14

ASX
Listing
Rule
10.14
requires
the
Company
to
obtain
Shareholder
approval
by
ordinary
resolution prior
to
the
issue
of
Options
to
a
Director
of
the
Company
(or
an
associate
of
a
Director)
under
an employee
incentive
scheme.

Approval
pursuant
to
ASX
Listing
Rule
7.1
or
10.11
is
not
required
to
issue
the
Options
to
Mr.
Spinks as
approval
is
being
obtained
under
ASX
Listing
Rule
10.14.
Shareholders
should
note
that
the
issue
of Options
to
Mr.
Spinks
will
not
therefore
be
included
in
the
15%
calculation
for
the
purposes
of
ASX Listing
Rule
7.1
to
determine
the
number
of
securities
which
the
Company
may
issue
in
the
future without
shareholder
approval.

For
the
purposes
of
ASX
Listing
Rule
10.14
and
Rule
10.15,
the
following
information
is
provided
in relation
to
the
issue
of
Options
pursuant
to
Resolution
6:

(a) Mr.
Spinks
is
a
director
of
the
Company;
(b) The
maximum
number
of
Options
to
be
issued
by
the
Company
to
Mr.
Spinks
is
one
million Options
in
two
tranches
as
follows:
(c) 500,000
Options
with
an
expiry
date
two
(2)
years
after
being
granted
(d) 500,000
Options
with
an
expiry
date
two
(3)
years
after
being
granted
(e) The
Options
will
vest
at
the
time
of
granting,
subject
to
Mr
Spinks
serving
a
minimum
of
five months
as
a
non-‐executive
Director
of
the
Company
from
the
date
of
his
appointment.
(f) The
Options
will
be
issued
for
nil
cash
consideration.

Page
20

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

(g) The
exercise
price
for
each
Option
will
be
the
Market
Value
as
defined
in
the
Plan
at
the
time the
Board
resolves
to
issue
the
Options
plus
a
premium
(as
detailed
in
the
‘Valuation
of Options’
section
below).

Market
Value
as
defined
in
the
Plan
means
the
weighted
average closing
sales
of
the
Company’s
ordinary
shares
over
the
5
trading
days
on
which
sales
of
such shares
are
recorded
on
the
ASX
prior
to
the
day
on
which
the
Board
resolves
to
offer
the Options.
It
is
proposed
that
the
Board
will
offer
the
Options
and
issue
the
Options
as
soon
as practicable
after
the
Meeting.

(h) No
directors
or
their
associates
received
securities
under
the
Plan
since
that
plan
was
last approved
on
10
November
2010
except
that
Mr.
Chris
Start,
Managing
Director
of
the Company
who
was
issued
three
million
Options
under
the
Plan.
Mr.
Start
was
issued
these Options
prior
to
him
being
appointed
a
Director.

The
exercise
price
of
Mr.
Start’s
options
is $1.54
each.
Of
the
three
million
Options
issued,
one
million
have
vested,
one
million
are
due to
vest
on
1
October
2012
and
the
remaining
one
million
Options
are
due
to
vest
on
1
October 2013.
The
Options
will
expire
two
years
after
each
vesting
period.

(i) All
Directors
of
the
Company
are
entitled
to
participate
in
the
Plan
(subject
to
Board
and Shareholder
approval
in
each
instance).
The
names
of
the
Directors
are
Messrs
Christopher Start,
John
Morris,
Tim
Spencer,
J.
William
Phillips
and
Andrew
Spinks.
(j) No
loan
is
being
made
by
the
Company
in
relation
to
the
acquisition
of
the
Options
by
Mr. Spinks.
(k) The
Options
will
be
issued
as
soon
as
is
practicable
after
Resolution
8
is
passed
but
in
any event,
having
regard
to
listing
rule
10.15.7
not
later
than
12
months
after
the
date
of
the Meeting.
(l) No
funds
will
be
raised
by
the
issue
of
the
Options
(although
funds
will
be
raised
to
the
extent that
the
Options
are
eventually
exercised).
(m) The
terms
and
conditions
of
the
Options
to
be
issued
to
Mr.
Spinks
are
set
out
in
Schedule One.

Section 208 of the Corporations Act

Pursuant
to
Chapter
2E
of
the
Corporations
Act,
a
public
company
cannot
give
a
“financial
benefit”
to a
“related
party”
unless
one
of
the
exceptions
to
that
section
apply
or
shareholders
have
in
general meeting
approved
the
giving
of
that
financial
benefit
to
the
related
party.

Mr.
Spinks
is
a
“related
party”
of
the
Company
as
defined
under
the
Corporations
Act
because
he
is
a Director
of
the
Company.
Accordingly,
the
proposed
issue
of
Options
to
Mr.
Spinks
will
constitute
the provision
of
a
financial
benefit
to
a
related
party
of
the
Company.

It
is
the
view
of
the
Directors
that
the
exceptions
under
the
Corporations
Act
to
the
provision
of financial
benefits
to
related
parties
may
not
apply
in
the
current
circumstances
and
so
the
Directors have
determined
to
seek
Shareholder
approval
under
section
208
of
the
Corporations
Act
to
permit the
issue
of
the
Options
to
Mr.
Spinks.

The
following
information
is
provided
pursuant
to
sections
217
to
227
of
the
Corporations
Act
in relation
to
Resolution
8
by
way
of
supplementation
of
the
information
set
out
above:

(a) The
related
party
to
whom
the
Options
will
be
issued
is
Mr.
Spinks.

Page
21

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

(b) The
nature
of
the
financial
benefit
to
be
provided
to
Mr
Spinks
is
the
issue
of
one
million Options
to
Mr.
Spinks.
(c) Mr.
Spinks
has
a
material
personal
interest
in
the
outcome
of
Resolution
8
and
accordingly does
not
wish
to
provide
a
recommendation
in
respect
of
the
Resolution.
The
other
Directors, who
do
not
have
a
material
personal
interest
in
the
outcome
of
Resolution
8,
recommend
that Shareholders
approve
Resolution
8
as
they
are
of
the
view
that
the
issue
of
Options
to
Mr. Spinks
is
appropriate
and
assists
the
Company
in
retaining
Mr.
Spinks’
services
and
dedication as
a
non
executive
Director
whilst
maintaining
the
Company’s
cash
reserves
(notwithstanding the
fact
that
the
issue
of
Options
to
a
non
executive
Director
is
not
in
accordance
with
the
ASX Corporate
Governance
Council’s
guidelines
for
non
executive
director
remuneration).
(d) The
Directors
(other
than
Mr.
Spinks
who
makes
no
comment)
considered
Mr.
Spinks’ experience,
the
current
market
price
of
the
Shares
and
current
market
practice
when determining
the
terms
of
the
Options
and
the
number
of
Options
to
be
issued
to
Mr
Spinks.
In addition
to
the
Options,
Mr.
Spinks
will
receive
A$30,000
per
annum
plus
9%
superannuation by
way
of
director’s
fees
for
acting
as
a
non-‐executive
director
of
the
Company.
(e) If
Shareholders
approve
the
issue
of
Options
to
Mr
Spinks
and
all
Options
are
ultimately exercised
the
effect
will
be
to
dilute
the
shareholding
of
existing
Shareholders
by approximately
0.34%
on
an
undiluted
basis
and
based
on
the
number
of
Shares
on
issue
(as
at the
date
of
this
Notice)
assuming
that
no
other
Options
are
exercised.
(f) The
Directors
(other
than
Mr.
Spinks
who
makes
no
comment)
do
not
consider
there
are
any significant
opportunity
costs
to
the
Company
or
benefits
forgone
by
the
Company
in
issuing
the Options
to
Mr.
Spinks
upon
the
terms
proposed.
(g) The
current
holdings
(direct
and
indirect)
of
Mr.
Spinks
in
the
Company
is
Nil.
(h) It
is
anticipated
that
Mr.
Spinks
will
provide
geological
and
corporate
services
to
the
Company as
and
when
required
and
agreed
and
will
receive
consultancy
fees
at
arm’s-‐length
market rates
for
these
services
provided.
(i) In
the
12
months
before
the
date
of
this
Notice,
the
highest,
lowest
and
last
trading
price
of Shares
in
the
Company
on
ASX
are
as
set
out
below:

	Date	Price
Highest	$1.635	08/12/2011
Lowest	$1.00	09/05/2012
Last Trading Price	$1.165	04/09/2012

(j) ASIC
policy
in
relation
to
documents
lodged
under
Section
218
relating
to
the
giving
of
financial benefits
to
related
parties
of
public
companies
requires
explanatory
information
regarding
the value
of
the
Options
proposed
to
be
issued.
The
value
of
the
Options
has
been
calculated
by the
Company
on
the
basis
of
the
market
value
of
the
Company’s
shares
during
the
period
prior to
the
issue
of
the
Notice
and
is
set
out
below
in
this
Explanatory
Memorandum.
(k) Other
than
the
information
specified
in
this
Explanatory
Memorandum,
the
Directors
are
not aware
of
any
other
information
that
would
be
reasonably
required
by
Shareholders
to
allow

Page
22

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

them
to
make
a
decision
whether
it
is
in
the
best
interests
of
the
Company
to
pass
Resolution 8.

(l) Full
details
of
the
terms
and
conditions
of
the
options
to
be
issued
to
Mr.
Spinks
are
contained in
Schedule
One,
which
forms
part
of
the
Notice.

Valuation of Options

The
intended
Grant
Date
is
a
future
date
yet
to
be
decided
though
expected
to
be
on
2
November 2012
or
thereafter.
However,
since
the
actual
“Market
Price”
is
not
known,
for
the
purposes
of
the valuation,
the
Options
have
been
valued
as
though
granted
24
August
2012
(“ Notional
Grant
Date ”). The
Options
have
been
valued
using
market
data
current
at
that
time.
Accordingly
the
actual
exercise price
(and
also
the
value
of
the
Options
as
at
the
date
of
issue)
could
vary
having
regard
to
the fluctuations
in
the
market
price
in
the
Company’s
shares
between
the
date
of
this
Notice
and
the
date upon
which
the
options
are
offered
to
Mr.
Spinks
following
the
Meeting
in
which
the
case
the valuation
of
the
Options
may
vary.

In
determining
the
value
of
options
the
Company
has
made
the
following
assumptions.
Market conditions
on
or
around
2
November
2012
may
differ
from
these
assumptions.

	Tranche A	Tranche B
Notional grant date	24 August 2012	24 August 2012
Number of options	500,000	500,000
Underlying share price (a)	1.19	1.19
Exercise price premium	15%	20%
Exercise price	1.37	1.43
Price volatility (b)	49.50%	51.86%
Average risk free rate (d)	3.33%	3.07%
Expiry date	24 August 2014 (2 years)	24 August 2015 (3 years)
Option valuation	29 cents per option	38 cents per option

(a) The
underlying
share
price
is
based
on
the
weighted
average
closing
sale
price
of
the
Shares recorded
on
the
ASX
over
the
last
five
days
trading
up
to
and
including
the
Notional
Grant Date.
(b) Price
volatility
of
the
Company’s
Shares
is
based
on
the
historical
volatility
of
Company’s underlying
shares
trading
on
the
ASX
over
a
period
equal
to
the
expected
life
of
the
Options ending
on
the
grant
date
of
the
option.
(c) The
average
current
risk
free
rate
is
based
on
the
1
year
trend
between
the
180
day
and
2
year RBA
bond
rates
for
Tranche
A
and
on
the
1.5
year
trend
between
the
2
and
3
year
RBA
bond rates.
(d) It
has
been
assumed
that
the
Options
will
be
exercised
mid-‐way
between
the
Notional
Grant Date
and
the
expiry
date.
This
is
because
it
has
been
assumed
that
options
issued
to consultants
and
employees
are
generally
poorly
diversified
and
the
Options
are
unlisted.
As

Page
23

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

such,
the
only
way
the
Options
can
be
converted
to
cash
is
by
exercising
the
Options
and selling
the
underlying
shares
in
the
market.

(e) All
Options
would
expire
if
unexercised
by
the
option
expiry
date.

Based
on
these
assumptions
and
using
the
Black
and
Scholes
option
valuation
model,
the
Company estimates
that
the
Options
to
be
issued
to
Mr.
Spinks
are
valued
at
approximately:
Tranche
A
-‐
$0.29 per
option;
Tranche
B
-‐
$0.38
per
option.
It
is
noted
that
the
market
value
of
the
Shares
may
vary prior
to
the
offer
of
the
Options
to
Mr.
Spinks
in
which
case
the
valuation
of
the
Options
may
vary accordingly.

**Resolution 9

-‐ Ratification of Securities Issue to a Commissioner of Indonesian subsidiary**

On
22
February
2012
the
Company
issued
to
Mr.
Simon
Sembiring,
an
independent
Commissioner
of the
Company’s
Indonesian
subsidiary
PT
Natarang
Mining,
500,000
free
Options
(“the
Non-‐ESOP Options”),
each
of
which
entitles
the
holder
on
exercise
to
acquire
one
ordinary
Share
at
an
exercise price
of
$1.53
each
on
or
before
22
February
2014.

This
issue
was
made
by
the
Company
in
accordance
with
Listing
Rule
7.1
of
the
ASX
Listing
Rules, which
permits
a
Company
to
issue
up
to
15%
of
its
issued
capital
without
shareholder
approval.

The
Commissioner
is
not
a
related
party
of
the
Company.

Resolution
9
seeks
Shareholder
approval
under
Listing
Rule
7.4,
which
provides
that
an
issue
of securities
that
is
made
without
Shareholder
approval
under
Listing
Rule
7.1
is
treated
as
having
been made
with
approval
for
the
purposes
of
Listing
Rule
7.1
if
each
of
the
following
applies:

the
issue
did
not
breach
Listing
Rule
7.1;
and
the
holders
of
ordinary
securities
subsequently
approve
it.

The
Directors
confirm
that
the
issue
of
the
Non-‐ESOP
Options
to
the
Commissioner
did
not
breach Listing
Rule
7.1.
The
effect
of
Shareholders
passing
Resolution
9
will
be
to
restore
the
Company’s ability
to
issue,
without
Shareholder
approval,
further
securities
up
to
the
full
15%
limit
currently imposed
by
Listing
Rule
7.1
without
obtaining
shareholder
approval.

As
required
by
Listing
Rule
7.5,
the
following
information
is
provided
in
relation
to
the
issue
of
the Non-‐ESOP
Options
to
Mr.
Sembiring:

(a) a
total
of
500,000
Non-‐ESOP
Options
were
issued.
(b) the
Non-‐ESOP
Options
were
issued
for
no
consideration
but
with
an
exercise
price
of
$1.53 each
upon
exercise
of
a
Non-‐ESOP
Option.
(c) The
Non-‐ESOP
Options
are
unlisted
and
are
subject
to
the
terms
and
conditions
set
out
below.
(d) The
name
of
the
Commissioner
to
which
the
Non-‐ESOP
Options
were
allotted
is
Mr.
Simon Sembiring.
(e) No
funds
were
raised
by
the
issue
of
the
Non-‐ESOP
Options.
In
the
event
the
Non-‐ESOP Options
are
exercised
in
due
course
the
funds
raised
will
be
applied
for
general
working capital.

Page
24

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

**Terms

and
Conditions
of
the
Non-‐ESOP
Options
Issued
to
the
Mr
Sembiring**

(a) Each
Non-‐ESOP
Option
entitles
the
holder
to
one
(1)
Share;
(b) The
Non-‐ESOP
Options
are
exercisable
at
any
time
prior
to
5.00pm
WST
on
22
February
2014 (the
Expiry
Date);
(c) The
exercise
price
of
the
Non-‐ESOP
Options
is
$1.53
cents
per
option;
(d) The
Non-‐ESOP
Options
are
freely
transferable;
(e) In
the
event
of
any
reconstruction
(including
consolidations,
sub-‐division,
reduction
or
return) of
the
issued
capital
of
the
Company
prior
to
the
Expiry
Date,
all
rights
of
an
option
holder
are to
be
changed
in
a
manner
consistent
with
Listing
Rule
6.16;
(f) The
Company
will
provide
to
each
Option
holder
a
notice
that
is
to
be
completed
when exercising
the
Non-‐ESOP
Options
(Notice
of
Exercise).

The
Non-‐ESOP
Options
may
be exercised
wholly
or
in
part
by
completing
the
Notice
of
Exercise
and
delivering
it
together
with payment
to
the
Secretary
of
the
Company
to
be
received
any
time
prior
to
the
Expiry
Date. The
Company
will
process
all
relevant
documents
received
at
the
end
of
every
calendar
month;

(g) Upon
the
exercise
of
an
option
and
receipt
of
all
relevant
documents
and
payment,
the
holder will
be
allotted
and
issued
a
Share
ranking
pari
passu
with
the
then
issued
Shares;
and
(h) There
will
be
no
participating
rights
or
entitlements
inherent
in
the
Non-‐ESOP
Options
and
the holders
will
not
be
entitled
to
participate
in
new
issues
of
capital
which
may
be
offered
to Shareholders
during
the
currency
of
the
Non-‐ESOP
Options.

However,
the
Company
will ensure
that
for
the
purposes
of
determining
entitlements
to
any
such
issue,
the
record
date will
be
at
least
seven
(7)
business
days
after
the
issue
is
announced.

This
will
give
option holders
the
opportunity
(where
available)
to
exercise
their
Non-‐ESOP
Options
prior
to
the
date for
determining
entitlements
to
participate
in
any
such
issue.

**Resolution 10

– Amendment to Constitution**

(10A)

Recent
changes
dealing
with
certain
criteria
which
must
be
met
before
a
dividend
may
be declared
came
into
effect
in
2011.

Article
20.1
of
the
Company’s
Constitution
currently provides
that
a
dividend
may
only
be
paid
out
of
profits,
whereas
the
new
rules
state
that
each of
the
following
three
tests
must
be
satisfied
before
a
dividend
may
be
declared,
i.e:

1. Balance
Sheet
Test:

The
Company’s
assets
exceed
its
liabilities
immediately
before
the
dividend
is
declared
and
the excess
is
sufficient
for
the
payment
of
the
dividend.

2. Fair
to
Shareholders
Test:

The
payment
of
the
dividend
is
fair
and
reasonable
to
the
Company’s
shareholders
as
a
whole.

3. No
Material
Prejudice
to
Creditors
Test:

The
payment
of
the
dividend
does
not
materially
prejudice
the
Company’s
ability
to
pay
its creditors.

The
Company
is
seeking
to
amend
Article
20.1
to
provide
for
the
new
dividend
rules.

Page
25

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

(10B) Article
13.20
of
the
Company’s
Constitution
currently
states
that
in
order
for
a
circular resolution
to
be
treated
as
a
if
it
were
passed
at
a
meeting
of
the
Board
duly
convened
and held,
all
directors
are
required
to
pass
that
resolution
for
it
to
become
effective;
however, from
time
to
time,
where
a
director
has
an
interest
in
the
outcome
of
the
resolution
he
is
not permitted
to
vote
on
the
resolution,
thereby
making
it
necessary
to
convene
a
full
meeting of
the
Board
of
Directors
to
pass
that
resolution.

The
Company
is
seeking
to
amend
Article
13.20
to
provide
that
a
resolution
in
writing
signed only
by
directors
eligible
to
vote
on
the
resolution
be
treated
as
a
determination
of
the Board
passed
at
a
meeting
of
the
Board
duly
convened
and
held.

Page
26

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

Glossary

In
the
Explanatory
Memorandum
the
following
terms
bear
the
following
meanings
unless
the
context otherwise
requires.

A$ means
the
lawful
currency
of
Australia.

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

ASIC means
Australian
Securities
and
Investments
Commission.

ASX means
ASX
Limited
(ABN
98
008
624
691)
and
where
the
context
permits,
the
Australian
Securities

Exchange
operated
by
ASX
Limited.

Board means
the
Board
of
Directors
of
the
Company.

Business
Day means
Monday
to
Friday
inclusive,
except
New
Year’s
Day,
Good
Friday,
Easter
Monday,

Christmas
Day,
Boxing
Day,
and
any
other
day
that
the
ASX
declares
is
not
a
business
day.

Company means
Kingsrose
Mining
Limited.

Constitution means
the
constitution
of
the
Company.

Corporations
Act means
the Corporations
Act
2001 (Cth).

Directors means
the
directors
of
the
Company.

Explanatory
Memorandum means
the
explanatory
memorandum
to
this
Notice
of
General
Meeting.

Listing
Rules
or
Official
Listing
Rules means
the
listing
rules
of
ASX.

Notice means
this
Notice
of
Annual
General
Meeting
and
includes
the
Explanatory
Memorandum
and
Proxy
Form.

Option means
an
option
to
acquire
a
Share.

Plan means
Kingsrose
Mining
Limited
Employee
Option
and
Share
Rights
Plan
2012.

Resolution means
a
resolution
contained
in
this
Notice
of
General
Meeting.

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

Share
Rights means
rights
to
acquire
Shares
issued
pursuant
to
the
Plan.

Shareholder means
a
shareholder
of
the
Company.

WST means
Australian
Western
Standard
Time.

Page
27

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

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**EXPLANATORY

MEMORANDUM**

SCHEDULE ONE

RULES
OF
THE
KINGSROSE
MINING
LIMITED EMPLOYEE
OPTIONS
AND
SHARE
RIGHTS
PLAN
2012

1. NAME
OF
PLAN

2. ESTABLISHMENT
AND
TERMINATION
OF
THE
PLAN

3. PURPOSE
OF
THE
PLAN

4. OPERATION
OF
THE
PLAN

5. ELIGIBILITY

6. OFFERS
OF
OPTIONS
AND
SHARE
RIGHTS

7. ACCEPTING
OFFERS

8. NO
CONSIDERATION

9. CERTIFICATES

10. QUOTATION
AND
TRANSFERS

11. FORFEITURE
AND
PERFORMANCE
CONDITIONS

12. EXERCISE
OF
OPTIONS

13. VESTING
AND
EXERCISE
OF
SHARE
RIGHTS

14. SHARES
ALLOTTED
ON
EXECISE
OF
OPTIONS
AND
SHARE
RIGHTS

15. LAPSE
OF
OPTIONS
AND
SHARE
RIGHTS

16. PARTICIPATION
RIGHTS,
BONUS
ISSUES,
RIGHTS
ISSUE,
REORGANISATIONS
OF
CAPITAL
AND WINDING
UP

17. TAKEOVERS

18. AMENDMENTS
TO
THE
RULES

19. POWERS
OF
THE
BOARD

20. NOTICES

21. NO
COMPENSATION
OR
DAMAGES

22. GOVERNING
LAW

23. ADVICE

24. DEFNITIONS
AND
INTERPRETATION

Page
28

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

**1. NAME

OF
PLAN**

1.1 This
Plan
shall
be
called
the
Kingsrose
Mining
Limited
Employee
Options
and
Share
Rights Plan.

**2. ESTABLISHMENT AND

TERMINATION
OF
THE
PLAN**

2.1 The
Board
may
establish
and
administer
the
Plan
in
accordance
with
the
terms
and
conditions set
out
in
these
Rules
and
otherwise
as
it
determines
from
time
to
time
in
its
absolute discretion.
2.2 The
Board
may
terminate
the
Plan,
or
suspend
its
operation
for
any
period
it
considers desirable,
at
any
time
that
it
considers
appropriate.
2.3 The
Board
may
not
issue
any
further
Options
or
Share
Rights
after
the
Plan
has
been terminated.
However,
these
Rules
will
continue
to
apply
to
Options
and
Share
Rights
on
issue at
the
date
of
such
termination
until
the
last
of
those
Options
and
Share
Rights
lapses
or
is exercised.

3. **PURPOSE

OF
THE
PLAN**

3.1 The
purpose
of
this
Plan
is
to:
a) recognise
the
ongoing
ability
of
the
Employees
and
Directors
of
the
Company
and
their expected
efforts
and
contribution
in
the
long
term
to
the
performance
and
success
of
the Company.
b) provide
an
incentive
to
the
Employees
and
Directors
of
the
Company
to
remain
in
their employment
or
other
arrangement
with
the
Company
in
the
long
term.
c) attract
persons
of
experience
and
ability
to
contract
with
the
Company
and
foster
and promote
loyalty
between
the
Company
and
its
Employees
and
Directors:
and
d) provide
Employees
and
Directors
of
the
Company
with
the
opportunity
to
acquire
Options, and
ultimately
Shares,
in
the
Company,
in
accordance
with
these
Rules.

**OPERATION

OF
THE
PLAN**

4.1 The
Plan
operates
according
to
these
Rules
which
bind
the
Company
and
each
Participant.
4.2 The
number
of
Shares
to
be
received
on
exercise
of
the
Options
or
Share
Rights
the
subject
of an
Offer
when
aggregated
with:
a) The
number
of
Shares
which
would
be
issued
were
each
outstanding
offer
or
Option
or
Share Right,
being
an
offer
made
or
Option
or
Share
Right
acquired
pursuant
to
the
Plan
or
any other
employee
share
scheme
extended
only
to
Employees
or
Directors
of
the
Company,
to be
exercised:
and
b) The
number
of
Shares
issued
during
the
previous
5
years
pursuant
to
the
Plan
or
any
other employee
share
scheme
extended
only
to
Employees
or
Directors
of
the
Company:

but
disregarding
any
offer
made,
or
Option
or
Share
Right
acquired
or
Share
issued
by
way
of
or
as
a result
of:

a) An
offer
to
a
person
situated
at
the
time
of
receipt
of
the
Offer
outside
Australia:
or
b) An
offer
that
did
not
need
disclosure
to
investors
because
of
section
708
of
the
Corporations Act:
or
c) An
offer
made
under
a
disclosure
document.

must
not
exceed
5%
of
the
total
number
of
issued
Shares
as
at
the
time
of
the
Offer.

Page
29

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

5. ELIGIBILITY

5.1 Subject
to
these
Rules,
the
Board
may
from
time
to
time
determine
that
any
Eligible
Person
is entitled
to
participate
in
the
Plan
and
the
extent
of
that
participation.
Prior
to
making
that determination,
the
Board
must
consider:
a) the
seniority
of
the
relevant
Eligible
Person
and
the
position
the
Eligible
Person
occupies within
the
Company:
b) the
length
of
service
of
the
Eligible
Person
with
the
Company:
c) the
record
of
employment
of
the
Eligible
Person
with
the
Company:
d) the
potential
contribution
of
the
Eligible
Person
to
the
growth
of
the
Company:
e) the
extent
(if
any)
of
the
existing
participation
of
the
Eligible
Person
(or
any
Permitted Nominee
in
relation
to
that
Eligible
Person)
in
the
Plan
or
any
predecessor
Plan;
and
f) any
other
matters
which
the
Board
considers
relevant.
5.2 Any
Eligible
Person
who
is
an
Australian
resident
employee
of
the
Company
or
a
subsidiary with
at
least
three
years
service
will
be
entitled
to
be
offered
Options
under
this
Plan.
5.3 The
Board
may
exercise
its
powers
in
relation
to
the
participation
of
any
Eligible
Person
on any
number
of
occasions.

**OFFERS

OF
OPTIONS
AND
SHARE
RIGHTS**

6.1 Subject
to
these
Rules
and
to
the
Listing
Rules,
the
Company
(acting
through
the
Board)
may offer
Options
or
Share
Rights
to
any
Eligible
Person
at
such
times
and
on
such
terms
as
the Board
considers
appropriate.
Each
Offer
must
state:
a) the
name
and
address
of
the
Eligible
Person
to
whom
the
Offer
is
made;
b) that
the
Eligible
Person
to
whom
the
Offer
is
addressed
may
accept
the
whole
or
any
lesser number
of
Options
or
Share
Rights
offered;
c) if
there
is
a
minimum
number
of
Options
or
Share
Rights
or
a
multiple
of
such
minimum
or any
other
number
which
may
be
accepted,
that
minimum
or
multiple;
d) the
period
within
which
the
Offer
may
be
accepted
and,
for
Options,
the
period
or
periods during
which
the
Options
or
any
of
them
may
be
exercised
and
the
Expiry
Date;
e) any
Forfeiture
Conditions;
f) for
Options,
the
method
of
calculation
of
the
Exercise
Price;
and
g) any
other
matters
which
the
Board
may
determine,
including
any
additional
terms
and conditions
which
the
Board
may
see
fit
to
impose
in
relation
to
the
Options
or
Share
Rights including
any
terms
required
to
comply
with
the
ASX
Listing
Rules
and
the
imposition
of Forfeiture
Conditions.
6.2 The
method
of
calculation
of
the
Exercise
Price
of
each
Option
will
be
determined
by
the Board
having
regard
to
such
factors
as
the
Board
considers
appropriate,
including
the
Market Value
of
the
Shares
when
it
resolves
to
offer
the
Option
(but
the
Exercise
Price
may
be
higher than
the
Market
Value
where
the
Board
considers
this
appropriate.)

**ACCEPTING

OFFERS**

7.1 Upon
receipt
of
an
Offer,
an
Eligible
Person
may,
within
the
period
specified
in
the
Offer:
a) accept
the
whole
or
any
lesser
number
of
Options
or
Share
Rights
offered
by
giving
to
the Company
an
Application
Form;
or

Page
30

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

b) nominate
a
nominee
in
whose
favour
the
Eligible
Person
wishes
to
renounce
the
Offer
by notice
in
writing
to
the
Board.
Such
nominee
must
be
either
a
close
relative
of
the
Eligible Person,
or
a
company
or
trust
controlled
by
the
Eligible
Person.
The
Board
may,
in
its absolute
discretion,
resolve
not
to
allow
such
renunciation
of
an
Offer
in
favour
of
a
nominee without
giving
any
reason
for
such
decision.
7.2 Upon:
a) receipt
of
the
Application
Form
referred
to
in
paragraph
7.1
(a);
or
b) the
Board
resolving
to
allow
a
renunciation
of
an
Offer
in
favour
of
a
nominee
designated
by the
Eligible
Person
and
acceptable
to
the
Company
(“Permitted
Nominee”)
and
the
Permitted Nominee
accepting
the
whole
or
any
lesser
number
of
Options
or
Share
Rights
offered
by giving
the
Company
an
Application
Form,

then
the
Eligible
Person
or
the
Permitted
Nominee,
as
the
case
may
be,
will
be
taken
to
have agreed
to
be
bound
by
these
Rules
and
will
be
granted
the
offered
Options
or
Share
Rights, subject
to
these
Rules.

7.3 If
Options
or
Share
Rights
are
issued
to
a
Permitted
Nominee
or
an
Eligible
Person,
the Eligible
Person
must,
without
limiting
any
provision
to
these
Rules,
ensure
that
the
Permitted Nominee
complies
with
these
Rules.
7.4 On
the
issue
of
Options
or
Share
Rights
following
receipt
by
the
Company
of
an
Application Form,
an
Eligible
Person
or
the
Permitted
Nominee,
as
the
case
may
be,
becomes
a Participant.

**8. NO

CONSIDERATION**

8.1 No
consideration
is
payable
by
an
Eligible
Person
or
Permitted
Nominee
as
the
case
may
be
for a
grant
of
an
Option
or
a
Share
Right,
unless
the
Board
decides
otherwise.

9. CERTIFICATES

9.1 The
Company
must
give
a
Participant
one
or
more
Certificates
stating
the
number
of
Options or
Share
Rights
issued
to
the
Participant
and
specifying,
in
the
case
of
Options
–
a) the
Issue
Date,
Exercise
Price
and
Expiry
Date
of
those
Options;
and
b) that
the
Options
are
subject
to
these
Rules
and
the
Forfeiture
and
Performance
Conditions specified
in
the
Offer
pursuant
to
which
the
Options
were
issued;

and,
in
the
case
of
Share
Rights
–

c) the
Issue
Date
of
those
Share
Rights;
and
d) that
the
Share
Rights
are
subject
to
these
Rules
and
the
Forfeiture
and
Performance Conditions
specified
in
the
Offer
pursuant
to
which
the
Share
Rights
were
issued.
9.2 The
Certificates
for
the
Options
or
Share
Rights
will
be
dispatched
within
10
Business
Days after
the
Issue
Date.

**10. QUOTATION

AND
TRANSFERS**

10.1 The
Company
will
not
apply
for
Official
Quotation
of
any
Options
or
Share
Rights.
10.2 If
Shares
of
the
same
class
as
those
allotted
pursuant
to
the
exercise
of
Options
granted under
the
Plan
are
listed
on
the
ASX,
the
Company
must
apply
for
Official
Quotation
of
those Shares
allotted
pursuant
to
the
exercise
of
Options
within
the
time
required
by
the
Listing Rules
after
the
date
of
allotment.
10.3 Options
and
Share
Rights
are
not
transferrable
except
with
the
prior
written
consent
of
the Company.

Page
31

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

10.4 A
Participant
is
not
entitled
to
vote
or
receive
dividends
or
participate
in
issues
of
securities made
or
offered
pro
rata
to
holders
of
Shares
in
respect
of
any
Options
or
Share
Rights
they hold.

11. FORFEITURE
AND
PERFORMANCE
CONDITIONS

11.1 The
Board
may
when
Options
or
Share
Rights
are
offered
determine
that
the
Options
or Share
Rights
issued
will
be
subject
to
Forfeiture
Conditions
or
Performance
Conditions .
11.2 Subject
to
the
Board’s
discretion
to
determine
otherwise, Options
or
Share
Rights
held
by
a Participant
subject
to
Forfeiture
or
Performance
Conditions
will
be
forfeited
if
any
of
the Forfeiture
or
Performance
Conditions
are
not
satisfied.
An
Option
or
Share
Right
that
is forfeited
will
be
cancelled
and
will
not
thereafter
be
capable
of
being
exercised.
11.3 No
Option
or
Share
Right
that
is
subject
to
Forfeiture
or
Performance
Conditions
can
be exercised
until
such
time
as
the
Forfeiture
or
Performance
Conditions
have
been
satisfied.
11.4 Forfeiture
and
Performance
Conditions
will
comprise
those
conditions
described
as
such
by the
Board
and
set
out
in
an
Offer
(or
in
a
document
accompanying
an
Offer).
11.5 Without
limiting
the
Board’s
power
to
impose
Forfeiture
and
Performance
Conditions,
such conditions
may
include:
- (a) A
  condition
  that
  the
  Eligible
  Person
  must
  remain
  as
  an
  employee
  or
  director
  (as
  the case
  may
  be)
  of
  the
  Company
  or
  its
  subsidiary
  for
  a
  minimum
  period;
- (b) A
  condition
  that
  any
  stipulated
  performance
  criteria
  be
  satisfied;
- (c) A
  condition
  that
  certain
  specified
  milestones
  in
  connection
  with
  the
  development
  or operation
  of
  any
  mineral
  or
  other
  project
  of
  the
  Company
  or
  a
  subsidiary
  are completed
  within
  a
  specified
  time
  or
  in
  a
  specified
  manner;
  or
- (d) A
  condition
  that
  the
  Market
  Price
  of
  the
  Company’s
  ordinary
  shares
  attain
  a
  specified price
  (or
  remain
  at
  a
  specified
  price
  for
  a
  specified
  number
  of
  days)
  within
  a
  specified period.
11.6 The
Board
may
by
notice
in
writing
to
a
Participant
partly
or
fully
waive
any
Forfeiture
or Performance
Conditions
applicable
to
Options
or
Share
Rights
held
by
that
Participant.
Any Forfeiture
or
Performance
Conditions
so
waived
will
be
deemed
to
be
satisfied.
11.7 Subject
to
the
Listing
Rules,
the
Board
may
by
notice
in
writing
to
a
Participant
vary
any Forfeiture
or
Performance
Conditions
applicable
to
Options
or
Share
Rights
held
by
that Participant,
provided
such
variation
is
not
adverse
to
the
Participant.

12. EXERCISE OF
OPTIONS

12.1 Subject
to
any
Forfeiture
or
Performance
Conditions,
Options
may
be
exercised
at
any
time during
the
period
commencing
on
the
Issue
Date
and
ending
on
the
Expiry
Date.
12.2 Options
may
only
be
exercised
by
the
Participant
giving
notice
in
writing
to
the
Board delivered
to
the
principal
office
of
the
Company.
The
notice
must
specify
the
number
of Options
being
exercised
and
the
Exercise
Price
for
the
Options
specified
in
the
notice
and must
be
accompanied
by:
- a) the
  Certificate
  for
  those
  Options,
  for
  cancellation
  by
  the
  Company;
  and
- b) a
  cheque
  payable
  to
  the
  Company
  (or
  another
  form
  of
  payment
  acceptable
  to
  the Board)
  in
  the
  amount
  of
  the
  product
  of
  the
  number
  of
  Options
  then
  being
  exercised
  by the
  Participant
  and
  the
  Exercise
  Price.
12.3 Subject
to
paragraph
15.1,
within
10
Business
Days
after
the
notice
referred
to
in
clause
12.2 becoming
effective,
the
Board
must:

Page
32

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

a) allot
and
issue
the
number
of
Shares
to
be
issued
in
respect
of
the
Options
being exercised:
b) Cancel
the
Certificate
for
the
Options
being
exercised:
and
c) If
applicable,
issue
a
new
Certificate
for
any
remaining
Options
covered
by
the Certificate
accompanying
the
notice.

**13. VESTING

AND
EXERCISE
OF
SHARE
RIGHTS**

13.1 Subject
to
clauses
11
and
15,
a
Share
Right
will
vest
and
be
automatically
exercised
to
provide a
reward
(either
in
equity
or
in
cash,
at
the
election
of
the
Company)
to
a
Participant
when each
Forfeiture
and
Performance
Condition
applicable
to
that
Share
Right
has
been
satisfied.
13.2 Where
a
Participant
ceases
to
be
an
Employee
or
Director
of,
or
to
render
services
to,
a member
of
the
Group,
due
to
a
Specified
Reason
prior
to
the
date
on
which
a
Share
Right may
otherwise
vest
(‘Ceasing
Date’)
the
Board
may
resolve
that
the
Participant’s
right
to
have a
Share
allocated
or
a
cash
amount
paid
to
that
Participant
in
relation
to
that
Share
Right (subject
to
satisfaction
of
each
relevant
Forfeiture
and
Performance
Condition)
will
not
lapse on
the
Ceasing
Date.

The
Board
may
further
resolve
that
if
each
relevant
Forfeiture
and Performance
Condition
is
satisfied
(except
continuation
of
employment)
the
Company
will allocate
the
Share
or
pay
the
cash
amount
to
which
the
Participant
is
thereby
entitled
in relation
to
Share
Rights
held
by
the
Participant.

13.3 Where
the
Board
resolves
to
allocate
Shares
or
a
cash
equivalent
in
accordance
with
clause 13.2,
the
value
of
the
Shares
will
be
determined
in
reference
to
the
closing
price
of
the
Shares on
the
date
of
cessation
of
employment
of
the
Participant,
and
an
cash
equivalent
will
be determined
by
multiplying
the
number
of
Share
Rights
held
by
the
Participant
by
the
closing price
of
the
Shares
on
the
date
of
cessation
of
employment
of
the
Participant.
13.4 Upon
the
vesting
of
Share
Rights
for
which
a
Share
is
to
be
provided
pursuant
to
clause
13.1, the
Company
must
allocate
to
the
Participant
the
number
of
Shares
to
which
the
Participant is
entitled.
13.5 A
Participant
is
not
liable
to
make
any
payment
for
the
allocation
of
Shares
consequent
upon the
vesting
of
Share
Rights.
13.6 Upon
the
vesting
of
a
Share
Right
for
which
a
cash
amount
is
to
be
paid
pursuant
to
clause 13.1,
the
Company
must
pay
the
appropriate
amount
to
the
Participant
after
taking
into account
any
superannuation
guarantee
contributions
that
may
be
payable
by
the
Company, less
any
withholdings
required
by
law
in
relation
to
Tax
or
other
liabilities
of
the
Company
or the
Participant
in
relation
to
the
payment.
13.7 Where
Shares
are
allocated
and
a
Participant
or
the
Company
is
liable
to
Tax, superannuation,
duties
or
other
amounts
on
the
vesting
of
a
Share
Right
and
the
Company
is liable
to
make
a
payment
to
the
appropriate
authorities
on
account
of
that
liability
–
(a) the
Board
must
issue
and
sell
sufficient
number
of
the
Shares
that
would
otherwise
be issued
to
or
on
behalf
of
the
Participant
so
that
the
net
proceeds
of
sale
equal
the payment
the
Company
is
required
to
make
to
the
appropriate
authorities.
The
Board must
account
to
the
Company
for
the
net
proceeds
of
the
sale;
(b) provided
that
this
clause
13.7
shall
not
apply
if
the
Participant
makes
alternative arrangements
to
the
satisfaction
of
the
Company.

Page
33

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

**14. SHARES

ALLOTTED
ON
EXERCISE
OF
OPTIONS
AND
SHARE
RIGHTS**

14.1 All
Shares
allotted
upon
exercise
of
the
Options
and
Share
Rights
rank
pari
passu
in
all respects
with
Shares
previously
issued
and,
in
particular,
entitle
the
holders
of
Shares
to participate
fully
in:
a) dividends
declared
by
the
Company
after
the
date
of
allotment;
and
b) all
issues
of
securities
made
or
offered
pro
rata
to
holders
of
Shares.

**15. LAPSE

OF
OPTIONS
AND
SHARE
RIGHTS**

15.1 Options
not
validly
exercised
on
or
before
the
Expiry
Date
and
Share
Rights
that
do
not
vest will
automatically
lapse.
15.2 Unless
otherwise
determined
by
the
Board,
if
any
Options
or
Share
Rights
are
granted
subject to
Forfeiture
Conditions
and,
prior
to
satisfactions
of
the
Forfeiture
Conditions
(such
that
the Options
are
not
exercisable
and
the
Share
Rights
have
not
vested),
the
Eligible
Person
to whom
those
Options
or
Share
Rights
were
granted
ceases
to
be
an
Eligible
Person
then:
a) If
the
Eligible
Person
ceases
to
be
an
Eligible
Person
for
any
reason
other
than
a
Specified Reason,
any
such
Options
or
Share
Rights
held
by
such
Eligible
Person,
or
if
appropriate,
his
or her
Permitted
Nominee,
will
automatically
lapse;
and
b) If
the
Eligible
Person
ceases
to
be
an
Eligible
Person
for
a
Specified
Reason,
I. such
Eligible
Person,
or
if
appropriate,
his
or
her
Permitted
Nominee,
may
exercise
any such
Options
held
by
him
or
her
(or
the
Permitted
Nominee)
subject
to
the
Board,
in its
absolute
discretion,
reducing,
waiving
or
varying
the
Forfeiture
and
Performance Conditions
applying
to
those
Options
in
accordance
with
clause
11.6
or
11.7
so
that those
Options
may
be
exercised.
Options
the
subject
of
this
clause
15.2
b)
not exercised
within
the
3
months
or
the
longer
period
determined
by
the
Board,
will automatically
lapse;
II. any
such
Share
Rights
held
by
the
Eligible
Person,
or
if
appropriate,
his
or
her Permitted
Nominee,
will
vest
and
be
automatically
exercised
subject
to
the
Board,
in its
absolute
discretion,
reducing,
waiving
or
varying
the
Forfeiture
Conditions
applying to
those
Share
Rights
in
accordance
with
clause
11.6
or
11.7
15.3 Unless
otherwise
determined
by
the
Board,
if
an
Eligible
Person
ceases
to
be
an
Eligible Person
at
any
time
after
an
Option
has
become
exercisable
but
prior
to
the
relevant
Expiry Date,
then:
a) if
the
Eligible
Person
ceases
to
be
an
Eligible
Person
for
any
reason
other
than
a
Specified Reason,
such
Eligible
Person,
or
if
appropriate,
his
or
her
Permitted
Nominee,
may
exercise any
such
Option
held
by
him
or
her
(or
the
Permitted
Nominee)
within:
I. 1
month
of
ceasing
to
be
an
Eligible
Person;
or
II. such
longer
period
as
the
Board
determines,

and
any
Options
the
subject
of
this
clause
not
exercised
within
the
1
month
or
the
longer period
determined
by
the
Board,
will
automatically
lapse;
and

b) if
an
Eligible
Person
ceases
to
be
an
Eligible
Person
for
a
Specified
Reason,
such
Eligible Person,
or
if
appropriate
his
or
her
Permitted
Nominee
is
entitled
to
exercise
any
such Options
at
any
time
prior
to
their
Expiry
Date.
15.4 A
Certificate
signed
by
the
Company
Secretary
of
the
Company
stating
that
a
person
ceased for
any
reason
to
be
an
Eligible
Person
shall
(in
the
absence
of
manifest
error)
be
conclusive for
the
purposes
of
the
Plan,
both
as
to
such
occurrence
and
the
reason
for
such
occurrence and
the
date
of
such
occurrence.

Page
34

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

**16. PARTICIPATION

RIGHTS,
BONUS
ISSUES,
RIGHTS
ISSUE,
REORGANISATIONS
OF
CAPITAL
AND WINDING
UP**

**16.1 New

Issues**

a)

Participants
are
not
entitled
to
participate
in
any
new
issue
of
securities
to
existing
holders
of Shares
in
the
Company
unless:
I. Shares
have
been
allocated
to
them
upon
the
exercise
of
Share
Rights;
or
II. The
Participants
have
become
entitled
to
exercise
Options
under
the
Plan
and
they exercise
those
Options
before
the
record
date
for
the
determination
of
entitlements to
the
new
issue
of
securities
as
a
result
of
being
holders
of
Shares.

b) The

Company
must
give
Participants,
in
accordance
with
the
Listing
Rules,
notice
of
any
new issue
of
securities
before
the
record
date
for
determining
entitlements
to
the
new
issue. 16.2 Bonus
Issues

There
is
no
right
to
change
the
exercise
price
of
an
Option
or
the
number
of
underlying Shares
over
which
an
Option
or
a
Share
Right
can
be
exercised,
if
the
Company
completes
a bonus
issue.

**16.3 Pro

Rata
Issues**

There
is
no
right
to
change
the
exercise
price
of
an
Option
nor
the
number
of
underlying Shares
over
which
an
Option
or
Share
Right
can
be
exercised,
if
the
Company
completes
a
pro rata
issue.

**16.4 Reorganisation

of
Capital**

If,
prior
to
the
expiry
of
any
Options
or
the
vesting
of
any
Share
Rights,
there
is
a reorganisation
of
the
issued
capital
of
the
Company,
then
the
rights
of
a
Participant
(including the
number
of
Options
or
Share
Rights
to
which
each
Participant
is
entitled
and
the
Option Exercise
Price
and
Expiry
Date)
may
be
changed
by
the
Board
to
the
extent
necessary
to comply
with
the
Listing
Rules
applying
to
a
reorganisation
of
capital
at
the
time
of
the reorganisation.

**16.5 Winding

Up**

If,
prior
to
the
expiry
of
any
Options
or
the
vesting
of
any
Share
Rights,
a
resolution
for
a members
voluntary
winding
up
of
the
Company
is
proposed
(other
than
for
the
purpose
of
a reconstruction
or
amalgamation)
the
Board
may,
in
its
absolute
discretion,
give
written
notice to
Participants
of
the
proposed
resolution.
Subject
to
the
Forfeiture
Conditions,
during
the period
referred
to
in
the
notice
the
Participants
may
exercise
their
Options
and
the
Company may
exercise
Share
Rights
held
by
Participants.

**16.6 Fractions

of
Shares**

For
the
purpose
of
this
clause
16,
if
Options
or
Share
Rights
are
exercised
simultaneously
the number
of
Shares
or
fractions
of
Shares
to
which
the
Participant
is
entitled
may
be aggregated.
Fractions
in
the
aggregate
number
only
will
be
disregarded
in
determining
the total
entitlement
of
a
Participant.

**16.7 Calculations

and
Adjustments**

Any
calculations
or
adjustments
which
are
required
to
be
made
under
this
clause
16
will
be made
by
the
Board
and,
in
the
absence
of
manifest
error,
are
final
and
conclusive
and
binding on
the
Company
and
the
Participant.

Page
35

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

**16.8 Notice

of
Change**

The
Company
must
within
a
reasonable
period
give
to
each
Participant
notice
of
any
change under
this
clause
16
to
the
Exercise
Price
of
any
Options
held
by
the
Participant
or
to
the number
of
Shares
to
which
the
Participant
is
entitled
on
exercise
of
an
Option
or
Share
Right.

17. TAKEOVERS

17.1 If
during
the
life
of
an
Option
or
Share
Right
a
Takeover
Bid
is
made
to
the
Company's shareholders
to
acquire
their
Shares
and
the
Board
becomes
aware
that
a
bidder
who
did
not have
a
Relevant
Interest
in
more
than
50%
of
the
Company's
issued
Shares
has
acquired
(or become
entitled
to
acquire)
a
Relevant
Interest
in
more
than
50%
of
the
Company's
issued Shares,
or
that
there
has
been
a
change
of
Control
of
the
Company,
then
the
Board
may resolve
that
the
Company
notify
each
Participant
in
writing
that
some
or
all
of
the
Forfeiture and
Performance
Conditions
applying
to
Options
and
Share
Rights
will
be
waived
and
that Options
and
Share
Rights
may
vest
accordingly.

**18. AMENDMENTS

TO
THE
RULES**

**18.1 Board

May
Alter
Rules**

The
Board
may,
subject
to
clause
18.3
and
the
Listing
Rules,
alter,
delete
or
add
to
these Rules
at
any
time
(save
for
the
provisions
of
clause
4.2).

**18.2 Alteration

of
clause
4.2**

The
Board
may
alter
clause
4.2
with
the
prior
approval
by
ordinary
resolution
of
the shareholders
of
the
Company
in
a
general
meeting.

**18.3 Consent

of
Participants**

If
any
amendments
to
be
made
under
clause
18.1
would
adversely
affect
the
rights
of Participants
in
respect
of
any
Options
or
Share
Rights
then
held
by
them,
the
Board
must obtain
the
consent
of
Participants
who
between
them
hold
not
less
than
75%
of
the
total number
of
those
Options
and
Share
Rights
held
by
all
those
Participants
before
making
the amendment.

**18.4 Eligible

Persons
Outside
Australia**

The
Board
may,
subject
to
the
Listing
Rules,
make
any
additions,
variations
or
modifications to
the
Rules
in
relation
to
the
implementation
of
the
Plan,
and
the
specific
application
of
the Rules,
to
Eligible
Persons
residing
outside
Australia.

**19. POWERS

OF
THE
BOARD**

19.1 The
Plan
shall
be
administered
by
the
Board
who
shall
have
the
power
to:
a) Determine
appropriate
procedures
and
make
regulations
for
the
administration
of
the Plan
which
are
consistent
with
these
Rules;
b) Resolve
conclusively
all
questions
of
fact
or
interpretation
arising
in
connection
with the
Plan;
c) Terminate
or
suspend
the
operation
of
the
Plan
at
any
time,
provided
that
the termination
or
suspension
does
not
adversely
affect
or
prejudice
the
rights
of Participants
holding
Options
or
Share
Rights
at
that
time:
d) Delegate
those
functions
and
powers
it
considers
appropriate,
for
the
efficient administration
of
the
Plan,
to
any
one
or
more
persons
whom
the
Board
reasonably believes
to
be
capable
of
performing
those
functions
and
exercising
those
powers,
for such
period
and
on
such
conditions
as
the
Board
may
determine;

Page
36

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

e) Take
and
rely
upon
independent
professional
or
expert
advice
in
or
in
relation
to
the exercise
of
any
of
their
powers
or
discretions
under
these
Rules;
f) Determine
terms
and
conditions
applicable
to
Options
and
Share
Rights;
g) Administer
the
Plan
in
accordance
with
these
Rules
as
and
to
the
extent
provided
in these
Rules;
and
h) Made
regulations
for
the
operation
of
the
Plan
consistent
with
these
Rules.

20. NOTICES

20.1 Notices
may
be
given
by
the
Company
to
any
Holder
either
personally
or
by
post
to
his
or
her address
as
noted
in
the
Company’s
records
or
to
the
address
(if
any)
within
the Commonwealth
of
Australia
supplied
by
him
to
the
Company
for
the
giving
of
notices.
Notices for
any
overseas
Holders
shall
be
forwarded
and
posted
by
air.
Where
a
notice
is
sent
by
post the
notice
shall
be
deemed
to
be
served
on
the
day
after
posting.
The
signature
of
any
notice may
be
given
by
any
Director
or
secretary
of
the
Company.
A
notice
of
exercise
given
under clause
12.2
shall
not
be
deemed
to
be
served
on
the
Company
until
actually
received.

**21. NO

COMPENSATION
OR
DAMAGES**

21.1 The
rights
and
obligations
of
any
Holder
under
the
terms
of
his
or
her
employment
or consultancy
with
the
Company
are
not
affected
by
his
or
her
participation
in
the
Plan.
21.2 These
Rules
do
not
form
part
of,
and
will
not
be
incorporated
into,
any
contract
of engagement
or
employment
between
a
Holder
and
the
Company.
21.3 No
Holder
has
any
rights
to
compensation
or
damages
as
a
result
of
the
termination
of
his
or her
employment,
consultancy
or
directorship
so
far
as
those
rights
arise
or
may
arise
from
the Holder
ceasing
to
have
rights
under
the
Plan
as
a
result
of
the
termination.
21.4 Participants
do
not,
as
Participants,
have
any
right
to
attend
or
vote
at
general
meetings
of holders
of
Shares.

**22. GOVERNING

LAW**

22.1 The
Plan
and
any
Options
or
Share
Rights
issued
under
it
are
governed
by
the
laws
of
Western Australia
and
the
Commonwealth
of
Australia.
22.2 Each
Participant
irrevocably
and
unconditionally
submits
to
the
non-‐exclusive
jurisdiction
of the
courts
of
Western
Australia,
the
Commonwealth
of
Australia
and
courts
entitled
to
hear appeals
from
those
courts.

23. ADVICE

23.1 Eligible
Persons
and
Permitted
Nominees
should
obtain
their
own
independent
advice
at
their own
expense
on
the
financial,
taxation
and
other
consequences
to
them
of
or
relating
to participation
in
the
Plan.

**24. DEFINITIONS

AND
INTERPRETATION**

24.1 In
these
Rules,
unless
the
context
otherwise
requires,
the
following
words
and
expressions shall
have
the
following
meanings:

“Application
Form” means
a
duly
completed
and
executed
application
for
the
issue
of
Options
or Share
Rights
made
by
an
Eligible
Person
or
Permitted
Nominee
in
respect
of
an
Offer,
in
the
form approved
by
the
Board
from
time
to
time;

“ASX” means
ASX
Limited
as
operator
of
the
Australian
Securities
Exchange;

“Board” means
the
Directors
acting
as
the
board
of
directors
of
the
Company
or
a
committee appointed
by
such
board
of
directors;

Page
37

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

“Business
Day” means
a
day
on
which
banks
are
open
for
business
in
Perth,
Western
Australia excluding
a
Saturday,
Sunday
or
public
holiday;

“Certificate” means
the
certificate
issued
in
accordance
with
clause
9
by
the
Company
to
a
Holder in
respect
of
an
Option
or
a
Share
Right;

“Company” means
Kingsrose
Mining
Ltd
(ACN
112
389
910).

“Control” has
the
meaning
given
to
that
term
in
section
50AA
of
the
Corporations
Act;

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

“Director” means
a
director
of
the
Company
from
time
to
time
but
does
not
include
a
person
who is
only
a
director
by
virtue
of
being
alternate
director;

“Eligible
Person” means
at
any
time
a
person
who
then
is
a
Director
or
is
an
Employee
(whether full-‐time
or
part-‐time)
of
the
Company
or
of
a
subsidiary
of
the
Company;

“Employee” means
an
employee
of
the
Company
from
time
to
time;

“Exercise
Price” means,
in
respect
of
an
Option,
the
subscription
price
per
Share,
determined
in accordance
with
clause
6.2,
payable
by
a
Holder
on
exercise
of
the
Option;

“Expiry
Date” means,
in
relation
to
an
Option,
the
date
determined
by
the
Board
prior
to
the
offer of
the
relevant
Options,
subject
to
any
restriction
in
the
Corporations
Act
from
time
to
time
but
in any
event
no
longer
than
7
years
from
the
Issue
Date;

“Forfeiture
Conditions” and/or “Performance
Conditions” mean
any
conditions
imposed
under clause
11
of
this
Plan
which
if
not
satisfied
will
result
in
Options
or
Share
Rights
being
forfeited
and cancelled
such
that
the
Options
will
never
be
exercisable
and
the
Share
Rights
will
not
be
exercised;

“Holder” means,
in
relation
to
an
Option
or
a
Share
Right,
the
Person
(whether
an
Eligible
Person or
a
Permitted
Nominee)
entered
in
the
Company’s
register
of
options
as
the
holder
of
that
Option or
Share
Right;

“Issue
Date” means,
in
relation
to
an
Option
or
a
Share
Right,
the
date
on
which
the
Company grants
that
Option
or
Share
Right;

“Legal
Personal
Representative” means
the
executor
of
the
will
or
an
administrator
of
the
estate
of a
deceased
person,
the
trustee
of
the
estate
of
a
person
under
a
legal
disability
or
a
person
who holds
an
enduring
power
of
attorney
granted
by
another
person;

“Listing
Rules” means
the
Official
Listing
Rules
of
ASX
as
they
apply
to
the
Company
from
time
to time;

“Market
Value” means,
if
the
Company
is
admitted
to
the
official
list
of
ASX;

a) The
weighted
average
closing
sale
price
of
the
Shares
recorded
on
the
stock
market
of
ASX over
the
five
trading
days
immediately
preceding
the
day
on
which
the
Board
resolves
to
offer an
Option;
or
b) In
circumstances
where
there
has
been
no
trading
in
the
Shares
during
the
five
trading
days immediately
preceding
the
day
on
which
the
Board
resolves
to
offer
an
Option,
the
last
sale price
recorded
on
the
stock
market
of
ASX;

“Offer” means
an
invitation
to
an
Eligible
Person
made
by
the
Company
under
clause
6.1
to
apply for
an
issue
of
Options
or
Share
Rights;

“Official
Quotation” has
the
meaning
ascribed
to
it
in
the
Listing
Rules;

“Option” means
an
option
issued
under
the
Plan
to
subscribe
for
a
Share;

Page
38

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**EXPLANATORY

MEMORANDUM**

“Participant” means
a
person
who
holds
Options
or
Share
Rights
issued
under
the
Plan
and includes,
if
a
Participant
dies
or
becomes
subject
to
a
legal
disability,
the
Legal
Personal Representative
of
the
Participant;

“Permitted
Nominee” has
the
meaning
given
to
it
by
clause
7.2;

“Plan” means
the
Kingsrose
Mining
Limited
Employee
Options
and
Share
Rights
Plan
established
in accordance
with
these
Rules;

“Relevant
Interest” has
the
meaning
given
to
that
term
in
sections
608
and
609
of
the
Corporations Act;

“Retirement” means,
in
relation
to
an
Eligible
Person,
retirement
by
that
Eligible
Person
from
the Company
at
age
65
or
over
or
such
earlier
age
as
considered
appropriate
by
the
Board;

“Rules” means
these
rules,
as
amended
from
time
to
time;

“Shares” means
fully
paid
ordinary
shares
in
the
capital
of
the
Company;

“Share
Right” means
a
right
to
be
allocated
a
Share
or
to
receive
a
cash
amount
of
equivalent
value to
a
Share
under
the
Plan,
as
determined
by
the
Company,
subject
to
vesting
and
satisfaction
of
the Forfeiture
Conditions ;

“Specified
Reason” means
Retirement,
Total
and
Permanent
Disablement,
death
or
such
other reason
as
may
be
determined
by
the
Board
in
its
absolute
discretion;

“Tax” means
any
tax,
levy,
impost,
GST,
deduction,
charge,
rate,
contribution,
duty
or
withholding which
is
assessed
(or
deemed
to
be
assessed),
levied,
imposed
or
made
by
any
government
or
any governmental,
semi-‐governmental
or
judicial
entity
or
authority
together
with
any
interest, penalty,
fine,
charge,
fee
or
other
amount
assessed
(or
deemed
to
be
assessed),
levied,
imposed
or made
on
or
in
respect
of
any
or
all
of
the
foregoing;
and

“Total
and
Permanent
Disablement” means,
in
relation
to
an
Eligible
Person,
that
the
Eligible Person
has,
in
the
opinion
of
the
Board
and
with
effect
on
a
date
determined
by
the
Board,
after considering
such
medical
and
other
evidence
as
it
sees
fit,
become
incapacitated
to
such
an
extent as
to
render
the
Eligible
Person
unlikely
ever
to
engage
in
any
occupation
for
which
he
is
reasonably qualified
by
education,
training
or
experience.

24.2 In
these
Rules,
unless
a
contrary
intention
appears:

a) Where
an
expression
is
defined,
another
part
of
speech
or
grammatical
form
of
that
expression has
a
corresponding
meaning;
b) The
singular
includes
the
plural
and
vice
versa;
c) A
reference
to
a
gender
includes
all
genders;
and
d) An
expression
defied
in,
or
given
a
meaning
for
the
purposes
of,
the
Corporations
Act
has
the same
meaning
where
used
in
these
Rules.
e) For
the
avoidance
of
doubt,
PT
Natarang
Mining
is
a
subsidiary
of
the
Company
for
the purposes
of
these
Rules.

Page
39

**APPOINTMENT

OF
CORPORATE
REPRESENTATIVE**

**Under

section
250D
of
the
Corporations
Act**

This
is
to
certify
that
by
a
resolution
of
the
Directors
of:

…………………………………………………………………………………………………………………………………………………………..………………….
(Company) The
Company
has
appointed:

………………………………………………………………………………………………………………………………………………
(Insert
name
of
Representative)

in
accordance
with
the
provision
of
section
250D
of
the
Corporations
Act,
to
act
as
the
body
corporate
representative
of
that company
at
the
Annual
General
Meeting
of
Kingsrose
Mining
Limited
to
be
held
on
Friday,
2
November,
2012
at
10.30am (WST)
and
at
any
adjournment
of
that
meeting.

Dated:

Executed
by
the
Company ) in
accordance
with
its
Constitution ) ……………………………………………………………………….. ………………………………………………………………………. Signed
by
authorized
representative Signed
by
authorized
representative ………………………………………………………………………… ………………………………………………………………………. Name
of
authorized
representative
(PRINT) Name
of
authorized
representative
(PRINT) ……………………………………………………………………….. ……………………………………………………………………….. Position
of
authorized
representative
(PRINT) Position
of
authorized
representative
(PRINT)

**Instructions

for
Completing
Appointment
of
Corporate
Representative**

Under
Australian
law,
an
appointment
of
a
body
corporate
representative
will
only
be
valid
if
the
Certificate
of Appointment
is
completed
correctly.

Please
follow
the
instructions
below
to
complete
this
Certificate:

Execute
the
Certificate
following
the
procedure
required
by
your
Constitution
or
other
constituent documents.
Print
the
name
and
position
(e.g.
director)
of
each
company
officer
who
signs
this
Certificate
on
behalf of
the
Company.
Insert
the
date
of
execution
where
indicated.

4. Send
or
deliver
the
Certificate
to
KINGSROSE
MINING
LIMITED
at
Level
2,
Suite
9,
12-‐14
Thelma
Street, West
Perth,
WA
6005
or
by
fax
to
the
registered
office
on
08
9486
1151
by
10.30am,
Wednesday,
31 October
2012.
Alternatively
the
Certificate
of
Appointment
may
be
presented
upon
attendance
at
the Annual
General
Meeting
of
the
Company.

Page
40

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**PROXY

FORM**

I/We Appoint Name
of
Proxy

being
a
Member
of
Kingsrose
Mining
Limited
entitled
to
attend
and
vote
at
the
Annual
General
Meeting,
hereby

or
failing
the
person
so
named
or,
if
no
person
is
named,
the
Chairman
of
the
Meeting
or
the
Chairman’s
nominee,
to
vote
in
favour
of Resolution
1
(unless
otherwise
indicated
below
by
ticking
one
of
the
boxes
next
to
Resolution
1)
and
to
vote
in
relation
to
each
of Resolutions
4,5,6,7,8,
and
9
in
accordance
with
the
following
directions
or,
if
no
directions
have
been
given
in
relation
to
any
of
Resolutions 4,5,6,7,8,
and
9,
as
the
proxy
sees
fit
at
the
Annual
General
Meeting
to
be
held
at
The
Celtic
Club,
48
Ord
Street,
West
Perth,
6005,
Western Australia
on
Thursday,
1
November
2012
at
10.30
am
(WST)
and
at
any
adjournment
thereof.

**Voting

Directions
on
Business
of
the
Annual
General
Meeting**

==> picture [463 x 163] intentionally omitted <==

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

||||
|---|---|---|
|FOR|AGAINST|ABSTAIN*|
|Resolution
1|Adoption
of
Remuneration
Report
(i)|
|Resolution
2|Re-‐election
of
Director
–
Mr.
J.
William
Phillips|
|Resolution
3|Re-‐election
of
Director
–
Mr.
Timothy
G.
Spencer|
|Resolution
4|Increase
non-‐executive
directors’
fee
pool
(ii)|
|Resolution
5|Approval
of
KRM
Employee
&
Share
Rights
Plan
(iii)|
|Resolution
6|Long-‐term
incentive
–
Mr.
Christopher
N.
Start
(iv)|
|Resolution
7|Long-‐term
incentive
–
Mr.
Timothy
G.
Spencer
(v)|
|Resolution
8|Issue
of
unlisted
options
–
Mr.
Andrew
P.
Spinks
(vi)|
|Resolution
9|Ratification
of
past
issue
of
shares
(vii)|
|Resolution
10|Amendment
to
Constitution|

----- End of picture text -----

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
you
votes
will
not
be
counted
in
computing
the
required
majority
on
a
poll.

(i) Resolution

IF
THE
CHAIRMAN
IS
APPOINTED
AS
YOUR
PROXY,
THE
CHAIRMAN
WILL
VOTE
IN
FAVOUR
OF
RESOLUTION
1
UNLESS
YOU DIRECT
OTHERWISE
BY
TICKING
ONE
OF
THE
BOXES
ABOVE
NEXT
TO
RESOLUTION
1.

(ii) Resolution

IF
YOU
DO
NOT
WISH
TO
DIRECT
THE
CHAIRMAN
AS
YOUR
PROXY
TO
VOTE
ON
RESOLUTION
4, PLEASE
PLACE
A
MARK
IN
THIS
BOX.

(iii)

Resolution
5

==> picture [32 x 15] intentionally omitted <==

IF
YOU
DO
NOT
WISH
TO
DIRECT
THE
CHAIRMAN
AS
YOUR
PROXY
TO
VOTE
ON
RESOLUTION
5, PLEASE
PLACE
A
MARK
IN
THIS
BOX.

(iv)

Resolution
6

==> picture [32 x 15] intentionally omitted <==

IF
YOU
DO
NOT
WISH
TO
DIRECT
THE
CHAIRMAN
AS
YOUR
PROXY
TO
VOTE
ON
RESOLUTION
6, PLEASE
PLACE
A
MARK
IN
THIS
BOX.

(v)

Resolution
7

IF
YOU
DO
NOT
WISH
TO
DIRECT
THE
CHAIRMAN
AS
YOUR
PROXY
TO
VOTE
ON
RESOLUTION
7, PLEASE
PLACE
A
MARK
IN
THIS
BOX.

(vi)

Resolution
8

IF
YOU
DO
NOT
WISH
TO
DIRECT
THE
CHAIRMAN
AS
YOUR
PROXY
TO
VOTE
ON
RESOLUTION
8, PLEASE
PLACE
A
MARK
IN
THIS
BOX.

==> picture [32 x 15] intentionally omitted <==

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**PROXY

FORM**

(vii)

Resolution
9 IF
YOU
DO
NOT
WISH
TO
DIRECT
THE
CHAIRMAN
AS
YOUR
PROXY
TO
VOTE
ON
RESOLUTION
9, PLEASE
PLACE
A
MARK
IN
THIS
BOX.

==> picture [32 x 15] intentionally omitted <==

By
marking
any
of
these
boxes
you
acknowledge
that
the
Chairman
may
exercise
your
proxy
even
if
he
or
she
has
an
interest in
the
outcome
of
the
respective
resolution,
and
that
votes
cast
by
him
or
her,
other
than
as
proxy
holder,
would
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
will
not
cast
your
votes
on
the
respective
resolutions
and
your
votes
will
not
be
counted
in
calculating
the
required majority
if
a
poll
is
called
on
a
resolution

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

Please return this Proxy Form to the Company Secretary, Kingsrose Mining Limited, Suite 9, Level 2, 12-‐14 Thelma Street, West Perth 6005, Western Australia, or by fax to 08 9486 1151 by 10.30 am (WST) on Wednesday, 31 October 2012.

Signed
this

day
of

(Signature
boxes:
see
over) By:
Individuals
and
joint
holders By:
Companies
(affix
common
seal
if
appropriate)

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

**Please
provide
the
following
information
should
we
need
to
contact
you Name:

Day
time
contact
number:**

**Instructions

for
Completing
Appointment
of
Proxy
Form**

In
accordance
with
Section
249L
of
the
Corporations
Act,
a
shareholder
of
the
Company
who
is
entitled
to
attend cast
two
or
more
votes
at
a
general
meeting
of
shareholders
is
entitled
to
appoint
two
proxies.
Where
more
than one
proxy
is
appointed,
such
proxy
must
be
allocated
a
proportion
of
the
member’s
voting
rights.

If
the shareholder
appoints
two
proxies
and
the
appointment
does
not
specify
this
proportion,
each
proxy
may
exercise half
the
votes.

A
duly
appointed
proxy
need
not
be
a
member
of
the
Company.
In
the
case
of
joint
holders,
all
must
sign. 3. Corporate
shareholders
should
comply
with
the
execution
requirements
set
out
on
the
Proxy
Form
or
otherwise with
the
provisions
of
section
127
of
the
Corporations
Act.
Section
127
of
the
Corporations
Act
provides
that
a company
may
execute
a
document
without
using
its
common
seal
if
the
document
is
signed
by:
two
directors
of
the
company;
a
director
and
a
company
secretary
of
the
company;
or
for
a
proprietary
company
that
has
a
sole
director
who
is
also
the
sole
company
secretary
–
that director.

For
the
Company
to
rely
on
the
assumptions
set
out
in
sections
129(5)
and
(6)
of
the
Corporations
Act,
a document
must
appear
to
have
been
executed
in
accordance
with
sections
127(1)
or
(2).
This
effectively
means that
the
status
of
the
persons
signing
the
document
or
witnessing
the
affixing
of
the
seal
must
be
set
out
and conform
to
the
requirements
of
section
127(1)
or
(2)
as
applicable.

In
particular,
a
person
who
witnesses
the affixing
of
a
common
seal
and
who
is
the
sole
director
and
sole
company
secretary
of
the
company
must
state that
next
to
his
or
her
signature.

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

Kingsrose
Mining
Limited Annual
General
Meeting 1
November
2011

==> picture [25 x 22] intentionally omitted <==

**PROXY

FORM**

Where
a
Proxy
Form
or
form
of
Appointment
of
Corporate
Representative
is
lodged
and
is
executed
under
power of
attorney,
the
Proxy
Form
and
the
original
or
certified
copy
of
any
power
of
attorney
under
which
it
is
signed must
be
lodged
in
like
manner
as
this
proxy
and
received
no
later
than
48
prior
to
the
time
of
commencement
of the
Meeting.

In
accordance
with
section
250BA
of
the
Corporations
Act
the
Company
specifies
the
following
for
the
purposes
of
receipt of
proxy
appointments
-‐

Registered
Office:
Suite
9,
Level
2,
12-‐14
Thelma
Street,
West
Perth,
WA
6005.

Fax
Number:
+618
9486
1151.

Proxy appointments are to be received no later than 48 hours prior to the time of commencement of the Meeting. Any proxy received after that time will not be valid.

If
you
need
any
further
information
about
this
form
or
attendance
at
the
Company’s
Annual
General
Meeting,
please contact
Jeannette
Smith,
Company
Secretary,
on
08
9486
1149.

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KINGSROSE MINING LIMITED — AGM Information 2012

65202_rns_2012-10-01_60bb3e6b-0b43-4d6a-8837-e6adbf193e47.pdf

**Notice

**CHRIS

**About

NOTICE OF MEETING and EXPLANATORY MEMORANDUM

**NOTICE

**TIME

Venue

**How

**Voting

**Voting

**NOTICE

_**Proxy

**Your

**NOTICE

**BUSINESS

_**Voting

**NOTICE

_**Ordinary Resolution 2

_**Ordinary Resolution 4

_**Voting

• _**Ordinary Resolution 5

**NOTICE

• _**Ordinary Resolution 6

• _**Ordinary Resolution 7

_**Ordinary Resolution 8

**NOTICE

• _**Ordinary Resolution 9

_**Special Resolution 10

(Resolution 10B)

**EXPLANATORY

**PROXY

**EXPLANATORY

• Financial Statements and Reports

• **Resolution 1

NB: Voting Consequences

**EXPLANATORY

NB: Proxy Restrictions

If you appoint the Chair as your proxy

•

**Resolution 2

•

**Resolution 3

**EXPLANATORY

**EXPLANATORY

**EXPLANATORY

_In relation to Share Rights

**EXPLANATORY

**EXPLANATORY

Background

Shareholder Approval (Section 208 of the Corporations Act)

**EXPLANATORY

**EXPLANATORY

**EXPLANATORY

**EXPLANATORY

KRM Relative TSR LTI Comparator Group Companies

**EXPLANATORY

**Resolution 8

ASX Listing Rule 10.14

**EXPLANATORY

**EXPLANATORY

**EXPLANATORY

Valuation of Options

**EXPLANATORY

**Resolution 9

**EXPLANATORY

**Terms

**Resolution 10

**EXPLANATORY

**EXPLANATORY

Glossary

**EXPLANATORY

SCHEDULE ONE

**EXPLANATORY

**1. NAME

**2. ESTABLISHMENT AND

3.

**PURPOSE

KINGSROSE MINING LIMITED AGM Information 2012